Jon Kyl

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Kentucky (Mr. Bunning). Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``nay.''

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Kentucky (Mr. Bunning). Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``nay.''

Mr. KYL

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KYL. Mr. President, I ask unanimous consent that all the remaining time on the Democratic side be reserved.

Mr. KYL

Mr. KYL. Mr. President, I wish to speak briefly about the contest in Minnesota involving the Senate seat currently held by Senator Norm Coleman. Obviously, the other new Members of the Senate were sworn in last week, but this seat remains empty, a winner yet undeclared. To be clear, under Minnesota law, that is the way it has to be right now because there is an election contest that has been filed in the courts, and under Minnesota law, therefore, neither the Secretary of State nor the Governor can declare the seat filled. Senator Coleman had been declared the winner on election night and through the ensuing administrative canvassing process. But throughout the following State Canvassing Board stage of the proceedings, there were numerous inconsistencies and problems uncovered, and the board- certified totals were different. They are, obviously, at issue, and they are preliminary. The Minnesota State Canvassing Board totals, for example, include more votes than voters in a significant number of the Minnesota precincts. So, clearly, there is something wrong, and it has to be resolved by the court. The Coleman campaign has followed Minnesota election law in filing an election contest, and that comes before a three-judge panel in Minnesota before the end of this month. The contest is based on significant errors. I wish to mention four of these categories so folks will understand what is at issue. First is newly discovered ballots which appeared for the first time during the recount and are included in the State Canvassing Board totals. Second is missing ballots supposedly tallied on election night but which could not be found during the recount process--obviously a problem. Third is double-counting of duplicate and original ballots of the same voter during the recount process. Fourth is wrongly rejected absentee ballots and inconsistent standards regarding what constitutes a wrongly rejected absentee ballot applied in different locations throughout the State. Let me discuss each of these briefly in turn. On the newly discovered ballots, there are 171 such ballots that appeared without explanation several days after the election in Ramsey County precinct Maplewood P6. Election officials were unable to reconcile the number of votes cast with the number of voters signed in, but the board, nevertheless, included the additional votes in Al Franken's favor in its totals. Furthermore, the board directed that this issue should properly be dealt with during the contest phase, and that, of course, is now occurring. On the missing ballots, there were 133 ballots in Hennepin County that could not be found during the recount and were declared ``missing,'' despite the fact that there are any number of possible reasons for the change, including the possibility that the ballots never existed in the first place. But instead of following a consistent standard and including the new recount total, the board reverted to election night totals, again resulting in more votes for Al Franken. On the double-counting, in at least 25 precincts in Minnesota, there are more votes than voters in the Canvassing Board's totals, and there are 150 separate incident logs prepared by local recount officials describing issues involving duplicate and original ballot counting. This is due to the counting of both the voter's original ballot and a duplicate ballot which was created to take the place of the original ballot, resulting in double-counting of some votes when both of those ballots are included in the total. That is, obviously a blatant error and one that threatens the sanctity of ``one person, one vote.'' Obviously, most people get one vote. Those who got more than one vote have an advantage for whom they cast their ballot. Both the Canvassing Board and the Minnesota Supreme Court directed the issue to be dealt with during the election contest. So that issue is now being dealt with. Finally, on the category of wrongly rejected absentee ballots, during the recount process, a ``fifth pile'' was created for absentee ballots that were rejected but not because one of the four reasons stipulated by Minnesota election law. This fifth pile was requested by the Franken campaign at the time they were trailing in the count, and the Canvassing Board granted the request without issuing any direction to ensure consistency among the counties in their review. A vast number of these ballots, which happened to generate more votes for Franken, were included in the Canvassing Board total. However, the board also refused to review over 160 ballots requested by the Coleman campaign. We can see there are obviously some issues to be resolved. The three- judge panel will be appointed. The campaigns will convene with the panel, set forth the ground rules for the election contest trial, and then that will occur. There are no stipulations for when the proceedings must be completed, and estimations are, at least from folks in Minnesota, that it could take a month, if not more. As a part of that context, the Coleman campaign has requested the review of hundreds more ballots that may have been wrongly rejected. Because of the size of the pool of ballots to be reviewed and the erroneous recount totals including questionable votes for Franken, Senator Coleman has expressed confidence that the numbers will revert back to where they were on election night and his lead will be restored and then he would be declared the winner. Obviously, this is for the Canvassing Board and the court in Minnesota to resolve. It is not for us to prejudge the result at this time. Unfortunately, the majority leader and his staff have publicly stated they would try to seat Al Franken while the contest is still proceeding, despite the fact there is not a signed certificate, which is required of every Senator. This dates back to 1884. This action, of course, was blocked, and we presume the process will continue in regular order to await the result of the proceedings. It is true Al Franken attempted to declare himself the winner. Yesterday, the campaign requested the Governor and Secretary of State send him a certificate so he could be seated. But it was, of course, not granted because both officials indicated correctly that would directly violate State law. So we are left with the matter of a vacancy in Minnesota, with the issue to be resolved by the people in Minnesota, properly under their law, the Canvassing Board, and the three-judge court. For my part, I certainly hope this phase will not fall prey to inconsistencies and problems that have led some experts and newspaper editorials to claim the election process needs to be fundamentally reformed. If it is done in the proper way and due care for the evidence that is presented, then hopefully everyone will be satisfied with the result and willing to abide by that result. It will then come to the Senate, and we will seat the appropriate candidate. The Republicans ask for nothing more. We are certainly hopeful our former colleague and soon-to-be current colleague, Senator Coleman, will resume his seat. But that is for the process in Minnesota to determine, not for that to be determined in some arbitrary way in the Senate.

Mr. KYL

Mr. KYL. Mr. President, the president-elect spoke to the stimulus package today. The Finance Committee had an informal meeting today to discuss the proposition. Its outlines are still quite vague. There is no specificity to what precisely will go into the stimulus package, but there are some general concepts emerging. So what I wanted to do today, very briefly, is to outline what I think would be some sensible tests to evaluate what is being proposed, and what it may reveal is that some ideas would not meet these tests and should not be part of a stimulus package. Others would meet the tests and would help to resolve the economic crisis that faces America today. I think the context we put this in is one in which we have already had some bailouts, and Americans are a little suspicious that some of the money we have committed to these bailouts is going to help--the $200 billion bailout to Fannie Mae and Freddie Mac, the $150 billion bailout of AIG, the insurance company, the $700 billion Troubled Asset Relief Program, the recent $17.4 billion auto bailout, and, by the way, the announcement yesterday was that for the first time in the history of the world the budget deficit of a country--namely, the United States of America--will top $1 trillion. That is over 8 percent of our gross domestic product. A friend of mine reminded me today--I think it is an interesting bit of trivia--$1 trillion is more money than all the cash in circulation in the world today of the United States of America. All the dollar bills, the ten-dollar bills, the hundred-dollar bills, and all of the quarters, nickles, and all of the other cash of the United States does not equal $1 trillion, and that is how much the deficit is going to be for just this current year. That is a lot of money. In that context, we have to be very careful about how we spend another $1 trillion or thereabouts to stimulate the economy. The money comes from somewhere, and it either comes from taxpayers directly in the form of increased taxes or it is borrowed and the taxpayers eventually have to pay that back with interest. The interest cost, by the way, is expected to be well over $300 billion. So, as a result, we have to be very careful that we do more good than harm by taking this money away from American taxpayers. The first test obviously is, will it work? Will it stimulate economic growth? That is the test that Larry Summers, an adviser to the President-elect, has stated. In fact, he said, and I am paraphrasing, that investments will be chosen strategically on the basis of which will do the most to spur the economy. So if we have tried something before, and it has not worked, it is a good sign that probably we should not do that. The reason I say that is we had a stimulus already: the so-called tax rebate. We spent $150 billion on it. The facts are now in. It did not work; it did not stimulate the economy. In fact, only about 12 percent of the money turns out to have been spent. The lesson to be learned in a situation like this is, if you have tried something before and it has not worked, then do not repeat it because it is throwing good money after bad. The reason it did not work is because when people get a one-time windfall, they tend to save it or to pay bills with it. They spend it if they believe that it is a permanent part of their income forever, more so if it is going to relate to their taxes, we need to ensure that they know that they are going to have permanent tax relief. If it is simply something they believe they are going to have for a year or two, chances are they are not going to spend it. It is not going to do any good. Another test is, would Government action be better in the private sector or the Government sector? We know in America it is small business and some big business. It is our free enterprise system that creates jobs, that creates economic growth. The Government cannot create economic growth. In fact, when the Government gets involved, there is more potential to do harm than good. We can tax them, we can regulate them. Usually, it does not do them any good. Sometimes you can do things to help business. Usually, you do it in a way that helps with their tax burden. There are some good ideas that I have heard discussed that would, by making it more tax friendly to invest in certain kinds of equipment, for example, or to hire more people, if we knew that would stimulate an economic activity, that those kind of activities would be very useful. But frequently when we spend Government money, in this case, for example, potentially creating 600,000 new Government jobs, remember we are taking that money out of the private sector, and it is likely to do less good in the public sector than it would if we left it in the private sector. In fact, a couple of economists with whom we spoke yesterday noted that even in a recession business gets a 4 to 5 percent return on its investment. The real test should be, if the money is spent in the Government sector, will we get at least that return on the investment that we are making? If we do not, we should leave that money in the private sector so the private sector can get that return on that investment and therefore generate more economic activity in our private enterprise system. Another question is whether the new Government spending replaces State and local spending. My understanding is there is a big chunk of money to go to State and local governments. Now they have gotten themselves into a pickle because a lot of them have big budget deficits this year. They are going to constrict what they spend money on as well or they are going to have to raise taxes or fees or find some other way to balance their budgets. But they obviously would like for the Federal Government to bail them out. Well, obviously before the Federal Government considers doing that, the first question is, Are you going to correct what has created the deficiency in the first place or are we simply going to save your bacon then you do not have to do anything to change your ways. Are you going to reduce your spending? For example, are you going to spend the money anyway? People are talking about shovel-ready projects. There are a lot of shovel-ready projects at the State level for roads or highways or whatever, and they are called shovel-ready because the State is prepared to do them. Well, if the State is going to do them anyway, then clearly the Federal Government paying for it is not going to create any new jobs. It is not going to stimulate economic growth in any way, even though it might produce a new bridge or a new highway that is useful to the people in that State. So since our goal is to stimulate new economic activity, we must ask whether the spending will really create new economic activity or merely replace something at the State level that would occur anyway. The penultimate question is, Is it worth doing? We have to ask the taxpayers from whom we are getting money whether an investment is worth undertaking at all. For example, one of the things that would be on an infrastructure to-do list was a mob museum in Las Vegas; there was a snowmaking venture in Minnesota. Are these the kind of investments that American taxpayers believe are warranted under any circumstances? There are a lot of investments the Federal Government can make that are worthwhile. For example, clearly we have used a lot of military equipment that needs to be replaced. There are good jobs throughout this country producing military equipment. We need to add personnel to our military. I think there is a general consensus to do that. That will cost money. That will obviously create jobs. So those are activities that are needed, are worthwhile, are job creating, and clearly would help our country, potentially being much more worthwhile than, like I say, a mob museum or some kind of snowmaking equipment. Then, finally, I think there is one final test that we might talk about. In view of the huge deficit we have, should we make the deficit worse? This is a cost-benefit analysis. This is clearly going to be added to the deficit. So the question is, How much more deficit can we pile on without having adverse consequences in the immediate and long- term? We might stimulate the economy over the next 3 or 4 months, but if we are creating a huge hole to dig out of 3 or 4 years from now, we have to ask, Is it really going to be worth it. So when we evaluate the different proposals, we have to ask whether it is going to be worth it to have this large a deficit, twice the $1.2 trillion of this coming year. One thought in this regard is this: When we lower tax rates, we know it helps people. It helps small business create jobs. That is what you do in a recession. You try to help people by letting them keep more of their money so they can spend it and help get us out of the recession. Permanent tax cuts are the way to do that. The permanent tax cut obviously may or may not reduce revenue to the Treasury. The right kind of tax cuts can actually produce more revenue to the Treasury, but increased spending, there is no way around it, loses money to the Treasury. It puts you in a deeper hole. So as between the potential relief from taxes, leaving more money in the private sector, which is eventually going to create the jobs to get us out of the recession, or having the Government spend more money and creating a larger deficit that way, it is a test that I think we need to be very clear about, from my mind. While I am willing to help do things to stimulate economic activity in the short term, I am not willing to ignore long-term consequences of a deficit the size that would be created by the kind of spending we are talking about. If we apply the right kind of tests--and they are sensible. They are not Republican or Democratic tests; they are obviously tests that any prudent person would ask before spending this kind of money--I think that will help us better evaluate the kind of economic stimulus package we can actually support in the Senate. It will be the kind of analysis our taxpaying constituents expect of us when, in view of all of the other things that have been done to bail out various aspects of our economy, with the kind of trillion-dollar-plus deficit we are looking at, they want us to engage in, they want us to be prudent. They have had their fill of wasteful Washington spending. They want us to be very careful about what we do with their money in the future. I hope as we engage this debate in the future--we will have plenty of time to talk about it, debate it, think about it, to analyze it and I am not suggesting we try to slow-walk it, but in trying to move quickly we nevertheless take the time to perform the kind of analysis I have talked about. I yield the floor, and I suggest the absence of a quorum.

Mr. KYL

Mr. KYL. Mr. President, I would like to speak to two subjects. The first deals with a resolution the Senate unanimously adopted this morning. Mr. President, today the Senate approved a resolution recognizing the right of Israel to defend itself against terrorist attacks from Gaza and reaffirming the United States' strong support for Israel in its battle with Hamas. The first thing the resolution does is remind people why the State of Israel had to act. Israel has had to endure more than 6,300 rocket and mortar attacks on its citizens since it fully withdrew from Gaza in 2005. In fact, the town of Sderot, which is about 3 miles from the border of Gaza, has been suffering for over 8 years from these attacks. Is there any doubt that if the United States were suffering an attack from just across the border similar to what Israel is facing, that we wouldn't react to stop that from happening? I think there is no question that we would act to stop this terrorism, and this resolution expresses the United States' support of Israel's right to defend itself. The second point the resolution makes is that there is no equivalency between the terrorist actions of Hamas and the defensive actions of Israel. Israel conducts its military operations to spare innocent life. It has specifically targeted Hamas command centers, security installations, rocket-launching sites, weapons stockpiles, and weapons smuggling tunnels. It has tried very hard to avoid civilian casualties. Hamas, on the other hand, deliberately and maliciously fires rockets into civilian areas from civilian areas, thereby making it more difficult for Israel to target the terrorists and increasing the likelihood of civilian casualties when Israel does take action. Finally, this resolution speaks to calls for a cease-fire. Many voices in the international community have been heard pleading for an immediate cease-fire, although I think it is instructive that one never hears those voices condemning rocket attacks by Hamas terrorists. I believe the path to a halt in the violence is clear. A cease-fire is appropriate if, and when, it is durable and sustainable. A precipitous cease-fire, on the other hand, that would allow Hamas to rearm and rebuild its support in Gaza is not acceptable. Hamas cannot be given a cease-fire that only serves to provide it breathing room to regroup and then start firing its rockets and missiles again. By adopting this resolution, we have said to the Israeli people: ``We stand with you, and we support you in defending yourselves against terrorists.'' In short, the resolution expresses strong support for the defense of Israel by its military action today in the Gaza Strip, the fact that it has been repeatedly attacked by Hamas terrorists from the Gaza Strip, and finally decided that the only way to stop those attacks on its citizens was to go into Gaza and try to remove the weapons and the launching sites and to try to arrest the terrorists who were involved in the launching of those rockets. This resolution expresses strong support for Israel. It reminds us all why Israel was forced to act. It makes the point that there is no equivalency between the action of the Israelis and the terrorist action of Hamas, which deliberately seeks to harm civilians. Finally, it speaks to the question of a cease-fire, noting that the position of the United States is correctly that a cease-fire could only be supported if it is durable and sustainable; in other words, it ensures that the conditions that created the controversy today are not simply repeated another 6 months from now when the Hamas terrorists have had an opportunity to rearm. I am pleased the Senate has spoken in such a timely fashion on this important issue. I commend my colleagues for supporting the resolution.

Mr. KYL

Mr. KYL. Mr. President, would it be in order for me, before I begin my remarks, to compliment the Presiding Officer for his nomination to be Cabinet Secretary, the Secretary of the Interior, and wish him very well before the Senate in being confirmed and serving in that position? I guess that question doesn't need a response. I certainly hope it is in line for me to be able to say that.

Mr. KYL

Mr. KYL. Mr. President, I hope--and I am joined here by Senator Lieberman--that the Senate will have an opportunity to consider before this week is out a resolution we believe has been drafted by the majority leader and the minority leader that deals with the ongoing war in the Gaza Strip and that we believe needs to express the will of the Senate. We believe as well that a similar resolution would be voted on in the House of Representatives to express the will of the House. So then the whole world--and certainly the administration--would know of this body's strong support for the State of Israel and our support for the actions Israel is taking right now. We hope that vote can occur before this week is out. I wish to commend Senator Lieberman for his considerable leadership on this issue. We support this resolution. The first thing the resolution does is to remind people why the State of Israel had to act. Last February, on a trip to the Middle East, I visited the Israeli town of Sderot, which is about 3 miles from the border of Gaza, and I learned from the town's mayor of the toll taken on the residents of this town and neighboring cities from more than 8 years of rocket attacks by the Hamas terrorists. At the police station, I saw rack after rack of these spent rockets, the remains of the rockets that had been launched by Hamas against the civilian population of this city. In fact, about 15 minutes after we departed the city, one of these Hamas launched a Qassam rocket--identical to the hundreds we had seen at the police station--which fell on an Israeli home in town, destroying it. Thankfully, no one in that attack was harmed. Is there any doubt that if the United States were suffering an attack from just across the border similar to this, that we wouldn't react to stop that from happening? I think there is no question that we would act to stop this terrorism. It is our hope that the resolution would express our acknowledgment that a nation has the right to defend itself, that Israel has had to respond to this, to more than 6,300 rocket and mortar attacks on its citizens since it fully withdrew from Gaza in the year 2005. In fact, this town has been suffering for over 8 years from these attacks. The second point the resolution makes is that there is no equivalency between the actions of Hamas and Israel in this case. Israel conducts its military operations to spare innocent life. They have specifically targeted Hamas command centers and security installations and rocket- launching sites, weapons stockpiles, and weapons smuggling tunnels. They have tried very hard to avoid civilian casualties. In fact, Israel has transmitted very specific warnings to Gazans. They have dropped leaflets and made phone calls to targeted areas to warn citizens to leave because an attack is imminent. This, of course, even means they lose the element of surprise and potentially put the lives of Israeli soldiers at risk. But Israel believes it is important where possible to avoid jeopardizing innocent life--quite the opposite from Hamas, which deliberately and cynically fires rockets from civilian areas to make it more difficult for Israel to target the terrorists and to increase the likelihood of civilian casualties when Israel does take action. Hamas has ignored a plea by U.N. Secretary General Ban Ki-moon on April 28 that: Civilian areas in Gaza should not be used as a base from which to launch its actions against Israel. Dozens of mosques in Gaza have been turned into weapons storage facilities and Hamas command centers. In fact, an airstrike on a mosque in the Tel El Hawa neighborhood of Gaza City last Wednesday set off numerous secondary explosions caused by the arms that had been stockpiled in the mosque. Finally, Hamas openly admits that it uses women and children as human shields. A leading member of Hamas told Al-Aqsa TV on February 29, 2008: For the Palestinian people, death has become an industry . . . This is why they have formed human shields of the women, the children, the elderly, and the mujahedeen, in order to challenge the Zionist bombing machine. While targeting terrorists, Israel works to avoid a humanitarian crisis for ordinary Gazans as well. During the first week of Israel's operations, it facilitated the delivery to Gaza of 400 trucks loaded with more than 2,000 tons of food and medicine. This is not easy when you are in the middle of military operations. Ten ambulances and two thousand blood units were transferred to Gaza just in that week. More than 80 Palestinians have entered Egypt for treatment, in addition to a dozen or more who have entered Israel. On January 5, more than 93,000 gallons of industrial diesel fuel and gasoline for vehicles was transferred into Gaza from a fuel depot in Israel. By the way, that fuel depot comes under constant attack from terrorists in Gaza, as does the place where the electricity is generated for Gaza, which, of course, makes absolutely no sense. Finally, this resolution speaks to calls for a cease-fire. Many voices in the so-called international community have been heard pleading for an immediate cease-fire, although I think it is instructive that one never hears those voices condemning rocket attacks by Hamas terrorists. I believe the path to a halt in the violence is clear. A cease-fire is appropriate if and when it is durable and sustainable. A cease-fire, on the other hand, that would allow Hamas to rearm and rebuild its support in Gaza is, of course, not acceptable. Hamas cannot be given a cease-fire that only serves to provide it breathing room to regroup and then a month or 2 months or 3 months from now start firing its rockets and missiles again. The United Nations could play a constructive role, but it must resist the temptation that it all too often falls into, and that is that of moral equivalency. I point to the press statement of the Security Council on December 28 which, among other things, said the parties should ``stop immediately all military activities.'' This is dangerous moral equivalency. Only one party to the violence carries out ``military activities.'' The other party--Hamas--terrorizes and murders innocent people. That is why the only Security Council resolution that could be acceptable in this situation--and I say this with the understanding that the Security Council is meeting as we meet here today--is one that affirms Israel's right to defend itself and calls on Hamas to immediately stop its terrorist activity. I add that a Security Council resolution should look to all of those who support Hamas--primarily and most significantly Iran. For years, Iran has been the source of money, training--including training at the facilities of the Islamic Revolutionary Guard Corps in Iran itself--and weapons to Hamas. Hamas's relationship with Iran is so close that the Egyptian President said this past May that Hamas rule in Gaza means that Egypt has a ``border with Iran.'' Since Israel launched its military operation against Hamas, Iran has announced stepped-up arms shipments. Senior Iranian clerics have organized recruiting drives to send Iranians to Hamas's aid. Just yesterday, a senior Iranian cleric announced that it had recruited 7,000 Iranians to join the cause of Hamas. Yet the international community has taken no action to counter Iran's support of Hamas terrorists. A U.N. Security Council resolution sanctioning Iran for its assistance to Hamas would send an important message and would be a good place to start, as would unilateral sanctions by the United States. Let me conclude by quoting the Washington Post columnist Charles Krauthammer, who recently wrote one of the most precise and succinct observations on the situation in Gaza that I have read. He wrote: Some geopolitical conflicts are morally complicated. The Israel-Gaza war is not. It possesses a moral clarity not only rare, but excruciating. The Reid-McConnell resolution we expect to be introduced shortly will be an important reaffirmation of the bond between Israel and the United States. It is one forged on the basis of common values and the tragically shared experience of terrorism. By passing this resolution, we are saying to the Israeli people: We stand with you, and we support you in defending yourselves against terrorist attacks.

Mr. KYL

Mr. KYL. Mr. President, I want to speak for just a moment about the comments that Senator Specter made earlier about the process for considering the nomination of Eric Holder as Attorney General. The Republican members of the Judiciary Committee have been seeking information and doing work to prepare for the hearing. But there is a great deal of information that is not yet available and a great deal of information that hasn't yet been reviewed, all to the point that it is going to take a little bit of time to prepare for the hearing in order to do it right. Of course, we want to do it right. While there is absolutely no desire on anyone's part to slow a process down or filibuster or in any other way make it difficult for the orderly process to unfold for the confirmation of the nominee of the President, we do ask that we be accorded the same consideration that was given to others in this situation and that there be adequate time to confirm him. I see no reason, if he is qualified and if he is confirmed, that he could not take office very soon after the President himself takes office, perhaps as early as a week or two after that. So nobody is talking about a long delay, but we do need to have adequate time. In that regard, since the chairman of the Judiciary Committee has indicated he would like to begin holding hearings on January 8, which is literally right after we begin the swearing in of the new Members and the beginning of the next session, there is not adequate time for the kinds of things that have to be done if that is the date that we meet. This has been conveyed to the chairman by Senator Specter. He has asked for a reasonable amount of time to get prepared. I hope that can be accommodated. It is of sufficient concern that several of us have indicated, through a letter to the chairman, that we are going to insist on having adequate time for the consideration of his nomination. I remember the nomination of John Ashcroft who was a colleague of everyone here, a Senator from Missouri, when he was nominated to become the Attorney General; nevertheless, it took 4 days of hearings for the Senate to decide to confirm him. His hearings began on Tuesday, January 16. As I said, they lasted for 4 days. The chairman of the committee has, as I said, indicated that the Holder hearings would be scheduled for January 8, more than a week earlier. I don't think that is adequate for the things we have to do. Ashcroft was voted on by the full committee on January 30. He was confirmed on February 1. So that timing certainly would be totally appropriate for nominee Holder and would not in any way delay the administration with respect to the office of the Attorney General. In fact, irony of ironies, because Senator Ashcroft was not confirmed until February 1, Eric Holder himself, who was in charge at the end of the Clinton administration, served as Acting Attorney General at the beginning of the Bush administration. Senator Specter, when he was chairman, accommodated numerous requests for sufficient time on the part of the then-ranking Democrat, Senator Leahy, on, for example, the nominees of Chief Justice Roberts and Justice Alito. I think reciprocation would be in order. Right now, we don't even have Eric Holder's questionnaire or FBI background investigation, all of which are necessary to prepare for the hearing. Senator Specter noted that we currently have 86 boxes of archived committee documents relating to Mr. Holder's tenure at the Justice Department to review. There are additional documents that have been sought from the Department of Justice and the Clinton library which would provide additional information that we will need to examine. One might say this is a lot of work to do for a nominee. Bear in mind, this is the Attorney General of the United States, an individual who has some controversy in his past. I don't know whether this controversy is sufficient to suggest that he should not be confirmed, but that is what the investigation and hearings, of course, are all about. We are familiar with what these items are. Mr. Holder was involved in the pardons of members of the FALN organization by President Clinton, the pardons of Marc Rich, Pincus Green, Susan Rosenberg, and Linda Sue Evans. He was also involved in a controversial raid in Miami by the Border Patrol action to take Elian Gonzales into custody. He was involved in death penalty approvals, rejections, or disputes. One that troubles me--and I want to get to the bottom of this--was the decision of the Department of Justice not to defend the power of Congress to enact a particular statute, 18 U.S.C 3501. There was Supreme Court litigation called Dickerson v. United States, including Department of Justice responses to Judiciary Committee inquiries on the subject and views of U.S. attorneys and Department advisory panels on the matter. The case involved challenging Miranda doctrine. Paul Cassell, a competent attorney, argued that case. The Justice Department, contrary to precedent and tradition, didn't defend the Government's position; that is to say, the Congress having passed a statute and defended the power of Congress to enact that statute. I don't know whether any of those controversial matters are enough to reject the nominee, but they are well known, controversial, and I think we have an obligation to look into all of these matters. I am not alone. Richard Cohen wrote in the Washington Post that Eric Holder should not be the Attorney General. I don't know whether he is right or not, but the questions he raises need to be examined. Glenn Greenwald wrote in the Salon magazine that Holder's involvement with the Rich pardon was ``substantial, continuous, and concerted, much, much more than `peripheral,' '' which is the way Holder himself described it. One final note. In addition to having plenty of time to review and prepare and review documents and the FBI interviews and background checks of Eric Holder and prepare for his hearings, we will want to have sufficient time also to carefully consider other top Department of Justice nominees, such as the Deputy Attorney General, Associate Attorney General, Solicitor General, and the heads of the Office of Legal Counsel, the Criminal Division, the Civil Rights Division, and the National Security Division. I hope if we set the right precedent with the Attorney General himself, these other matters will be considered in due time and we won't have to argue each time there is an insufficient opportunity to conduct the kind of examination that would be necessary for positions as important as these. So I hope our colleague, the chairman of the committee, will reconsider his initial decision to schedule the hearings on January 8. If we can move those back even a week, that would provide time for us to conduct the process properly. We are not asking for some outrageous delay just for the sake of delay. I hope he can accommodate us, and knowing of the views of the other members of the committee on the Republican side, that he would be willing to do so. I suggest the absence of a quorum.

Mr. KYL

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

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Tennessee (Mr. Alexander), the Senator from Texas (Mr. Cornyn), the Senator from Idaho (Mr. Craig), the Senator from South Carolina (Mr. Graham), the Senator from Nebraska (Mr. Hagel), the Senator from Oregon (Mr. Smith), the Senator from Alaska (Mr. Stevens), and the Senator from New Hampshire (Mr. Sununu). Further, if present and voting, the Senator from Texas (Mr. Cornyn), the Senator from Tennessee (Mr. Alexander), and the Senator from South Carolina (Mr. Graham), would have voted ``no.'' The PRESIDING OFFICER (Ms. Klobuchar.) Are there any other Senators in the Chamber desiring to vote?

Mr. KYL

Mr. KYL. Madam President, I rise today to announce to the Senate the arrival of another Duffield in this world. Christopher James Duffield was born to his parents, Steven and Cara, on the third day of November. Christopher's father Steven served as the executive director of the Platform Committee at this year's Republican Convention in Minneapolis. Prior to that, Steven served as a senior policy advisor and chief counsel to me at the Republican Policy Committee and the Senate Republican Conference. Christopher's mother, Cara, is a partner at the law firm of Wiley Rein. Christopher joins us at what is a tumultuous and difficult time for both the Nation and the Republican Party. On November 4, we Republicans fared poorly in Federal elections, losing the Presidency and deepening our deficit in the House and Senate. The new majority promises to cure the Nation's economic ills with a Keynesian spending spree of the type that worked so brilliantly in the 1930s, and pledges that it will reduce taxes for 95 percent of Americans, while only increasing them for some other guy. Many fear that the coming years will put the test to Alexis de Tocqueville's warning that ``the American Republic will endure, until politicians realize they can bribe the people with their own money.'' Meanwhile, since September of this year, the United States has experienced a severe financial crisis, precipitated by the collapse of banks that have been overwhelmed by the weight of unsound mortgages that they acquired. Many established and storied financial institutions have disappeared in bankruptcies and mergers during the last few months. As lending has tightened, unemployment has increased, and the Nation appears to be headed into a deep recession. And on November 26, as if to remind us that the other problems confronting our nation have not receded, a group of Islamic terrorists attacked innocent civilians in the Indian city of Bombay, killing 171 people. Those attacks reminded many of us of the evil that this Nation faced on September 11, 2001, and of the long war that still lies ahead of us. And yet--and yet, things are not so bad. The United States is about to complete another peaceful democratic transition, and has just elected its first African-American President, giving hope to many that the Nation will yet overcome its racial divisions. The current credit crisis is not unlike ones that we have survived in the past, and our understanding of the financial system and how to fix it certainly is much deeper than it was in 1929. And, had you asked Americans 7 years ago, very few then would have dared to guess that the United States would not suffer any foreign terrorist attacks on its soil during these ensuing 7 years. The Republican Party, though currently unloved, will return to its roots and eventually regain the confidence of the American people. And though Republicans will be out of power in the political branches, the current President, with a little help from his friends, has made two very fine appointments to the U.S. Supreme Court, restoring a semblance of the rule of law to that branch of government for the first time in many years. The Republicans' loss of the Presidency may even have some salutary effects. Already, there are signs that with a Democrat coming to the White House, our Nation's liberal press may relent in its 8-year assault on the authority of the executive branch. On the day that Christopher was born, I and many others picked up the New York Times and nearly spilled our coffee when we came across a front-page article that was titled: ``Next President Will Face Test on Detainees--Some at Guantanamo Called Serious Risks.'' I will ask that a copy of this article be printed in the Record following my remarks. For at least 5 years now, anyone who relied on the New York Times as a source of information about the world was liable to come away with the impression that the men held by our military at the Guantanamo Naval Station are detained there purely out of spite or out of some other even less pure motive. News stories about Guantanamo have credited every accusation made by the detainees and their lawyers, no matter how implausible, but would treat with great skepticism any evidence that the Guantanamo detentions are necessary--that is, on the rare occasion when the papers could even be bothered to report such evidence. And yet just as a Democratic Presidential victory began to seem inevitable, the New York Times treats us to this article. We learn therein that many of the detainees have participated in terrorist attacks against Americans, are skilled in bombmaking and other terrorist arts, or have announced that they would like nothing better than to return to killing innocent people. For some of us, it is not news that the men detained at Guantanamo are dangerous. I would invite my colleagues to review the minority views that I and others submitted for Senate Report 110-90, or Justice Scalia's dissenting opinion in the Boumediene case. And on November 3, for the first time, such information is not news even to those who trust the New York Times. Public-relations victories like this one are important, for ultimately our enemies do not expect to defeat us on the battlefield. Rather, they seek to win by sowing fear, by demoralizing us, and by weakening our will to defend ourselves. Their particular brand of medieval barbarism will never sustain a civilization capable of defeating us in a conventional battle, but even a powerful nation such as ours must be willing to fight if it is to prevail against such an enemy. I know that Steven and Cara will instill in young Christopher, and his sister Laura, an appreciation and respect for our Nation, its unique institutions, and its open and democratic culture. It is just such people, who understand this country and its virtues, who ultimately will ensure that the American way of life continues and even thrives. And it is thus with hope for the future that I welcome young Christopher James Duffield to this world. I ask unanimous consent that the following news article be printed in the Record.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Georgia (Mr. Chambliss) and the Senator from New Hampshire (Mr. Sununu).

Mr. KYL. Madam President, I support H.R. 6867, the Unemployment Compensation Act of 2008. The unemployment level is high, it is increasing, and it is likely that this condition will prevail for many months. Thus, the need for this extension. According to the Labor Department, claims for unemployment benefits have increased dramatically, last week reaching a 16-year high. The unemployment rate in October was 6.5 percent; last year the rate averaged 4.6 percent. The Federal Reserve also released estimates Wednesday that project the jobless rate will climb to between 7.1 percent and 7.6 percent next year. As everyone knows, the economy has slowed dramatically. Retail and business spending has decreased. The next several months are projected to be a period of contraction. As long as the economy continues to struggle, the people of Arizona and the rest of our country will face difficult job prospects, given the limited number and types of jobs available. This dramatic downturn in the economy and surge in unemployment convinced me to support this extension of unemployment coverage. But this step simply treats a symptom of the bad economy; it is not a solution. We must try to take steps to improve the economy and, thus, create new jobs. As I have said in the past, I do not believe an extension or expansion of Federal unemployment benefits stimulates the economy. In fact, most economists believe that continual, temporary extension of unemployment benefits has little effect on the economy, and, in some circumstances, actually lengthens the time individuals remain unemployed because of the incentive to remain on unemployment insurance. Accordingly, I support this extension with a steadfast commitment to work to pass pro-growth measures that will actually help the economy recover and create new jobs. In the long run, people would rather have a job than have to take unemployment insurance; and, at some point, it will have to end. What can we do immediately to help Americans get back to work? First, we must maintain existing tax rates. During an economic downturn, the last thing Government should do is take more money out of the economy by increasing taxes. Everyone benefits when lower tax rates enable businesses and entrepreneurs to expand and create more jobs. When Congress returns to Washington, its first priority should be to reassure taxpayers that taxes will remain low by maintaining existing income-tax rates, marriage penalty relief, current rates on capital gains and dividend income, and relief from the death tax. Under existing law, the tax relief enacted in 2001 and 2003 will expire after 2010. Extending current tax rates now would give individuals and small businesses the certainty they need to plan their family budgets and permit small businesses to make critical long-term investments in our Nation's economy that will increase job growth now and in the future. Unless the tax relief is extended, 43 million working families with children will face a $2,300 tax increase. Small businesses will see their taxes increase by an average of $4,100. The death tax will rebound from zero in 2010 to a whopping 55 percent. The tax on capital gains will increase 33 percent, and the dividend tax rate will increase an astounding 164 percent, affecting 18 million senior citizens who will see their taxes rise by an average of $2,200. We shouldn't be asking Americans to pay out more of their hard-earned money at a time when they need it most; but if Congress doesn't act, we will be asking exactly that. The current economic downturn has also affected the Nation's investors, especially seniors who rely on their investments for their income. We need to continue to encourage responsible savings and investment, and one of the things we should do to ensure savings is to allow unlimited contributions to retirement accounts such as 401(k)s and IRAs. We should also raise the age at which holders of tax-deferred retirement savings accounts must begin making minimum required annual withdrawals. I believe that Congress will likely suspend the mandatory withdrawal rules for one year. While that is a positive step, a more permanent measure would provide certainty to seniors. The United States also needs to improve its competitiveness. We need to encourage trade between our country and others, and we need to enact, as soon as possible, the Colombia, Panama, and South Korea free trade agreements. We also need to stop taxing overseas corporate income and decrease our corporate tax rate--let's not provide additional reasons for valuable companies here in the U.S. to move all their operations overseas. The United States has the second highest corporate tax rate in the world. We can make the United States more attractive to foreign investment by reducing our own corporate tax rate, perhaps from its current rate of 35 percent to 25 percent. I will vote for the unemployment extension today. But I am also calling on the President-elect and Congress to quickly pass measures that will actually help the economy to maintain and create jobs. I look forward to working with my colleagues toward such an end in the coming weeks.

Mr. KYL

Mr. KYL. I object.

Mr. KYL

Mr. KYL. Madam President, reserving the right to object, the longer this legislation has been lying around, the more objections have been heard to it. So, yes, I do object.

Mr. KYL

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

Mr. KYL

Mr. KYL. Mr. President, I wish to address a matter that is supposedly before us, although to my knowledge there is not yet a bill on the floor that we can read and, therefore, debate. But I think the general concept of some kind of a so-called bailout for the auto companies is the reason why we have come back to Washington in this so-called lameduck session. I wish to address that and talk about the best way forward to assist the companies involved as opposed to what I understand the concept of this punitive legislation to be. Let me begin by saying that ordinarily in the Congress we have hearings. We develop legislation on big matters. We try to do it in a bipartisan way. We then mark up the bill in committee by discussing it, amending it, rewriting it. Then it comes to the floor of the Senate where we debate it and can amend it again and ultimately pass it to the other body. That is not what is happening today. We are told there is going to be legislation presented at some point to provide $25 billion to the three U.S. automakers. Beyond that, we know nothing. What I want to do is talk about the concept of it, and later we can talk about how the bill will actually get here, whether we can seek to amend it, and whatever else might be appropriate to try to conclude work on this matter. Obviously, everyone is hurting these days. The car companies aren't the only folks who are hurting. Every family is hurting, especially as we have leveraged our debts. We have home mortgage debt, credit card debt, perhaps car loan debt. All of us are tightening our belts, because we appreciate the fact we have to get that debt down. That is happening in the business sector as well. One of the reasons Congress passed the so-called TARP legislation, the stabilization package that was designed to assist financial institutions, was because in some respects the financial institutions are the blood that courses through the entire economy. They provide the cash; in many cases, the credit. Unfortunately, our country runs on credit. You don't buy anything these days without a credit card. You certainly don't buy anything big, such as a car or refrigerator, without a credit card. As a result, the question was whether banks were going to stop lending to consumers and businesses because the assets on their books were of such dubious value that they had to keep all the cash they could accumulate just to meet the law's requirements for their reserves. What the administration decided originally was that the $700 billion could be used to buy these troubled assets, get them off of the banks' balance sheets and, by giving them money to buy them, the banks would then have money to loan to a car dealer or the car dealer to loan to the car purchaser and the like. Ultimately, it was decided that the economy was in such a sorry state that we had to get the money infused directly into the banks and didn't have time to set up the rather complicated procedure of buying these assets. Instead, the loans currently being made are going directly to the banks and other financial institutions. Of course, the hope is that money will then be lent out to us and to businesses so that the blood which keeps the economy going, called cash, can continue to enable us to buy things. There is some indication that is beginning to happen, although the process takes a while. There are many folks in the economy who get hurt when people don't buy as much, whether it is from lack of credit or trying to tighten their belts. I think of one company that laid off 10,000 people in one small town in Ohio. The company is called DHL. I think of Circuit City which went bankrupt recently. A lot of folks are worried about Christmas season and consumers not buying. There are all kinds of folks who are in trouble economically, businesses and families. The question is whether we should respond to those with the largest voice in Washington, DC. Certainly the three big automakers have a big voice here and a constituency that would like to make their case that they should be bailed out and that is where we should draw the line. I have a hard time with that. Not because I don't like the car companies. I readily buy cars from them. I think it is great that they build the kind of cars I like to buy. I am not faulting them for the decisions they have been making in what they manufacture. The fact is, they are in trouble pretty much for reasons that relate to their own decisions rather than a lot of consumers out there who have gotten caught up in this credit crunch, in effect through no fault of their own, except perhaps going into debt more than they should have. The car companies have made some contracts with the United Auto Workers labor union that are literally dragging them down. It is like asking somebody to swim with a 50-pound weight around their neck. It is no wonder they can't meet their obligations under the contracts and need taxpayer assistance. But the question is whether an average family or small business should be asked to cough up the money to transfer to an auto company that has made these deals with the union or whether the car company should find an alternative way of dealing with it. Here is the order of magnitude I am talking about. According to the Bureau of Labor Statistics, the average hourly wage cost for the big three auto manufacturers is $73 an hour. The average for the Japanese automakers building cars in the United States is between $45 and $48-- substantially less. For the average manufacturing company in the country or average company, it is about $28.48. So you can see that these legacy costs of the big auto companies are like the 50-pound weight dragging them under. It does no good for taxpayers to pour $25 billion into the car companies and find a year later that money has been spent and yet nothing has changed to diminish their obligations. Where are they going to get the next $25 billion and then $25 billion after that? The reality is, they have to change the way they are doing business in order to warrant asking taxpayers for anything. This is where the alternatives come into play. There is already a law on the books that permits companies in financial straits such as this to reorganize their business, get rid of much of their debt obligation and start over again. You are required to slim down, to be sure, in order to be more competitive. It is called reorganization under chapter 11, sometimes chapter 11 protection. It falls under the Bankruptcy Code. When this is accomplished, the contracts that the car companies have made are renegotiated in such a way that the company can show it has the ability to emerge and make money, that the contracts are not going to continue to weigh them down. That would be the benefit of taking this reorganization. Some are more intent on preserving the status quo than being able to compete because they say things such as: Well, restructuring the business might mean there would be fewer employees. There might well be. It might be 10 percent or maybe even 20 percent fewer employees, if that is what it takes to compete successfully. There may be a number of dealerships cut. Maybe 10 or 15 percent of the dealerships will have to go away. If that is what it takes for them to compete with the Japanese automakers, then that is what should be done. We should not say those legacy costs or those built-in costs of operation should be retained and then ask the taxpayers to throw in $25 billion to maintain something that isn't working. It is true that these costs represent future obligations as well as current and so they are going to continue unless they are wiped out by the reorganization that is provided by chapter 11. Some people say: Well, what they need is better management, and we here in Washington know how to manage them better. That is the last thing we want, for Congress or folks in Washington to tell them how to do their business. Under reorganization, a committee of experts assists them in designing a business plan. They have 18 months to develop a plan to move forward. They have breathing room. Basically all of the obligations are stayed. They have the opportunity to fix what is wrong, plan for the future, and then implement that plan. We wouldn't have any of that if we simply gave them the $25 billion. They wouldn't be protected at all from any of the obligations that they have either on an ongoing basis or their future obligations. In all chapter 11 reorganizations, prefiling debts become unenforceable except to the extent that they are incorporated into the reorganization plan. GM has $40 billion in long-term debt; Ford about $136 billion. A reorganization plan, a business plan would be set forth that provides how each of those obligations is treated and, if they are too much to enable the company to go forward, then they are reduced accordingly. A taxpayer bailout would provide none of that protection. Protecting the workers would still require negotiation with the labor unions, but some of the amount of those legacy costs could be reduced in the process. I mentioned the fact that there might be fewer dealerships. They might decide to reduce the number of brands. They would be doing so under the protection of chapter 11 rather than the current situation. A taxpayer bailout wouldn't give them any protection from State franchising laws that make it very costly to reduce the number of brands and dealerships. I have some information that when GM eliminated the Oldsmobile brand, it reportedly cost $1 billion, and there are still litigation proceedings about whether they can do that with their dealerships. Some are concerned about whether they could receive financing if they took chapter 11, the so-called debtor in possession financing. This is an area where the Federal Government might provide some assistance. The administration, as a matter of fact, has been talking about such assistance. But a pure taxpayer bailout wouldn't guarantee any structural reforms or provide the possibility of debtor-in-protection kind of financing. It would, in fact, through the reorganization, at least provide taxpayers with the assurance that they could get repaid if they did provide some of this money as opposed to the current proposed bailout which has absolutely no guarantee that taxpayers would receive any of their money back. A final two quick points I wish to make. There is an argument by the car companies of who would buy a car from a company that is in chapter 11 protection. The answer is, probably the same people who are buying cars today. If I drive down Camelback Road in Phoenix, where we have a lot of car dealerships, 6 months from now and some of those companies have asked for chapter 11 protection, I guarantee you, I will not know which ones. They will all have the same bright lights, the same eager salesmen ready to sell me something. With reorganization, you don't go out of business. One of the myths is that this would put you out of business. If you take bankruptcy under chapter 7, you do go out of business. That is not what chapter 11 protection is at all. In fact, you are able to reorganize, and that is precisely why people would continue to buy the cars. Not everybody is going to lose their job through reorganization. I doubt that it would be more than a fraction of the people who would lose their jobs. Doug Baird, a bankruptcy professor at the University of Chicago, recently said, in response to the number 3 million which people have been bandying about: This three million figure is laughable . . . modern bankruptcy law is designed to protect against that. The bottom line is, there is a law that provides protection, breathing room, and an ability to get rid of the kind of debts burdening these companies. If all we do instead is throw $25 billion at the problem, none of this protection comes into play. None of the ability to renegotiate what is dragging them down now would occur. It would simply literally be throwing good money after bad without a justification of why these companies, as opposed to many other companies in the country, were to receive that help. The money has to come from somewhere. It has to come from people who are working hard to make a go of it themselves. So we have to ask the kind of hard questions like this before we ask our fellow citizens to cough up the money for this kind of a bailout. I hope we will be able to do that during the debate on this legislation, which I hope we will see soon, assuming we are going to be deciding whether to vote on it this week. Thank you, Mr. President.

Mr. KYL

Mr. KYL. Madam Presdient, November 11 marked the 54th anniversary of Veterans Day. It is an occasion when we must remember the great debt that we owe veterans and members of the armed services who fight to maintain our freedom around the world. Throughout history, our soldiers have risked their lives to defend our freedom, and we must not forget their sacrifices. For my State of Arizona, Veterans Day is particularly special because it is home to over 560,000 veterans. Each one has worked to maintain our freedom. Whether as a medic administering aid to a fallen soldier, a soldier rooting out the enemy in a safe house, or a mechanic servicing the military equipment, every veteran played an integral role in our military and thus strengthened our Nation. Our veterans shouldered this great responsibility with courage, dedication and honor. We, as a Nation, cannot forget the countless sacrifices our veterans have made for this country. Brave men and women in our Armed Forces continue to fight the war against terrorists. It is important to remember that the troops currently working to defeat the terrorists all volunteered for our Nation's military. Young people today are presented with many opportunities when they begin their careers, and many serving in the military could have chosen a more lucrative career that would not put them in harm's way or take them away from their families. This act of selflessness not only underscores the patriotism of our Nation, but also highlights the dedication of our Nation's youth. We should be thankful that so many Americans are willing to serve their Nation, particularly at such a critical and dangerous time. In the coming year, Congress will be called upon to preserve care and services to our veterans, as well as to support our men and women who are engaged in the missions abroad. We cannot forget those who have given up so much to fight for our Nation, and we will work to ensure that our veterans and soldiers are recognized for their service. My family and I pay respect to all soldiers who have sacrificed to ensure America remains free, safe, and the symbol of democracy for the world. I am immensely grateful to all who have served this great Nation.

Mr. KYL

Mr. KYL. Mr. President, I know that many of my fellow Members are concerned about the scale of this package. And while I agree that more private sector involvement would be preferable to placing hundreds of billions of taxpayer dollars at risk, I think that the enormity of the current financial crisis requires the government to act. I believe that the legislation before us will establish the appropriate conditions for financial markets to begin repricing mortgage related investments like mortgage backed securities, MBS, collateralized debt obligations, CDOs, and whole loans in order to provide liquidity to solvent financial institutions. Then, these institutions can begin trading again so that we can avoid a complete collapse of our nation's credit markets and return to normal. Impaired loans are now being held on the balance sheets of banks and other financial institutions as mortgage backed securities, MBS. Uncertainty surrounding the value of the underlying mortgages has made it virtually impossible to find an efficiently functioning market for these securities or rationally value them. The uncertainty surrounding the value of these assets has caused banks and other financial institutions to gradually withdraw from the market and refrain from making new loans to firms or individuals in order to preserve their capital. Unfortunately, the underlying value of many of these securities is high but firms lack confidence to reengage in the market. The Treasury's plan intends to make a market for these securities, allow them to be priced so that trading can continue and reinitialize financial intermediation. Treasury's ``troubled asset relief program'' will purchase illiquid mortgage assets directly using a reverse auction to purchase the impaired assets in order to create a market and establish a price for the assets. In a reverse auction the role of buyer and seller are reversed. In a standard auction, buyers compete by make bids for a security and the best offer is taken, thereby establishing a price. This price discovery process is important because it reveals information about what the buyers and sellers think a security is worth. A reverse auction would also be better than Treasury trying to assign a price without the input of the seller. It would also hopefully prevent Treasury from paying too high a price. The Secretary of Treasury, Chairman Bernanke, large national financial institutions, small Arizona community banks and credit unions have all warned me of the serious implications of not passing this legislation and the impact it will have on the lives of everyday Americans. Sound financial institutions, manufacturers and small businesses are all struggling to find investors willing to provide them with cash to fund their operations. Instead, investors are irrationally selling their stocks and bonds regardless of whether or not the companies are making money and are instead hording cash, investing their money in government bonds and even gold. If Congress fails to act, the consequences for Main Street will be severe. If banks are even willing to lend, mortgage loan interest rates will continue to rise making the purchase of a home less affordable. Major manufacturers won't be able to obtain affordable credit to purchase the raw materials and working capital that they need to stay in business. America's farmers won't be able to finance the large upfront costs associated with purchasing fertilizer and seed to plant their crops. Small businesses will not be able to get funding to extend credit to their own customers who wish to make every day purchases. Loans for college could dry up. The stock market lost over a trillion dollars on Tuesday, reducing American wealth and individuals' retirement accounts. For the tens of thousands of dollars in reduced account balances, those in retirement or approaching retirement will be forced to contemplate accepting a lower standard of living in retirement or consider working longer. One must remember that even though the plan contemplates the purchase of up to $700 billion in assets that the program is not likely to cost the taxpayer that much or even a significant portion of that amount. According to CBO, ``enacting the bill would likely entail some budgetary cost which would, however, be substantially smaller than $700 billion.'' Why? Treasury will be borrowing money to buy assets, many of which do have value and are generating income. Most of the whole mortgages which underpin the MBS and CDOs Treasury will purchase have value because most Americans are current on their mortgage payments. In fact, 92 percent of mortgages are performing. Any potential cost associated with the program is likely to be offset because Treasury can take advantage of our government's low financing costs and purchase MBS by borrowing at around 3.5 percent. The difference between the rate Treasury borrows funds at and the return on MBS will be profit which can be used to help finance the overall program. Furthermore, like any good investor, the government will be buying securities at a relatively low price, likely below the securities' fair market value and holding the assets until their price rises. The bill also includes a provision intended to protect against potential losses by requiring that firms selling troubled assets to the government provide warrants or senior debt instruments. The warrants would give the Treasury the right to buy stock in the future at a fixed price. In fact, warrants were issued to the federal government as part of previous deals to provide lending to both Chrysler and America West Airlines, AWA. According to CBO, ``AWA partially compensated the government for the loan guarantee by giving it warrants to buy as many as 18.8 million shares of the company's Class B common stock at an exercise price of $3 per share--the strike price--for a term of 10 years. Those warrants increase in value with the market price of AWA stock and thus provide the government with additional compensation if its guarantee allows the company to return to profitability. Similarly, Chrysler issued warrants to the government to purchase up to 14.4 million shares of Chrysler's common stock, also with a term of 10 years.'' The Federal Government lost $85 million and $256 million on America West and Chrysler's actual loan guarantees, respectively. However, the warrants gained in value making the Federal Government $80 million and $119 million, respectively ultimately reducing the overall cost of both loans to the taxpayer. One final element of the plan protecting taxpayers requires that in 5 years, the President submit a proposal to Congress to recoup any projected taxpayer losses from those in the financial services industry that benefit from the program. So as a result of these protections every dime we get back from asset sales, warrants or future recoupment will go to debt reduction.

Mr. KYL

Mr. KYL. Mr. President, considering the long and distinguished history of the State of Virginia, it is quite an accomplishment to be the state's second-longest serving Senator. But, that is just one of Senator John Warner's many accomplishments. Senator Warner has been serving his country since 1945 when he enlisted in the Navy. Later, he joined the Marine Corps and served in Korea. During the Vietnam war, he served in the Department of the Navy, ultimately attaining the position of Secretary. Senator Warner's service and knowledge of the military have guided his work in the Senate. He has served as chairman of the Armed Services Committee and has guided many bills through the Senate. His commitment to the men and women in uniform has never wavered, and he has used his position to make sure that they have the resources they need to complete their mission. Debating a Defense authorization bill without the leadership of Senator Warner will be a new experience for most of us. On a daily basis, Senator Warner provided a fine example for other Senators. For the Senate to function properly, there must be comity in the body. Senator Warner was courteous and always willing to settle disagreements in a way that befits Senators. The Senate cannot work on behalf of Americans if Senators are unwilling to work in a courteous and bipartisan manner. Senator Warner understood that fact well. Senator Warner has served in the Senate for 30 years, winning five elections. Many Americans have never seen a Senate without John Warner, and many Virginians have always had John Warner as their Senator. When John leaves the Senate, the body will lose not only a distinguished legislator but also a consummate gentleman. Chuck Hagel Mr. President, when the 111th Congress convenes next year, the Senate will be without Senator Chuck Hagel. Senator Hagel has decided to retire from the Senate after two terms. His career in public service, however, long predates his service in Congress. Like many public servants, Senator Hagel entered politics after first serving the Nation in the armed forces. He saw combat in Vietnam and served with valor, receiving two Purple Hearts among other decorations. He would later serve as a congressional staff member, and in 1981, President Reagan tapped him as Deputy Administrator of the Veterans Administration. When Senator Hagel came to the Senate, his actions often reflected his experience as a combat veteran. He did what he believed was best for the men and women in uniform, and he defended his positions forcefully. Senator Hagel has continued to protect and defend the country, notably through his work on the Foreign Relations and Intelligence Committees. He had strong opinions, and he was never shy about letting them be known. I wish Senator Hagel all the best in his pursuits after the Senate. I expect that he will devote much of his time to his wife Lilibet and their family, but I imagine he will save some time to follow his Nebraska Cornhuskers. Pete Domenici Mr. President, the Senate will be a different place when Senator Domenici departs at the end of this session. I say that as a colleague and as a neighbor in the great Southwest. Senator Domenici has served in this body for six terms, longer than any Senator in the history of New Mexico. Judging from the energy that he has displayed during the past months, he could serve another; but he has decided to retire, and it is well deserved. During his time in the Senate, Senator Domenici has been involved in some of the most difficult issues to confront the body. Recently, he has spoken eloquently about the financial stabilization plan the Senate just passed; and earlier in the summer, he was one of the more vocal advocates of securing this nation's energy future. Of course, he has long supported reducing the country's dependence on foreign sources of energy, but this summer he addressed the issue with renewed vigor. Senator Domenici has been of great help to his neighbors in Arizona. Without his assistance, we would not have an Arizona Water Settlements Act, one of the landmark settlements in the history of the country. He has also been working hard on a water settlement for New Mexico. It won't be completed before he leaves the Senate, but Senator Domenici has been instrumental in getting the settlement as far as it has. Senator Domenici should also be proud that legislation he has worked on for some time now is poised for passage. Mental health parity has long been a priority for Senator Domenici, and it appears he will be able to add it to his long list of accomplishments in the Senate. When a Senator has served as long as Senator Domenici, it is difficult to imagine the Senate without him. My Senate colleagues and I will miss Pete and Nancy, and we will remember his legacy of leadership and years of distinguished service to the nation. Larry Craig Mr. President, five colleagues on my side of the aisle are retiring from the Senate at the end of this session. They have served for many years, and I have come to know each of them very well. Senator Larry Craig and I served in the House together until 1990 when Senator Craig moved to the Senate. I joined him four years later. We represent Western States, so we have had occasion to work together on issues that are important to the American West. In his position on the Energy and Natural Resources Committee, he has defended property rights and stood for the prudent use of our natural resources. He has also been a strong advocate of Americans' second amendment rights. And, as a member of the Veterans' Affairs Committee-- for a time the ranking member--he has worked to ensure that veterans receive the benefits they were promised. Senator Craig has held a number of positions among Senate Republicans. He served as chairman of the Republican Policy Committee, and he participated in the musical effort of Senators Trent Lott, John Ashcroft, Jim Jeffords, and himself--the Singing Senators. After almost three decades in the U.S. Congress, Senator Craig is now leaving public service. Idaho has lost a great Senator who always looked out for the interests of the State and its citizens. He has a great record of accomplishment on which to reflect--numerous legislative victories and, of course, one CD. We will miss Senator Craig in the Senate, especially the spirited remarks he so often delivered on the Senate floor. I wish Larry and Suzanne all the best and hope they have many happy moments with their wonderful family. Wayne Allard Mr. President, as this session draws to a close and as we look forward to the 111th Congress, I would be remiss if I didn't pay tribute to my colleagues who are retiring after years of service to their country. I have known Senator Wayne Allard since we served in the House together. Senator Allard served with distinction on the Armed Services Committee, and we have worked together to make sure that this country is prepared to meet national security challenges. Both of us believe strongly in President Reagan's famous axiom, ``peace through strength.'' Recently, we worked together to secure funding to study the possibility of basing missile defenses in space. As a result, policymakers will finally begin to have the information necessary to debate the overall feasibility of a space-based missile defense layer. The space threat will only grow in the years ahead, and I am pleased that I was able to work with Senator Allard to make small, but measurable progress towards better defending the nation. Senator Allard is the model legislator. He's not a professional politician, but a veteranarian by trade. He understands that the money we spend in Washington is not the government's money, but the taxpayers'. And he proves it, returning over $4 million of his office's funds to the government's coffers. His votes are based on principle, not politics. I wish Senator Allard all the best. Colorado has lost a great legislator, but I am sure that his wife Joan, his children, and his five grandsons will be glad to have him at home more often.

Mr. KYL

Mr. KYL. Mr. President, in what has become a frequent occurrence in this Congress, the majority has unnecessarily combined two bills--one that I support and one that I don't--in order to ensure quick passage of both bills. As a result, I must weigh the two bills together. Of course, I want to improve rail safety. However, I cannot support a rail safety bill when it is combined with a bill that is essentially a $13.1 billion taxpayer subsidy to Amtrak. The need for rail safety was recently highlighted after the tragic rail accident in California on September 12 that killed 25 people. Clearly, we need to ensure that Americans are safe traveling to work and moving the Nation's freight. This bill does augment rail safety by revamping the Federal Railroad Administration and providing over $1.6 billion for rail safety programs. It also mandates many much needed safety changes, including: installing positive train controls; amending the hours of service requirements so operators are not overworked; requiring a risk reduction program, which includes a technology implementation and fatigue management for all Class I and rail carriers with poor safety records; requiring certain mandatory training; and making changes to grade crossing safety management practices. A similar version of the rail safety legislation passed the Senate by unanimous consent on August 1. I suspect that if the majority were to allow a vote on final passage of the rail safety bill, it would easily pass the Senate. The majority, however, decided to take a different route. Instead of quickly passing the final version of the rail safety legislation by unanimous consent, it attached the bill to a more controversial piece of legislation--the Amtrak reauthorization bill. This maneuver was obviously done so that the Amtrak reauthorization bill would pass. Unfortunately, the Amtrak reauthorization bill is riddled with bad policy. Since its inception in 1971, Amtrak has required over $30 billion in taxpayer subsidies. According to the Congressional Research Service, Amtrak runs over a billion dollar deficit each year, and requires Federal assistance to cover operating losses and capital investment. Without a yearly Federal grant to cover operating losses, Amtrak would not survive as currently configured. This bill extends Amtrak's dependency on the Federal Government by authorizing $13.1 billion for Amtrak through fiscal year 2013, more than double the amount authorized in the previous Amtrak bill that expired in 2002. Rather than keep Amtrak dependent on taxpayer support, I believe the rail carrier should modify its financial strategy to become self- sufficient and profitable. This bill also includes five new provisions that expand the Davis- Bacon Act requirements. These provisions would force Amtrak to ensure that laborers and mechanics employed by contractors and subcontractors in construction work financed under this bill are paid wages no less than the prevailing wages on similar construction projects. The Davis- Bacon requirement seems harmless enough, but in practice, forcing contractors to pay their laborers a wage standard, which many argue is set on a flawed wage determination, only raises construction costs for that locality. Why would American taxpayers want to set a floor on the cost of construction if it can be done more efficiently and inexpensively? Again, this is just bad policy. It is with regret that I will be forced to register a ``no'' vote on this bill.

Mr. KYL

Mr. KYL. Mr. President, while both the majority leader and Senator Domenici are here, I want to say I appreciate the opening remarks of the majority leader today. It is precisely that tone of necessity and bipartisanship that will enable us to achieve the result to which Senator Domenici referred. I hope to continue in that same vein with some comments I will make in a moment. If I could turn to Senator Domenici, the majority leader pointed out several of the things that have been commented upon before regarding Senator Domenici's leadership. I want to focus on two other things briefly. The majority leader spoke to his leadership on matters relating to the preservation of our great National Laboratory assets, two of which are located in New Mexico. He referred to Senator Domenici's leadership on mental health reform, on nuclear power; that is to say, our production of electricity on which Senator Domenici has worked so hard. I don't recall if he mentioned all of the budget reform that Senator Domenici put in when he was chairman of the committee, but we are certainly all aware of that. I would like to briefly mention two others, to express appreciation to Senator Domenici for his help in achieving one of the landmark Indian water settlements in the history of the country related to Arizona a couple of years ago. Without his help, that wouldn't have been possible. And I want to indicate something that probably not a lot of folks are aware of, but people in New Mexico will become aware of, that Senator Domenici has worked hard to lay the foundation for an equally historic water settlement for New Mexico. Unfortunately, that will not be completed before the end of Senator Domenici's service, but it will not be completed without the foundation he helped to lay. Finally, something that has happened recently that only his Republican colleagues would be familiar with, but in these last several weeks in which we have confronted this financial crisis, several leaders have risen to accept the challenge of leadership. Senator Domenici is one of those. Perhaps because he had been here a long time, had the respect of his colleagues, always spoke thoughtfully on these issues, it would be expected that he would perhaps rise to that leadership role. I know in our Republican conference during the meetings we have had to discuss this, and others, it was frequently the case that Senator Domenici stood and thoughtfully and quietly expressed the words that only very respected leaders can speak. He did that on one occasion to bridge a gap between two groups of Republicans, to compliment one group and to demonstrate how we all could work together to restore confidence to our markets. He has done that subsequently in a thoughtful and, I even suggest, profound way. I have heard Senator Domenici speak eloquently before, but I have never heard him speak more eloquently than when he has been addressing this crisis. It allows us to return to the proposition that as this great Senator nears the end of his service in the Senate for the people of New Mexico and the people of America, he is joining together in a bipartisan way to work on a problem of great significance to the people. He has done everything he can. I know when he leaves, he will be able to say he did everything he could do--and he did it well. I appreciate his service. I have appreciated the personal relationship we have had, the friendship we have had, his assistance to me. I know that will continue even though he and Nancy will not be here in the Senate. But we will be close, since we are neighbors in the great Southwest. I join the remarks of the distinguished majority leader and compliment my friend for his years of service to the people of this country.

Mr. KYL. I will use that.