Edward Kaufman

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I believe the document we are now debating reflects two basic realities. First, it reflects the deep troubles that we have inherited from years of lax regulation, excessive risk, neglected oversight, even fraud and criminal behavior in our financial sector. As President Obama said when he addressed the Joint Session of Congress, America's ``day of reckoning'' has arrived. The deficit spending of the past administration and the economic collapse that began last fall have created deep structural problems that this budget inherits. Along with short-sighted budget policies that have put us deeper into debt, the collapse of our financial sector has brought down virtually every other sector of our economy. Those facts set the difficult context in which we do our work. Delaware has not been spared from the waves of bad economic news that have swept over our Nation. We have seen the job losses in our manufacturing industries, layoffs in flagship companies like DuPont, and downsizing in our financial services industry. Nationally, we just lost another three-quarters of a million jobs last month. In Delaware, our statewide unemployment rate has hit 7.4 percent, a level we have not seen in a generation. As families in Delaware and around the country sit at their kitchen tables, they know that the world outside has changed. For those who have lost their jobs, for the husbands, the mothers, who have come home with that heartbreaking news--the process of sorting out mortgage payments, health insurance, groceries--even school books and lunch money--has taken on a sad urgency. For the others, whose neighbors are out of work, whose neighborhood now has a foreclosure or two mixed in with the for sale signs, whose own jobs could be among the next to go--basic decisions about family priorities are growing tougher every day. We must not forget those families as we do our work here on the Federal budget this week. But this budget reflects another reality, as well. It reflects the fundamental strengths of our country--our faith in the future, our ability to pull together, the strengths of our national character. And this budget reflects the change in direction, the change in priorities and values, the American people voted for last November. To help with family finances, this budget provides tax cuts to middle-class families. To begin the work of making our health care system more affordable, this budget makes health care more accessible for families and small businesses. It makes a college education more accessible and more affordable, so our children can qualify for the jobs that will define our economic future. This budget starts winding down our dependence on imported fossil fuels, by investments in clean and renewable energy we can provide right here--creating new processes, new products, and new jobs. And it begins the process of restoring the balance to our Nation's finances--a balance we had achieved just eight years ago--indeed, a budget surplus that was squandered. Just as the economic crisis has hit the paychecks of American workers, it has lowered the economic activity that funds the revenues we need to pay for our national priorities. One key part of our response to this crisis must be to fill the hole left in our economy by the loss of 5 million jobs, the loss of so much economic activity. Our economic recovery package, passed earlier this year, is a part of that response. So a key function of this budget will be to continue to fill that gap in our economy, to continue to provide families, businesses, and state and local governments with the resources they need to slow, stop, and reverse the decline in our economy. But if we are to move beyond the current crisis, we must make the investments that will reshape our future. This budget is a clear statement of new priorities: it lays down a new foundation for economic growth. These are the priorities, these are the commitments President Obama and Vice President Biden campaigned on. These are the priorities the American people voted for last November. We must not lose sight of the lesson before us: under the previous administration we gave free rein--and huge financial rewards--to short- term risk-taking, to highly leveraged debt, to deals that many times were not worth the paper they were written on. We now know that tens of billions, or maybe more, of those paper profits were created by criminal enterprises like the one run by Bernie Madoff. Others, while legal, tread on the very border of our outdated and poorly enforced rules and regulations. At the same time, we failed to recognize and support average families in their struggles with rising health care costs, with the rising costs of a college education. We wasted years when we could have invested in cleaner and more efficient domestic sources of energy, while our dependence on dirty, dangerous, uncertain sources of imported oil increased. Those wasted years made our country more vulnerable to those who control oil reserves. The American people have rejected those failed policies and misplaced priorities. This budget replaces them with an agenda for rebuilding our economy and reasserting our values. Budgets are statements of our priorities, here in Washington, at the kitchen tables of families in Delaware, in the homes of families around the country. No budget is perfect. All budgets reflect difficult choices. In this economic crisis, our choices are more difficult, and our decisions carry more importance. I believe this budget reflects the best balance of addressing our present crisis, building a foundation for the future, and putting our finances on a sustainable path. I urge my colleagues to join me in supporting it.

Mr. KAUFMAN

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

Mr. KAUFMAN. Mr. President, I would like to begin by thanking my distinguished colleague, Senator Mikulski, for her effective leadership steering this bill through the HELP Committee while gaining bipartisan support. The strong support this bill enjoys is not surprising given her stewardship and, of course, the hard work of Senator Kennedy who brought us to this point. I would also like to thank Senators Hatch and Enzi for their work on this bill. When we work together across the aisle, the end result is a better bill and good governance. I can think of no bill that better represents the values of America than the Serve America Act. It will expand the opportunities for Americans to serve their communities and their Nation. It makes me--and I think all of us here proud that each year over 60 million Americans volunteer, donating over 8 billion hours of their own time, their own lives--to make our country--and the world--a better place. We are in a time of crisis. Right now, our country needs those volunteers at our schools, hospitals, and shelters more than ever. Nonprofits are doing all that they can to help those who have lost their jobs, their houses, their savings, their retirement. This bill recognizes the need to reinforce and strengthen this system in a number of ways. I recently spoke here in the Senate about the need for our country to reset its focus on how best to change the culture of our economy away from a Wall Street profit-first mentality to one that prioritizes jobs and careers that will help our Nation tackle the challenges it currently faces. I believe that the vitality of our economy rests with our ability to be the world's leader in innovation, and I believe this means that we must do more to attract the best and the brightest to careers in science and engineering. Those who have dedicated themselves to these fields have much to contribute beyond making our economy competitive; they also contribute to our communities' well-being. This bill, I am proud to say, recognizes the important role that engineers can play in bettering our communities. I would like to commend the HELP Committee for expanding the purpose of the bill to include providing service opportunities for our Nation's retiring professionals, including those retiring from the science, technical, engineering, and mathematics professions--also known as ``STEM'' jobs. Not only will this allow us to tap the unique skills and knowledge of our retired STEM workforce, but it will allow us to strengthen the STEM education pipeline. This bill will send retired engineers into communities, classrooms, and after school programs, allowing them to share their wisdom and experience with students. Ultimately, they will help these young people understand not only the important role that science and math can play in their careers, but how they can use their expertise in those fields to solve our country's-- and the world's--greatest challenges. This bill also acknowledges that innovative, community-based service- learning programs that integrate STEM are a successful strategy to engage middle- and high-school students in meaningful hands-on learning opportunities that also help them meet their community's needs. It specifically allows funds to be used to integrate service-learning programs into STEM curricula at the elementary, secondary, and postsecondary schools levels and then draw on practicing or retired STEM professionals to work in these programs. In this case, electrical engineers might participate in a program that helps students apply lessons from their math and science classes to expand and improve broadband access in rural communities. Linking the classroom to real-world applications will help students better understand the role and responsibilities of engineers and scientists in the workplace. The third way that this bill draws on the expertise and knowledge of engineers is that it allows ``Professional Corps'' programs to be created. These ``Professional Corps'' programs will recruit and place qualified professionals, like engineers, in communities that don't have an adequate supply of these professionals. For example, an employer would sponsor an individual and pay their salary to be placed in an organization that works with the community to conduct green energy audits of local public buildings or homes in disadvantaged communities. This would not only reduce a community's carbon footprint; it would also help improve public awareness of engineering's critical role in solving our Nation's greatest challenges--like energy efficiency and energy dependence. We must--once again--capture the attention of our students and let them see the numerous ways that STEM contribute to our economy and can improve the lives of their fellow citizens--in America and abroad. Just as I decided to study engineering because I was inspired by ``Sputnik'' and the race to put a man on the Moon, we must inspire our students to work on issues of critical need as well. The underrepresentation of so many groups in STEM fields is troubling, since diversity is widely acknowledged to spur innovation and creativity. Innovation and creativity in turn spur the development of new products and new markets, which are essential to maintaining a competitive economy. Engineers and scientists can have a tremendous impact on the lives of these traditionally underrepresented groups by serving as mentors in their communities. This bill will encourage our Nation's scientists and engineers to work in and with economically disadvantaged communities to ensure that these fields include rather than exclude, and encourage rather than discourage, traditionally underrepresented groups from pursuing a STEM education. The Serve America Act will help our young people identify those challenges and provide them with real opportunities to make a difference--opportunities like improving energy efficiency, working toward energy independence for America, bolstering disaster preparedness and response, promoting environmental sustainability, strengthening our education and health care infrastructure, and improving opportunities for economically disadvantaged individuals. These challenges are daunting, yet I know that if asked, a new generation of engineers and scientists will rise to the occasion. I stand in proud support of the Serve America Act, as it will inspire multiple generations to volunteer and to engage in national service. Their generosity will not only strengthen America--but the world. I appreciate my colleagues' allowing me the opportunity to explain how the service opportunities this bill creates are also opportunities for our practicing and retired engineers to serve their fellow citizens-- ensuring that that our country's future STEM workforce is strong enough, diverse enough, and motivated enough to tackle the greatest challenges facing America. I will close by once again thanking Senators Mikulski, Kennedy, Hatch, and Enzi for their leadership. Mr. President, I yield the floor and note the absence of a quorum.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I begin by thanking the Senator from Alabama for his courtesy. I appreciate him allowing me to go before him to speak. I rise today in support of the nomination of Elena Kagan to be Solicitor General of the United States. As we saw from her confirmation hearing in the Judiciary Committee more than a month ago, Elena Kagan has the piercing intellect, superb judgment, and wealth of experience necessary to be an outstanding Solicitor General. Dean Kagan's academic credentials could not be any more impressive. After graduating summa cum laude and Phi Beta Kappa from Princeton University, she attended the Harvard Law School, served as supervising editor of the Harvard Law Review, and graduated magna cum laude. After law school, she clerked first for Abner Mikva of the District of Columbia Circuit, and then Thurgood Marshall on the U.S. Supreme Court. That auspicious start to Dean Kagan's legal career was followed by private practice at one of America's leading law firms, and then service in the Office of the Counsel to the President. She has also been a policy adviser to the President, and a legal scholar of the first rank at both the University of Chicago and Harvard. As others have pointed out, her research and writing in the areas of administrative and constitutional law make her a leading expert on many of the most important issues that come before the Supreme Court. If that level of experience were not enough, she has spent the last 5 years as the extraordinarily successful dean of the Harvard Law School, which by all accounts is not an easy place to govern. I note that several of that school's most conservative scholars have voiced their support for this nomination. They praise her vision and judgment, her incredible work habits, and her extraordinary management skills. Just as important, they point to her ability to bridge disagreement, by listening to all sides of an argument, engaging honestly with everyone concerned, and making decisions openly and with good reasons. No one disputes that Dean Kagan has served Harvard incredibly well. She will do the same for the Office of Solicitor General. Her accomplishments as a scholar and teacher are unmatched. Her skill as a leader and manager are beyond dispute. In fact, she has the support of every single Solicitor General who has served since 1985, including all three who worked in the previous administration. As they wrote to the Judiciary Committee: We are confident that Dean Kagan will bring distinction to the office, continue its highest traditions and be a forceful advocate for the United States before the Supreme Court. On a personal note, I want to add that earlier in her career, Dean Kagan spent some time working as an adviser to then-Senator Biden. I had the good fortune to get to know her in that context. Based on that experience, and everything I have seen since, I am absolutely convinced not only that she possesses enormous intellect and consummate skill, but also that she is a person of the highest character and unquestioned integrity. In short, this is an outstanding nominee, and an outstanding nomination. On March 5, after thorough consideration, a bipartisan majority of the Judiciary Committee--13 to 3--voted to report Dean Kagan's nomination. I urge my colleagues to confirm her without delay, so she can begin the critical task of representing the United States in the Supreme Court. Mr. President, I yield the floor to the Senator from Alabama.

Mr. KAUFMAN

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

Mr. KAUFMAN. Mr. President, I ask unanimous consent to proceed as in morning business.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I wish to spend a few minutes talking about action that needs to be taken to restore the credibility of the fairness of the American financial markets. On Monday, Senators Isakson, Tester, and I introduced S. 605, which directs the Securities and Exchange Commission to write regulations that will deal effectively with abusive short selling. One of the abusive techniques addressed in the bill is so-called ``naked short selling.'' Naked short selling is when traders sell shares they don't own and have no ability to deliver at the time of sale--which dilutes the value of a company's shares and can drive prices down artificially. Before the ink on our bill was even dry, we received a profoundly disappointing report from the SEC's inspector general entitled ``Practices Related to Naked Short Selling Complaints and Referrals,'' a report detailing the results of an audit on the SEC Division of Enforcement's policies, procedures and practices for processing complaints about naked short selling. An astounding 5,000 complaints about abusive short selling were sent to the SEC's Enforcement Division between January 1, 2007 and June 1, 2008. There could be no mistaking the scale of the potential problem that that number of complaints reflected. Incredibly, a mere 123 complaints were referred for further investigation. Worse, and I quote: ``none of the forwarded complaints resulted in enforcement actions . . .'' five thousand complaints, zero enforcement actions. Not surprisingly, the SEC inspector general has concluded that the processes for dealing with such complaints need a fundamental overhaul. Accordingly, the IG made 11 suggestions for improvements. And how did the Enforcement Division respond? It agreed to one of the IG's recommendations, and declined to move on the rest. I have been around Washington and the Senate for 36 years, but rarely have I seen an inspector general's call for action so summarily dismissed. In its comments to the IG report, the SEC Enforcement Division stated: there is hardly unanimity in the investment community or the financial media on either the prevalence, or the dangers, of ``naked'' short selling. I ask my colleagues: Why would the SEC Enforcement Division want to wait until there is unanimity in the investment community and the financial media to enforce the law? Why would the SEC Enforcement Division in its comments to the IG report want to give a virtual ``green light'' to continued abusive naked short selling? That is an enforcement division that is not worthy of its name. In the IG's response to the Enforcement Division, the IG notes that it is ``disappointed'' that the Enforcement Division only concurred with one of the 11 recommendations in the audit report. The IG is ``particularly concerned'' that the Enforcement Division did not concur in its first three recommendations--that the Division should develop a written in-depth triage analysis for naked short selling complaints. Moreover, the IG notes: SEC has repeatedly recognized that naked short selling can depress stock prices and have harmful effects on the market. In adopting a naked short selling antifraud rule, Rule 10b- 21, in October 2008, the Commission stated, `We have been concerned about ``naked'' short selling and, in particular, abusive `naked' short selling, for some time. Where does this leave us, Mr. President? We have an SEC that is ostensibly concerned about abusive naked short selling, but we have an enforcement division--after receiving literally thousands and thousands of complaints about naked short selling--that has brought no enforcement actions and doesn't take seriously an IG audit and recommendations. This is an outrage. I want to be clear, this was the record from a review of last year's examination of short selling complaints. This is an issue Mary Schapiro, the new SEC chair, has inherited. She just got to the SEC. But this is a strong indication of the need for real leadership at the SEC. Unless and until that happens, investors will have reason to worry that markets are not yet free of manipulation and abuse. Of all the challenges confronting our financial system, none is more important than restoring investors' trust and confidence in the market--the belief that the game isn't rigged against them. After the disastrous and unprecedented losses of the past year, millions of Americans will refuse to put their resources back into the stock market until they believe the system is once again sound, fair and adequately overseen by the SEC. In the not-so-distant past, a strategy of long-term buying-and- holding offered a roadmap for comfortable living in retirement and the ability to provide to our children and grandchildren that all-important economic head start in life. Then, the market valued companies based on economic fundamentals and expected future profits. Today, too many people view the stock markets as another gambling casino, dominated by volatility and susceptible to predatory short sellers who profit from false rumors and bear raids. To restore faith in our securities markets, the Securities and Exchange Commission urgently needs to reflect a clear commitment to meaningful change. It is time to restore the integrity, efficiency and fairness of our securities markets by preventing manipulative short selling, ensuring that the market fairly values the actual shares issued by a company, and outlawing the creation of ``phantom shares'' by abusive short sellers. Let's remember how we got here. The opaque derivatives market allowed some people to play a shell game by leveraging to the hilt and buying and selling synthetic instruments that ultimately crashed in value. The same thing happens through abusive short selling, when traders sell shares they do not own and have no ability to deliver at the time of sale. It is like making copies of your car's title, and then selling the title to the car three times, while hoping you can find other cars to deliver if the buyer proceeds. In some cases, the short interest in a particular company's stock on a given day has spiked dramatically after false rumors have circulated about the company. The data further show that ``fails'' to deliver are large and problematic. That is evidence of manipulation. It distorts the market. It must end now. Let me be clear: the problem isn't short selling itself, which can enhance market efficiency and price discovery. The problem is that, under current rules, short sellers can sell stocks they haven't actually borrowed in advance of their short sale-- and with no uptick rule in place as a circuit breaker. The current standard requires only a ``reasonable belief'' that a short seller can locate the necessary shares by the delivery date; that is no standard at all and subjects the market to rife abuse. For the market to flourish again, the SEC must issue rules and enforce them in a way that convinces investors the system is not rigged against them. One important step the SEC should take now is to reinstate the substance of its former ``uptick'' rule. The uptick rule served us well for 70 years until the SEC rescinded it in July 2007. It required short sellers to take a breath and wait for a sale at a higher price before continuing to sell short in declining markets. According to one survey, 85 percent of CEOs, and professionals at NYSE-listed companies favor reinstating it. Fed Chairman Bernanke, bipartisan Members of Congress, and former regulators favor reinstating it. The SEC should do that now. Restoring the uptick rule is necessary, but not sufficient, to rein in abusive short selling. If the SEC is to alter fundamentally the way stocks trade today, it must also require--and enforce--short sellers possessing at the time of the sale a demonstrable legally enforceable right to deliver the shares--a so-called ``pre- borrow'' requirement. We simply can't tolerate a market that permits short sellers to create phantom shares that dilute a company's value, erode the value of investors' holdings and manipulate share prices downward. A recent Bloomberg news report based on SEC data confirmed that so- called ``naked'' short selling contributed significantly to the demise of Lehman Brothers and Bear Stearns. Those companies took horrendous gambles and their share values had to reflect those serious missteps, but in the absence of ``naked'' short selling both might nevertheless have survived. Abusive short selling is gasoline on the fire for distressed stocks and distressed markets. And the knowledge that it is still tolerated rattles small investors and shakes confidence in our markets. Mr. President, I ask unanimous consent that this story be printed in the Record.

Mr. KAUFMAN. The new SEC leadership has the opportunity to make the SEC a ``can do'' agency once more. The SEC is scheduled to meet on April 8 to discuss the uptick rule and abusive short selling. The Chair and commissioners should move quickly to adopt the uptick rule and a pre-borrow requirement. If not, Congress should do its part and direct the SEC to do that quickly. After yesterday's IG report and the Enforcement Division's response to it, I am even more convinced that SEC Chair Schapiro needs to grab the reins quickly at the SEC, and get back to standing up for investor interests to restore confidence in the markets. If the SEC won't do it, Congress should require them to do it. Mr. President, I yield the floor.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I am honored to have the Senator from Georgia join me. The uptick rule and short selling is not a partisan issue; it is a bipartisan issue. We can work together to get this right. It is time to send a clear message to investors, to people who want to invest in our markets, that the markets are fair and they have an opportunity and they are going to get a chance at a level playing field. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KAUFMAN. Mr. President, the American people have lost literally trillions of dollars as a result of the meltdown of our financial markets. This is a disaster of monumental and unprecedented proportions. Think of the retirees who have lost more than half their savings and who lie awake at night worrying about how they are going to make it. Think of the parents who can no longer afford to send their children to the college of their choice or even to college at all. Think of the business men and women who will cancel investments or lay off workers because they cannot raise capital--hopes crushed, dreams denied, plans canceled, opportunities lost. We need to restore the strength of the financial markets. We need to rebuild the confidence in our economy and in our markets so we can restore those losses. We all look forward to the day when wealth and employment in America are growing again. There are many things we must do to make that happen. Foremost, we must rescue, reform, and recapitalize our banking system. In the Judiciary Committee, we moved on March 5 to restore investor confidence by reporting S. 386, the Fraud and Enforcement Recovery Act. Chairman Leahy, Senator Grassley, Senator Schumer, Senator Klobuchar, and I pressed this legislation forward because we needed to ensure that the Justice Department, the FBI, and other law enforcement agencies have the resources they need to find, prosecute, and jail those who have committed financial fraud. Our markets will flourish again only when investors are confident that the market will be held accountable to the law. This is one step we must take. I am here today to talk about another urgently needed piece of the much larger project of restoring confidence in our capital markets: We must stop the artificial manipulation of stock prices. We must stop the abusive short selling of securities. I am convinced that the SEC must restore the uptick rule and issue regulations that effectively ban abusive short selling. Abusive short selling is tantamount to fraud and market manipulation and must be stopped. The uptick rule must be restored now. There is a growing consensus that the SEC must move quickly to reinstate the uptick rule. Everyone is talking about it. Everyone seems to support it. Everyone believes the SEC needs to put on the brakes and stop those who dump millions of shares they don't own to drive prices down. Abusive short selling amounts to gasoline on the fire for distressed stocks and distressed markets. Abusive short selling happens when traders and hedge funds sell stock shares they don't have and won't be able to deliver. Let me make myself clear: The problem isn't short selling itself. Short selling can actually enhance market efficiency and provide the market with information it needs to set prices at appropriate levels. The problem is that under current rules, short sellers are allowed to sell stocks they haven't actually borrowed in advance of their short sale and with no uptick rule in place as a circuit breaker. This in turn frequently means they all too often simply fail to deliver the stocks they have supposedly sold. Abusive short sales expose sellers and those linked to their short sales to the risk that when settlement day arrives, the short seller won't have the necessary shares available. That harms the market and market participants, particularly when failure to deliver persists for substantial periods as statistics show they clearly have. We have the opportunity to have the SEC become a can-do agency once more. Under the leadership of Chairwoman Shapiro, the SEC needs to move at a pace to protect investors and restore investor confidence. I believe the SEC must impose at least two important changes. It must reestablish the uptick rule and it must establish a mandatory, marketwide, pre-borrow requirement to sell shares short. As for the uptick rule, that rule held us in good stead for 70 years. It was first established in 1938 and the SEC eliminated it in July 2007. In my view--and I am not alone--it should never have been repealed. The uptick rule is especially helpful when the market is falling. It simply requires short sellers to take a breath and wait for an increase in price before continuing to sell shares short. Establishing a mandatory, marketwide pre-borrow requirement would simply require short sellers to demonstrate at the time of the sale that they have a legally enforceable right to deliver the shares of stock at the required delivery date. To permit short sellers to sell shares they don't have turns our capital markets into gambling casinos where these ``naked'' short sellers profit if the price goes down and fail to deliver if the price doesn't. The time has come for that practice to stop. I wrote to the SEC Chair Mary Shapiro on March 3 making these same points. I understand she testified before the Banking Committee in February and that she intends, as quickly as possible, to engage in a full review of the SEC's actions with respect to short selling, including an evaluation of why the uptick rule should be reinstated. I also understand the SEC is scheduled to meet soon to discuss ways to reform short selling practices. We need quick action to restore investor confidence. That is why I, along with Senator Isakson of Georgia, am introducing a bill today that would direct the SEC to write regulations addressing abusive short sales. We believe that restoring the uptick rule is necessary, but not sufficient, to end abusive short selling. Our bipartisan bill would direct the SEC to write regulations within 60 days that accomplish five things to end the abusive short selling. One: Reinstate the substance of that portion of its prior regulations that prohibited short sales that are not made on an increase in the price of the stock. This prevents short sellers from piling on declining stock, driving prices down. Two: Require trades by short sellers of securities to yield priority and preference to transactions effected by long sellers of securities. This would require exchanges and other trading venues to execute the trades of long sellers instead of short sellers, all other things being equal. Third: With the concurrence of the Secretary of the Treasury and the Chairman of the Board of Governors of the Federal Reserve System, prohibit short sales of the securities of any financial institution unless the trade is effected at a price, in minimum lots specified by the Commission, at least 5 cents higher than the immediately preceding transaction in such securities. Our financial sector and financial stocks are in a fragile state and our taxpayers now hold substantial shares in many institutions. If the Treasury and the Fed believe they need additional protection in these times, this legislation permits it. Four: Prohibit any person from selling securities short unless that person has at the time of the short sale a demonstrable legally enforceable right to deliver the securities at the required delivery date. Under current law, many short sellers fail to deliver. We must tighten up the rules. Five: Require that all short sales settle in the same timeframe employed for long sales of the same securities. There is no reason short sellers should have 13 days to deliver shares when long sellers have only 3 days. I look forward to hearing from Chair Shapiro soon about the conclusions of her review and the actions the SEC intends to take to stop these harmful activities that are preventing our markets from returning to a sound footing. In the meantime, Senator Isakson and I believe the Senate should move forward with this legislation directing the SEC to take action now. In the end, I hope the SEC will move quickly on its own to take these actions urgently, and now. Mr. President, I yield the floor.

Mr. KAUFMAN

Mr. KAUFMAN. I suggest the absence of a quorum.

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

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I am honored to have the Senator from Georgia join me. The uptick rule and short selling is not a partisan issue; it is a bipartisan issue. We can work together to get this right. It is time to send a clear message to investors, to people who want to invest in our markets, that the markets are fair and they have an opportunity and they are going to get a chance at a level playing field. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KAUFMAN. Mr. President, the American people have lost literally trillions of dollars as a result of the meltdown of our financial markets. This is a disaster of monumental and unprecedented proportions. Think of the retirees who have lost more than half their savings and who lie awake at night worrying about how they are going to make it. Think of the parents who can no longer afford to send their children to the college of their choice or even to college at all. Think of the business men and women who will cancel investments or lay off workers because they cannot raise capital--hopes crushed, dreams denied, plans canceled, opportunities lost. We need to restore the strength of the financial markets. We need to rebuild the confidence in our economy and in our markets so we can restore those losses. We all look forward to the day when wealth and employment in America are growing again. There are many things we must do to make that happen. Foremost, we must rescue, reform, and recapitalize our banking system. In the Judiciary Committee, we moved on March 5 to restore investor confidence by reporting S. 386, the Fraud and Enforcement Recovery Act. Chairman Leahy, Senator Grassley, Senator Schumer, Senator Klobuchar, and I pressed this legislation forward because we needed to ensure that the Justice Department, the FBI, and other law enforcement agencies have the resources they need to find, prosecute, and jail those who have committed financial fraud. Our markets will flourish again only when investors are confident that the market will be held accountable to the law. This is one step we must take. I am here today to talk about another urgently needed piece of the much larger project of restoring confidence in our capital markets: We must stop the artificial manipulation of stock prices. We must stop the abusive short selling of securities. I am convinced that the SEC must restore the uptick rule and issue regulations that effectively ban abusive short selling. Abusive short selling is tantamount to fraud and market manipulation and must be stopped. The uptick rule must be restored now. There is a growing consensus that the SEC must move quickly to reinstate the uptick rule. Everyone is talking about it. Everyone seems to support it. Everyone believes the SEC needs to put on the brakes and stop those who dump millions of shares they don't own to drive prices down. Abusive short selling amounts to gasoline on the fire for distressed stocks and distressed markets. Abusive short selling happens when traders and hedge funds sell stock shares they don't have and won't be able to deliver. Let me make myself clear: The problem isn't short selling itself. Short selling can actually enhance market efficiency and provide the market with information it needs to set prices at appropriate levels. The problem is that under current rules, short sellers are allowed to sell stocks they haven't actually borrowed in advance of their short sale and with no uptick rule in place as a circuit breaker. This in turn frequently means they all too often simply fail to deliver the stocks they have supposedly sold. Abusive short sales expose sellers and those linked to their short sales to the risk that when settlement day arrives, the short seller won't have the necessary shares available. That harms the market and market participants, particularly when failure to deliver persists for substantial periods as statistics show they clearly have. We have the opportunity to have the SEC become a can-do agency once more. Under the leadership of Chairwoman Shapiro, the SEC needs to move at a pace to protect investors and restore investor confidence. I believe the SEC must impose at least two important changes. It must reestablish the uptick rule and it must establish a mandatory, marketwide, pre-borrow requirement to sell shares short. As for the uptick rule, that rule held us in good stead for 70 years. It was first established in 1938 and the SEC eliminated it in July 2007. In my view--and I am not alone--it should never have been repealed. The uptick rule is especially helpful when the market is falling. It simply requires short sellers to take a breath and wait for an increase in price before continuing to sell shares short. Establishing a mandatory, marketwide pre-borrow requirement would simply require short sellers to demonstrate at the time of the sale that they have a legally enforceable right to deliver the shares of stock at the required delivery date. To permit short sellers to sell shares they don't have turns our capital markets into gambling casinos where these ``naked'' short sellers profit if the price goes down and fail to deliver if the price doesn't. The time has come for that practice to stop. I wrote to the SEC Chair Mary Shapiro on March 3 making these same points. I understand she testified before the Banking Committee in February and that she intends, as quickly as possible, to engage in a full review of the SEC's actions with respect to short selling, including an evaluation of why the uptick rule should be reinstated. I also understand the SEC is scheduled to meet soon to discuss ways to reform short selling practices. We need quick action to restore investor confidence. That is why I, along with Senator Isakson of Georgia, am introducing a bill today that would direct the SEC to write regulations addressing abusive short sales. We believe that restoring the uptick rule is necessary, but not sufficient, to end abusive short selling. Our bipartisan bill would direct the SEC to write regulations within 60 days that accomplish five things to end the abusive short selling. One: Reinstate the substance of that portion of its prior regulations that prohibited short sales that are not made on an increase in the price of the stock. This prevents short sellers from piling on declining stock, driving prices down. Two: Require trades by short sellers of securities to yield priority and preference to transactions effected by long sellers of securities. This would require exchanges and other trading venues to execute the trades of long sellers instead of short sellers, all other things being equal. Third: With the concurrence of the Secretary of the Treasury and the Chairman of the Board of Governors of the Federal Reserve System, prohibit short sales of the securities of any financial institution unless the trade is effected at a price, in minimum lots specified by the Commission, at least 5 cents higher than the immediately preceding transaction in such securities. Our financial sector and financial stocks are in a fragile state and our taxpayers now hold substantial shares in many institutions. If the Treasury and the Fed believe they need additional protection in these times, this legislation permits it. Four: Prohibit any person from selling securities short unless that person has at the time of the short sale a demonstrable legally enforceable right to deliver the securities at the required delivery date. Under current law, many short sellers fail to deliver. We must tighten up the rules. Five: Require that all short sales settle in the same timeframe employed for long sales of the same securities. There is no reason short sellers should have 13 days to deliver shares when long sellers have only 3 days. I look forward to hearing from Chair Shapiro soon about the conclusions of her review and the actions the SEC intends to take to stop these harmful activities that are preventing our markets from returning to a sound footing. In the meantime, Senator Isakson and I believe the Senate should move forward with this legislation directing the SEC to take action now. In the end, I hope the SEC will move quickly on its own to take these actions urgently, and now. Mr. President, I yield the floor.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, people have asked me what it is like to be a Senator as opposed to being chief of staff, and one of the great things is getting to work with a chairman such as Chairman Leahy on the Judiciary Committee; someone who knows what he is about, knows the Senate, and is a former prosecutor. We are truly fortunate to have him as chair and also to have a truly great staff on the Senate Judiciary Committee, led by Bruce Cohen. So it is a great and a genuine pleasure. Pleasure is used a lot of times on the floor. Sometimes it is not too pleasurable. But this is truly pleasurable, to work with the chairman and the staff of the Judiciary Committee, but especially the chairman. So I thank the chairman for his kind remarks. I do agree with so much of what he has to say about David Ogden for Deputy Attorney General. I, along with him, am deeply disappointed that the nomination of David Ogden for Deputy Attorney General has been so needlessly delayed. This has real consequences for the administration of law in our country during a challenging time. Depriving the Department of Justice of senior leadership at this critical juncture is much more than unfortunate. As we saw from his confirmation hearings in the Judiciary Committee more than a month ago, David Ogden has excellent academic credentials and broad experience in law and government. He fully understands the special role of the Department of Justice and is deeply committed to the rule of law. He has broad support from lawyers of all political and judicial philosophies. President Obama designated Mr. Ogden be Deputy Attorney General on January 5, which seems like an eternity ago--over 2 months ago. We held his confirmation hearing in the Judiciary Committee over a month ago and, on February 26, after thorough consideration, a bipartisan majority of the committee, 14 to 5, voted to report his nomination. The ranking member, the Senate minority whip and the well-respected senior Senator from South Carolina, voted in favor of his nomination. Despite that bipartisan vote and broad support from law enforcement groups, children's advocates, civil rights organizations, former Democratic and Republican officials, his nomination has faced unwarranted delay. This delay is unfortunate in itself, particularly when the nominee has impeccable credentials and broad support. However, as important, this delay has come at a critical time for the Department of Justice. Without a Deputy Attorney General, the Department is forced to deal with some of the most important issues facing this Nation with one hand tied behind its back. The Deputy Attorney General holds the No. 2 position at the Department of Justice and, as we all know, is responsible for the day- to-day management of the Department, including critical national security responsibilities. The Deputy Attorney General, for example, signs FISA applications. These are essential to ensuring that our intelligence services get the information they need to protect us from terrorism and other national security threats. The Deputy Attorney General will also play an important role in overseeing the Guantanamo Bay detainee review, to make sure we assess each of the remaining detainees and make sure they are safely and appropriately transferred-- I know an issue that everyone in this body shares a concern about. One of the recommendations of the bipartisan 9/11 Commission was that after Presidential transitions, nominations for national security appointments, such as Mr. Ogden's, be accelerated. The delay we are seeing now, to put it mildly, is not helping those who are sworn to protect our country. The Deputy Attorney General manages the criminal division of the FBI, which helps keep Americans safe, not only from violent crime but also from financial fraud. In the aftermath of the financial fraud meltdown that has thrown the American economy into a serious recession, we must ensure that lawbreakers will be identified and prosecuted for financial fraud. Punishing complex financial crimes and deterring future fraud are vital in restoring confidence in our decimated financial markets. How can people be expected to go back in the market again when they do not know or cannot have confidence that the people who perpetrated these crimes are not still there but are in jail? This is important. As we know in dealing with crime, the sooner you deal with it after the crime happens the better your chance of catching the people involved. Getting the Deputy Attorney General involved as soon as possible is essential for our financial well-being. The Deputy Attorney General also oversees efforts to fight waste and corruption in Federal programs by means of the False Claims Act. As we expend vast sums in two wars and work to stimulate the economic recovery, we must do everything we can to make sure the taxpayer dollars are well spent. Along the same line, the Deputy Attorney General oversees the distribution of billions of dollars in economic recovery funds in support of critical State and local law enforcement initiatives. Everyone agrees that to fulfill the promise of the economic recovery package, we need to get the funds out the door quickly. Again, depriving the Department of Justice of senior leadership at this critical time is bad policy. The American people need a Deputy Attorney General in place now, to meet all these critical efforts. The problems and threats confronting the country are too serious to delay. We know David Ogden is extraordinarily well qualified. We know the Judiciary Committee fully vetted his background, experience and judgment and reported out his nomination with a bipartisan majority. We know the Attorney General needs his second in command as well as other members of his leadership team in place and working as soon as possible. We know further delay in this crucial nomination is inexcusable. I hope on this nomination, and going forward, we do better. I yield the floor, suggest the absence of a quorum, and ask the time be charged equally.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I rise to call my colleagues attention to a promising development for U.S. public diplomacy efforts in the Middle East. Yesterday, Alhurra Television, the U.S. Government-sponsored Arabic language channel, launched a new groundbreaking live television show originating simultaneously from five countries and three continents including Dubai, Beirut, Cairo, Jerusalem and Alhurra's headquarters in Springfield, Va. The 3-hour daily program titled Al Youm (Today in Arabic), provides viewers a window to the world through its coverage of the latest news from the Middle East, the United States, and the world. The show also includes topics such as health, sports technology, entertainment news, and social and cultural issues. Al Youm includes interviews with everyone from politicians to athletes, leaders in business, and the arts. On its opening broadcast, Al Youm carried an interview with House International Relations Committee Chairman Howard Berman and included a report from Alhurra's White House correspondent discussing the Obama administration's outreach to a moderate faction of the Taliban. Since its launch coincided with International Women's Day, Al Youm had a series of reports on the role of women in the Middle East, including a story on young girls being forced into marriage and a live interview with the Executive Director of Dubai's Social Development Institute. There was also a profile of the former First Lady of Lebanon and her work as the founder of a health center for children with blood diseases. Al Youm had the latest financial and sports news, as well as a health segment on the growing problem of obesity. Al Youm's entertainment segments featured well-known singers and performers in the region. Popular Arab singer Myriam Fares introduced her latest song that has not been released to the public. Hisham Abbas, another famous Arab singer, joined Al Youm during its debut and sang his most popular hit song, Feno. Actress Nadine Al Rassi appeared live to discuss her program, Assr El Harim, one of the most popular television programs in the Middle East. Al Youm also profiled the first Arab singer to represent Israel in the Eurovision Festival. Al Youm further enhances the strong core of program options already offered by Alhurra Television. Launched in 2004 under the U.S. Broadcasting Board of Governors, the 24-hour broadcast network has gained traction in the competitive television marketplace of the Middle East. Recent surveys of the Middle East by research companies such as ACNielsen show that Alhurra has a weekly reach of an estimated 26 million adults. Alhurra is broadcast on the Nilesat and Arabsat satellites in the Middle East and the Hotbird satellite system in Europe. Al Youm is also streamed live on the Internet--Alhurra.com--at 4-7 p.m. GMT.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent that the Record remain open until 1 p.m. for the purpose of adding cosponsors and submitting statements.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and any statements related to the resolution be printed in the Record.

Mr. KAUFMAN. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 59, submitted earlier today by Senator Lincoln.

Mr. KAUFMAN

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

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that it stand adjourned under the previous order.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent that the Judiciary Committee be discharged from further consideration of S. Res. 58 and the Senate proceed to its immediate consideration.

Mr. KAUFMAN. Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and any statements related to the resolution be printed in the Record.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, America's economy is in crisis. We can either drown under the weight of the problem, or we can ride the wave of opportunity that it offers. To do that, we must put science, engineering, and innovation back in their rightful place in our economy. If every cloud has a silver lining, this economic crisis can benefit America, we use this opportunity to restore our leadership in the world, if we create anew the industries, businesses and products that will shape the new economy. As the only Senator holding an engineering degree, I remember when engineering ranked far ahead of business administration as the premier college degree for those who had ambition and the determination to succeed. After the Soviet Union's 1957 surprise launch of Sputnik 1, American leaders spurred the Nation to catch up, to increase our national commitment to science. The Sputnik crisis led to the creation of NASA and other government research agencies, as well as an increase in U.S. Government spending on scientific research and higher education. It doensn't seem that long ago, but I was one of the young students who were drawn by Sputnik and our leaders' call to seek an engineering degree. More recently, though, more and more of America's best and brightest college students opted instead to take their ``quant'' skills in math and analysis to Wall Street. From what I understand, of all the undergraduate majors in the 2008 class at the Massachusetts Insitute of Technology, 11.4 percent took jobs in finance. This is the Massachusetts Institute of Technology, our leading engineering school, sending over 10 percent of its graduates to Wall Street. The stark truth is that during the go-go years on Wall Street, America's engineering and innovation expertise declined. And it is not just that engineers have been choosing finance over traditional engineering careers; fewer students having been choosing to study engineering, period. Back in 1986--not that long ago--engineering and engineering technology students earned close to 10 percent of U.S. bachelor's degrees. Despite attractive starting salaries, often above $50,000 a year, the percentage today is only about 5 percent. Only about 121,000 people earned degrees in engineering in 2007, and that includes bachelors, masters, and doctoral degrees. Today's financial crisis has given our young people an opportunity to take a hard look at how they want to spend their lives. It gives America's political and educational leaders an opportunity to reorder their resources, to open a pipeline to produce students skilled in science, technology, engineering and mathematics, STEM. According to the U.S. Department of Labor, about 80 percent of the new jobs created in the next 10 years will require these critical STEM skills. While America must remain a leader in finance, it is clear we must also be a world leader in energy, biotech, biomed and many other industries based on science, technology, and mathematical skills. Here is what we should do right away: We need to find more and better ways to marry public policy and engineering. Many universities have begun to do this, but we also must act on a national level, with the support and coordination of national policies. To take one key example, our Nation, and indeed our planet, is facing a potential crisis in the supply and demand for clean energy and water. How these issues are resolved will define our children's future. These problems require technical solutions, designed by scientists and engineers who also have an understanding of cultures, religions, and policy. We also need to develop programs that allow students to ``make a difference,'' to tap the idealism our young people are eager to express. For example, we should create an engineering jobs corps--similar to the Peace Corps or Teach for America--to help channel the young talent emerging from our engineering schools. The fields of biotech and biomed, energy and environment should attract socially conscious students who want to improve the quality of life for us all. Prior to graduating, engineering students typically must write a final paper addressing a problem to solve. We should make those papers part of our national dialogue, publish them, and make them available to government and to the business community, with authors' rights kept secure. Finally, we need to reach out to women and other students who have traditionally been underrepresented in engineering. The United States cannot maintain its position as a technological leader nor can we solve the problems we face without the perspectives and participation of all members of our society. We are in a struggle to define our nation's future. We must recruit all of the talent we can find. We know our competitors in countries like China are throwing their resources into science and engineering. We can do no less. When I went to college I wanted to be an engineer, in part because 52 years ago the United States was supporting science and engineering on an unprecedented level. America's competitive spirit helped us meet the challenges of those times. Thousands of technical innovations created new products, new jobs, new industries, and new levels of economic productivity. We can do this again. The financial crisis--and our recognition of the misplaced priorities and resources that created it--can help lead a cultural shift back to the strong foundations of innovation and know-how that have always been the American way. The Federal Government can and should lead in supporting the basic scientific, medical and engineering research that will spur discoveries and innovations. Our entrepreneurs have always been ready to build on those foundations, to create millions of new jobs and shape a bright American future. I look forward to working with my colleagues and the administration to restore the prestige and leadership of science and engineering in our country.

Mr. KAUFMAN

Mr. KAUFMAN. Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 2 p.m. Monday, March 2; that following the prayer and the pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day; and the Senate proceed to the consideration of H.R. 1105, the Omnibus appropriations bill, as under the previous order.