Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, I ask to reserve my time and ask that I be recognized at the completion of the presentation by the Senator from Alaska.

Mr. GREGG

Mr. GREGG. Is the first amendment my amendment relating to the inspector general?

Mr. GREGG. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. Madam President, is the regular order now that we are to proceed to a vote on a series of amendments?

Mr. GREGG. Madam President, I will go forward, and I guess the Senator from Indiana will close. This amendment seems to me to be eminently reasonable in the sense that all it does--it is certainly not partisan in any way--is set up an independent inspector general for this specific program. Why does this program need an independent, specific inspector general? It is because under the present law, where we have over $15 billion being spent over 5 years, we have five different inspectors general looking at these programs, and it has been pretty clear that they haven't had time to do it very effectively. Only one inspector general has spent any time, in fact, and that has been the USAID inspector general. By requiring the program to increase threefold, we are dramatically increasing the responsibility relative to spending money, but the USAID inspector general isn't going to have time to increase their efforts significantly in this account. So it is very important that we have an independent inspector general. This is especially true because almost every country that these dollars are going to go into is a country which rates very low on the international evaluation of transparency, integrity, and functioning of the government in a way that we would deem to be efficient and effective. We cannot afford to have U.S. tax dollars wasted, and we certainly don't want to have them going to processes which are corrupt. The way to avoid that is to set up a specific inspector general for this account. I wouldn't ask for it if we weren't expanding it so dramatically. But when you take a program and triple its size, you better have someone looking over the shoulders of the folks spending that money. That is why we need an independent inspector general relative to this account. I yield the remainder of my time, and I ask for the yeas and nays.

Mr. GREGG

Mr. GREGG. It is my understanding that presently the inspectors general for Defense, for Labor-HHS, the State Department, and the USAID all have line responsibility for PEPFAR; is that not true?

Mr. GREGG. Mr. President, I make a point of order that a quorum is not present.

Mr. GREGG. Well, Mr. President, I am not sure what has happened here, but I was seeking recognition. I do not believe I had lost the floor, and I think it is inappropriate that I was taken off the floor. I am not going to continue this debate at this point, and I will yield to the Senator from Louisiana and let her proceed.

Mr. GREGG. Will the Senator yield for a question?

Mr. GREGG. Thank you, Mr. President, I call up amendment No. 5081.

Mr. GREGG. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. GREGG. Mr. President, this amendment, I do not know why we are taking up this amendment at all. It is an amendment which is going to try to make funds spent under this bill be responsibly spent. It sets up an IG to review how these funds are spent. We are taking a program which we presently spend $15 billion on and we are tripling it, we are doing more than tripling it, we are taking it to more than $50 billion. I know the taxpayers of America would hope and expect that when we take a program and radically expand it in this manner, we would expect that those dollars be spent efficiently and effectively. Now, we put inspectors general into a lot of different programs around here. There are programs which spend less than $20 million that have inspectors general tied to them. It is only reasonable that if you are going to take a program and radically expand it, the way this program is being expanded, which will lead to significant pressure to push money out the door, and, unfortunately, that quite often leads to instances where the money is not well spent, that you should have someone looking over the shoulders of the folks who are spending the money and saying: Is this money being spent for what, first, it was intended to do, which is to help people in nations who are suffering from the plague of AIDS, specifically, and, secondly, that people who are the recipients of those dollars are handling those dollars in a way where the dollars are not being wasted or handled in a corrupt manner. Now, one of the unfortunate factors involved in the PEPFAR Program is that many of the countries which receive PEPFAR funds are countries which have governments which are not all that committed to integrity and are not transparent at all. In fact, a corruption index by Transparency International took a look at the various countries around the world to determine which countries are basically corrupt and which are not; which have governments that function under the rule of law and which do not, and which governments end up with a large amount of patronage, waste, and fraud when they manage their funds. This map shows that conclusion of that index. The darker the colors get on this map, the more problematic is the nation relative to the issue of transparency and integrity in their government. Well, as you look at this map, you maybe cannot see it, but there are little yellow stars on the countries which are going to be receiving most of the PEPFAR funds or are presently receiving PEPFAR funds. Almost all those countries are nations which have serious issues on transparency and where the governments have some questions about integrity and management and waste. So it is very reasonable that we should put in place an inspector general within the Office of the Global AIDS Coordinator to make sure these dollars, which are fairly significant--in fact, they are dramatic when you look at the increases--are being spent well. You know, American taxpayers and most Americans are extremely generous people. We as a nation are generous. There is no other nation in the world that has stepped up to the AIDS fight, especially in Africa, the way we have. I congratulate this Administration for taking the lead on that. I congratulate Senator Lugar for being one of the leaders on this effort and Senator Biden. They are reflecting, the President and the leadership of the Foreign Relations Committee are reflecting the inherent nature of the American people, which is to try to help people out who have problems. We recognize AIDS is a scourge, and it is a terrible situation, especially in these African countries. But the American people also expect that when they are generous with their dollars, as they are being under this program, and have been under this program, that these dollars are going to be well used; they are not going to end up in the pocket of some cousin of somebody who is going to be running the program; or not end up in a Swiss bank account or not end up going for somebody's new Mercedes or, alternatively, they are not going to go into an NGO, a nongovernmental organization, which rather than being an efficient provider of care, turns out to be simply a place where a lot of money is spent on administration, instead of a lot of money being spent on trying to cure or address the problem of AIDS. One of the ways we accomplish that, to make sure we have accurate accountability, is through the use of inspectors general. Now, some will say: Well, there is already an inspector general who can be responsible for this money. Well, those inspectors general who would logically have jurisdiction over these dollars are spread thin in their responsibility; they have a lot of other accounts to cover. It is not like this is a small account. Under this bill, this account explodes. So we have actually set up inspectors general in other accounts which are much smaller and had no problem with that. Inspectors general do not cost a lot of money actually, and they get a pretty good return on the investment, usually, because these individuals set up small offices of people who have oversight of the dollars that are being spent. They usually end up saving enough money to easily justify their existence. But we have an inspector general, for example, in programs such as the Smithsonian Institution, which is not very significant compared to PEPFAR; programs such as the Postal Regulatory Commission, which is almost nonexistent on a spending level compared to PEPFAR; we even have an IG for the Denali Commission, and obviously for the Library of Congress and National Archives; two organizations which I suspect do not need an inspector general because they are pretty well managed organizations, to say the least. But we put inspectors general in those positions in order to make sure the American tax dollars are efficiently, effectively, and appropriately used and that the programs that are supposed to be addressed are addressed. Well, there is resistance, for some reason, to putting an inspector general into this program. I cannot understand it. I mean, it is just logic that you would, when you are expanding a program at this rate, do that, put an inspector general in. So I would hope there would not be opposition to this amendment, that it would be accepted, that we would take this responsible action. If we do not, I have to ask the question: What is all this new money going to be spent on? Is there some plan we have not been informed of that is of a nature that does not want to have oversight, that does not want to have a legitimate review of the way the money is spent? Are there groups out there thinking they are going to have this money and have the influence to basically stop before it even starts the accountability of those groups? Are there countries out there that fall into that category? It would seem there would have to be if there is resistance on the inspector general program for this proposal. So that is why I hope it will be supported. On the side issue, which is actually not a side issue, it is an overriding issue, but it does not relate so much to the inspector general. On the spending side, this initiative in PEPFAR is a huge expansion of a program, just massive. This year we are going to go from a budget deficit last year that was $177 billion to a budget deficit that is already projected by CBO as being well over $400 billion. Because of the slowdown in the economy, which has slowed revenues, because of the slowdown in the economy, which is putting more pressure on us to come in and support various activities in the marketplace such as our banking industry and our housing industry, that number will probably even go up, probably well over $400 billion, we could be headed to a $450 or $500 billion deficit in 1 year, this year, 1 year, a massive expansion in the deficit which fundamentally undermines our Nation and, in the long run, it adds to our debt. These young people down here who are pages today are going to end up picking up that bill. It is going to be passed to them. So we do have to be very responsible when we decide to expand programs in the face of the deficit because all this new spending that is going to come in on PEPFAR is either going to be borrowed or it is going to have to come from other programs. Now, let me try to impress upon people how big this expansion is. In relation to our foreign aid account, which I have jurisdiction over, to some degree, because I am the ranking member of the Foreign Aid Committee in the Appropriations Committee. This is a pie chart that shows today's international development aid program. PEPFAR represents a fairly significant portion under today's funding level, which is at $15 billion authority. It represents about a quarter of what the foreign aid funding is. Well, after we pass this bill or after this bill gets passed, because I am not planning to vote for it in its present profligate state, even though I support the basic program and would support a reasonable increase in it, PEPFAR is going to represent about 77 percent of all foreign aid development money. The question becomes, what happens to all these other accounts? If I, as ranking member, and Senator Leahy, as chairman of this committee-- and maybe that will be reversed next year; it has been reversed in the past--are responsible for dividing up this development aid money, how is it going to work? We are going to receive an allocation. That is what we will get from the full Appropriations Committee after the Budget Committee acts, of which I also happen to be ranking member. I don't expect that allocation to be increased by 25 percent. There has never been a whole lot of enthusiasm for dramatically ramping up foreign assistance in this body. So I don't think we are going to see a 20- to 25-percent increase in our allocation, which is what it would cost to fully fund PEPFAR and keep that funding from impacting the other programs. The last couple of years we have received an increase--3 percent, 5 percent, 4 percent. Let's presume we continue with that increase level. Let's presume we get the increases we have received in the last couple of years which have been bigger than most other accounts have received in the Federal Government that are not related to defense. That is still going to leave literally somewhere around $8 billion-- potentially, $6 to $8 billion, by my guesstimate--we are going to have to find somewhere else, if we are going to fully fund the PEPFAR Program. People say this is an authorization. We pass authorizations all the time. Everybody knows that is a number put out there for the political purpose of making a statement about how important the program is. In this instance, that is probably not the case. When you are talking about funding AIDS and the fight against diseases such as malaria in Africa, there is a consensus that we need to be aggressive and participate. I fully expect this authorization will be very close, if not fully funded. So where are we going to get the money? We are going to have to take it out of other foreign aid accounts because of this threefold increase, going from a $15 billion program to a $50 billion program. That is a tripling of the program. The accounts that are going to be impacted are pretty popular accounts. They are going to be cut. We are going to have to cut funds to Israel. We will have to cut funds to Egypt. We will have to cut educational and communications funding we are making in the Middle East and in the Arab world to try to communicate our message over the message of al-Qaida and the radical Muslim fundamentalist movement. We will have to cut the Foreign Agricultural Service, the international narcotics and Andean initiatives, the migration and refugee assistance disaster program. The USAID organization itself will be cut significantly, operations and people on the ground. Child survival and health programs will be cut. Obviously, the Millennium Challenge will be cut, and sustainable development assistance programs will have to be cut. They will simply have to be cut. You can't produce these types of funds for PEPFAR at this rate of increase without making reductions. I believe PEPFAR is a program that is a success. I believe we as a nation have done the right thing and stepped up to what was our responsibility as a nation. I certainly support a reasonable increase that is, as the administration suggested at one time, around $30, $35 billion as a 5- year number. That is a pretty big increase. That is double. But this bill goes too far; $50 billion is simply too much for this budget and for the Appropriations Committee, on which I have some responsibility, to handle, unless we will start running a surplus where we can find funds. I put out that red flag. This is a feel-good vote. Everybody is going to vote for it. People want to make a statement. But this statement is going to have consequences. I suspect a year from now, when people insist on full funding for this over the next 5 years, people will be a little upset about the accounts that will have to be reduced into in order to accomplish that full funding. That is a red flag I am putting out. The issue I am talking about today is whether we will put in place a process where the American taxpayer, no matter what the final dollar figure is, can have some confidence that money going into these nations, which have been identified as having fairly significant problems, for the most part, with the way they handle money, is going to be efficiently and effectively used so that we actually do care for people who have AIDS, so that we do get money out to that mother and child who suffer from these conditions. I certainly hope Members would look favorably on this amendment, put in place an IG on an account that is fairly significant and a lot bigger than a lot of other accounts that have inspectors general and which cries out for review because it is going into areas which are not quite as stable as the National Archives. The National Archives is pretty stable. The Library of Congress is a pretty stable place. You pretty much can figure out what is going on there when money goes to those folks. But when you send money into some of these nations which are governed, in many instances, by people who are not subject to the rule of law as we are, or to transparency rules as we are, you need to think about having somebody look over the shoulder of the folks spending the money to make sure the American taxpayer gets what they pay for and that this deep commitment by Americans to compassion, especially on the issue of AIDS, leads to actual positive action rather than simply people going out and wasting taxpayers' dollars or using it in a fraudulent way. I reserve the remainder of my time and yield the floor.

Mr. GREGG. It is also my understanding that every one of those agencies which I have listed has billions--and in the case of HHS and Defense, hundreds of billions of dollars--to be sensitive to as to how they are being spent. The only IG who I believe has done any reports of those five who theoretically have been charged with that responsibility of overlooking PEPFAR spending is, as I understand, USAID, which is using a small number of its membership to do that, and spending, I think, less than $1.5 million a year on that program. So doesn't it make sense that we should acknowledge the fact that these very large entities--Defense, Labor-HHS, USAID, and State-- probably on their radar screen of relative issues are not going to place PEPFAR very high and we should have, instead, an individual in an office which does place it right at the center of its responsibility to make sure the money is being spent well?

Mr. GREGG. That was a question.

Mr. GREGG. I thank the Senator.

Mr. GREGG. Mr. President, I was seeking recognition.

Mr. GREGG. Mr. President, I make a point of order that a quorum is not present.

Mr. GREGG

Mr. GREGG. Madam President, are we in morning business?

Mr. GREGG. I will speak on the bill. I wish to associate myself with the comments of the Senator from South Carolina. I am not sure why, when it is costing $4.40 to put a gallon of gas in your car, when we are looking at a winter where energy prices may be as high as $5 a gallon, which is going to just overwhelm and create a horrific situation in parts of the country like my own, where people's ability to survive depends on their ability to buy heating oil, why we would be moving to a bill which essentially, dramatically expands an AIDS program in Africa. Now, the PETFAR Program has been a success, and I congratulate the administration for initiating it. We, as a people, are very compassionate. We have made a commitment to Africa and the nations there to help them with this terrible AIDS epidemic they are dealing with. There is no question but to take a hard look at this program and making some good decisions on improving it is appropriate. But certainly on our list of priorities it should not be above doing something substantive on the issue of how we increase supply in the area of energy in this country and how we energize more conservation in the area of energy in this country. We, as a people, need to pursue a course of more production--American production--and more conservation. There is much this Congress can do to assist in this area. It needs to be done now because--at least in production--there is significant lead time. But the one thing we could do which would affect the price of oil and which would impact the speculation in the marketplace that is occurring today is to make it clear that we, as a government, are going to support initiatives that are reasonable, environmentally sound, and will produce significant amounts of new energy through production. That will have an immediate impact on those folks out there who are driving up the price of oil. The price of oil is driven up as a result of people presuming that supply will be stagnant and will not expand and, therefore, demand, as it goes up, will increase price. If we can put in place policies which increase production, and therefore supply, and make an American product, we will do two very good things: We will reduce the speculation in the price of oil and thus cause it to go down. Secondly, we will actually be producing American product and spending American dollars--hard-earned dollars--in America rather than sending them over to nations many of which don't like us to begin with. So there are at least three major areas of production we should be pursuing and which we need legislation on to pursue. The first is drilling on the Outer Continental Shelf. We know we have years and years of supply in the Outer Continental Shelf. But it is locked up by legislation that was initiated by the other side of the aisle, which essentially took off limits almost all the new, available resources on the Outer Continental Shelf. What has been proposed and what is a reasonable approach is that States that believe they are willing to pursue drilling off of their shores--over the horizon, by the way, 50 miles out in most instances--following the example of Louisiana, for example, and Mississippi and Alabama which already do this, States such as Virginia, for example, which has said they may be willing to pursue these resources, that they be given the option to do that and not be told they cannot do it, which is what the law says now. That is reasonable. It will open a huge amount of potential supply of both oil and natural gas. In addition, we know we have more oil reserves in oil shale in three States--Colorado, Wyoming, and Utah--than all of Saudi Arabia has. We have three times the amount of reserves Saudi Arabia has, and the oil shale can be recovered in an environmentally sound way, and the recovery doesn't require anything to happen at the surface. It is all done under the surface. The technology is there and it is viable and it is economically viable when oil exceeds $70 a barrel or maybe $60 a barrel. We know we can do it. But we are stopped from doing it by rules and regulations put in place by the Congress and by the prior administration. We ought to revisit those. We ought to debate those on the floor of the Senate. We ought to be willing, in my opinion, to pursue programs that will, in an environmentally sound way, use that oil resource, which is so huge-- huge--and which is American oil. We will be using American product rather than product that comes from nations that not only don't like us but, in some cases, want to do us harm. Thirdly, we have the issue of nuclear power. France gets 80 percent of its energy from nuclear power. China is adding new nuclear powerplants all the time. We have not added a new nuclear powerplant since the late 1980s. Nuclear power is clean energy. People who are concerned about the environment--as many of us are, and I think most people are--and about the issue of global warming, nuclear power is an energy source that has no impact at all on global warming. It has no emissions. We know how to make nuclear powerplants that are safe. Nobody has ever died in a nuclear accident in this country. More important, when you look at nuclear power as an energy source, it is American made, American produced, and it means that instead of having to buy product from overseas to produce our electrical energy, we can produce it here with American product, made in America through nuclear powerplants. We should be adding nuclear powerplants. We made some improvements in the regulatory process, but it still is an extraordinarily long process to bring on line nuclear powerplants. In fact, in France, I think it takes something like less than 2 years to license and get a powerplant on line. In the United States, we are looking at 4\1/2\ years, or something like that, to license it, to get the plant under construction. It takes longer to construct them, obviously. So there are things we can do in this area. Those are the areas of production we should be aggressively looking at. They are controversial, and they should not be at a time when oil is at $140 a barrel and gasoline is costing us $4.50 a gallon and home heating oil is costing as much as $4.85 a gallon. At a time like this, we should be looking at those resources that can be produced in the United States and that will take the pressure off of our economy. One of the big problems with the price of oil and energy and gasoline, beyond the fact that it is stretching the average American's budget, people are legitimately worried and fearful about what will happen to them this winter. One of the other consequences of the price is that we are taking a huge amount of American capital, hundreds of billions of dollars' worth a year, and instead of retaining it in the United States where it can be used and reinvested and produce jobs, it is being sent overseas on a daily basis. Some of it is coming back through investments in our bonds, but we are then paying interest to foreign governments and foreign individuals. It would be much smarter of us to try to reduce our dependence on foreign oil by increasing domestic production. We need to aggressively pursue programs of conservation and renewables also. That is why the Ensign-Cantwell bill on extending renewable tax credits is so important. I am sorry we have not been able to get to that and it has been blocked. That should be passed. Clearly, conservation needs to be aggressively pushed. So we should be producing more, and we should be using less. What we should be producing more of is American product. I think next week, rather than debating whether we should expand a foreign aid program by three times--the program was initially a $15 billion program, and it is proposed to take it up to $50 billion--rather than debating that, an authorization bill, we should be focusing on what America really needs to have done today, which is address the energy needs. I understand the Senator from Texas may make a unanimous consent request here. If he does, I certainly hope it will be accepted. It is reasonable that we should be pursuing and addressing those in the Senate--how we are going to produce more and use less. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, reserving the right to object, there is obviously a great need to correct the problem of what will occur if we do not fix the doctors' reimbursement schedule. But there are also more ways to do this than one, and the one that is being proposed is the House-passed bill by the majority leader. We would suggest that since the Senate should be heard on this matter and have the opportunity to put its ideas on the table, Senator Grassley and Senator Baucus should have a chance to work on the Senate proposal; that we would rather proceed with an extension of the present Medicare provisions so doctors are not subject to a reduction in reimbursement for 30 days and allow this to happen. I will be required to object to this on behalf of the leadership over here and myself. Then I would like the courtesy of the majority leader to ask unanimous consent for a 30-day extension.

Mr. GREGG. Mr. President, I ask unanimous consent that the Senate proceed to the consideration of a 30-day Medicare extension that is at the desk; that it be read a third time and passed; that the motion to reconsider be laid upon the table. I think the point is, there are serious reservations on our side of the aisle, and I think legitimately other places, on the way the House has handled elements of the Medicare system in this bill and that is to undermine the ability of many seniors to participate in what is known as Medicare Advantage. We think there is a better way to do it. We think the Senate can do a better job of this bill, and we think 30 days to work on it makes some sense.

Mr. GREGG

Mr. GREGG. Mr. President, I want to speak on the bill, not in morning business. I am concerned we are not getting to a lot of the issues in this bill we should get to. Although I am supportive of the underlying bill, one of the issues we are not getting to, and I do not understand it, is the need to extend the renewable tax credits. Senator Ensign and Senator Cantwell have brought forward an amendment to accomplish this. The renewable tax credits are those tax credits which create an incentive for using things that are more energy efficient: making your home more energy efficient, using solar, using wind, using wood pellet stoves, things which are basically alternative sources of energy, or doing additions to people's homes which make their homes more energy efficient. At a time when gas prices are extraordinarily high, and oil prices are going through the roof, especially home heating oil--in fact, it is estimated home heating oil will be about $4.77 this week--it is essential that we do whatever we can as a government to encourage the use of alternative sources and renewables and to encourage people to be more energy efficient as they either build a new home or they refurbish and renovate their old homes. That seems to be common sense to me. It has such common sense that this proposal, the extension of the renewable tax credits, passed this body with 88 votes. However, for some reason it is not being allowed to be brought up on this bill. It is very appropriate for this bill, it is even germane to this bill, as I understand it, which is a pretty heavy test to pass. But it is not being allowed to be brought up for a vote. I cannot understand that. This is such an important action from the standpoint of giving consumers and people who are struggling with high energy cost options. It is something we should rush to do. It is not something that should be delayed by the leadership of the other side of the aisle. But that is what is happening. I join with Senator Ensign and Senator Cantwell and strongly encourage the leadership of the Senate Democrats to allow a vote on this amendment and let it pass. If the House does not want to take it, that is their choice. But I suspect the House will, because, again, it is common sense, and commonsense ideas usually lead to common ground, which leads to something happening around here. When you have got 88 votes for something, it should be done. In the larger context of the energy crisis which we face, this type of step is critical. It is not going to solve the whole problem, we know that, but it is certainly part of the matrix of moving to a more positive result and getting our energy costs under control. People in New Hampshire--this is true across the country, but people in New Hampshire are thinking about next winter and the cost of home heating oil is going to be extraordinary. It looks as if this will add tremendous stress, especially on people who live on a fixed income but even those who were able to adjust their income through working are going to find it difficult. They are going to find it difficult, because at $4 a gallon, if they have to commute to work--and most people in New Hampshire have to commute; it is a rural State from the standpoint of moving around--they are going to find it much more expensive to commute. Most people use oil to heat their homes, and with home heating oil at over $4.50 a gallon, you are talking about a doubling of the oil costs from last year. That is going to overwhelm the pocketbooks and the economic situation for a lot of people in New Hampshire. It is going to be a real hardship. We need to do something which will relieve that. This is one element of extending the renewable energy tax credits. But another major element of it is for us to have an energy policy at the national level which essentially promotes American production of energy. We should produce more American energy and obviously we should consume less. There is no question that conservation is a critical element, as are renewables. But on the production side, there is no reason that we as a nation have locked up our capacity to use our resources in order to relieve the pressure on America's people who are now having to pay these outrageous prices for energy, and with the revenues from those purchases going overseas, in many instances to nations which do not like us all that much. In addition, obviously every time we send a dollar overseas, it is a dollar that can't be invested here in more jobs, in more economic activity, and the fact that we have now tripled what we are exporting in the way of resources, in the way of dollars, again to countries in some instances that do not have a great deal of admiration for us, in many ways are antagonistic to us--the exportation of those huge amounts of dollars, over $300 billion a year, is money which we need here in America to make ourselves stronger.We are heading down a very dangerous road here when we do not recognize that we need to produce American energy and keep those dollars in the United States, rather than shipping them overseas. Now, from the other side of the aisle we heard these proposals, we heard it from the Senator from North Dakota, that the way to address this is to litigate; the way to address this is to regulate; the way to address this is to tax. Well, none of those initiatives add more resources to the mix. And this is, in large part, an issue of supply and demand. The world is expanding. India and China have a population base of almost 2.5 billion people between them. We have 300 million people. They are growing economically, and they are using a lot of energy to do that. We have to recognize that if we are going to remain competitive and productive and strong, we have got to produce energy here, we have got to conserve it--we have to produce more of it, and we have to use less. As part of that initiative, we need to look at ways and places that we can produce more, areas such as oil shale, for example. We have more reserves in oil shale, three times as much reserves in oil as Saudi Arabia. The estimate is between 2 and 3 trillion barrels of reserves in oil shale alone. We have huge reserves in Outer Continental Shelf oil and gas. But both of those types of resources are being locked down by opposition, again regrettably by the other side of the aisle, which says we cannot drill in the Outer Continental Shelf except in the Gulf of Mexico, and we cannot use the oil shale reserves which are available. In fact, 100 percent of the oil shale reserves have been put off limits by policies of the other side of the aisle, supported by their national Presidential candidate, Mr. Obama, and 85 percent of the oil in the lower 49 that is potentially out there on the Outer Continental Shelf has been put off limits, again, by the other side of the aisle and, again, supported by Senator Obama. That is a huge amount of reserves which we are leaving in the ground while we buy oil at exorbitant prices from Venezuela, a country led by an individual who hates America; oil from Iran, a country where the entire government hates America and anything western. Why do we do that? That makes no sense at all. Clearly, we have these reserves here, and they can be recovered in an environmentally safe and sound way. The example on the Outer Continental Shelf was shown when we saw Katrina, a horrific disaster, a force 5 hurricane that came up the Gulf of Mexico and wiped out one of our great cities, New Orleans. Virtually no oil or gas was spilled as a result of Hurricane Katrina. Yet it went right across the Gulf of Mexico where all the major oil and gas rigs are. That proved beyond any question that gas and oil can be produced on the Outer Continental Shelf with environmental safety. There is a lot of it out there that has been locked down. Eighty-five percent of the potential leaseholds are no longer available because of the position taken by the other side. In the area of oil shale, these huge reserves which may be available to us are recoverable by drilling underground and by doing almost all the effort to recover that oil underground so that what actually comes out of the ground is virtually the product that is used. We could essentially get all the oil we need in order to operate the armed services of the United States, the biggest consumer of oil in this country, simply from oil shale because it is a heavy oil which is diesel-like fuel. Yet that is locked down; 100 percent of that is locked down by the policies of the other side of the aisle. We can move on, of course, to another source that we need to use, which is nuclear power. Nuclear power is essential if we are going to produce the electricity necessary to make this country productive and prosperous and to meet the need to reduce greenhouse gases which are creating problems for us as a culture and for the world. The other side of the aisle has resisted and stopped construction of new nuclear powerplants. We are uniquely familiar with this in New Hampshire. We had the last nuclear powerplant that went on line, Seabrook. It took us an extra 10 to 15 years to build that plant beyond what it should have required. It cost us almost $1 billion more than it should have cost, and almost all of those costs and delays were a function of protests undertaken by very activist elements led primarily by the Democratic Party within the State of New Hampshire. There has never been an apology for what they did to the people of New Hampshire--over a billion dollars of extra energy costs put on the people of New Hampshire, a direct tax, and yet Seabrook, once it was turned on, has delivered power for almost 18 years and has delivered it safely and at a fair price, to the point where New Hampshire actually exports energy to surrounding States as a result. We know nuclear power can be safe. Nobody has ever died from nuclear power as compared with other types of power sources. We should not bar its development; we should encourage its development. We need new nuclear powerplants. We need new sources. We need to find and explore for new sources of energy such as are available on the Outer Continental Shelf and in oil shale. Yet, regrettably, what we run into here is that everybody can agree on the need for conservation, but it doesn't appear we are going to agree on the need for renewables because that amendment is being stopped. But the idea that we should go out and produce more American energy so we are not buying energy from Venezuela and from Iran, that is rejected, regrettably, by the other side of the aisle. The policy presented in their energy plan was taxation, litigation, and regulation. We heard it again today. We just regulate our way into a surplus of supply. That is not going to happen. You can't take a trial lawyer and stick him in your oil tank, in your house, and get energy. The simple fact is, giving the trial lawyers the ability to sue Venezuela isn't going to produce any more energy for the United States. What it is probably going to do is create an atmosphere where countries that dislike us within the OPEC group are going to say: The heck with you. You want to create a lawsuit against us, we don't have to sell you the energy or, when you send us your money, we don't have to reinvest in the United States. It is cutting off our nose to spite our face. It is a policy that is virtually absurd on its face because it will have so little productive effect on the price of energy. The same could be said for taxation. We are going to create a confiscatory tax on companies that produce energy, American companies. Those companies only control about 6 percent of the world's reserves. The rest of the world's reserves are controlled by nations such as Saudi Arabia, Venezuela, and Iran. They are not going to be subject to that tax, their companies. So that puts our companies immediately at a competitive disadvantage. What do these companies which have been so vilified around here and such easy targets for the online press release really do with those profits? They do two things: They reinvest them in trying to find more energy, which will hopefully be American-produced energy, which is good because more supply reduces cost, or they distribute those profits to shareholders. Who are the shareholders? Most Americans are shareholders, and most American shareholdings are in these companies. If you have a 401(k), if you are a member of a pension fund, if you are a union employee and you have a pension fund, the odds are good that pension fund is invested in one of these companies that are going to be subject to this brand new taxation coming from the other side of the aisle. There will be less money to explore and less money to distribute back to working Americans through their pension funds and dividends. That is not going to produce any more energy; in fact, it will produce less. That, again, accomplishes nothing except putting out a press release which has nice cosmetics, but when you look behind it, it has no substance as to addressing the fundamental issue. The fundamental issue is this: We, as a country, need more American energy production, and we need to consume a lot less. There are two sides to the coin. We also need a renewable policy that works. That is why this amendment offered by Senators Ensign and Cantwell, and which has such broad support here, should be voted on. It is a no-brainer. Let's at least move this part of the package of responsible energy policy. I cannot understand why it is not being voted on, especially since it is relevant to the housing bill. We should pass this in a nanosecond because it will at least help in a small way toward moving our energy policy in the right way, which is toward more renewables as we address the issue of production and conservation along with it. I yield the floor.

Mr. GREGG

Mr. GREGG. Reserving the right to object, I intend to speak on the bill, and I presume it will be for about 10 minutes, but I am not sure.

Mr. GREGG. Mr. President, I am seeking recognition on the bill in morning business, but first I will comment on the oil issue. I am rising primarily to speak to the bill, which has been brought to the floor by the Senators from Connecticut and Alabama--and I congratulate them--at a time when there hasn't been a lot of effort to do business in a cooperative way to produce positive events for our Nation or Government. They have done it, and they deserve a tremendous amount of praise for that. I have not had a chance to read the whole bill, but I have listened to what they are planning to do. We have worked with their staffs. Up until a couple of weeks ago, we were working reasonably close, and Senator Shelby has been a force for progress. In my opinion, they appear to be on the right track. I want to get into the specifics of why I feel that way in a second. Offshore Oil Exploration First, I wish to talk about the oil issue, about whether or not we explore offshore. The proposal we have seen for energy that has been brought to the floor so far, primarily by the other side, has been to do three basic things. One is to litigate; sue the oil cartels. If you are the Saudis, and America gives American attorneys a new right to sue you, or if you are the Emirates States or some other oil-producing nation, you are going to be affronted by the fact that the United States would suddenly turn to its legal community and say: You can sue these other nations. I suspect my reaction, were I running a government of one of those countries that had oil reserves, would be to say, A, we don't need you, we don't need to sell you this oil; or, B, reinvest in your economy with the proceeds from purchasing this oil. Our economy, to a large degree, is dependent upon people being willing to invest in it, both domestically and also internationally. Obviously, the petrodollars that are floating around the world because of the price of oil are a significant part of the investment capital in this world, and we are shipping overseas massive amounts of our capital to purchase oil. That is one of the biggest problems with the fact that we are buying all this foreign oil at ridiculously high prices. We should not take an action that essentially would be cutting off our nose to spite our face by saying: We are going to sue you if you don't do what we want relative to our laws and relative to cartels. Their laws don't bar cartels. They don't have to invest in the United States. I suspect they would limit their investment through their sovereign funds in the United States were we to take that action. That would not produce more energy for us. The second proposal is to take a percentage of the profits of our domestic oil companies because, I guess we believe that as a Congress we can spend those profits better than those domestic oil companies. First off, those domestic oil companies don't make up the majority of producers in this world. In fact, only 6 percent of the proven reserves in the world are controlled by publicly held companies. The rest are controlled by companies that are managed by governments, the Saudi company being the biggest. But you have Venezuelan companies, Chinese companies, and the Russians, and you have a series of nations, of course, that have control over their supply. So supply is not controlled by these private companies. And their profit, if we take it as a government, is not going to give us the capacity to produce more oil. We are going to take that money as a Congress and spend it on whatever interest group we think is important today. We will probably spend it on some program to help out people who are trying to buy their energy. But that is not going to produce more oil. That is not going to produce more exploration. Remember, these companies are owned by Americans, for the most part. They are owned by Americans through pension funds. People who work for unions own these companies, people who work in businesses own these companies, people who have a job and have a 401(k) own these companies. The profits flow back to two different actions: One, exploration; or two, dividends--dividends running to American citizens, most of whom are retired, or many of whom are retired. So to simply say, well, their profits are too high and we are going to grab them as a government and spend that money because we can spend that money more efficiently and better than those companies--because they are evil, they are oil companies--is, again, cutting off our nose to spite our face. It won't produce more exploration. It will produce less. It will take from Americans who have invested in those companies through their pension funds and their dividends. That makes no sense. The things that make sense are: More conservation, more renewables-- both of which I strongly support--and also more exploration in the United States. Produce more American energy--clean energy, hopefully. One way to do that, of course, is to expand nuclear power. But another way is to look for reserves where we have reserves, and where we can look for them in an environmentally sound way. One way is to take a look at oil shale. That is a great opportunity. We have more oil reserves in oil shale, three times more in oil reserves in oil shale, than Saudi Arabia has in plain oil. We have over 2 trillion barrels of reserves in oil shale, and we are not using it. We are not using it because it is on public lands and we have been barred by the activists and the environmental communities from using that oil. Remember, the way you produce that oil is underground. You don't produce it aboveground. So there is no destruction of the surface area of the ground. Secondly, there is the fact that we have proven we know how to drill. We know how to explore in the ocean. The greatest example of that was Katrina. Here is the largest hurricane to hit the American shore in history, as far as damage is concerned--it wiped out one of our great cities, New Orleans, then came right up the Gulf of Mexico--and not a barrel of oil was spilled, even though the Gulf of Mexico is filled with drilling rigs. Why is that? Because we know what we are doing. We have the technology to drill and to produce from the Outer Continental Shelf in an environmentally sound and safe way, even in the face of a force 5 hurricane. So of all that has been proposed here and that makes sense is let's look for other places where we can produce oil, American oil, off our shores, if States agree to it. That is the caveat: If a State agrees to it. Now, if Florida doesn't want to do it, that is their choice. Louisiana does want to do it, Mississippi does want to do it, Alabama does want to do it. Virginia wants to do it, but Virginia is barred from doing it because we have a Federal law saying even if Virginia wants to do it, they can't do it. That makes no sense. Why should we be buying oil from people who hate us, who want to destroy our civilization and do us in, when we can produce it off of States, where the States agree, where the people of those States agree they are willing to explore because they know it can be done in an environmentally safe and sound way? That makes no sense. I am sorry to get off on that tangent, but I had to, because this is a topic of current concern and the Senator from Florida raised a number of issues on this question. To return to the issue at hand, however, the bill brought to the floor by Senators Dodd and Shelby, whom I just finished praising for their excellent effort here--as a conservative, it is not my inclination to have the Government step into the marketplace. In fact, that is anathema to me in most instances, and I am fairly resistant to it. I think I have as good a record on trying to keep the Government out of unnecessary interference in the marketplace as anyone else around here, and certainly have a very conservative fiscal record. But I have an experience here which I think lends some knowledge on what is happening and what we need to do. I was Governor of the State of New Hampshire in the late 1980s and early 1990s when we went through a massive real estate bubble meltdown. It was incredibly destructive to the Southwest and to New England. The Southwest's was caused by a large amount of fraud, regrettably, and in New England it was caused by excessive speculation, especially in commercial real estate development. As a result of that, we had seven major banks in New Hampshire in late 1989 and five of them went bankrupt. The other two would have gone under, except they were owned by larger banks from outside of New Hampshire that were able to come in and give them the capital to sustain themselves. Numerous other smaller banks, community banks, went under. Lending contracted, people's home values, as a result of the bubble bursting, dropped by between 30 and 50 percent. It was a horrific time for our citizenry in New England, and it was an incredibly difficult time economically. How did we get out of this? There were a lot of things done, but one of the key things that was done was the Resolution Trust Corporation. The leadership of the FDIC at that time, led by Bill Seidman, and the Federal Government came in and intervened. It essentially came in underneath the failed banks and said they would be there to backstop the deposits and liquidate the assets so they became marketable again and so the economy could move forward. When you have a contraction such as that, which is what we are seeing in our market today as a result of the subprime meltdown in States such as Florida, Arizona, and California--and it is spreading, regrettably, to some instruments that weren't subprime--when you have a meltdown such as that, what happens is the banking and the lending industry of the Nation start to have to rebuild their capital quickly because they are taking huge losses. And the only place a bank can rebuild its capital is by calling in essentially good loans. So even though somebody might have a good idea and know how to make a business work and have a real estate proposal which makes sense and is going to have a positive cashflow, it is extremely difficult for them to get a loan-- extremely difficult--because the banks are trying to build their capital and they are not lending. That is what we are seeing today. We are seeing that type of contraction. On top of that, of course, we have the meltdown. We have the major investment house of Bear Stearns, which was reacted to appropriately by the Federal Reserve, by opening the window so other investment houses would be able to have resources, but we still have this serious issue of liquidity. That is what it all comes down to. It comes down to the ability of the lender to be able to take the loan and sell it and move it in the marketplace so they can actually lend some more money by taking money in and by selling the loans which they have on their books. That is what it comes down to. What we have today is a market that is contracting because they do not have that capacity. The lenders do not have that capacity. That being the case, what is the role of the Federal Government? I am hesitant to have the Federal Government step into this, beyond what it has already done, but I think setting up a backstop is appropriate, and that is essentially what the bill that is brought to us by Senators Dodd and Shelby does today. First, I congratulate them for the regulatory reform they put in for Fannie Mae and Freddie Mac, very important reform. But going to the part which is the essence of the bill beyond the reform, which is very important, the question of expanding FHA authority to basically become a backstop for these mortgages and basically a force for making these mortgages liquid is the key element of this bill. As I understand it--and, again, I haven't been able to read the whole bill--the way it basically works is for these loans, for the FHA to step in and insure refinanced mortgages, the loans first have to be written down to 90 percent of the market value of the house; second, the home has to be owner occupied, so it is not a speculative home; and third, all the secondary liens that might be on the property have to be cleared so it is basically the single underlying primary first mortgage that is being underwritten. That is the proposal as I understand it. The possible effect of this, in my opinion, will be that the lenders, the banks specifically, the people who have made these insured mortgages, may be able to move these mortgages off their books, unlike mortgages which are not moving right now, in a way which will free up the marketplace and allow them to relend money to other people who want to buy a home. Equally important, of course, is that the homeowners, who find themselves caught in this subprime web of having taken on a mortgage which they couldn't afford because the adjustment in the ARM went up so quickly and so radically in an unexpected way, will be able to stay in their home and make their payments, if they have the capacity to do that. That should be our goal. Our goal shouldn't be to have foreclosures occurring all across this country. Our goal should be to keep the homeowners in their homes, those who do have the wherewithal to pay for their mortgages, as long as their mortgage is properly priced. That is what this bill will accomplish in many ways. What is the cost of this bill? That is of primary concern for me, and I know it is a primary concern for Senator Shelby, because he is probably even more of a skinflint than I am around here. CBO is saying the ability of people to take advantage of this may be limited because of the fact you have to clear all the second liens off the home, so there may not be as much use of it as one might think. But I think there will be more use of this option than CBO thinks, because the lender and the borrower will see it as an opportunity for the borrower to stay in the home and for the lender to get the loan and move it off the books so they can get more liquidity and rebuild their capital. I think that will be the outcome of this language, should it go into place: A lot of homes will be saved. Secondly, as I understand it, a lot of the money to support this is going to come out of Fannie Mae and Freddie Mac. I may be wrong about that, but I think that is the way it works. That is appropriate, because Fannie Mae and Freddie Mac have an unfair playing field here. They get a tilted rate benefit because of the fact they are perceived as being backed up by the Federal Government, even though they aren't. So this will level the playing field a little bit, and it will take resources which aren't coming into the Treasury anyway to support it. Thirdly, and I think this is probably the most important part, the economic slowdown we are in today I believe will be relieved to some degree because there will be a mechanism in place. It is not a magic wand. It is not the absolute full response to the problem. In fact, there is only one end of the pyramid that needs to be built here. But it is a response which will help the economy recover quicker and with more energy. I opposed the original stimulus package we passed, and I opposed the housing bill that was on the floor earlier this year because I didn't think either one was going to do a heck of a lot to help the economy move forward. This bill, however, if it is in the form that I think it is in, does something to accomplish that goal. It will help the economy because it will free up the market. It will make the market more liquid, which is what we need, and it will also give people the capacity to avoid foreclosure, which is very important to the mindset and the psychology of the economy. I do think this will be part of the effort to raise the economy of this country as we continue in this rather significant--and I do not think we are out of the woods yet--severe slowdown in the area, especially, of the financial industries. Again, I hope I understand the bill. I am not sure I fully understand it. I wouldn't claim I do. But I think I understand its concept, its purpose, and I agree with its concept and its purpose, and I congratulate the leadership of the Banking Committee. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I yield myself 5 minutes from time that is reserved for the leader or, alternatively, from time that is available at this point that is open.