Tom Harkin

Mr. HARKIN

Mr. HARKIN. Madam President, on behalf of the majority leader, I yield the remainder of our time.

Mr. HARKIN

Mr. HARKIN. Madam President, on behalf of the majority leader, I yield back whatever time remains in morning business for this side.

Mr. HARKIN

Mr. HARKIN. Madam President, I ask unanimous consent that the Senate proceed to a period of morning business, with Senators permitted to speak for up to 10 minutes each.

Mr. HARKIN

Mr. HARKIN. Madam President, I ask unanimous consent that Caitlin Miller and Edwina Hambridge of my staff be granted floor privileges for the duration of today's session.

Mr. HARKIN

Mr. HARKIN. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on June 18, 2009 at 9:30 a.m., to conduct a hearing entitled ``The Administration's Proposal to Modernize the Financial Regulatory System.''

Mr. HARKIN. Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on Thursday, June 18, 2009.

Mr. HARKIN. Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate on Thursday, June 18, 2009 at 9:30 am in room 406 of the Dirksen Senate Office Building.

Mr. HARKIN. Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet during the session of the Senate on Thursday, June 18, 2009, at 10 a.m., in room 325 of the Russell Senate Office Building.

Mr. HARKIN. Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on Thursday, June 18, 2009, at 2:30 p.m., to conduct a hearing entitled ``Examining State Business Incorporation Practices: A Discussion of the Incorporation Transparency and Law Enforcement Assistance Act,'' S. 569.

Mr. HARKIN. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate, on Thursday, June 18, 2009, at 10 a.m., in SD-226 of the Dirksen Senate Office Building, to conduct an executive business meeting.

Mr. HARKIN. Mr. President, I ask unanimous consent that the Committee on Small Business and Entrepreneurship be authorized to meet during the session of the Senate on Thursday, June 18, 2009, at 10 a.m.

Mr. HARKIN. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Thursday, June 18, 2009, at 2 p.m.

Mr. HARKIN. Mr. President, I ask unanimous consent that the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security of the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on Thursday, June 18, 2009, at 2:30 p.m., in room 253 of the Russell Senate Office Building.

Mr. HARKIN. Mr. President, I ask unanimous consent that the Emerging Threats and Capabilities Subcommittee of the Committee on Armed Services be authorized to meet during the session of the Senate on Thursday, June 18, 2009, at 2:30 p.m.

Mr. HARKIN

Mr. HARKIN. I would respond to the Senator from Georgia that it is my understanding that nothing in the Family Smoking Prevention and Tobacco Control Act would restrict the Administrator's authority provided under FIFRA.

Mr. HARKIN

Mr. HARKIN. Mr. President, I rise today to introduce the School Building Fairness Act of 2009. I offer this legislation to meet the urgent need for Federal support to repair crumbling schools in disadvantaged and rural school districts. This bill would authorize up to $6 billion annually to fund a new program of Federal grants to States for the repair, renovation, and construction of public schools. States would award the grants competitively, with priority given to high-poverty and rural school districts, as well as school districts that plan to make their facilities more energy efficient and environmentally friendly. Districts receiving this federal funding would then be required to provide a local match. I know this approach to school construction and repair can work because this bill is modeled on the success of the Iowa Demonstration and Construction Grant Program in my home State. Over the last decade, I have secured $121 million in Federal funds that more than 300 school districts across Iowa have used for school construction and repair. This modest Federal investment has leveraged more than $600 million in additional local funding. In addition to improving the learning environment for students, the School Building Fairness Act will provide a stimulus to the economy by creating jobs in thousands of communities all across the country for workers in the construction industry, as well as architects and engineers. It will also spur school districts to make their facilities more environmentally friendly and energy-efficient. According to the 2006 report ``Greening America's Schools: Costs and Benefits,'' green schools use an average of 33 percent less energy than conventionally built schools, and generate financial savings of about $70 per square foot. Safe, modern, healthy school buildings are essential to creating an environment where students can reach their academic potential. Yet too many students in the U.S., particularly those most at risk of being left behind, attend school in facilities that are old, overcrowded and run-down. We all agree that school infrastructure requires constant maintenance. Unfortunately, far too many schools have been forced to neglect ongoing issues, most likely due to lack of funds, which can lead to health and safety problems for students, educators and staff. The most recent Infrastructure Report Card issued by the American Society of Civil Engineers gives public schools a D grade. Now, I do not know many parents who would find D grades acceptable for their children. So why on Earth would we stand by while the state of the buildings in which our children learn are assigned such a grade? Despite the declining condition of many public schools, federal grant funding is generally not available to leverage local spending. In fiscal year 2001, in the Senate Labor, Health and Human Services, and Education Appropriations Subcommittee, which I then chaired, I was able to secure $1.2 billion for school repair and renovation. I continue to hear nothing but positive feedback from educators across the country about that funding. But that one-time investment amounted to nothing more than a drop in the bucket compared to the estimated national need. At the beginning of this decade, the National Center for Education Statistics estimated that the nation's K-12 public schools needed $127 billion in repairs and upgrades. A 2008 analysis by the American Federation of Teachers found that the Nation's school infrastructure needs total an estimated $254.6 billion. This bill is called the School Building Fairness Act because, as I said, States will give preference in awarding grants to high-poverty and rural districts. Currently, spending on school facilities is almost twice as high in affluent districts as in disadvantaged districts. This is one of those ``savage inequalities'' that Jonathan Kozol writes about--inequalities that largely explain the learning gap between affluent and poor children. Something is seriously wrong when children go to modern, gleaming shopping malls and sports arenas, but attend public schools with crumbling walls and leaking roofs. This sends exactly the wrong message to children about our priorities as adults. With the School Building Fairness Act, we have a chance to get our priorities right, and to provide a desperately needed boost to school districts all across America. I hope that my colleagues will join me to help create safe, modern, and healthy school environments so all of our children can grow to be the leaders of tomorrow.

Mr. HARKIN

Mr. HARKIN. Mr. President, I rise today to introduce the School Building Fairness Act of 2009. I offer this legislation to meet the urgent need for Federal support to repair crumbling schools in disadvantaged and rural school districts. This bill would authorize up to $6 billion annually to fund a new program of Federal grants to States for the repair, renovation, and construction of public schools. States would award the grants competitively, with priority given to high-poverty and rural school districts, as well as school districts that plan to make their facilities more energy efficient and environmentally friendly. Districts receiving this federal funding would then be required to provide a local match. I know this approach to school construction and repair can work because this bill is modeled on the success of the Iowa Demonstration and Construction Grant Program in my home State. Over the last decade, I have secured $121 million in Federal funds that more than 300 school districts across Iowa have used for school construction and repair. This modest Federal investment has leveraged more than $600 million in additional local funding. In addition to improving the learning environment for students, the School Building Fairness Act will provide a stimulus to the economy by creating jobs in thousands of communities all across the country for workers in the construction industry, as well as architects and engineers. It will also spur school districts to make their facilities more environmentally friendly and energy-efficient. According to the 2006 report ``Greening America's Schools: Costs and Benefits,'' green schools use an average of 33 percent less energy than conventionally built schools, and generate financial savings of about $70 per square foot. Safe, modern, healthy school buildings are essential to creating an environment where students can reach their academic potential. Yet too many students in the U.S., particularly those most at risk of being left behind, attend school in facilities that are old, overcrowded and run-down. We all agree that school infrastructure requires constant maintenance. Unfortunately, far too many schools have been forced to neglect ongoing issues, most likely due to lack of funds, which can lead to health and safety problems for students, educators and staff. The most recent Infrastructure Report Card issued by the American Society of Civil Engineers gives public schools a D grade. Now, I do not know many parents who would find D grades acceptable for their children. So why on Earth would we stand by while the state of the buildings in which our children learn are assigned such a grade? Despite the declining condition of many public schools, federal grant funding is generally not available to leverage local spending. In fiscal year 2001, in the Senate Labor, Health and Human Services, and Education Appropriations Subcommittee, which I then chaired, I was able to secure $1.2 billion for school repair and renovation. I continue to hear nothing but positive feedback from educators across the country about that funding. But that one-time investment amounted to nothing more than a drop in the bucket compared to the estimated national need. At the beginning of this decade, the National Center for Education Statistics estimated that the nation's K-12 public schools needed $127 billion in repairs and upgrades. A 2008 analysis by the American Federation of Teachers found that the Nation's school infrastructure needs total an estimated $254.6 billion. This bill is called the School Building Fairness Act because, as I said, States will give preference in awarding grants to high-poverty and rural districts. Currently, spending on school facilities is almost twice as high in affluent districts as in disadvantaged districts. This is one of those ``savage inequalities'' that Jonathan Kozol writes about--inequalities that largely explain the learning gap between affluent and poor children. Something is seriously wrong when children go to modern, gleaming shopping malls and sports arenas, but attend public schools with crumbling walls and leaking roofs. This sends exactly the wrong message to children about our priorities as adults. With the School Building Fairness Act, we have a chance to get our priorities right, and to provide a desperately needed boost to school districts all across America. I hope that my colleagues will join me to help create safe, modern, and healthy school environments so all of our children can grow to be the leaders of tomorrow.

Mr. HARKIN

Mr. HARKIN. Madam President, I wish to speak about the effort that seems to be underway here now--and I guess we will be having some more amendments this afternoon from the other side of the aisle--to prevent the President from addressing a serious national security problem: the continued operation of the detention center at Guantanamo Bay, Cuba. It is long past time we close this facility. On May 23, 2007, almost exactly 2 years ago, I introduced legislation to close that detention center. Since that time, unfortunately, it has only become more imperative that we act. It remains the case that there is simply no compelling reason to keep the facility open and not to bring the detainees to maximum-security facilities here in the United States. This Nation has long been a beacon of democracy, a champion of human rights throughout the world. Over the past 8 years, however, we have repeatedly betrayed our highest principles. Torture was authorized in direct violation of the law, and we intentionally put detainees beyond the most basic rules of law, including secret tribunals where detainees lacked opportunities to challenge their confinement and lacked sufficient due process. These errors are manifest in the detention center at Guantanamo Bay, where the very purpose was to avoid providing legal safeguards that are enshrined in our Constitution and the Geneva Conventions to detainees and to prevent independent courts from reviewing the legality of the administration's actions. That was the purpose of Guantanamo as a detention center. Now that the Supreme Court has definitively ruled that constitutional protections apply at Guantanamo, it truly serves no purpose. Closing the facility, however, does not just follow from a commitment to our most cherished values and constitutional principles; rather, closure is essential for our national security. As long as the detention center at Guantanamo Bay is open, it remains a recruiting tool for those who wish to do us harm and provides ammunition for our enemies. This is not just my view but is the view of military and foreign policy officials. The Director of National Intelligence, Dennis Blair, has said: The detention center has become a damaging symbol for the world . . . it is a rallying cry for terrorist recruitment and harmful to our national security, so closing it is important for our national security. That is from Dennis Blair, our Director of National Intelligence. Former Navy general counsel Alberto Mora has said: There are serving U.S. flag-rank officers who maintain that the first and second identifiable causes of U.S. combat deaths in Iraq--as judged by their effectiveness in recruiting insurgent fighters into combat--are, respectively, the symbols of Abu Ghraib and Guantanamo. Retired Air Force MAJ Matthew Alexander, who led the interrogation team that tracked down Abu Mus'ab al-Zarqawi, the leader of al-Qaida in Iraq, said: I listened time and time again to foreign fighters, and Sunni Iraqis, state that the number one reason they had decided to pick arms and join al-Qaida was the abuses at Abu Ghraib and the authorized torture and abuse at Guantanamo Bay. Let me repeat that. Matthew Alexander, a retired Air Force major who led the interrogation team who tracked down the leader of al-Qaida in Iraq said this. I listened time and time again to foreign fighters, and Sunni Iraqis, state that the number one reason that they had picked up arms and joined al-Qaida was the abuse at Abu Ghraib and the authorized torture and abuse at Guantanamo Bay. It cannot get much clearer than that. Colin Powell, Henry Kissinger, Madeline Albright, James Baker, Warren Christopher have all called for Guantanamo to be closed, as has Secretary of Defense Gates and Chairman of the Joint Chiefs Admiral Mullen. As former Secretary of State Colin Powell said: Guantanamo has become a major, major problem . . . if it were up to me, I would close Guantanamo not tomorrow but this afternoon. That was Colin Powell. Indeed, even President Bush repeated time and time again his desire to shut down Guantanamo, I am sure because of all the information that was given to him by his Joint Chiefs of Staff and by his intelligence services. So President Obama should be applauded for taking a step that military and foreign policy officials insist will directly and immediately improve our national security. The President has set up a special task force to review the status of the detainees remaining at Guantanamo and to make recommendations on what to do with these individuals. The administration faces some difficult decisions it inherited from the previous administration. Guantanamo was conceived--Guantanamo as a detention center, I should say, was conceived outside the law. And bringing detainees back into our legal system, as the Supreme Court has rightly found necessary, involves some very difficult policy issues. I, myself, greatly look forward to the President's plan, and I will judge it carefully. Closing Guantanamo and simply replicating the same deficient legal process in the United States would be purely symbolic and meaningless. As the administration undertakes its review of the detainees at Guantanamo and considers the most appropriate way to close the facility, the last thing Congress should do is handcuff the President. What I am hearing are some arguments on the other side of the aisle basically saying, through these amendments they are offering, Guantanamo Bay should remain open. That is the thrust of the amendments: Guantanamo should remain open. Make no mistake, if these amendments become law, the President's ability to take the step that military and foreign policy officials-- Republicans and Democrats and Independents alike--have all said is needed will be very difficult. It will be difficult for the President to take the steps necessary to close Guantanamo Bay. Al-Qaida and those who wish to cause us harm will continue to have a major recruiting tool at their disposal. I would not say this is the intention of the people offering those amendments, but listen to what our intelligence officers have said and what our military officers have said, that the biggest recruiting tool for those in Afghanistan and the Taliban and al-Qaida is a continued detention center at Guantanamo Bay. So while it may not be the intention of those people offering the amendments to have this as a recruiting tool for al-Qaida and the Taliban, those who have been in our intelligence service tell us that is, in fact, what is happening. It is the biggest recruiting tool for those who wish to do us harm. While it may not be the intention of those offering the amendments, that is what is going to be the practical effect, if those amendments are adopted. One other thing. President Obama's decision to close Guantanamo Bay is already starting to pay some dividends. Countries such as Portugal and Ireland have made offers to join Albania in accepting detainees who cannot be returned to their home countries. Just last week, France accepted Lakhdar Boumediene, an Algerian suspected in a bomb plot against the Embassy of the United States in Sarajevo. The assistance of our allies is critical. Yet to obtain that assistance will only be more difficult if we, ourselves, are unwilling to do what we ask our allies to do; that is, to accept detainees on our own soil in secure detention facilities. We say: Oh, no, we cannot take them here but, France, you can take them and, Ireland, you can take them, and Portugal. They will say what kind of fairness is there in that? Indeed, I feel the statements and the arguments of many on the other side of the aisle are simply to scare the American people, unduly scare the American people, and spread this kind of fear and misinformation by suggesting that closing the facility at Guantanamo Bay will somehow mean the terrorists will be walking Main Street or, as the junior Senator from Arizona claimed: Khalid Shaikh Mohammed and his partners will be our neighbors--will be our neighbors if they are in secure detention facilities. This is the kind of language that rightfully gets Americans fearful that they are going to be our neighbors. Well, the fact is, those individuals who can be tried in Federal court can and will be vigorously prosecuted. Federal courts have successfully prosecuted terrorists in the past. In fact, between September 12, 2001, and the end of 2007, 145 terrorists were convicted in American courts. How many American people know that, that 145 were convicted in American courts. Likewise, U.S. prisons are already holding some of the world's most dangerous terrorists in the United States. Ramzi Yousef, the mastermind of the 1993 World Trade Center bombing, is in jail in the United States. Zacarias Moussaoui, the 9/11 coconspirator, is in jail in the United States; Richard Reid, the ``shoe bomber,'' in jail in the United States. Several al-Qaida terrorists responsible for bombing Embassies in Kenya and Tanzania are in jail in the United States. The men, women, and military officials who run these facilities have a proven track record. I ask those who are saying that Khalid Shaikh Mohammed and his partners will be our neighbors, I ask them: Can you point to any prisoner who has escaped from a Federal maximum security facility? Point to one. Just point to one. Well, we have no greater duty than to protect the American people. That is the oath we all take. National security is our first job. In this regard, the President is undertaking a process that will result in the closing of a national stain on our character and a recruiting tool for those who wish to do us harm. He is taking a step our military and foreign policy officials make clear will make us safer. The President should not be handcuffed and should not be prevented from improving our national security, as the other side in those amendments wish to do. Finally, we must never forget that people around the world know we are right and the terrorists are wrong. Of the 5 or 6 billion people who live in the world, only a handful think the terrorists are right. All the rest are on our side. They know we are right and the terrorists are wrong. If we wish to defeat the terrorists, therefore, we should remain faithful to our ideals and our values. We will not win this war with secret prisons, with torture chambers, with degrading treatment, with individuals denied basic human rights. Rather, we will win this by upholding our values and insisting on legal safeguards that are the very basis of our system of Government and democracy. It is time to close Guantanamo Bay. There is no reason to keep it open and every reason, for our national security, to shut its doors. I yield the floor.

Mr. HARKIN

Mr. HARKIN. Mr. President, again, to recap what was said, we have voted twice, once to approve Mr. Gensler as a Commissioner of the Commodity Futures Trading Commission and another vote to approve him as the Chairman of the Commodity Futures Trading Commission. I voted yes on both measures. Let me share my reasoning on the nomination of Mr. Gensler. Honestly, I have had some reservations about this nominee, though certainly not about him as a person. Based upon my meetings with him and our committee hearing, I believe Mr. Gensler is a good and decent man with a strong personal story, and he has certainly shown his intellectual capability and his knowledge of the subject. I simply had concerns with elements of his background and philosophy, concerning the regulation of over-the-counter derivatives transactions and other financial transactions, and his views on regulations in general. Mr. President, I chaired a nomination hearing that lasted some time. It was a hearing of substance. Mr. Gensler answered some very tough questions straightforwardly. It is not possible to know how Mr. Gensler will decide any given question, but he has expressed support for much stronger, more effective reform in the oversight and regulation of derivatives. Of all the things we are doing around here, in terms of banking and bailouts and pronouncements coming from the Secretary of the Treasury, perhaps the construction of the whole thing is centered around how are we finally going to regulate derivatives and swaps. These are over the counter, hidden from view and, quite frankly, they have led to the debacle we have now. Let me read some excerpts from Mr. Gensler's testimony before the Senate Agriculture Committee, which gives me, again, some positive feelings toward his future chairmanship of the CFTC. Here is what he said: I firmly believe that strong, intelligent regulation with aggressive enforcement benefits our economy and the public. We must urgently move to enact a broad regulatory regime that covers the entire over-the-counter derivatives markets. Right on target, Mr. Gensler. He also said: The CFTC should be provided with authority to set position limits on all over-the-counter derivatives to prevent manipulation and excessive speculation. A transparent and consistent playing field for all physical commodity futures should be the foundation of our regulations. I agree with that. Lastly, Mr. Gensler said this: I believe that the CFTC must work with Congress, with other regulators, and with our global financial partners to ensure that the failures of our regulatory and financial systems, failures which have already taken a toll on every American, never happen again. Those are all excerpts from the extensive testimony and question-and- answer period of Mr. Gensler before our committee. So now I am prepared to entrust momentous decisions to Mr. Gensler, and I am, of course, supporting the President's choice. Given the fragile state of the economy and financial markets, having a confirmed chairman at the CFTC is of critical importance. As I said at Mr. Gensler's nomination hearing, these are challenging times, particularly for regulators like the CFTC. Since the Commodity Futures Trading Commission was established 35 years ago, it has never faced more daunting market challenges than those that exist now. The unprecedented price volatility of our markets for physical commodities, such as energy and grains, has hurt our economy. The lack of sufficient regulatory authority and oversight over the derivatives and financial markets has proven disastrous to the entire global economy. Derivatives that were touted as managing or reducing risk turned out in practice to magnify risk--or certainly at least to allow banks, insurance companies, and investors to take on totally unsustainable and reckless levels of risk and leverage. If these financial markets and derivatives markets are not properly regulated, we won't have a strong economy. The CFTC plays a vital role in providing oversight in keeping these markets healthy and in keeping the players honest. It is imperative that we pass strong financial regulatory reform in the Congress, and not just piecemeal, patchwork reform, but comprehensive and fundamental reform that brings full transparency and accountability back to the markets. Earlier this year, I introduced the Derivatives Trading Integrity Act. Our committee will be having a hearing on this early next month. That bill would require all derivatives and swaps to be traded on a regulated exchange. Exchange- traded contracts are subject to a level of transparency and oversight that is not possible in over-the-counter markets. For 60 years, futures contracts traded very efficiently on regulated exchanges. I believe the burden of proof is on those who say there must be exceptions and loopholes to allow derivatives and futures trading off- exchange to continue. These are touted as customized swaps or customized derivatives. I have asked Mr. Gensler and others to please define for me what a custom swap is. No matter how you define it, it leaves a loophole big enough to drive a Mack truck through. Once there is a derivative that is off the trading boards, that no one knows about, that is shrouded in secrecy, what is to keep someone else from doing another custom derivative on that derivative, and then a derivative on that derivative? That is what got us into this mess in the first place--derivatives on derivatives on derivatives on derivatives, ad infinitum, with nobody knowing what was going on, without anybody knowing the value of each of those. To this day, Treasury has never been able to tell us how they came up with the value of those derivatives. It is a kind of voodoo. It is some kind of mathematical calculation that they put into a computer somehow. Well, I am sorry; I just don't buy that. I believe they all ought to be on a regulated exchange, open and above board, so anybody can look and see who is trading what. If it is a custom derivative, fine; put it on a trading exchange, a regulated exchange. Let the market decide whether it is customized or not, and then if somebody wants to sell a derivative on that, put it right back on the exchange. To me, that is the only way we will ever get around this. I keep hearing noises out of Treasury that they want to keep this loophole for some kinds of customized swaps. I know the swaps and futures industry would like to have that. I understand that. But that is what got us into this trouble in the first place. As I said, the burden of proof is on them, I believe, to show why we need this loophole and to somehow define a custom swap, what it really is, and why we don't need to put it on a regulated exchange. Some suggest that reforming regulations of these markets, like I am suggesting, will limit flexibility and inhibit the incentives of market participants to develop and introduce new financial products, and thus harm the market. Again, I reject that notion. To the extent that financial innovation can be shown to benefit all participants in the market by providing some new hedging opportunities or risk management capabilities, without putting other parties at undue risk, then that is all to the good. However, if these new products are used to obscure risk in the market, or elude or evade accounting rules placed on market participants, then they clearly don't serve the public good and should be prohibited. That is why I say no more of this behind-the-scenes, over-the-counter trading of derivatives. Put them on a regulated exchange. If it is custom, so what; put it on the exchange. Then a regulated exchange can put margin requirements on the buyers, clearing the floor every day. Other investors can look and see what is going on. It provides for the best transparency possible. Some are talking about having some kind of a clearinghouse. Again, I don't know about clearinghouses. There are some functions for clearinghouses, I am aware of that. But, again, they just don't function like a regulated exchange, on which we have set regulations, an exchange that can provide for margin calls, and which is open and above board to everyone. Again, these financial innovations we hear about, like credit default swaps, collateralized mortgage obligations, collateralized debt obligations--I did a little history on this. None of those existed prior to 20 years ago. Most of them are within the last dozen years or so. So I asked the question of a number of people at the Treasury Department, and others--I asked what was the demand for these financial instruments? They didn't exist before, especially credit default swaps. They literally didn't exist before about 10 years ago. What was the public demand or public need for these? There wasn't any. Someone described it to me. It is sort of like Honey Nut Cheerios. I have been eating Cheerios since I was a kid. Did I demand that they put a honey nut inside each of those Cheerios? General Mills had a new idea, and they came up with Honey Nut Cheerios and marketed them with good advertising, and they thought everybody would like Honey Nut Cheerios now. Fine, but that is what they did with credit default swaps. Some brainiacs up there at MIT--the mathematicians who went to work for the investment houses--said we know how to slice and dice derivatives to the nth degree--these credit default swaps--and we can make a lot of money on that. But there was no need for that. There was no outcry by banks or insurance companies saying they needed this kind of financial instrument. But they came up with it and marketed it and sold it as a way of better hedging risk when, in fact, it increased and magnified risk. Again, if someone comes up with a financial instrument--a new product, as they say--let's get it out there in the open. If you want it out there, put it in the open and get it on the regulated exchange and let everybody look at it and see what it is. That is why we need better regulation and openness and transparency. I reject the idea that somehow this regulation of which I speak is somehow going to thwart financial instruments. If we thwart the development of other credit default swaps or collateralized mortgages or debt obligations, wonderful; we should. We should get back to sensible dealings in the marketplace. Again, no more obscuring of the risk, eluding accounting rules--get them out in the public. The free-wheeling derivatives markets contributed to a financial crisis from which our economy is only beginning to recover. We are at work in the Agriculture Committee on legislation that will ensure stronger regulation in order to bring transparency and integrity to the derivatives market. I want to make it clear at the outset that I am not against all derivatives. Certain derivatives have a functional value in hedging and reducing risk. But, again, they should be in the open. We are at work in the Agriculture Committee to do that--bring transparency and integrity to the derivatives markets. In the meanwhile, the CFTC must be at full capacity to keep watch over the markets. We are counting on Mr. Gensler to be a strong voice at the helm of this important agency. With that, I yield the floor.

Mr. HARKIN

Mr. HARKIN. Mr. President, I rise to introduce a bill, the Menu Education and Labeling Act, on behalf of myself and my colleagues, Senator Kennedy of Massachusetts, Senator Reed of Rhode Island, and Senator Gillibrand of New York. It is by now well established that poor diet and obesity, as well as related conditions such as heart disease, have reached epidemic levels. The majority of the U.S. population is either overweight or obese. The incidence of type II diabetes has reached levels not even imaginable 20 years ago, with some research suggesting that one in three children will develop the disease by adulthood. There is no single solution to this complex issue of poor nutrition and diet related diseases. Policymakers looking for a silver bullet will be disappointed. But inaction is not an option. We must start taking meaningful steps to address this growing problem by giving people the tools necessary to live healthier lifestyles. That is why my colleagues and I are introducing this bill today to extend nutrition labeling beyond packaged foods to include foods at chain restaurants with 20 or more locations, as well as food in vending machines. This common-sense idea will give consumers a needed tool to make wiser choices and achieve a healthier lifestyle. It is a positive step toward addressing the obesity epidemic. In 1990, Congress passed the Nutrition Labeling and Education Act, NLEA, requiring food manufacturers to provide nutrition information on nearly all packaged foods. The impact has been tremendous. Not only do nearly three-quarters of adults use the food labels on packaged foods, but studies indicate that consumers who read labels have healthier diets. Unfortunately, when Congress first passed the NLEA, it excluded restaurants from any labeling requirements. Since that time, restaurants have become more and more important to Americans' diet and health. Americans consume a third of their calories and spend half of their food dollars at restaurants at the very time when nutrition and health experts say that rising caloric consumption and growing portion sizes are causes of obesity. We also know that when children eat in restaurants, they consume twice as many calories as when they eat at home. Consumers say that they would like nutrition information provided when they order their food at restaurants, yet, while they have good nutrition information in supermarkets, at restaurants they can only guess. In recent years, some states and cities have led the way on menu labeling. New York City has already implemented a menu labeling initiative that requires the disclosure of calories on menus and menu boards at chain restaurants. Consumer surveys show that the residents of New York are enthusiastic about the initiative. The experience in New York has also underscored the feasibility and practicality of the endeavor. Despite earlier concerns about implementation, the vast majority of restaurants in New York City complied with the law quickly and without incident. Those with particular challenges were assisted by the New York City Health Department to enable them to comply with the law. But New York City is not the only such initiative. Other cities such as Philadelphia, Seattle, Portland, and San Francisco have followed suit. Just last fall, the State of California became the first State in the Nation to enact a statewide menu labeling law, and Massachusetts became the second yesterday. Clearly there is not only a public health rationale for menu labeling, but consumer demand as well. As I already stated, I harbor no illusions that any one policy will turn the tide on obesity and poor diet in our country, but if we are ever to reorient our society and our health care system in the U.S. away from treatment and towards a stronger focus on prevention, we must build prevention into the very fabric of society. We must provide consumers with the tools and the support that they need to make the healthy choice the right choice. The MEAL Act is one means by which to accomplish that goal, and I urge my colleagues to join me in supporting this important legislation.

Mr. HARKIN

Mr. HARKIN. Mr. President, I rise to introduce a bill, the Menu Education and Labeling Act, on behalf of myself and my colleagues, Senator Kennedy of Massachusetts, Senator Reed of Rhode Island, and Senator Gillibrand of New York. It is by now well established that poor diet and obesity, as well as related conditions such as heart disease, have reached epidemic levels. The majority of the U.S. population is either overweight or obese. The incidence of type II diabetes has reached levels not even imaginable 20 years ago, with some research suggesting that one in three children will develop the disease by adulthood. There is no single solution to this complex issue of poor nutrition and diet related diseases. Policymakers looking for a silver bullet will be disappointed. But inaction is not an option. We must start taking meaningful steps to address this growing problem by giving people the tools necessary to live healthier lifestyles. That is why my colleagues and I are introducing this bill today to extend nutrition labeling beyond packaged foods to include foods at chain restaurants with 20 or more locations, as well as food in vending machines. This common-sense idea will give consumers a needed tool to make wiser choices and achieve a healthier lifestyle. It is a positive step toward addressing the obesity epidemic. In 1990, Congress passed the Nutrition Labeling and Education Act, NLEA, requiring food manufacturers to provide nutrition information on nearly all packaged foods. The impact has been tremendous. Not only do nearly three-quarters of adults use the food labels on packaged foods, but studies indicate that consumers who read labels have healthier diets. Unfortunately, when Congress first passed the NLEA, it excluded restaurants from any labeling requirements. Since that time, restaurants have become more and more important to Americans' diet and health. Americans consume a third of their calories and spend half of their food dollars at restaurants at the very time when nutrition and health experts say that rising caloric consumption and growing portion sizes are causes of obesity. We also know that when children eat in restaurants, they consume twice as many calories as when they eat at home. Consumers say that they would like nutrition information provided when they order their food at restaurants, yet, while they have good nutrition information in supermarkets, at restaurants they can only guess. In recent years, some states and cities have led the way on menu labeling. New York City has already implemented a menu labeling initiative that requires the disclosure of calories on menus and menu boards at chain restaurants. Consumer surveys show that the residents of New York are enthusiastic about the initiative. The experience in New York has also underscored the feasibility and practicality of the endeavor. Despite earlier concerns about implementation, the vast majority of restaurants in New York City complied with the law quickly and without incident. Those with particular challenges were assisted by the New York City Health Department to enable them to comply with the law. But New York City is not the only such initiative. Other cities such as Philadelphia, Seattle, Portland, and San Francisco have followed suit. Just last fall, the State of California became the first State in the Nation to enact a statewide menu labeling law, and Massachusetts became the second yesterday. Clearly there is not only a public health rationale for menu labeling, but consumer demand as well. As I already stated, I harbor no illusions that any one policy will turn the tide on obesity and poor diet in our country, but if we are ever to reorient our society and our health care system in the U.S. away from treatment and towards a stronger focus on prevention, we must build prevention into the very fabric of society. We must provide consumers with the tools and the support that they need to make the healthy choice the right choice. The MEAL Act is one means by which to accomplish that goal, and I urge my colleagues to join me in supporting this important legislation.

Mr. HARKIN

Mr. HARKIN. I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HARKIN. Madam President, I fully support the bill offered by the distinguished chairman of the Banking Committee, Senator Dodd. It would create a long overdue reform of the credit card industry whose practices have been increasingly predatory and abusive. I have heard from many hundreds of Iowans who have been victimized by credit card companies. These are good people who, in the current economic downturn, have had no choice but to resort to their credit cards in order to put food on the table or to make a car payment or even help pay for college tuition. As a result, they have found themselves on the receiving end of a whole array of unfair and often outright abusive practices; things such as double billing, unwanted fees, and arbitrary interest rate increases. I applaud the Dodd-Shelby legislation for cracking down on some of these abuses. I think the legislation is a good first step. However, this bill still allows credit card companies to charge excessive and, for millions of Americans, ruinous interest rates. Currently one-third of all credit cardholders in the United States are being forced to pay interest rates above 20 percent, sometimes as high as 41 percent. These interest rates are grossly excessive. It is time to set a reasonable limit on what credit card companies can charge. In times past, an interest rate of 20 percent, 30 percent, or 40 percent would have been condemned by religious leaders of all faiths as being the sin of usury. People daring to charge these interest rates would have been prosecuted for loan sharking. But today the credit card industry tells us that charging people these grossly excessive interest rates is both fair and necessary. I totally disagree. It is not fair, and it is not necessary. What is more, many Iowans have pointed out to me the very financial institutions that are victimizing and squeezing ordinary hard-working Americans have already received billions of dollars from the taxpayers. Now these institutions are lending money that came from taxpayers to people at interest rates as high as 41 percent. Someone tell me, what is the logic of that? No wonder people are upset all over this country. We take their hard-earned tax dollars, give it to the big institutions. They have a credit card and in hard times they have to use that credit card for some necessities. Now they are being charged 20, 25, 30 percent interest. It is a sweet deal for the financial institution. It is nothing more than an old-fashioned rip-off of consumers. For these reasons, I have joined with Senators Sanders, Whitehouse, Leahy, Durbin, and Levin to offer an amendment to cap credit card interest rates at 15 percent. Yes, that is exactly what I am saying. No credit card could charge more than 15 percent interest rates. Why did we pick 15 percent as an appropriate top rate? Thanks to a law passed by this Congress 30 years ago--I was here at the time--we put a cap of 15 percent on the maximum interest charges a credit union could charge their customers. That was 30 years ago. We left a safety valve for special circumstances. This rate cap of 15 percent has protected millions of consumers at credit unions. I belong to a credit union right here in the Senate. I have always belonged to a credit union. I belonged to one in the House when I was there, and before that, in the Navy, I belonged to the Navy Federal Credit Union. These credit unions have performed a viable, good service for millions of Americans without harming the safety or soundness of the institutions and without negatively impacting access to credit for credit union members. I have been a member of a credit union all my adult life. I have never once seen them constrict the amount of credit involved to borrowers. If you need a car, you have been able to get consumer loans from credit unions. I would also point out, not one single credit union--not one--had to line up with the big banks begging for a bailout. Not one credit union. Yet they are capped at 15-percent interest rates. Interesting, isn't it? Credit unions have remained strong and stable despite the meltdown in much of our financial system. Chris Coliver, a regulatory analyst for the California Credit Union League, was recently asked about the effect of the interest rate cap on his institutions--the 15-percent cap. He answered: It hasn't been an issue. Credit unions are still able to thrive. Of course, there may be some special circumstances under which an interest rate above 15 percent is temporarily necessary. Currently, credit unions are allowed to charge higher interest rates if their regulator--which is the National Credit Union Administration-- determines this is necessary to maintain the safety and soundness of the institutions. At the present time, the NCUA, the National Credit Union Administration, allows credit unions to charge interest rates as high as--get this--as high as 18 percent, though most credit unions continue to have a top rate that is actually much lower than that, and some of them lower than 15 percent, some as low as 12 percent, 11 percent. Well, our amendment includes a similar, reasonable exception. It would allow credit card companies to charge interest rates higher than 15 percent in circumstances where Federal regulators determine that higher rates are necessary to protect the safety and soundness of financial institutions. It seems as if this is deja vu all over again for me. I have been advocating for a 15-percent cap since I was an attorney for the Iowa Consumer League in 1973, fresh out of law school. I was a lawyer for the Iowa Consumer League, and we were trying to get the Iowa Legislature at that time to put a cap of 15 percent on credit cards. So this issue has been around for a long time. As a legal aid lawyer at that time, I saw firsthand the devastation and hardship caused to Iowa families by excessive interest rates charged by credit card companies and others. Again, many of these Iowans turned to their credit cards in a time of crisis--a medical emergency, for example--but because of the prohibitive interest rates, they found themselves falling further and further behind in their payments. Some were forced into bankruptcy. Well, it is no different today. As I said, I have received many hundreds of letters and e-mails from Iowans who have been victimized by credit card companies' abusive practices. For example, Madam President, let me share an all-too-common story from one of my Iowa constituents, and I will read it verbatim as she wrote it: I am a single mom with a pretty good job, [for] which I am very thankful. I have 3 credit cards. Recently, I received notices from 2 of them that they were raising my interest rate due to the ``economic conditions.'' I don't mean a little, I mean a LOT. She capitalized ``LOT.'' Capital One-- We all know who Capital One is, and their credit cards-- Capital One sent me a notice that they were raising my rate from 13.9 percent to 23.99 percent. I had the option of cancelling my card and paying off the existing balance at my current rate of 13.9 percent, which I did. The other one is Washington Mutual. They were recently purchased by JP Morgan Chase. I received a notice from them a couple of weeks ago that my rate was going from-- Get this-- 10.4 percent to 23.99 percent. Now, you wonder: Here is JPMorgan Chase, operating through Washington Mutual, increasing their interest rate to 23.99 percent. Capital One increasing their interest rate to 23.99 percent. Why weren't they off just 1 percent? Why are they both exactly the same? Well, it looks as if they are all ganging up to charge the same high interest rate. Anyway, let me continue to read from her letter. The rate was going from 10.4 percent to 23.99 percent. I have never missed a payment or been late on either one of these. Tonight I called JP Morgan Chase and they told me I missed the deadline to say I wanted to decline the changes in my cardholder agreement. I said I wanted to close my account and pay off the existing balance at the 10.4 percent. They refused! . . . I could see it if I had missed any payments or even paid a day late, but I have NOT. This is just WRONG. End of her letter. Imagine that. She actually had the wherewithal to pay it off at 10.4 percent, and JPMorgan said: No. You missed the deadline. We all get this mail. We all get this junk mail and all that stuff from credit card companies. I just throw them away. Well, maybe there is some notice in there that, oh, if it is not a bill, maybe they have sent you a notice that maybe you have to do something. Who reads all that junk mail? Nine times out of ten, it is some kind of promotion they are promoting: You can get a free airline pass or you can get a cut rate on going to Cancun or something like that. You get all that junk. Then they slip in there another little letter that says: Oh, by the way, if you do not cancel your previous agreement, we are going to do this, this, and this. Good luck in finding that out. This constituent who wrote me would clearly benefit from the provisions in the Dodd-Shelby bill that would prohibit retroactive rate increases on existing balances in accounts with no late payments. But the larger issue remains: Why should any bank be allowed to charge an interest rate of 24 percent under any circumstances--under any circumstances? Why should banks be allowed to charge other customers interest rates as high as 41 percent--41 percent? As I said, I support the underlying bill, but the bill will continue to let them charge those kinds of interest rates. The bill does clean up some of the other stuff, and that is why I am supporting it. But this does not get really to the nub of the problem; that is, we are allowing usurious interest rates to be charged for credit cards. We know why they are charging these interest rates. They can get by with it. It is legal. Well, the credit unions can survive and provide credit and issue credit cards to their holders and survive on 15 percent. Are you telling me these big companies cannot? Of course they can. But guess what. They probably would not be able to pay their executives $50 million a year in salaries and bonuses or--$50 million; I am being a piker--try $200 million or $300 million a year. That is what they are paid. So to keep up this lavish lifestyle for their executives, for their corporate offices, they charge 20, 30, 40 percent. Well, as I said, take a lesson from the credit unions. Take a lesson. That is what we have to put a limit on. That is why I cannot emphasize enough that unless and until we cap interest rates, we are still going to have these problems because people will get credit cards, they will get into dire straits. This is their only way of paying a bill--to use their credit card--and something else happens, and all of a sudden they are racked up with these high interest rates. The other thing credit card companies are doing is they are charging these high interest rates in order to be able to give credit cards to just about anyone. People get credit cards sent to them without any kind of credit checks, whether they are really creditworthy. They get all these kinds of credit cards out there. People who are like my constituent, who are responsible and who pay their bills on time and who have credit cards which they do pay on time and never get behind, are penalized because credit card companies are so lax and so loose with whom they give these credit cards to. So we all pay for it. Well, the credit card companies ought to be a little bit more circumspect about whom they give their credit cards to. Again, they should take a lesson from the credit unions. So, Madam President, as I said, I support the underlying bill. But we must seize this opportunity to address the single most widespread and destructive abuse in this industry; that is, grossly excessively high interest rates. That is why I support this amendment. I urge my colleagues to vote for the Sanders-Harkin-Leahy-Whitehouse-Durbin-Levin amendment on this bill. With that, Madam President, I yield the floor. I suggest the absence of a quorum.

Mr. HARKIN

Mr. HARKIN. I ask unanimous consent that Sharon Lee and Conor O'Brien of my staff be granted the privileges of the floor for the duration of today's session.

Mr. HARKIN

Mr. HARKIN. I thank the Chair. (The remarks of Senator Harkin in pertaining to the introduction of S. 953 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')