Johnny Isakson

Mr. ISAKSON

Mr. ISAKSON. I thank the chairman. Second, is it not true that the amendment the Senate unanimously adopted that set forth a deficit- neutral account of $34.2 billion for a housing tax credit was deleted from the conference report?

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I consulted with Senator Dodd and Senator Conrad, both of whom want a rollcall.

Mr. ISAKSON. Mr. President, I ask unanimous consent that the pending amendment be set aside and the clerk call up amendment No. 995.

Mr. ISAKSON. Mr. President, I ask unanimous consent to speak for 5 minutes.

Mr. ISAKSON. Mr. President, I am honored to be introducing this amendment today on this piece of legislation. I am particularly pleased to have worked for the past 3\1/2\ months with the Senator from North Dakota, Mr. Conrad, who is the principal cosponsor on what is known as the Financial Markets Commission. In the last year, the people of the United States have seen the value of their homes decline, the value of their 529 savings accounts for their kids' college decline, their mutual funds, and their investments in whatever category. Declines that started out to be a hiccup became colossal and we now find ourselves in a position where we are deleveraging and we are deflating in the United States of America. There should be some answers. Quite frankly, there is plenty of blame to go around, but we need some answers. We need some guidance. We need to ensure that my grandchildren and my children and yours don't ever go through the experiences we have gone through and we have shared with the American people in the last 12 months. The only way to get an objective evaluation of what went wrong and where mistakes were made is to create an independent commission of recognized people of experience to look into the financial markets, the rating agencies, Freddie Mac, Fannie Mae, investment bankers, hedge fund operators, commodities traders--everybody--and FASB and say: What went right, what went wrong, and what could we have done better to have prevented this from going on? I have a lot of suggestions. I could drop a lot of bills right now, including transparency for hedge funds and changing who compensates the rating agencies from the seller securities to the buyer securities. But we need a forensic audit of the laws of the United States as it relates to the financial markets, the Federal Reserve, and every aspect, so whatever did go wrong that could have been avoided is avoided. This Commission is designed to operate for 18 months. It has a budget of $5 million and subpoena powers and it is directed to report back to the Congress of the United States its findings. It is specific in every regard so that anybody who could have been a part of what happened in this financial collapse is subject to investigation, is subject to scrutiny, and is subject to the sunshine that is necessary to get answers. I think we owe it to the American people. I know I owe it to my children and grandchildren and to those people who voted for me to find out what went wrong and try and make it right. Senator Conrad has been diligent in his effort to help. He has made very constructive suggestions concerning the amendments to this legislation. Jointly with him, we worked with the Banking Committee members, the ranking member, and the chairman to try to incorporate the ideas of everyone and to make sure we don't miss the mark, that we stay on focus, and we get what the American people deserve; that is, answers to what caused the financial collapse that has decreased the value of their homes, the value of their savings accounts, protracted their retirement, and brought about the uncertainty that we have today in the economy of the United States of America. With that, I thank the Senator from North Dakota for his help. I thank the chairman and ranking member of the Banking Committee. I yield the floor.

Mr. ISAKSON. Mr. President, I thank the Senator from North Dakota for his comments with regard to the commission. I want to reiterate what I said in my earlier speech. When I thought about this, when I watched my kids' 529s, when I watched my own savings for retirement, when I saw what was happening to men and women across the United States, I felt this was a situation that needed a forensic audit, maybe even an autopsy. The damage had already been done. There were multiple factors that led to it. I am not smart enough--I don't know that anybody is--to put a finger on exactly where the blame lies, but I know this: To not find the problems and cure them would be a mistake on the part of the Senate. Without talking about the select committee as a pro or a con, I want to say why I didn't go that route with this legislation. We are part of what needs to be scrutinized--the Senate. We are part of what needs to be seen. If we left this just strictly to a select committee, it would be like appointing the board of directors to AIG to tell us what went wrong with AIG. It wouldn't be a good autopsy. It wouldn't be objective. Senator Conrad and I have tried to put together a piece of legislation that no one could say is partisan, that no one could say is loaded, that is objective, that gives subpoena power to individuals who have the credibility, the knowledge, and the past experience to evaluate the highly technical derivatives, the highly technical hedge funds, and the rules of trading on the Securities and Exchange Commission. We may need a select committee for oversight if our committees can't do oversight. But we do not need a select committee to investigate the collapse that has happened. We need an independent body, independent of this body. We need them to have the power and the funds necessary to get the answers to the problem so we can objectively say we exposed ourselves to the same scrutiny to which we wish to expose everybody else. We will have the recommendations of what went wrong, who might have done wrong, and if there were criminal acts on the part of somebody, referrals to the Justice Department. This is a clean, targeted, bipartisan, specific approach to address the No. 1 financial problem the American people are facing today, and that is the collapse of their savings and the retirement and college education funds of millions of Americans. I appreciate the endorsement of the Senator from North Dakota, but I want to make sure we understand that a select committee would be no substitute for this independent commission at this time. I yield the floor.

Mr. ISAKSON. I thank the chairman for the 2 minutes. Mr. President, Senator Conrad and I have worked very diligently for 3\1/2\ months to create a platform in which we can get the answers the American people deserve and need with regard to the financial collapse that happened to this country. We have created a bipartisan commission that has no elected officials on it--all experts are within their chosen fields--a commission that has both subpoena power and the funding necessary to do precisely what the 9/11 Commission did. It is structured in the same way except targeted on the investigation of the financial markets, the securities markets, the commodities markets, Freddie Mac, Fannie Mae, the financial services market, the hedge funds, and every other institution that had a part in what has been a collapse of our economic system and a great decline in the value of equity for our people, college savings for their children, and retirement for their future. I urge colleagues to vote favorably on the creation of the Financial Markets Commission. I retain the remainder of my time.

Mr. ISAKSON

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

Mr. ISAKSON. Madam President, I have 1 minute. I spoke last night at length about this amendment, so I will not take the Senate's time again. I know Senator Shaheen is about to offer her amendment. But this is an amendment that carves out a deficit-neutral reserve in the budget in order to fund a $15,000 tax credit for the purchase of a single-family home in America. That is an amendment the Senate passed, the House rejected but is a pending bill before the Senate. This would reserve that money in the account, so that if the bill is passed, it can be paid for, and it is a deficit-neutral amount. At an appropriate time, I will ask for the support of the Members. I yield the floor and I suggest the absence of a quorum.

Mr. ISAKSON. I ask unanimous consent that the pending amendment be set aside and the clerk report amendment No. 762.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, we have heard all week long about this budget, President Obama's budget, and the mantra that it spends too much, it taxes too much, and it borrows too much. I agree with that. But I wish to bring up some other points about this budget that, quite frankly, are counterintuitive to what we have been told by the administration. The President has said repeatedly in the last 2 weeks, in talking about the American recovery, that his vision for the American recovery is founded in this budget document. I wish to talk about some of the things that have been talked about in this budget document as they relate to the recovery we so desperately need in this country. For example, I think everyone agrees--Democrats, Republicans, Independents--that what led us into this difficulty is the housing market. Sure, the subprime mortgages were a part of it, but it is the loss of equity that homeowners have all over this country, a decline in value, an escalating foreclosure rate, and a massive amount of short selling and foreclosing that is going on. It would seem at a time when that is going on, when that is the major cause of the crisis with which we are confronted, you would have policies for home ownership so buyers would come back to the market, they would buy the homes that are distressed and troubled, stabilize the values, and begin to build the equity of the average American family. But this budget portends we would drop the tax deductibility for a first mortgage on a family home that they occupy. So you take away a tax preference that for history and for years the American Government has granted to homeowners to encourage home ownership and you take it away from them at the very time home ownership is under the greatest stress in its history. It is counterintuitive and it is wrong. The Senator from Kansas made a reference to charity. I just came from a congressional awards reception downstairs where we gave golden awards to young people around this country for the volunteer service they have given to help their fellow man. That is a gift of charity itself. At that reception were four major corporations that make charitable contributions to the Gold Medal Award Program to encourage these young people to volunteer their time. If you reduce the ability of corporations or high-income wage earners or high-income earners to deduct the charitable donation, you are actually motivating at a time of need less charity on behalf of your people and in turn putting more burden on the back of the Government. We saw earlier today, with the vote on the Thune amendment, that there is one idea the entire Congress almost appears not to like about this budget, and that is part of this budget portends that we would pay for some of the increased spending by taxing utilities. The Thune amendment made the statement that the Senate does not believe that is right, and 88 Members of the Senate voted for the Thune amendment. Obviously, that policy is misdirected. And then we are at a time when values in equities have declined, when American investment is declining, when corporate America is finding great difficulties, and at a time when all those things are going on, this budget portends that we would raise the capital gains tax by 33 percent and, further, that we would raise the dividend tax at the highest marginal rate by three times what it is right now. Penalizing people for investing in stocks that pay dividends at a time when the market is depressed does not make sense to me. Further, they are saying, for those who have assets or have a profit built in, they are going to raise that tax by 33 percent at a time when the economy is suffering. I think it is, at best, counterintuitive. I do not like politicians who get up and talk about how bad something is without offering some solutions. We have a responsibility--every Member in this body--to offer some proposals. So if I think these policies driven by this budget proposal are going in the wrong direction, what is the right direction? I have an amendment that will be offered at the appropriate time. It is amendment No. 762. It is an amendment that creates a placeholder, a deficit-neutral placeholder in this budget proposal for a $15,000 tax credit for any family who buys a home and occupies it as their residence in the next 12-month period following the passage of that amendment. What will it do? Quite frankly, the Senate unanimously adopted that amendment a few weeks ago on the stimulus, only to find it taken out by the House of Representatives. Why do we need to stimulate home ownership right now? Because it is the single largest asset of the average American family. It is the basis on which most credit is extended to families. It is fundamentally the foundation of consumer confidence in the United States of America. And right now there isn't any, and there isn't any because the housing market basically collapsed, values have depreciated in some areas by as much as a third, and one in every five houses in America is actually underwater, meaning the debt exceeds the value. This tax credit is not an original idea by me as a Member of the Senate. In fact, in 1974, when we had the last major housing crisis in America, the Congress--Democratically controlled and a Republican President, Gerald Ford--passed a $2,000 tax credit for the purchase of any standing vacant home in 1975. This country took a declining housing market, with a 3-year supply of houses on the market, back to stability and equilibrium in 12 months, all with the motivation of the tax credit. I first offered this tax credit in January of last year when we began to see the downward spiral in our economy. It is scored at $34.2 billion. I was told last January that is too much. So we then spent $700 billion in October on the TARP, and the Federal Reserve has spent almost $14 trillion. We are considering spending more, and $34 billion to me does not sound like very much. In fact, economic estimates by experts--not by me--have estimated that the tax credit, if passed by the Congress, would create 700,000 home sales in the first 12 months and 587,000 jobs. I don't know about you, but both of those are awfully good numbers that we certainly would like to be seeing reported on Wall Street and on Main Street. When I offer this amendment, what I will merely be asking the Senate to do is send a signal. Instead of discouraging home ownership, we want to encourage it because it is the foundation of our recovery. Instead of having a tax policy that is punitive to investment, we want to have a tax policy that is positive to investment, and understanding home ownership and the value of it is still the fundamental key, the economic stability of the American family. It is my hope the Senate will adopt this amendment and send the message so we can come back after the recess, pass the tax credit, make it effective, and return investment to the housing market and stability to the U.S. economy. So instead of taxing too much, spending too much, and borrowing too much, it is time we encourage investment in the American dream, which always has been and remains the home in which people raise their families, live, and retire. Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, on March 12, 2009, I was attending the funeral of a very close friend and was unable to cast votes on rollcall vote No. 97 and rollcall No. 98. I ask that the Record reflect that had I been present I would have cast my vote as follows: rollcall vote No. 97, confirmation David W. Ogden, of Virginia, to be Deputy Attorney General: NO; rollcall vote No. 98, confirmation Thomas John Perrelli, of Virginia, to be Associate Attorney General: NO.

Mr. ISAKSON

Mr. ISAKSON. I thank the Chair and yield back my time.

Mr. ISAKSON. Mr. President, the Senator and I are precisely the same age, and he and I were both inspired by President Kennedy's inaugural address and the establishment of the Peace Corps. It is ironic that the next President who embraced voluntarism in his office happened to be George Herbert Walker Bush. So we had a great Democrat and a great Republican who encouraged us to volunteer to help the plight of others. It is a great tribute to this bill and to America.

Mr. ISAKSON. Yes.

Mr. ISAKSON. Mr. President, I am glad the Senator from Connecticut and the Senator from Utah are on the Senate floor. I rise to speak in favor of the National Service Act and to commend the Health, Education, Labor and Pensions Committee for the diligent work they did on this reauthorization. There are a lot of people who will poke fun at voluntarism or at programs or say we are always creating new things and spending more. This bill, with a bipartisan effort by Senators Enzi, Dodd, Mikulski, and others, is to ensure that the 40 programs we had under the National Service Act are brought down to 24 programs and to see that meaningful, good programs are empowered. This bill doesn't pay people to volunteer. It provides capital for the infrastructure for communities to develop the programs for volunteers; for example, Hands on Georgia and Hands on Atlanta. Hands on Atlanta is a program of volunteers that addresses the 52 percent of the young children in Atlanta elementary schools who are not reading at grade level. Volunteers have been mobilized over the last 4, 5 years to give the greatest gift of all--the gift of literacy--and improve the standing of our children. It is no small secret that one of the reasons our school superintendent in Atlanta was selected the superintendent of the year recently by the national association was because of the dramatic program of bringing people into the school system to help uplift our students. So voluntarism is important to us in the United States, and it is important to our reputation around the world. Secondly, I support this legislation because I have an affinity for a young lady named Michelle Nunn. A former U.S. Senator from Georgia, Sam Nunn, was a distinguished leader here for 24 years and served our State well. He is personally a good friend of mine. His daughter Michelle has dedicated her life to the organization of volunteer efforts in this country to improve the plight of other people. She now heads the Points of Light Foundation, started by George Herbert Walker Bush, which helps people around the country. For Michelle's everlasting support and contribution to voluntarism, I give her credit. I also want to take a minute--Senator Dodd served in the Peace Corps, and I wanted him to hear this because I want to acknowledge his support on this effort, along with Senators Hatch and Kennedy. This past Saturday, I attended one of the most moving ceremonies of my life-- moving in a sad way but also in an uplifting way. Unfortunately, a wonderful young lady, 24 years old, from Cumming, GA, Kate Puzey, was killed in Benin, Africa, on March 11. She was a Peace Corps worker who graduated first in her class in high school, was an honors graduate from William and Mary, and she studied French in Paris to learn the language that led her to be able to go to this part of the world and teach this poor African nation about agriculture and other skills. She served since July of 2007 and was in the last 2 months of her service in Benin. I went to this service because I felt moved. I am ranking member of the African Subcommittee on Foreign Relations. Paul Coverdell, who served in the seat I now hold, was a director of the Peace Corps. I felt moved that morning when I got to go to the service and sit in the back of the room and pay my respects to a great American. I left having listened to 12 eulogies by young people whose lives were changed by Kate. The acting director of the Peace Corps, Ms. Jody Olsen, delivered a beautiful eulogy. I realized how much voluntarism means to the United States, not just on our shores but in Africa and on continents around the world. I commend people such as Senator Dodd who have given time in the Peace Corps. I ask the Senate to give its unanimous support to this legislation. I dedicate this speech in honor of Kate Puzey, to her life, and what she did as a Georgian and as a volunteer. She joined the Peace Corps and changed the plight, the lives, the hopes, and in fact the future of children in that small country on the west coast of Africa. God bless the Peace Corps and the life of Kate Puzey. And thanks to those who have volunteered and to the committee that has brought this National Service Act reauthorization to the floor of the Senate.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I ask unanimous consent to speak in morning business.

Mr. ISAKSON. Mr. President, we were all reminded yesterday, when news of the AIG bonus payouts hit, of the frustration all of us have and all the American people have with the financial difficulties the Nation has had but also what appear to be at best irresponsible acts taking place by many of the financial institutions that, in fact, received Federal TARP money. I rise to repeat a call that Senator Conrad and I made 6 weeks ago on the floor of the Senate. We created a piece of legislation known as the Financial Markets Commission, a commission patterned after the 9/11 Commission, a commission of seven appointed members--two by the President, one by the Speaker of the House, one by majority leader of the Senate and one by the minority leader, one by the minority leader of the House, and then one by the chairman of the Federal Reserve-- seven members given 360 days a year, empowered with a $3 million budget and subpoena power to investigate every aspect of the financial collapse in the United States, whether it is insurance, investment bankers, mortgage bankers, individual managers such as Mr. Madoff in New York or anybody else, and to come back to the American people and to the President a year from now and tell us, to the best of their ability, in a forensic way, what happened. If, in the course of their investigation, they find inappropriate activities, there is the requirement that they refer those to the Attorney General of the United States of America. It is important that we do this for four reasons. I will go about them briefly. No. 1, it should be an independent panel that is fully funded and has subpoena power so there is no impediment to gathering facts, finding out the information necessary, and making that report. No. 2, it should be created by the Congress, but the membership should be appointees who are experienced and knowledgeable in finance, banking, investment banking, and in law, not politicians but professionals who know, just as we had on the 9/11 Commission 2 years ago. No. 3, there is no question that mistakes were made, but there is no question that some people took advantage of the system. The public expects, I expect, and we should demand that where we find wrongdoing, it is eliminated, pointed out, the individuals who did wrong are held accountable, and we restore some level of confidence in the oversight of our financial system. No. 4, I think it is time that all of us recognize there is plenty of fault to go around. You could blame a hedge fund. You can blame a Madoff. You could blame an AIG. We have to look in the mirror as well. The second vote I ever cast in the Congress was the vote that repealed Glass-Steagall, put in the Gramm-Leach-Bliley bill. I thought it was good legislation. So did 99 percent of the House and Senate. In retrospect, by allowing the vertical integration of the financial system from insurance and mortgage banking to investment banking and regular banking, we blurred some of the lines that for so many years had protected the integrity of the financial system in America. As a result of that, situations happened, like AIG and Citibank, where vertical integration beyond the original mission of the financial services of the company attracted more money but it also attracted more greed. And it had no transparency. I think it is critical, at a time and place where we recognize we have had some significant problems, where the American people know it is going to take us time to recover, for us to have a forensic audit of the financial systems of the United States, the regulatory authorities, the legislative bodies, and any individuals who were part of it so that we can learn from the mistakes that have been made, we can put in the transparency that is necessary to prevent it happening in the future, and we can restore the confidence of the American people in the American financial system. I urge colleagues to look at the Financial Markets Commission, join Senator Conrad and myself as cosponsors. Let's begin finding the answers that all of us seek and that the American public demands. I yield the floor and suggest the absence of a quorum.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I rise first to commend the distinguished Senator from Delaware, Mr. Kaufman, on a very appropriate bill at a very appropriate time in our country. I am proud to be an original cosponsor of this legislation. History teaches us good lessons and, as the Senator said, for 70 years, until July of 2007, the uptick rule served the American investor, the American banking industry, and the traders of America well, because it protected it from a very dangerous thing happening which happened beginning in September of last year. Everybody in this room will remember the markets of last fall. What happened is we hit some unsettling times. We in fact passed the TARP stabilization bill. The markets began to climb. I e-mailed Chris Cox, who was the then- Chair of the SEC, the position Mrs. Shapiro now holds. I sent him an e- mail begging him to please reinstate the uptick rule. They took a brief look at it, suspended it for a few days, and then let it stay. What happened was hedge funds and other traders coming in to cash in were taking the downward spiral of stocks and banks and financial institutions in the country and making money off the demise and the decline of those stocks, all because there was no protection so that they couldn't feed off a downward spiral. The uptick rule, as well explained by the Senator from Delaware, simply provides a cushion to discourage those who would exploit a dangerous and difficult market and make money at the expense of the American people. Senator Kaufman has introduced a piece of legislation that is right for America, it is right for America's investors, and it is right for our stock market as it still languishes today somewhere down near what we hope is the bottom. One way to ensure that bottom exists is to stop rewarding those who would feed off of it and instead reinstate good discipline that ensures good practices and allows the market to restore itself back to a good equilibrium. I commend Senator Kaufman on the introduction of the legislation. I am honored that he asked me to cosponsor it and I am proud to do so. I hope the Senate will expeditiously deal with it, not in the interests of Senator Kaufman or myself, but in the interests of the American people who are looking to us for answers in difficult times.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I rise first to commend the distinguished Senator from Delaware, Mr. Kaufman, on a very appropriate bill at a very appropriate time in our country. I am proud to be an original cosponsor of this legislation. History teaches us good lessons and, as the Senator said, for 70 years, until July of 2007, the uptick rule served the American investor, the American banking industry, and the traders of America well, because it protected it from a very dangerous thing happening which happened beginning in September of last year. Everybody in this room will remember the markets of last fall. What happened is we hit some unsettling times. We in fact passed the TARP stabilization bill. The markets began to climb. I e-mailed Chris Cox, who was the then- Chair of the SEC, the position Mrs. Shapiro now holds. I sent him an e- mail begging him to please reinstate the uptick rule. They took a brief look at it, suspended it for a few days, and then let it stay. What happened was hedge funds and other traders coming in to cash in were taking the downward spiral of stocks and banks and financial institutions in the country and making money off the demise and the decline of those stocks, all because there was no protection so that they couldn't feed off a downward spiral. The uptick rule, as well explained by the Senator from Delaware, simply provides a cushion to discourage those who would exploit a dangerous and difficult market and make money at the expense of the American people. Senator Kaufman has introduced a piece of legislation that is right for America, it is right for America's investors, and it is right for our stock market as it still languishes today somewhere down near what we hope is the bottom. One way to ensure that bottom exists is to stop rewarding those who would feed off of it and instead reinstate good discipline that ensures good practices and allows the market to restore itself back to a good equilibrium. I commend Senator Kaufman on the introduction of the legislation. I am honored that he asked me to cosponsor it and I am proud to do so. I hope the Senate will expeditiously deal with it, not in the interests of Senator Kaufman or myself, but in the interests of the American people who are looking to us for answers in difficult times.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, in conclusion, I hope everyone will visit their ``Tommy's Barber Shop'' and look at what we are doing that may have the unintended consequences of exacerbating the economic problem for the average American today and for Tommy the barber. I yield the floor.

Mr. ISAKSON. Mr. President, first of all, I wish to commend the distinguished Senator from New Hampshire. As a Member of the Senate, there are many people I look to for wisdom and knowledge, and Judd Gregg is one of them. In my hometown of Atlanta, GA, there is another person I look to for wisdom and knowledge, and that is my barber, Tommy. I got a haircut, as you can probably tell, on Saturday. I was at Tommy's Barbershop on West Paces Ferry Road and Northside Drive in Atlanta. While in that barbershop, I talked to a real estate broker, a stock broker, a pension fund manager, and a good old, average, everyday American retiree trying to figure out how he is going to make it on what the markets have done to him in the last year or so. It is ironic--and I had no plan to make this speech behind Judd Gregg--but they talked to me about only two things. The first one was debt because last Saturday was just a week after the announcement of a $3.6 trillion budget, a 20-percent increase; an increase in taxes and concern because at a time of economic peril America is bearing more and more and more. The other thing is what I rise to talk about today. We have looked into the mirror to look for the enemy, but we have avoided looking at ourselves. For a second I wish to talk through regulatory policy. I am talking about both administrations: the end of the Bush administration and the beginning of the Obama administration. I think we have been missing the mark. I wish to share some real-life stories about real- life Georgians that indicate where mark-to-market accounting is going in the United States of America, the businesses of the United States of America, and the people of the United States of America. Some of my colleagues have watched television and watched the AFLAC duck commercials. I think they are the best commercials on television. I also think AFLAC is one of the finest companies in the United States of America. When we consider AFLAC and Dan Amos, the CEO of AFLAC, he put in stockholder consent and stockholder advice on his compensation and repealed his own golden parachute. All of those things we all complain about CEOs doing, he did it right. But stock has plummeted in AFLAC. Do you know why? Because of the FASB rules on mark to market, his core asset base, which is long-term assets, held to maturity, to protect against insurance commitments AFLAC has made, are now being marked to market, meaning assets worth something are being marked worth nothing. So the stock has gone down because the evaluators say the footings on the asset side of the ledger sheet aren't looking as good because of the mark to market. Let me explain the best I can what that really means. Mortgage-backed securities are one investment a lot of life companies and other industries bought to put on their asset sheet to offset obligations they have off into the future because those securities have maturities corresponding with the maturities of the loans embedded within them of anywhere from 7 to 30 years. When the subprime market started failing last year, Merrill Lynch, in a crisis mode last July, sold its subprime securities to get rid of them; it financed the sale and sold them for 22 cents on the dollar. Under the FASB rules, assets worth 70 or 80 or 90 percent were marked down to 22 percent. That lowered the asset side of the ledger and made the stability of the company look--and I underline that word ``look''--worse, when, in fact, those assets, held to maturity, would not be anywhere near the value. Here is a good example of that: Let's just say I bought a mortgage- backed security, a subprime mortgage-backed security, backed 100 percent by 30-year mortgage loans made in the State of Nevada--every one a subprime loan. Nevada has the highest foreclosure rate of any State on subprime paper. Seventy percent of those loans in Nevada today are paying right on time; 30 percent are in default. Yet, because of mark to market, that security is not marked at 70 percent, which it is performing at, but at zero because at a given point in time today you can't sell it. It is being held by the institution as an offsetting asset to a liability over a term of maturity. At Tommy's Barber Shop, I ran into a pension fund man and an insurance guy, and they said: Why in the world don't we look for accounting on mark to market like we looked at the pension crisis in 2004? We have short memories in the Senate. In 2004, because of the declining stock market in 2001 and 2002, there were a number of defined benefit plans in America that underfunded. Because of the accounting rules that were being enforced at the time, those institutions were asked to write checks to fully fund the pension funds when, in fact, not everybody is going to retire the same day but over a number of years. What did we do in the Congress? With Senators Kennedy, Enzi, myself, and others, we passed the Pension Protection and Reform Act. We said: If your pension fund's corpus becomes underfunded, if you cannot meet your obligation, we will let you smooth that investment, or amortize it, over 4 to 6 years. In the case of Delta, which was in trouble at the time, they had a $900 million shortfall in their pension fund. But because of smoothing, instead of having to put $900 million in in 1 year, they did $150 million over 6 years. Delta is the most profitable airline in the United States today. They would not exist today had it not been for the smoothing.

Mr. ISAKSON. Mr. President, I ask unanimous consent for another minute.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I rise to discuss the nomination of Hilda Solis to be Secretary of Labor. I do so as a Senator whose responsibility, constitutionally, it is to advise and consent on the nominees of the President. I also do so as ranking member of the subcommittee of the Health, Education, Labor, and Pensions Committee dealing with occupational safety. I will vote to confirm Ms. Solis this afternoon, after a great deal of study, after a lot of interaction, and a lot of direct conversations over issues about which Ms. Solis and I have different points of view. President Obama was elected, and it is his right to choose a Cabinet. It is the Senate's responsibility to give advice and consent on those nominees. After the due diligence and the process this nominee has gone through, making sure she was properly vetted, it is my belief that she is worthy of the appointment of Secretary of Labor of the United States of America. I am going to cast that vote because I will expect, as ranking member of the occupational safety subcommittee, the same type of conversation from the Secretary as we deal with some of the contentious issues we both know lie before us in the months and years ahead. One is card check. I am adamantly opposed to card check. I believe the right to a secret ballot is a fundamental right--not only at the ballot box in November but as to the question of whether you were organized and unionized in work. I know that when labor unions were formed and labor legislation was originally passed, it was the union movement that sought to ensure a secret ballot on behalf of the workers to make sure there was no intimidation from the company. That has served us well in this country for over 90 years and will continue to serve us for many years ahead. I know Ms. Solis differs on that, but I hope when the issue comes before us, she will be as respectful in the arguments and debates we will bring forward as she will of her own opinion in that regard. Secondly, as a Senator from the South and from the great State of Georgia, I am very proud of the right to work statutes of our State. It has served us well, as it has a number of States in this country that are right to work States. Those are States where an awful lot of manufacturing has come and been born, and even in difficult times today new manufacturing entities are coming to States, such as the Kia plant coming to La Grange, GA. I know Ms. Solis was at least equivocal in her response as to whether she supported the right to work status for States. I stand on the floor today and say unequivocally that I support them, and I support my State of Georgia and the right to work of all of its workers. With those points made, Ms. Solis's reputation and record and the handling of her personal responsibilities, such as her taxes and her responsibilities in the House, all pass muster in terms of the Committee, and I will vote in favor of her confirmation when the vote comes before us. Difficult Times Mr. President, we are in difficult times. Tonight the President will speak to all of us. I look forward to those remarks with great anticipation. I told the President, when he appeared before our caucus just 3 weeks ago for lunch, that every night I pray for his success. And I do. Our people are in difficult times. We have difficult economic circumstances. It is imperative that we move forward together as Members of the House and Senate and the executive branch to find solutions to the challenges before us. Similar to most Members of the Senate, I have a few suggestions. I wish to offer four of them today as we lead up to the discussion tonight and the debate that will follow. Some of the economic difficulties in the United States are self- inflicted by our own regulatory agencies. In particular, there are two areas I wish to discuss. First is the SEC. Last fall when the markets began to cascade down on Wall Street and when the financial stocks took their initial hit and the subsequent tumble, it was because of short sellers rushing to the market and shorting financial stocks and accelerating the decline of those values. I called Chris Cox, then the SEC Commissioner, and begged him to please implement the uptick rule, which would stop the short selling on the downside and protect the value of those equities. Fortunately, they did declare a moratorium for 27 days and stopped the short selling and things stabilized. Unfortunately, when that 27 days was over, they reinstituted the former rule, short selling accelerated, and financial stocks deteriorated so that now they are 85 to 90 percent below their value of 18 to 24 months ago. It is imperative the SEC reinstitute the uptick rule to ensure we don't have people coming into the marketplace and taking advantage of difficulties and suppressing the values of equities even greater than the market might otherwise dictate. Secondly, there has been a lot of speeches made on the floor about mark to market, and I will make one now. I am going to use specific examples to show you how the imposition of mark to market is hurting our financial institutions desperately, and it is disproportionately penalizing the people we serve. Mark to market basically takes the position that on any given day you are going to mark your assets based on their value of that day. Given the clients we have seen in mortgage-backed securities and real estate, marking to market has caused a tremendous decline in the asset side of the ledger while liabilities continued to grow, which has caused capital problems in the banking system and exacerbated the financial problems we have today. In fact, mark to market should not be an arbitrary and capricious writedown to zero but, rather, should be a recognition of the transition of values in a down market or in an up market. The Senate, in 2005, in dealing with the pension crisis and defined benefit programs in America, asked businesses to come in one year and replenish retirement funds because the decline in the stocks was unrealistic. So we passed legislation that provided for a smoothing, meaning we amortized over years 3, 4, 5 or 6 the amount of money a pension fund was short, to give a company the ability to invest capital in the fund to restore it but not to deplete all the capital the company had to operate. Today, what is happening in our financial institutions, when the FDIC comes in and says you are going to mark to market, and this real estate asset that might have been worth $20 million 2 years ago is worth $6 million today, you are going to take a $14 million hit on the asset side when, in fact, over time that asset might have brought 15, 16, 17, 18 or maybe the original 20 percent because most real estate is absorbed over time and not in one fell swoop. It is very important our financial institutions be able to recognize value in a realistic environment. Some will tell you we don't want to do what Japan did--and we don't. Japan, in the 1990s, bought a lot of real estate and put it on the books at what they paid for it. As values declined, they didn't change the values in the books, and finally when they recognized them, they were underwater. That was an unrealistic approach. Equally unrealistic is today's approach of taking today's economy and saying: Well, because you cannot sell it for X today, that as its value went over time, we could smooth or amortize and approach it realistically. What is happening over and over again, mark to market is causing banks to do things that compound the things we are facing in the Senate and in the House and in our country. Last December, this body passed the ability for banks to carry back losses against profitable years, pull back some of the money they paid in taxes and provide liquidity. Because of that advantage, which we did for the right reasons, a number of banks took real estate assets in December of last year and wrote them off, even though they were performing, so they could take the loss carryback against income in better years. But now they are coming against the properties as a nonperforming asset and marking it to market in order to call the loan, with nobody out there willing to take them out. The unintended consequences of mark to market and the loss carryback that this Congress passed made it almost impossible for the commercial real estate industry and the development industry and the single-family real estate industry to compete in the United States today. So my suggestion is to install the uptick rule; second, stop the ridiculous nature of mark to market from absolute to absolute, and put in a mechanism of amortization or smoothing so the absorption of those assets over time is more reflective of reality and less of the dire straits we find ourselves in today. Third--and I appreciate very much the Senator from California mentioning the housing tax credit--I am very pleased that in the stimulus bill that passed, the credit is now $8,000 rather than $7,500. I am glad it is not repayable now but, in fact, is an actual credit. I am sorry it was means tested and limited to incomes of $75,000 or $150,000, and I am sorry it was only for first-time home buyers. I believe that until we fix housing, we can fix nothing else. We must fix housing first, and we must have an incentive and a reason for those people to return to the marketplace and begin to absorb the houses that become vacant because of foreclosure, transfer or because of default. So I hope we will continue to work on catalytic agents to inspire the consumers to come back to the marketplace and buy. That is essential. I think the tax credit of $15,000 for the purchase of any home by a family that occupies that home for 3 years is good for America, good for a business, and it is a small price to pay for what it will bring. CBO estimates its cost at $34.8 billion. They also estimate it would create 700,000 sales and 587,000 jobs in 1 day. That is no bad payback when you consider we have thrown billions after billions at the banking system and the stimulus system. Lastly--and I know the President will talk about mortgages today--I listened to his remarks last week and am encouraged by some of the things he said. I think there are some things we can do in terms of financing that can help us with our problem. No. 1, we do have to get back to sound underwriting. The President's proposals of a threshold of 31 percent debt service to gross monthly income illustrated that the President sees to it that we have fundamentals of qualifications under loans that are made, and I commend him for that. Secondly, I also recognize the fact that we can refinance loans that are in difficulty today at lower interest rates, amortize them over 30 years, and, in fact, save people from foreclosure. Some we cannot save, but some we can, and I am for that. But we have to remember, just as 1 in 10 houses in America is in default, 9 out of 10 are performing. To those people who are performing, who are making their payments, who are living by the rules, who are doing what is right, the same type of refinance opportunities ought to be available to them as are available to someone who is in trouble. I fully believe if we would direct Fannie Mae to issue debt with the full faith and credit of the United States of America behind it, we could generate a pool of resources to make loans for less than 5 percent on a 30-year basis in the United States of America, loans that many people who are in trouble could actually find they could work their way through because it would lessen their monthly payment. But to those who are paying their payments but have rates of 5\1/2\, 6, 7\1/ 2\, 8 percent, give them the same opportunity to reduce the cost of their debt service. Just because they are performing does not mean they should be penalized in a time in which we have 10 percent nonperformance. I stand here today on the floor of the Senate willing and able anytime, anyplace, anywhere to work with the President and work with the Members of this Congress to address the fundamentals of our economy and the fundamental problems we face. It is my sincere hope the SEC will take another look at the uptick rule and establish it. I think it will be an advantage to the market, advantageous to investors, and I think it will stop an egregiously bad process. Second, on mark to market, I don't want us to go the route of Japan, but I want us to go the route we went in this body in 2005 on pensions and let's smooth and amortize those obligations without catastrophic writedowns of assets which only cause difficulty in the financial community. Third, let's do fix housing first, and let's make sure we have a tax credit that is meaningful, available across the board, fosters home ownership, restores our marketplace, creates the 700,000 sales we need, and the 587,000 jobs we so desperately want. Lastly, as we make available creative financing and inexpensive financing for those in trouble to work their way out of a difficult mortgage, let's not forget those who are playing by the rules, the 9 out of 10 who are making the payments. Let's make sure we make the same thing available to them so the rates at which they can refinance are equally competitive and as beneficial. Mr. President, I yield back the remainder of my time. I suggest the absence of a quorum.

Mr. ISAKSON

Mr. ISAKSON. Madam President, I wish to honor in the Record of the Senate Martha Bryant, a true leader and an excellent businesswoman, for her many years of service to her community. Martha has a long history of service to the communities she has called home. Born in Waycross, GA, the daughter of Arloa Gerald Morgan Wood and Joseph Cepheus Wood, she returned to her hometown after college to teach high school English for 3 years. Following that, she was certified as a professional YMCA director and served as program director for the State YMCA of Georgia from 1959 through 1962. The citizens of Rome, GA, were lucky that Martha came to their town to serve as the program director of the YMCA of Rome/Floyd County in 1962. During her years in Rome, Martha served two terms on the board of the United Way as well as numerous terms on the Administrative Board of First Methodist Church, including as chair for 2 years. She also taught the Adult Sunday School class for 35 years, served 2 terms on the Alcohol Control Commission for the city of Rome, and was a part of the organizational committee that brought Georgia Highlands College to Rome. Despite her volunteer schedule, she also found time to begin a brandnew business in 1972, Bryant and Garrett Travel, which she nurtured to its current status as a thriving, respected company. While she has just sold the business and retired from full-time service in 2009, I know Romans will still think of her first when they start to plan their family vacations. Martha also is heavily involved with the Greater Rome Chamber of Commerce and has served in many leadership positions there over the years, including the chair of the Small Business Action Council. She is a graduate of Leadership Rome and became the first woman to serve as chair of the chamber in 1993. She continues to serve on the Governmental Affairs Committee and organizes the chamber's official visit to Washington, DC, each spring. I hope Martha knows just what her leadership has meant to the many organizations she has touched and that she is able to enjoy a little more time with her grandkids and her beloved dachshunds at home.