Paul Sarbanes

Mr. SARBANES

Mr. SARBANES. Mr. President, I join my colleagues in support of the Terrorism Risk Insurance Extension Act of 2005. Three years ago, we passed the Terrorism Risk Insurance Act to stabilize the insurance marketplace after the shock of the September 11 attacks. TRIA, as that Act became known, established a partnership between the insurance industry and the Federal Government to share the risk of significant losses from terrorism. TRIA is scheduled to expire at the end of this year. The bill that is now pending before the Senate would extend TRIA for an additional 2 years while requiring the insurance industry to take on progressively more of the terrorism risk. This bill is the product of a great deal of effort by the Banking Committee to accommodate the widely differing views of many members on the structure of a TRIA extension. I thank the chairman of the Committee, Senator Shelby, for his willingness to reach across the aisle in developing this bill. Under his skillful guidance, we have been able to develop a product that has won unanimous support in the Banking Committee. I also want to recognize Senator Dodd for his dedication to this issue. He was instrumental in 2002 in the development and passage of the original TRIA legislation, and he has been a strong and effective leader this year as well. The original TRIA was designed to address the adverse impact on the terrorism insurance marketplace of the sudden lack of terrorism reinsurance after the September 11 attacks. Reinsurance is a mechanism by which insurance companies spread their own risks, allowing them to write more policies. Without it, insurers' capacity to offer coverage for losses due to terrorism shrank considerably. By all accounts, the Federal backstop provided by TRIA achieved its goal of making terrorism insurance coverage available and affordable once again. The Treasury Department reported this summer, ``TRIA was effective in terms of the purposes it was designed to achieve. TRIA provided a transitional period during which insurers had enhanced financial capacity to write terrorism risk insurance coverage. . . . More generally, TRIA provided an adjustment period allowing both insurers and policyholders to adjust to the post-September 11th view of terrorism risk.'' As discussions began over a possible extension of TRIA, it became clear that there are serious disagreements as to what would be the most efficient, effective, and equitable way to assure the continued availability of terrorism insurance. A number of studies have concluded that the reinsurance market has not rebounded to any great extent since the attacks of 2001. These studies conclude that if the backstop provided by the Federal Government does not continue, insurers will write fewer terrorism policies or charge much higher prices for them, creating a drag on our nation's economy and leaving companies uninsured against a terrorist attack. On the other hand, the administration and others argue that the insurance industry is now better prepared to handle the risk of terrorism than it was three years ago, and that any extension of TRIA should therefore be significantly narrower than the current program to avoid crowding out additional private sector activity. These are issues that deserve careful analysis, which is why this extension bill contains a requirement for a study by the President's Working Group on Financial Markets on the long-term availability and affordability of terrorism risk insurance. I hope that this requirement will result in a thorough examination of the issues which will help us answer the question of how to insure against terrorism over the longterm. To allow time for that examination to take place, the pending legislation continues the TRIA program for two additional years, with certain modifications, which I will briefly summarize. This bill narrows the scope of the TRIA program, further targeting the program toward the types of terrorism insurance that are the most difficult to provide. Under the terms of the extension, the Federal backstop will no longer be available for insurance policies covering commercial automobiles, professional liability, burglary and theft, farmowners' multiple peril, and surety. Just as the original TRIA did, this exteusion places more of the risk on the insurance industry, and correspondingly less on the federal government, in each year. For example, in 2005, under the current program, the amount of terrorism losses that an insurer must cover before Federal assistance becomes available is 15 percent of the premiums collected by that insurer in lines covered by the TRIA program. Under this extension, this ``insurance company deductible'' will rise to 17.5 percent of premiums in 2006, and 20 percent of premiums in 2007. Moreover, the amount that insurers must pay above their deductible also increases, rising from 10 percent of losses in 2006, to 15 percent of losses in 2007. In addition to the individual insurance companies' deductible, tbe insurance industry as a whole must cover a certain amount of losses before federal assistance becomes available. In 2005, the last year of the current TRIA program, that amount is $15 billion. Under this legislation, that will rise to $17.5 billion in 2006, and $20 billion in 2007. Also, starting in 2006, no Federal assistance will be available at all under tbe program for a terrorist attack in which total losses do not exceed $50 million, a level which rises to $100 million in 2007. Finally, I want to emphasize that the extension retains a critically important piece of the current TRIA program: the requirement that insurers make terrorism coverage available to policyholders in all of the lines covered by TRIA. These provisions follow the framework of the existing TRIA program, keeping the Federal backstop in place so that insurers will continue writing terrorism policies, while placing progressively more of the costs onto the industry itself. I want to take just a moment to acknowledge the hard work that the staff has put into this bill, particularly Sarah Kline from my Banking Committee staff, Alex Sternhell with Senator Dodd, Kathy Casey and Mark Oesterle with Chairman Shelby, and Mike Nielson with Senator Bennett. As with any compromise product, no one would say that the legislation is perfect. But it is a serious effort to address the concerns we have heard raised regarding TRIA and the potential effects of its expiration, and I urge my colleagues to join me in supporting it.

Mr. SARBANES

Mr. SARBANES. Mr. President, I want to pay tribute today to Michael O. Hill, superintendent of Assateague Island National Seashore. Mike is retiring after a long and distinguished career in the National Park Service, and I want to thank him for his service to our Nation and especially for the outstanding job he did in managing and enhancing Assateague Island National Seashore since coming to Maryland in 2000. Throughout his 33-year career with the National Park Service, Mike Hill has distinguished himself through his commitment and dedication to managing and protecting some of our Nation's most precious treasures. Beginning as a seasonal employee at Sequoia National Park in 1973, Mike's career quickly took him through a variety of increasingly challenging posts, from his first permanent position as a horse patrol ranger at Petrified Forest National Park to management positions in parks all over our country including Channel Islands National Park, Shenandoah National Park, VA, and Biscayne National Park, FL. In 1990, he was selected for the 2-year Bevinetto congressional fellowship program, where he worked with the National Park Service and Congress to better manage our national parks. In 1993, he became superintendent of Petersburg National Battlefield, and in 2000 he was selected for his present position at Assateague Island National Seashore. Over the past 5 years, I have had the opportunity and privilege to work closely with Mike on several initiatives to protect the natural resources at Assateague and to enhance visitors' experiences at the seashore. I know firsthand the great leadership and expertise he brought not only to these initiatives, but equally important, to supporting and encouraging one of the finest staffs of park professionals in the country--at a time when all our parks are operating with only two-thirds of the needed funding and personnel. Under Mike's direction, the integrity of the northern 7 miles of the National Seashore has been restored after decades of unnatural erosion, plans have been advanced to develop a new barrier island visitors center to accommodate the increasing number of visitors to the park, and partnerships with the University of Maryland Eastern Shore, the Maryland Coastal Bay Program, and the State and local governments have been strengthened. Mike's dedication to the stewardship of the National Park System has earned him the respect and admiration of his colleagues, park visitors, and community residents, alike. His passion for Assateague was evident even in his voicemail: ``I can't take your call right now. With any luck, I'm out on the Island.'' It is due to that commitment that visitors to Assateague and other units of the National Park System will benefit from his labors for years to come. I want to extend my personal congratulations and thanks for his many years of hard work and dedication to the principal conservation mission of the National Park Service and join with his friends and coworkers in wishing him and his family well in the years to come. It is my firm conviction that public service is one of the most honorable callings, one that demands the very best, most dedicated efforts of those who have the opportunity to serve their fellow citizens and country. Throughout his career, Mike Hill has exemplified a steadfast commitment to meeting his demand.

Mr. SARBANES

Mr. SARBANES. I thank the ranking member for that observation. I simply point out, as further stories are heard about the inability to get people back up on their feet and address their needs, it should be remembered that there were provisions in the Senate-passed bill which, if included in this conference report and therefore enacted into law, would have provided very important measures of assistance in a very timely fashion. I, too, regret very much that has not taken place. I yield the floor.

Mr. SARBANES. Mr. President, first, I commend both Senator Shelby, the chairman of the subcommittee, and my colleague from Maryland, Senator Mikulski, the ranking member, for their hard work in bringing this conference report to the Senate this afternoon. I do want to express my regret that this report does not contain an important provision, to provide emergency housing vouchers to victims of the recent hurricanes. On September 14 of this year, the Senate unanimously approved an amendment to this bill to provide $3.5 billion in emergency spending to be used to ensure that any person displaced as a result of the hurricanes could receive a housing voucher. These emergency housing vouchers would have enabled displaced families to find and afford safe, decent, and stable housing. While FEMA and HUD are providing some housing assistance to evacuees, it is clear from news reports, as well as from people in the affected areas, that the promises of housing assistance from the Federal Government are falling far short of what is necessary. Just in the past week, there have been articles about the lack of stable housing for evacuees. The titles alone indicate the stress evacuees are under. For example: Hurricane Evacuees Face Eviction Threats At Both Their Old Homes and New; Displaced in Crisis of Affordable Housing; FEMA Housing Slow In Arriving. The administration's housing policy for the victims of the recent hurricanes is unclear and inadequate. HUD is only assisting people who were assisted by HUD previously in the disaster areas, while FEMA has the responsibility for the vast majority of the evacuees. FEMA, an emergency management agency which is overwhelmed in the face of this unprecedented disaster, is now being tasked with the job of housing hundreds of thousands of people. This is not a job for FEMA. FEMA has provided people with 3-months' worth of rental assistance. However, it is clear that not all evacuees have received this assistance. Second, it is also not clear how evacuees and the landlords renting to them can be guaranteed that rental assistance will continue. Indeed, some Katrina victims are being threatened with eviction. FEMA seems to be handling the continuation of rental assistance on a case-by-case basis, with no clear rules or principles guiding these critical decisions. In the words of an editorial in yesterday's New York Times: The woefully inadequate program for housing put forward by the administration is tantamount to stonewalling the Katrina victims. The emergency housing voucher proposal, which was adopted by the Senate, was, regrettably, not included in the conference report now under consideration. The Senate conferees met implacable resistance, apparently, from the House conferees and from the administration, as I understand it. But the emergency housing voucher proposal which this body adopted would have ensured that every evacuee in need would receive at least 6 months of rental assistance with an additional 6 months of assistance available if necessary. The assistance would have been distributed by HUD and the existing housing network, which houses millions of people around the Nation. There is extensive experience at HUD. I am disappointed, very disappointed that this critical assistance is not included, and I hope that we can find some other way to provide the needed housing assistance to hurricane victims. Again, I commend my colleagues, Senators Shelby and Mikulski, for their successful completion of this report. I again underscore that this emergency housing voucher provision was included in the bill which passed the Senate under the leadership of Chairman Shelby and Ranking Member Mikulski. I regret that they met this resistance in conference and were not able to include it in the final version. It is the evacuees of the hurricanes who, unfortunately, will pay the price.

Mr. SARBANES

Mr. SARBANES. Mr. President, today I would like to honor Werner Fornos, who is retiring after 23 years as president of the Population Institute. Across his long and productive career, Werner has worked tirelessly to improve the lives of Marylanders and people around the world. Werner has been a dedicated public servant. He and I served together in the Maryland House of Delegates from 1966-1970. As a delegate he fought many important legislative battles--to protect the State's natural resources, to strengthen civil rights and to ensure open government. He served as Maryland's Manpower Administrator and as Assistant Secretary of Human Resources. At the Federal level he served as Special Assistant to the U.S. Assistant Secretary of Labor for labor-management relations and Deputy Assistant Manpower Administrator. Over the past three decades, Werner broadened his focus to the international arena, fighting to expand access to voluntary and affordable family planning information, education, and services to couples across the globe. He has spoken to college and university audiences and service and community organizations in all 50 States and has addressed virtually every major international population and development conference. He has written numerous opinion articles for newspapers and magazines worldwide, and is the author of the book, ``Gaining People, Losing Ground.'' His numerous awards and honors include the Humanist of the Year Award of the American Humanist Association; the University of Maryland University College Alumnus of the Year Award; Germany's Order of Merit, the highest distinction granted by the German Government; Rotary International's 2005 Service Above Self Award; and the 2003 United Nations Population Award. Werner Fornos' efforts for more than a quarter of a century have aimed to provide a better quality of life for people everywhere. I ask my colleagues to join me in commending his extraordinary record of achievement and public service.

Mr. SARBANES

Mr. SARBANES. Could I ask the Senator, who is holding this debt?

Mr. SARBANES. Certainly.

Mr. SARBANES. If I could have 4 or 5 more minutes, I could draw to a close.

Mr. SARBANES. Mr. President, could I inquire what the parliamentary situation is.

Mr. SARBANES. How much time is available to each side?

Mr. SARBANES. I understand the Senator from New Hampshire has now yielded to the Senator from South Carolina. Could I inquire, so I have some idea of the sequencing, how much time the Senator from South Carolina will be using?

Mr. SARBANES. Would it be possible to make an opening statement before the chairman of the committee offers an amendment?

Mr. SARBANES. Ten minutes.

Mr. SARBANES. I thank the Chair.

Mr. SARBANES. As I understand it, today, after this series of excessive tax cuts the President has pushed through, using this reconciliation process--actually, I think, abusing it, not using it, because it was designed to reduce deficits, not to increase deficits-- but using this fast-track procedure, the President and his allies in the Congress have pushed through a series of excessive tax cuts. So as I understand it, we are now in deficit, $317 billion for the fiscal year that just ended, and we are facing projected deficits, over the next 10 years, of $4.5 trillion; is that correct?

Mr. SARBANES. Mr. President, I want to underscore what the very able Senator from North Dakota has pointed out. This is an incredible deterioration in the fiscal position of our Nation. We have gone, in less than 5 years' time, from projecting a surplus of $5.6 trillion, over a 10-year period, to a point where we are now projecting a deficit of $4.5 trillion over a 10-year period. And as the able Senator points out, that is a swing in our fiscal position of $10 trillion--$10 trillion in the wrong direction. It is incredible when one stops to think about it.

Mr. SARBANES. Mr. President, I close with this observation: In one of his plays, Tennessee Williams has a character, Blanche Dubois, who says: I have always depended on the kindness of strangers. That is what is happening to the fiscal future of the United States of America. We are becoming increasingly dependent on foreign nations, in many instances central bankers, not individuals, central bankers buying our debt, holding this paper, financing this deficit, underwriting this debt. The United States, as a consequence, is losing a measure of its strength and independence which only underscores the seriousness of the situation we confront.

Mr. SARBANES. I asked the Senator who was holding the debt.

Mr. SARBANES. Certainly.

Mr. SARBANES. As I look at the chart which the Senator has presented, Japan has $684 billion of it; China, $248 billion--and that is rapidly escalating, moving upwards very fast--the United Kingdom, $174 billion. Caribbean banking centers are holding over $100 billion of our national debt. This is a recipe for eventual disaster if we don't get this situation under control. The budget reconciliation process ought not to be used in such a way that the ultimate result is going to be an increase in our deficit and a further runup of the debt. I thank the chairman and the ranking member for this opportunity to speak. I again commend Senator Conrad from North Dakota for the effective and consistent leadership he has provided over the years in addressing the important question of the fiscal underpinnings of our national economy. I yield the floor. Exhibit 1 Stalking the Poor To Soothe the Affluent Impoverished Americans are being set up as targets this week in Congress's desperate attempt to find budget cuts after four straight years of tax cuts for the affluent. House Republicans propose harmful cuts in Medicaid access and benefits, while forcing another 10 hours of work from welfare families and giving states free rein to pile more draconian reductions onto the most vulnerable citizens. This gross political posturing does not even translate into true savings. While imperiously proclaiming cuts of $50 billion over five years, Congressional leaders are determined to fiddle more harmfully with the revenue half of the budget and to pass an additional $70 billion in upper-bracket tax cuts. The proposals would have the federal government--supposedly the protector of the neediest--give the states broad leeway to restrict current benefits; to require co-payments by the poor for medicine and for care by doctors and emergency rooms; and to cut preventive care for children, who represent half of the Medicaid roll. The food stamp program would probably also be hit with a $1 billion cut, and even welfare payments to elderly people who are sick would be crimped by using federal bookkeeping tricks. One particularly boneheaded proposal would severely cut the funds for child support enforcement by $4 billion. This program currently returns $4 in benefits from natural parents for every dollar invested. The proposals are so appalling that moderate Republicans are even said to be considering a show of life on the floor. In contrast, Senate Republicans are shaping cuts that would spare the poor's Medicaid and other safety nets, while finding savings in Medicare overpayments. The Senate approach is obviously preferable, but it is also rooted in the G.O.P.'s pre-election fiction that overspending is the basic problem. The tax cuts should be scuttled and the poor protected.

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

Mr. SARBANES. Will the Senator yield.

Mr. SARBANES. Now, the Senator should yield on that point.

Mr. SARBANES. On questioning the comity of the Senate, the Senator should yield on that point.

Mr. SARBANES. I thank the Chair. Mr. President, I rise to speak on the measure before us. As we well know, budgets are all about priorities. The budget resolution which was passed earlier this year paved the way for the reconciliation legislation which is now before us, legislation which I strongly believe represents the wrong set of priorities for America. I say this for two primary reasons. One is the adverse impact this legislation will have on the Nation's soaring budget deficit; in effect, what it does to the fiscal underpinnings of our economy. The second very strong reason is the impact this legislation will have on families all across the country. I commend the able Senator from North Dakota, Mr. Conrad, for his very effective leadership on this issue. He has been consistent throughout in trying to bring a sense of fiscal responsibility to our budget deliberations. His presentation earlier today has maintained that strong commitment, as he set out the fiscal consequences of the path on which we are proceeding. The reconciliation process, which originated in the mid-1970s, provides fast-track procedural protections for reconciliation bills, which are supposedly designed to help achieve the goal of reducing budget deficits. Regrettably, that goal has been absent from the reconciliation process since 1997, which was the last time the Congress considered a reconciliation bill that actually sought to bring down the deficit. In fact, in recent years, the reconciliation process has been used not to bring down the deficit but to cut taxes. So a process designed to help reduce budget deficits has actually made our deficits worse, significantly worse, by speeding through the Congress package after package of excessive tax cuts. This year's reconciliation process is no different. The budget resolution, which passed on a party-line vote earlier this year, provided fast-track procedural protection for both a spending bill and a tax bill. Both were provided this protection under the reconciliation process. So if one is to see the impact made on the deficit by the reconciliation process, one has to take into account both of these measures. Only one of the two is before us today. But the other is scheduled to follow next week. They constitute part of a package. Now, the budget resolution, passed earlier in the year, required various committees to make $35 billion in spending cuts. The effort to implement that is reflected in the legislation before us today. That same budget resolution required the Finance Committee to report a tax bill that reduces revenues by $70 billion. So we have a requirement, under the budget resolution now being implemented by this fast-track procedure, of $35 billion in spending cuts which I understand is actually coming in at $39 billion--and $70 billion in tax cuts. The consequence of using this reconciliation process for both the spending cuts and the tax cuts will be to increase the budget deficit by more than $30 billion. So the reconciliation legislation, originally designed for the purpose of budget deficit reduction, is not, in fact, going to reduce the budget deficit; it is going to increase the budget deficit. This bill is really about trying to make room for more tax cuts, primarily benefitting the people at the very top of the income and wealth scale. When you look at the reconciliation instructions in the budget resolution, on both the tax and spending sides, that conclusion is inescapable. The reconciliation legislation is a clear example of a fiscal policy that places a higher priority on tax cuts than on funding needed services and reducing the deficit. To me, that is a misplaced priority but, regrettably, one that has marked this administration. Now, if the ranking member would yield for a couple of questions?