S2368 CONGRESSIONAL RECORD — SENATE April 3, 2008 I look forward to a good debate on CONGRATULATING SENATORS (The amendment is printed in today’s this legislation. There will be amend- SHELBY AND DODD RECORD under ‘‘Text of Amendments.’’) Mr. DODD. Mr. President, let me, ments offered to take provisions out of Mr. MCCONNELL. Mr. President, let the bill. There will be amendments of- me begin this morning by congratu- first of all, begin by thanking the ma- jority leader, Senator REID, and the fered to put provisions in the bill. That lating my good friends Senator SHELBY Republican leader, Senator MCCON- is the way it should be. I would hope and Senator DODD for their great work that people would be willing to have in getting us to the point we are today. NELL. We would not be where we are at this moment without their leadership. relatively limited time. We wish to Of course, Senator GRASSLEY and Sen- So any discussion of where we are on move forward on this bill as quickly as ator BAUCUS were deeply involved in we can. that with regard to the tax portion of this matter begins with them and their At this stage, I have had a number of the bipartisan bill we have before us. I staffs for helping us organize the effort conversations with the Republican think this is a good start to the debate. over the last number of hours, begin- leader as to what we hope can be ac- I also say to my good friend, the ma- ning earlier this week, as we returned complished in this bill. I think at this jority leader, I think this is a good ex- from the 2-week Easter break, to try to time it is far too early to talk about ample of how we can work together and fashion together a proposal, at least on timelines and when, in fact, we are accomplish something on an important matters with which there was common going to get it done. We do know there issue for the country. We know now we agreement. As the leader has pointed out, there is an emergency out there and we need will have amendments on both sides be- are many matters here with which to do it as quickly as we can. I applaud cause that is the way the Senate oper- there is significant disagreement. They the bipartisan work, as I have indi- ates. It is my hope we can get to the are not part of the pending substitute. cated. I think we need to continue this end of the trail here in the very near Senator SHELBY and I and our respec- effort of bipartisanship. I think it is future and have a bipartisan bill we tive staffs, along with many others— critical to do this, to complete this ac- can all feel proud of. certainly the Finance Committee, be- tion on this important legislation, and I want to begin the debate by again cause there are portions of this that in an expedited manner. thanking Senator SHELBY and Senator are exclusively the jurisdiction of the DODD for getting us to this point. We I have not had the chance privately Finance Committee—have worked over look forward to moving forward as rap- to ask the Republican leader—and I the last 2 days to find those issues upon idly as possible. normally do not do this—but I will vio- which there was common agreement, late my own rules today and ask the f or at least levels of spending on which Republican leader if he could agree to a RESERVATION OF LEADER TIME there was common agreement, to move unanimous consent to provide for hous- forward on as the centerpiece, with the ing-related amendments only. The ACTING PRESIDENT pro tem- pore. Under the previous order, the full understanding our colleagues will The ACTING PRESIDENT pro tem- leadership time is reserved. offer various other ideas either to in- pore. The Republican leader. crease amounts of money or to add ad- f Mr. MCCONNELL. Mr. President, let ditional provisions to this bill. me say my expectation is that the NEW DIRECTION FOR ENERGY What is important here is we are fi- amendments that will be offered to the INDEPENDENCE, NATIONAL SE- nally working on this issue. As I point- bill will be housing-related, but I am CURITY, AND CONSUMER PRO- ed out earlier this week, we have close not in a position at the beginning of TECTION ACT AND THE RENEW- to 8,000 foreclosures a day occurring in the bill to enter into such a consent ABLE ENERGY AND ENERGY this country, not to mention, of course, agreement. I think there is a wide- CONSERVATION TAX ACT OF 2007 the residual effects spreading across spread feeling on both sides of the aisle The ACTING PRESIDENT pro tem- the economy of our Nation—the con- that we need to get an accomplishment pore. Under the previous order, the tagion effect affecting students loans, here, that we need to do it on a bipar- Senate adopts the motion to proceed to car loans, people who are current in tisan basis. But I am not in a position H.R. 3221, which the clerk will report. their mortgage but are watching the other than to say to my good friend The legislative clerk read as follows: value of their house decline because that is my expectation. I am not in a A bill (H.R. 3221) moving the United States their neighbor’s house is in foreclosure, position to agree to such a consent toward greater energy independence and se- watching home sales drop. This is in here at the outset of the bill. curity, developing innovative new tech- the midst of an economy that is stum- nologies, reducing carbon emissions, cre- bling along, to put it mildly, with a fis- The ACTING PRESIDENT pro tem- ating green jobs, protecting consumers, in- cal situation in dire straits. The dollar pore. The majority leader. creasing clean renewable energy production, has been weakened. Inflation is rising. Mr. REID. Mr. President, we have an and modernizing our energy infrastructure, Unemployment rates are increasing. extremely important hearing that is and to amend the Internal Revenue Code of Consumer confidence is at a low point, going to start at 10 o’clock or there- 1986 to provide tax incentives for the produc- tion of renewable energy and energy con- the lowest it has been in years. abouts, being conducted by the two servation. So it has been critical, in my view, managers of this bill. The assistant aside from the specifics which you will The ACTING PRESIDENT pro tem- leader, Senator DURBIN, has agreed to hear about over the coming days, that pore. The Senator from Connecticut. manage this bill until these two good we do everything possible to remind men can complete enough of their work AMENDMENT NO. 4387 the American people that in this body at the hearing to come back and man- (Purpose: To provide a complete substitute) Democrats and Republicans can come age the bill. Senator DURBIN is experi- Mr. DODD. Mr. President, I have an together to try to take intelligent enced, and he will handle things ex- amendment at the desk. steps to move against the flow of the tremely well, as well as anyone could I call up that amendment. economy heading in the wrong direc- do that. I appreciate his stepping in. He The ACTING PRESIDENT pro tem- tion. had his own schedule, and he set that pore. The clerk will report the amend- This proposal we bring to you as a aside to work on this bill. I appreciate ment. substitute this morning on behalf of that very much. The legislative clerk read as follows: myself and Senator SHELBY, along with The Senator from Connecticut [Mr. DODD], the leadership, is that first major step. f for himself and Mr. SHELBY, proposes an Is it the end game? Absolutely not. Are amendment numbered 4387. there ideas I would love to have had in- RECOGNITION OF THE MINORITY Mr. DODD. Mr. President, I ask unan- cluded in this bill? Absolutely. Are LEADER imous consent that reading of the there matters here the Senator from amendment be dispensed with. Alabama would like to have included The ACTING PRESIDENT pro tem- The ACTING PRESIDENT pro tem- or excluded? Absolutely. But we real- pore. The Republican leader is recog- pore. Without objection, it is so or- ized we were not going to be able to do nized. dered. that in this discussion over the last 2

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00002 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.004 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2369 days, that we needed at least to come GRASSLEY, who did very good and im- Tax provisions. Senator BAUCUS and up with a core group of issues around portant work in the Finance Com- Senator GRASSLEY worked out a pack- which there was general agreement, mittee over this same period of time, age of tax provisions as well. I will and then from that move forward. That the fruits of which are also reflected in mention them briefly and let them de- is the good news. the package that is now before us in scribe the provisions more fully them- A month ago, we had a cloture mo- the substitute. This package includes a selves. They include a home buyer tax tion on going to a housing debate. It number of important provisions: credit to incentivize the purchase of was defeated. You could not even get to Foreclosure mitigation fund—$4 bil- foreclosed properties, the Isakson- a debate on this housing crisis. That lion for towns and cities to acquire Stabenow-Cardin proposal. No. 2 is a now is behind us. There are matters foreclosed and abandoned properties, property tax deduction to help people that occurred over the last several renovate them, and put them in the offset rising mortgage payments. We weeks that I think probably had a lot hands of qualified home buyers or turn will provide a modest tax cut to mid- of influence on what has caused us to them into rental housing as the local dle-income families of $100 to $250 who come here this morning. The Bear markets dictate. That is important be- don’t already itemize their deductions. cause when you have a foreclosed prop- Stearns, JPMorgan situation, which we Senator BAYH and Senator BAUCUS of- will be hearing about later this morn- erty in the neighborhood, every other fered that idea. Mortgage revenue ing in the Banking Committee, was property in that neighborhood declines bonds to help communities raise re- certainly one. I suspect the other in value immediately. So trying to do sources to invest in affordable mort- something about foreclosed properties major event was the fact that we went gages and rental housing—it goes right to put them back on the market and home for a couple weeks. to the heart of the problem we are get them back with people living in There is nothing like going home and talking about. Net operating loss them, either by purchase or rental, to get a message. Members went back carryback will help businesses ride out home—Democrats and Republicans— which will also benefit the neighbors in that community, not to mention prop- the current downturn. and they heard from their constitu- This package is a good start. I wish erty taxes, services, and the like—it is ents. They watched what happened on to thank as well Senator KERRY, Sen- a major provision, one which I am glad Wall Street in New York when all of a ator AKAKA, and Senator NORM COLE- is included. sudden there was an arrangement, Foreclosure prevention counseling— MAN for talking about veterans and which I think was the right one, prob- $100 million of additional funding in making sure those serving our country ably, with some minor differences, that fiscal year 2008 to bring borrowers and in Afghanistan, Iraq, and elsewhere are saved a major collapse in our financial lenders to the table to work out terms not going to have their properties fore- institutions. that will prevent foreclosures. This closed in the midst of all of this. But they asked the very legitimate brings the budget for foreclosure pre- There are other provisions as well question: If it was good enough for peo- vention counseling to $280 million for that I am not going into here, but ple to get together to solve a problem this fiscal year. That is up from $42 needless to say, again, these are items on Wall Street, what about the prob- million last year. Now, would we have upon which we could agree, both Demo- lem on Main Street? What are you liked to have done more? Absolutely, crats and Republicans, to serve as the doing here to see to it that I can stay we would have liked to have done core of the coming debate. Our action in my home, that our neighborhood is more. Senator SCHUMER and Senator today does not preclude, as I have said, not going to collapse—that our taxes MURRAY wanted $200 million. My col- further legislative action by the Sen- and properties and neighborhoods are league from Alabama will tell you ate. In fact, I am committed to going not going to further deteriorate? So I there was not a lot of appetite for this forward and doing more. In fact, I will suspect more than anything else going proposal here, to put it mildly, so we hold a hearing next week on the home home made a big difference, and we are compromised between $200 million and preservation idea that a number of here this morning to then talk about virtually zero and got it to $100 mil- Democrats and Republicans are at- what we can do. lion. I am told by the nonprofits that tracted to. Senator SHELBY, to his Two days ago, the majority leader there are adequate funds here now in credit—I appreciate his willingness to and the Republican leader asked Sen- the calendar year to assist in the coun- be a part of that debate and discussion ator SHELBY and myself to put together seling effort, which can make a huge during the coming days. There was a a consensus package to move this proc- difference. reluctance, and I would have loved to ess forward, and I am pleased to say we FHA modernization. The bill also in- have included that in this package. have complied with the wishes of the cludes the FHA modernization legisla- There is resistance to that idea at this two leaders in crafting a compromise tion which passed this body 93 to 1 last juncture, but I am still determined to proposal that we believe merits the full fall, with some improvements. For ex- do everything I can in the coming days support of this body. ample, we increased the FHA loan lim- to have that included as well, to see to Again, I thank the majority leader its from the current $362,000 to as high it that we really get a floor and a bot- and the Republican leader for their as $550,000. This will make FHA more tom on this issue as quickly as we can. leadership and support in this effort. available and usable to people who live My colleague from Alabama is here. We worked very intensely through in higher cost States. It would also We are both going to be going over to Tuesday night until yesterday evening strengthen the solvency of the FHA chair a hearing, so I want to give him to put together this package that is be- fund. FHA can help an awful lot of peo- some time to discuss this. fore us. This effort built on the consid- ple seeking safe, solid, affordable, Let me thank Senator REID and Sen- erable time that we have spent in the fixed-rate mortgages. We think it is a ator DURBIN for their efforts. They will Banking Committee over the past 15 very important component to our com- be offering ideas as well to improve and months, I might add, in hearings, prehensive strategy. strengthen this legislation. Some of meetings, and briefings, on the causes Better disclosure. Senator JACK REED these ideas we will welcome, others we of and remedies to the current eco- has included a provision in the legisla- will oppose. nomic crisis. Senator SHELBY and I tion that improves disclosure. It up- Senator SHELBY and I will consult said yesterday that at times of crisis dates penalties for lenders who fail to with each other in that process to de- such as this, inaction is not an option. make disclosures. These kinds of dis- termine how to go forward, but we With more than 7,000 Americans going closures might have helped prevent want to stick with this core idea if we into foreclosure every single day, true some abusive lending if they had been can. Other ideas that come to the table leaders cannot simply turn passively in place in years past. I would point we will certainly consider and may, in away. Our agreement takes important out that I think another Senator also fact, be added to the package, but I action to address symptoms of this cri- had disclosure provisions in this bill, think we want to try to keep this core sis in a constructive and sensible man- and this is a compromise between Sen- package whole and together if we can, ner. ator REID and a Republican Senator rather than having it unravel. I would be remiss if I did not also who was also interested in disclosure So with that, I thank the majority mention Senator BAUCUS and Senator language. leader, the Republican leader, and I

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00003 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.006 S03APPT1 ccoleman on PRODPC75 with SENATE S2370 CONGRESSIONAL RECORD — SENATE April 3, 2008 thank my colleague from Alabama. He lars and minimize the possibility that could not afford to purchase a home in DC or and I work closely together. Last year, funds will be wasted or profits inappro- anywhere near DC and were unwilling to we did 35 hearings and 17 bills in the priately pocketed, as has been the case take on an alternative mortgage with 100 percent financing. As such, we rented. Banking Committee, half of which be- in the past. When my tour is up in Japan we will prob- came the law of the land, and some The amendment before us also con- ably be going back to Washington and we others are still pending here. Our com- tains a number of tax-related provi- hope to buy a home. We have worked hard, mittee is a good committee with good sions prepared in a bipartisan fashion saved hard, and will be putting down a 20 working members who care about these by the chairman and ranking member percent down payment on the home with a 30 issues, and we are determined to make of the Finance Committee, Senator year fixed mortgage. An important factor in a difference. BAUCUS and Senator GRASSLEY. our being able to purchase a home is how With that, I yield the floor. I believe this is a focused and tar- much the market has softened. House prices The ACTING PRESIDENT pro tem- geted piece of legislation that will ad- are dropping because the market was incred- ibly inflated. pore. The Senator from Alabama is rec- dress in an appropriate manner a num- Yes, people are losing their homes to fore- ognized. ber of the difficulties we are now facing closure, but more often than not they Mr. SHELBY. Mr. President, this in the housing market. There is no shouldn’t have been in those homes in the morning I am pleased to join my friend doubt that we are experiencing serious first place. I have very little sympathy for and colleague, the chairman of the economic stress in communities across someone who took out two risky mortgages Senate Banking Committee, Senator the Nation. As I said in the beginning to cover 100 percent of the cost of a home DODD, in supporting the pending of my remarks, the American people that they could not afford. amendment. expect us here in the Senate to provide And the letter goes on: When a crisis such as the one we are effective and timely solutions. But I In fact, I would consider it an absolute slap now facing arises, I believe the Amer- would caution my colleagues here that in the face to see my tax dollars being spent on people to allow them to stay in the home ican people expect us to provide effec- while we are in agreement on the meas- tive and timely solutions. Chairman they can’t afford when I have been saving for ures contained in this bill, there is a years to get into the home that I hope I can DODD and I have worked together to de- line that I believe we should not cross. afford. velop a package of targeted measures That line is represented by a taxpayer- The letter goes on: intended to help stabilize and strength- funded bailout of investors or home- I recognize that much of the debate centers en the housing and the financial mar- owners who freely and willingly en- around predatory lending practices, and peo- kets. We chose not to pursue partisan tered into mortgages that they knew ple being duped into a mortgage they didn’t goals here. Instead, we are focusing our or should have known they could not fully understand. I feel for those people. I efforts on achieving the best possible afford. Nor should we be using taxpayer really do. But there must come a point when results in a bipartisan fashion. I com- dollars to bail out financial institu- people take responsibility for their actions. mend the chairman for his willingness tions that also contributed to this If you didn’t read your mortgage before you signed, you made a big mistake, and now are to work with me in this manner. problem. Chairman DODD and I will going to pay for it. It is not the Federal Gov- The amendment before us provides shortly be attending a Banking Com- immediate help to the marketplace by ernment’s job to save people from the nat- mittee hearing in the Senate where we ural consequences of their actions. reforming the Federal Housing Admin- will be examining that very question in The letter reads on: istration, allowing it to provide greater relation to the Bear Stearns situation. liquidity and thereby enhancing the As you look for a solution to the current While there are a large and growing situation please consider the position many options available to America’s home- number of homes entering foreclosure, of us are in. We work hard, we save, and we owners. It also provides additional I believe we must remember that the buy a home we can afford. Do you really funding for foreclosure prevention vast majority of homeowners are living want to punish us by using our tax dollars in counseling, which will hopefully help within their means and are making a bailout for those who got in over their many homeowners stay current on their mortgage payments. While some heads? Do you want to reward poor fiscal dis- their mortgages and be able to remain would argue that we have a responsi- cipline and encourage people once again to in their homes. bility to aid those who find themselves bite off more than they can chew knowing In order to prevent this situation that Uncle Sam is going to come to the res- underwater on their mortgages or un- cue? I believe that people like me are very from repeating itself, the amendment able to afford their increasing pay- much in the majority in this Nation. But the increases the disclosures—this is very ments, I would argue, on the contrary, media attention isn’t going to focus on us. It important—disclosures made to con- that we also have a responsibility to doesn’t make for good TV. They are going to sumers when they obtain mortgages those who have made prudent financial focus on the family that is losing their home and close their loans. I believe that decisions and those who may be look- because of ‘‘corporate greed.’’ No mention giving consumers; that is, buyers, more ing to enter the housing market for the will be made of the family that simply want- information and greater ability to un- first time. There is a large group of ed more than they can afford and now has to derstand the choices they are making pay the price. Americans who see falling home prices Please be an advocate not only for fiscal will help them avoid the pitfalls and not only as an opportunity to buy for discipline and responsibility in the govern- bad decisions many underinformed con- the first time but also as an oppor- ment, but in each and every American as an sumers made in the recent past. tunity to move up. We must not forget individual. To better protect our soldiers, sail- them in our zeal to do something here. I think that is a good letter. I believe ors, and airmen, the amendment ex- Recently, I received a letter from an these are wise words, and I believe they tends additional consumer protections individual stationed in Japan. I think are words that I hope we can keep in and provides those returning from com- he very effectively makes the case for mind to encourage my colleagues as we bat a chance to get back on their feet the other side of the housing market, work through this legislation. before they face foreclosure. That is and I would like to share this with my I yield the floor. the least we can do. Senate colleagues. I will read it into The ACTING PRESIDENT pro tem- In an effort to provide communities the RECORD: pore. The Senator from Illinois is rec- with the ability to clean up the damage Dear Sir: While I’m not a resident of your ognized. caused by the foreclosures that have State of Alabama, I would like to share my AMENDMENT NO. 4388 already occurred, we have included opinion with you on a very important issue. (Purpose: To address the treatment of pri- funding to allow States and commu- My wife and I are very concerned with the mary mortgages in bankruptcy, and for nities to buy and repair foreclosed resi- direction government policy seems to be other purposes) dences. Attached to this funding is a taking on the debate over the ‘‘housing cri- Mr. DURBIN. Mr. President, pursu- requirement that any profits from the sis.’’ I am an employee of the Department of ant to the unanimous consent agree- sale of properties must be used to buy Defense and I am serving overseas in Japan. Before we came here, we lived in Wash- ment, I send an amendment to the and repair additional properties, simi- ington, DC, an area with a very high cost of desk. lar to a revolving fund. I believe that living. From the very first paycheck I re- The ACTING PRESIDENT pro tem- reuse of this funding in this manner ceived we have been saving every month for pore. The clerk will report the amend- will maximize the impact of these dol- an eventual down payment on a home. We ment.

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00004 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.007 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2371 The legislative clerk read as follows: promise, this effort, I found there was issues of our time, and those following The Senator from Illinois [Mr. DURBIN], for a glaring omission—my amendment debate in the gallery or through C– himself and Mr. REID, proposes an amend- was gone. The bankruptcy amendment SPAN would hear both sides of the de- ment numbered 4388. I offered on the original bill had been bate and form their own opinions and Mr. DURBIN. Mr. President, I ask stripped from it. I wasn’t surprised. feel like we were doing our job. Let’s unanimous consent that the reading of There was a genuine effort and under- do that on this amendment. the amendment be dispensed with. taking to find common ground between On the bankruptcy amendment I The ACTING PRESIDENT pro tem- Republicans and Democrats. Clearly, have offered with Senator REID, let’s pore. Without objection, it is so or- there was opposition to my proposal. I have that kind of debate. dered. had an option at that point, as a Sen- I am going to yield now to the Sen- (The amendment is printed in today’s ator—and every Senator has this op- ator from Oklahoma at this point and RECORD under ‘‘Text of Amendments.’’) tion—to stop the train, to hold things ask unanimous consent to reclaim the Mr. DURBIN. Mr. President, I am up, and say that is the end of the story. floor after he completes his remarks. going to make a brief opening state- I have seen it done, where some Sen- The ACTING PRESIDENT pro tem- ment because I know the Senator from ators have made a career by being ob- pore. Is there objection? Without objec- Oklahoma, Mr. INHOFE, would like to stinate, saying nothing will happen tion, it is so ordered. take the floor and has to go to a com- until I get my way. Sometimes they Mr. DURBIN. Mr. President, I ask the mittee meeting. I am going to stay prevail but not always. The net result Senator, would he state publicly the here to manage this bill while Senators is an elongated Senate process and a time he thinks he might need? DODD and SHELBY are off to a Banking lot of wasted time. Mr. INHOFE. Yes. It is my under- Committee hearing with the head of Those who follow the Senate pro- standing we had up to 30 minutes. It is the Federal Reserve, Mr. Bernanke. ceedings on C–SPAN may be familiar not my intention to take that much The rules of the Senate are written with the so-called quorum call, which time, but there might be someone else so that virtually any Senator can stop basically means nothing happens but on our side who will want some of the the train. It is a strange way to do for a clerk who, every 5 or 10 minutes, time, in which case I will yield to business around here, but it is the way reads a name to remind people we still them. So it could take that long. we have done it historically. The so- have a pulse in the Senate. But that is Mr. DURBIN. Then, I ask unanimous called filibuster is where a Senator can a delay, it is a lack of effort, and it is consent that when 30 minutes has ex- take to the floor and say: Stop. I don’t a waste of time. So I made the decision pired, or if the Senator has not used all want this to go forward. Literally, that not to use my right as a Senator to that, I be allowed to reclaim the floor interrupts the proceedings of the Sen- stop this bill. I thought that would and describe the amendment I have ate until that Senator yields the floor have been selfish, self-centered and, laid at the desk. or is persuaded by an agreement to co- honestly, didn’t serve the purpose we The ACTING PRESIDENT pro tem- operate with the progress that is need- are all trying to serve. All I asked in pore. Without objection, it is so or- ed. return was to be able to offer this dered. This bill is critically important for amendment. All I ask my colleagues, in The Senator from Oklahoma is recog- America. It is relating to our housing return, is to give me a vote. I don’t nized. crisis—and it is a crisis. We proposed, know if I can prevail. It has substantial VICTORY IN IRAQ AND THE MIDDLE EAST on the Democratic side, a housing opposition. I wish to give my point of Mr. INHOFE. Mr. President, I thank stimulus bill that had five or six com- view, state my case for the amend- the Senator from Illinois for his co- ponent parts and that I thought was a ment, and I welcome those who are op- operation. As I said, if we have any good, fair, and important piece of legis- posed to do the same. other Members of our side who wish to lation. It included a provision that In fact, I am prepared to do some- come down and talk about this, there may have been one of the major provi- thing that is rarely done on the floor of was that length of time set aside. So I sions of that bill I had authored related the Senate today. I am prepared to reserve that time for anybody else who to the Bankruptcy Code. It turns out stand here and debate my amendment. wants to speak. If anybody is listening this was the most controversial part of I welcome those who oppose it, and I and they wish to use some of this 30 the Democratic housing stimulus pack- would debate it on the merits of what minutes, they are welcome to do it. age. It drew more fire than anything I have to offer. You don’t see that I returned 2 days ago from Iraq. It is else. There were other provisions even much anymore in this great delibera- my 18th trip in the area, in the theater. the President objected to, but it tive body. People give their speeches Sometimes it was Afghanistan and seemed like most of the opposition was and leave. I will stick around and I will other areas, but it was in that zone directed at my amendment, which I be prepared to debate the merits of it there. I wished to take this oppor- will describe. and then I will accept the decision of tunity to kind of show where we are There came a time this week, the Senate as to whether this amend- today, how we got here, and where we though, where we were going to return ment should be included in the pack- are going to go. Some good things are to the bill with the controversy associ- age. happening over there. A lot of people ated with it—this Democratic stimulus All I ask is that, in good faith, those don’t believe it, and some people don’t package—where an opportunity pre- who oppose the amendment give us a want to believe it. sented itself. Senator SHELBY from timely debate and a vote. Let’s not The first thing I wish to do is try to Alabama, the ranking Republican on drag this out forever. There are Mem- give an indication as to where we start- the Banking Committee, approached bers on both sides of the aisle who ed and how this whole thing started. Senator DODD, the chairman, and sug- would like to offer their amendments. I We keep hearing quotes from people— gested we try to work this out. In fact, wish to say, at the outset, I will not be and misquotes—such as General Cody. that effort was undertaken with the unreasonable in the debate time I ask He is very certain the Army—even blessing and approval of both HARRY for. I hope we can reach an agreement though it is stressed—the soldiers REID, the majority leader, and Senator where we can actually have a complete themselves are in a position to con- MCCONNELL, the Republican leader. A debate and vote on this amendment by tinue as they have been. But there is a lot of hard work went into the com- 12:15 today. I am prepared to do that. problem. I think the world needs to promise. The staff, as usual, had to As I said, whatever the decision of the know how we got into this problem in burn the midnight oil to get this bill Senate, I accept it. Let’s move forward. the first place. ready—not just the Banking Com- When I ran for the Senate—I left the It began in the 1990s during the Clin- mittee but also the Finance Com- House of Representatives—I did it be- ton administration. I have a chart. mittee. The end result is the substitute cause I respected this institution. I When I make this statement, people amendment that is pending before the knew so many fine people who served tend not to believe it is true. At that Senate at this moment. here, and I looked forward to the possi- time, we downgraded the military, dur- I will tell you, as I walked through bility that on the floor of the Senate ing those 8 years in the 1990s, by ap- this substitute amendment, this com- we could engage and debate on the proximately $412 billion. If you look at

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00005 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.009 S03APPT1 ccoleman on PRODPC75 with SENATE S2372 CONGRESSIONAL RECORD — SENATE April 3, 2008 where we were during the beginning of and increasing the force strength and quarters. I took the little girl up to her the Clinton administration, that would capability of our American military. bedroom—she wanted to see her little be this black line on the chart. If you Nonetheless, it is very significant that animals—only to find they had used merely put into this chart the inflation people realize that when this adminis- her bedroom for a torture chamber, and rate and kept the funding of the mili- tration took over, and 9/11 came about, there were body parts just scattered tary at a constant level, it would be this was the condition of our military. around in different areas. When we saw this black line. However, the red line It should not have been that way. The this, we realized what an animal this down here was the Clinton budget. The terrorist movement was active through man we were dealing with was. budget came in—if you added up all 8 the 1990s and during the Clinton admin- After 1991, we went back several dif- years—at $412 billion below what the istration. ferent times, only to find that Saddam static budget would have been with in- In February of 1993, there was a car Hussein went after everybody who he flation added. bomb planted in the underground park- suspected had been opposed to him dur- I say that, and it sounds a little bit ing garage below the World Trade Cen- ing that first war, and he took care of like something people are hearing for ter. We knew that, and that was prior them in different ways. He tortured the first time. Yet it should not be the to 9/11. In June of 1996, Khobar Towers, thousands of people to death. You have first time. I know there wasn’t one we remember, were bombed by to have gone over there, as I did, and month that went by in the 1990s that I Hezbollah, with intelligence pointing looked into the graves and seen people didn’t come down to the Senate floor to support by al-Qaida. The embassies who had been buried alive. His sons and say this euphoric attitude that the in Kenya and Tanzania, in 1998, were would raid weddings that were taking Cold War is over and we don’t need a blown up, and that was done by the ter- place. They would rape the bride, and military anymore is something that is rorists. We all remember what hap- then they would bury her alive. People going to come back to haunt us. Well, pened in Yemen, when a small craft who were going to be tortured to death it has come back to haunt us. This is went into the USS Cole and killed a by Saddam Hussein were begging to be the problem we have. It is very much number of Americans. That was an- dropped into the vats of acid head first like during the Carter administration other terrorist attack. so they would die quicker, or into the in the 1970s, when President Ronald So this terrorism was going on all grinders, or the limbs that were cut off. during the time we were downsizing Reagan inherited a hollow force when We really cannot draw a distinction our military. The next thing we find he took office. It was. between al-Qaida and Saddam Hussein out is we are in a position where we When you are decreasing the funding in terms of the fact they are terrorists have a down-sized military, and 9/11 of the military over 8 years, you are and they have no regard for human life. comes along and 3,000 Americans are dropping behind in your modernization We just recently found an al-Qaida tor- killed by terrorists, and we found out program, and it means your force ture manual. The very things Saddam other terrorist attacks were planned at strength will be dropped, and it was a Hussein was doing in torturing people, that time. That is when this all start- downgrading of about 40 percent. they are doing now. Take a look at this One of the things that concerned me ed. chart. They are using flames on the at that time was there is this feeling I have to say—because right now I throat; cutting the feet open so if they among the American people that we am missing a hearing, which I will go live, they will never be able to walk have the best of everything; that when to when my remarks are finished—in again; hanging by the arms while they our kids go into combat, they are talking about this stressed situation of had electrodes going in; drills used on armed and equipped with the very best our Army, people need to understand their hands; and, of course, chopping equipment that is out there. Unfortu- how we got into this situation. After off their limbs. This is a manual teach- nately, that is not true. It should be my 18th trip over there, and every time ing them how to do it. We watched this true. I think the American people in talking to the young people over and saw this was happening. I would would demand—if they knew we were there, yes, they are stressed and their think any reasonable person would say having these problems—that we would families are stressed and, yes, they that alone would have been enough to give our kids the very best of every- have had more deployments, and they go in to stop that reign of tyranny that thing. should be 12 months instead of 15 I have always been very appreciative months but they understand this has to was taking place at that time. But of GEN John Jumper, who, in 1998, be done. We cannot compromise our there are other reasons too. might been the Vice Chief of the Air victory. So we went in after 9/11 for The second reason is there were Force. He stood up and said Russia was three reasons. training camps located in Iraq in making a strike vehicle—he was refer- First, we went in to liberate Iraq places such as Sargot, Ramadi, ring to the SU–25 and SU–30 vehicles— from a tyrannical leader. I remember Samarra, and one of them was in Salm- and selling them all over the world to so well in 1991, after the first Iraq war, on Pac. Salmon Pac is a community in countries such as China, or potential I had an occasion to be on the first Iraq where they have a fuselage of a 707 adversaries, which are better than our freedom flight. It was 1991. There were on the ground, and they were teaching best strike vehicles, the F–15 and the nine of us, Democrats and Republicans. people how to hijack airplanes. We will F–16. In some areas, they were better. We were the first ones, in fact, to go to never know whether the perpetrators He talked about the stealth capabili- Kuwait City, but the Iraqis did not of 9/11 were trained in Salmon Pac. We ties of what the Russians were making even know at that time the war was don’t know that. We never will know. as opposed to what we had. At that over. They were burning oilfields. The Nonetheless, those are four training time, there was one sale of around 240 day would turn into night because of camps in Iraq. They are all closed now. of these vehicles to the Chinese. So the smoke. That was the environment They are not training anymore. That they had equipment that was better we were in at that time. alone is certainly itself enough reason than ours. We had a person of nobility in Ku- to have gone in there. Another example is the NLOS can- wait who had a palace by the Persian The third reason is to help the Iraqi non. This is the best thing we have. Gulf who was with us. He had a 7-year- people create a free and democratic The Paladin is World War II tech- old daughter. They went with us. Alex- country. People say: Why do we care nology. With the Paladin, after every ander Haig, Tony Cuello was one of the about the Iraqis? We have problems at shot of this cannon, you have to swab party who went over. At that time, he home. Why are we spending all this the breach. You saw pictures of this in was, I believe, the Democratic whip of money? Why do we care about what prior wars. But this isn’t acceptable be- the House of Representatives. So it was kind of democracy they have? And they cause there are five countries making a a mixture of people. This man of nobil- thought it was impossible to start one, better one than we are making, includ- ity and his daughter wanted to see anyway. One reason is, if they do not ing South Africa. what their house looked like, if it was do it, it is going to be a problem area So what we have been attempting to torn up during the first gulf war. When for terrorists in the Middle East until do, after this period of time was over, we got there, we found out that Sad- they are fighting on our soil. The was to start upgrading, modernizing, dam Hussein had used it for a head- troops who are over there know this.

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00006 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.011 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2373 I just got back. I talked with many watched what has happened since that We see these things happening. I al- troops. In fact, now we have the Okla- time. ways make a point when I visit with homa 45th over there, and we visited One of the reasons the surge has people in the markets, if I see someone with most of them. They understand worked so successfully is that we have carrying a little baby, I will go in there why they are there. had the religious leaders realizing that intentionally without any kind of ar- What would happen? There were a lot if we leave, Iran will come in and fill mament, with an interpreter. The in- of surrender resolutions, a lot of cut- the vacuum, and they cannot have that terpreter will tell us just what they are and-run resolutions that got a lot of happen. So the religious leaders, the saying. And people with young kids attention in this body. I can remember imams, the clerics started giving posi- love the Americans. when moveon.org had the big ad cam- tive messages about the United States I have to say this too. We are going paign portraying David Petraeus, one of America. to see, and have seen already, a lot of of our great American heroes, as ‘‘Gen- A year ago, we had our defense intel- accusations that we in the United eral Betray Us.’’ It was unconscion- ligence attending the weekly meetings States, in our Department of Defense, able. There were resolutions to disavow of the mosques. I think they meet CIA, and the rest of agencies, are what he said. There were 25 Members of every Friday. At that time, 85 percent guilty of all kinds of torture. It is true this Senate body who opposed those of the messages that were given in the that back in Abu Ghraib, when it first resolutions. mosques by the clerics and the imams happened, there were some people there When the terrorists see this, they are were anti-American messages. As of who did the wrong thing. I think there hoping and praying that we, the Ameri- April of last year, almost a year ago, were 11 of them altogether. They were cans, are going to leave Iraq. On Au- there had been virtually none. They doing some things that were perhaps gust 28, 2007, Ahmadinejad made a are all now positive messages. What not the kinds of things we would en- dorse. That was taken care of by the statement. He was referring to these does that mean? It means that the U.S. Army. They took care of it. But resolutions that are going to draw our Iraqi citizens have now—just like, Mr. that came out, and people started talk- people out of Iraq. He said: President, anyplace in your State of ing about what the Americans were Soon we will see a huge power vacuum in Arkansas or elsewhere in our commu- doing. Yet look what is in their man- the region. Of course, we are prepared to fill nities, we have Neighborhood Watch that gap. . . . ual, the types of inhumane torture. programs. Now they have them. They I went to Bucca. Bucca is where we We are talking about Ahmadinejad. have their own citizens going in with have the most detainees in Iraq. I was That is why the Iraqis are getting so bait cans, drawing circles around the wanting to find out for sure by going cooperative with us. They don’t want undetonated IEDs so our troops will around and interviewing detainees. I that vacuum filled. not be killed. We watched in Anbar all I was talking the other day with BG interviewed, I would say, about 40 or 50 the incidents. They have been down of them. I picked them out myself. I Jimmy Cash. He is retired. He is the from 40 a day to 10 a day. We have seen took an interpreter. Each one said: We former command director inside the economic growth, the markets open never were tortured when we were cap- Cheyenne Mountain complex in the and crowded. The large project in the tured. We have been detained. We will late 1980s. He said: I watched Iran and Sunni Triangle is now back on track. be going back to where we came from. Iraq shoot missiles every day, all day They are going to have the capability They have become real supporters of long for months. They killed hundreds to help their people now. the United States. They were treated of thousands of their own people. They The Iraqi Army is starting to per- right. They were treated humanely. were fighting for control of the Middle form really well. This surprises a lot of They are teaching them to read. They East. people because they don’t think the are teaching them to study their Which reminds me, when all these Iraqi security forces have the capa- Koran. They are teaching them car- people are talking about weapons of bility of being the type of soldiers they pentry and other trades because one of mass destruction, we knew they had are today. We saw this the other day. the biggest problems they have—it is weapons of mass destruction then. We In fact, I was over there the other day easy to recruit people when there is knew they were killing hundreds of in Bucca in Basra when they went in total unemployment. The unemploy- thousands of their own people in the and took care of the problems so we ment rate is so high. They have to feed north, the Kurds, and they were using didn’t have to do it. This is what we their families some way. Now we have weapons of mass destruction to send are seeing. trained them, and they are able to go chemical warheads up there that have If you have any question that it is back and get jobs and take care of the effect of burning people to death true, all you have to do is look at some their families without having to do it from the inside out, the most painful of the people who never really wanted through the military. thing—women, babies, everybody, to be friends of the Bush administra- I just say to you, Mr. President, since thousands and thousands of them. tion who were opposed to the liberation this whole situation began—and I hap- Anyway, if he were to fill that vacu- of Iraq. One such person was Katie pened to be in Fallujah during each of um, we do not know how long it will Couric. This shocked everybody when the two elections that took place, and take for America to be a target on our she was interviewed. That was in Sep- I watched the Iraqi security forces go soil. tember 2007 by Bob Schieffer. This was down to vote when they knew they If we look at what is working, one of live on TV. She had made a trip, after were risking their lives. They voted the the things I noticed on the many trips she had been criticizing the war, criti- day before so they could offer security. I have taken over there—about a year cizing the Bush administration, criti- I watched those people risking their ago, a little more than 13 months ago, cizing the whole liberation effort. She lives—remember the purple finger— the surge began. That was General went over and came back and said: knowing their lives were at risk when Petraeus. What did he say? GEN David Well, I was surprised, you know, after I they voted. This is the democracy they Petraeus said we have to go in there went to Eastern Baghdad. I was taken to the have been looking for. Democracy has with a surge capability in certain Allawi market— been working. I came back this last areas. He was concerned about some of I have been there also— time thinking the surge has been pro- the areas around the triangle. As we gressing so well; if we just keep it up, went in there and positioned ourselves, which was near Haifa Street which was the scene of that very bloody gun battle back in really good things are happening over we found that he was right in his anal- January, and you know this market seemed there. ysis as to where we needed to have to be thriving and there were a lot of people Considering we started with a down- more troops stationed—in Fallujah and out and about. A lot of family-owned busi- grading of some $412 million in our Ramadi. Remember, just about 2 years nesses and vegetables stalls and so you do military, then 9/11 came and we were ago, they declared that Ramadi would see signs of life that seem to be normal . . . forced into a war as a result of that, we become the terrorist capital of the the situation is improving. have done so well. world. Now Ramadi is under total secu- That is not me talking, that is Katie Mr. President, I was a part of the rity, not by the United States but by Couric, whom we least expected that draft many years ago, and I was a be- the Iraqi security forces. So we have from. liever for quite a number of years,

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He went to Basic by 50 people at Apple Tree Terrace, Newberry they have done, you come back so Training three weeks after college gradua- Estates, Dallas, where the wedding reception proud that they started out down here tion, earned his Airborne Wings and Sapper was to be—she traveled to Virginia, where with very little to work with, and they Tab, and graduated from the SAS she was living. have been able to sustain it. Antiterrorist Course. He was a player-coach She was packing her belongings for the Are they overworked right now? Are of the Ft. Leonard Wood soccer team, which move to an apartment at Cleary’s military base in Georgia, where they planned to live they deployed too often and too long— won the Post Commander’s Cup. His last soc- cer competition was as player-coach of 1st/ until Cleary’s enlistment was complete in 15 months? Yes, they are. It looks as 15th Infantry Soccer Team that played a December 2006. though we are going to be able to drop Thanksgiving Day game with the Republic of It was there on Tuesday night when she that down to 12 months. But the troops Georgia Army Team. learned the devastating news her soon-to-be themselves say: Whatever it takes, we Mike’s military decorations include the husband had been killed. are going to do this. They know the al- Combat Action Badge, Bronze Star Purple Her mother, brother and close friend drove ternative. The alternative is the war Heart, Army Commendation Medal, Air the 250 miles to tell her face-to-face, she said. will be waged on American soil. We Force Commendation Medal, Army Achieve- ment Medal, Good Conduct Medal, and three Kavanagh struggled but couldn’t describe don’t want that to happen. campaign medals. He was awarded the Over- her initial reaction Thursday before a family Mr. President, I yield the floor. seas Military Service and Active Duty Army member walked into the office, approached The ACTING PRESIDENT pro tem- Ribbons, as well as Meritorious and Valorous her crying and offered condolences. The two pore. The assistant majority leader. Unit Citations. sustained a lengthy embrace as they whis- Mr. DURBIN. Mr. President, I yield Mike is survived by his parents, Marianne pered to each other and sobbed. 10 minutes to the Senator from Penn- and Jack Cleary, Dallas; sisters, Erin Flana- Several minutes later, Kavanagh discussed sylvania before we claim the floor to gan, her husband James and their three chil- how she’s coping with the tragedy. ‘‘I’ve just been with family. I’ll have to describe my amendment. dren, Bedford, N.H.; Shannon Cleary, Maui, HI; Kelly Cleary and Fred Tangeman, take it one day at a time,’’ she said. The ACTING PRESIDENT pro tem- ‘‘And, I have a new family, right Jack?’’ pore. Without objection, it is so or- DeLand, FL; brother, Patrick Cleary, Dallas; his loving fiance´e, Erin Kavanagh, Dallas, she innocently asked Cleary’s father, who dered. The Senator from Pennsylvania. and his maternal grandfather Joseph Nemeth said yes without delay. Cleary tried to, and usually did, call every Mr. CASEY. Mr. President, I ask of Waverly, N.Y. unanimous consent to speak as in other day, Kavanagh and Jack Cleary said. morning business. [From citizensvoice.com, Dec. 23, 2005] He last called each of them Monday, they said. The ACTING PRESIDENT pro tem- A FAMILY MOURNS A FALLEN SOLDIER Toward the end, he focused on talking pore. Without objection, it is so or- (By Robert Kalinowski) about a Dodge Ram pickup truck he bought dered. DALLAS.—It was at her bridal shower Sun- and was waiting for him and where he and Mr. CASEY. Mr. President, I ask day when Erin Kavanagh had one of her last Kavanagh should go on their honeymoon, unanimous consent to have printed in conversations with fiance´, 1st Lt. Michael they said. the RECORD the two documents I have Cleary. The honeymoon location was still being fi- in front of me, one of which is a de- ‘‘Mike called during the shower and said, nalized. scription of the life of one of our fallen ‘Have fun doing whatever girls do at bridal ‘‘Erin said she didn’t care (where they were showers. I love you,’’’ Kavanagh recalled, going), but he said, ’Dad, I think that means soldiers, as well as a news article from her voice soft and crackling with a cup of she really does,’’’ Jack Cleary recalled. the Citizens’ Voice newspaper dated water she was sipping in hand. Cleary and Kavanagh began dating on Nov. December 23, 2005. A grand wedding was set for mid-February. 25, 2004, which was Kavanagh’s 24th birthday, There being no objection, the mate- Cleary was ‘‘packing up’’ in Iraq, scheduled while Cleary was home before deploying to rial was ordered to be printed in the to complete his yearlong tour in 10 days. The Iraq. RECORD, as follows: couple was to move into an apartment near The two knew each other since they were his Georgia Army base Jan. 4, she said. children and graduated together from Dallas First Lieutenant Michael J. Cleary, of Dal- ‘‘I kind of thought we were free and clear,’’ High School in 1999. After high school, las, born April 4, 1981 was killed in action by Kavanagh said Thursday with Cleary’s dad, Cleary decided to follow in his dad’s foot- hostile forces on December 20, near Samarra, Jack, by her side just two days after Cleary steps to Hamilton College in New York state. Iraq. Lt. Cleary had just completed a was killed in action. Pursuing an economics degree, Cleary was demolitions mission when an ambush oc- The two spoke at length about the heroic in his junior year when he first considered curred. Mike was Platoon Leader of the Ex- 24-year-old Army officer from the office of the military. He was troubled by the Sept. plosive Ordinance Disposal Team in E Com- Jack Cleary’s Dallas-based business, Cleary 11, 2001, attacks, his dad said. pany, 1st of the 15th Infantry Regiment, 3rd Forest Products. ‘‘He came home for Thanksgiving in No- Brigade, 3rd Infantry Division. Cleary and another soldier from his unit, vember and told us he all but signed the final Mike graduated from Dallas Senior High in Spc. Richard Junior D. Naputi, 24, of Guam, papers to join the Army special forces,’’ said June 1999. While at Dallas, he was a four- died Tuesday in Taji, Iraq, when an impro- Jack Cleary, a decorated Army veteran of year letterman in both soccer and tennis, vised explosive device detonated near their the Vietnam War. and captain of both teams his senior year. He Humvee during combat operations, the De- His parents convinced him to finish college was named to all star teams in both sports. partment of Defense reported Thursday. first. While doing so, he applied for the Ma- He was selected to attend the National They were assigned to the 1st Battalion 15th rine Corps officer flight school. When told Youth Leadership Forum on law in his junior Infantry Regiment, 3rd Brigade, 3rd Infantry his entry would be delayed, he ‘‘said ‘I’m not year and was involved in many school activi- Division, Fort Benning, Ga. waiting’’’ and decided to enlist in the regular ties including National Honor Society. He re- Kavanagh sporadically cried while slowly Army. ceived the Dr. Pepper Soccer MVP Scholar- flipping though a thick stack of pictures of After completing basic training, Cleary ship and the History Scholarship at gradua- Cleary. was quickly promoted several ranks and en- tion and was offered academic scholarships There were photos of him fishing and hunt- tered the Army’s Officer Candidate School. at Ursinus College, Gettysburg, Dickinson, ing. Some were of him with family and some He was commissioned first lieutenant in De- and Lafayette. He chose Hamilton College in with fellow soldiers in Iraq. She cracked a cember 2003 and trained extensively for his Clinton, NY. small laugh at one of him chopping down a eventual deployment to Iraq, where he was a While at Hamilton, Mike participated in Christmas tree last year. platoon leader and champion for his soldiers, varsity soccer and lettered in varsity tennis. The 25-year-old then paused when she came his dad said. He joined Sigma Phi Fraternity and became across one of the couple and their parents, ‘‘He loved the guys he was with. They were the chapter president. He gave up intercolle- immediately recalling the date it was taken: doing their job,’’ Jack Cleary said. giate sports and participated in all frater- May 19, 2005. The military has offered Cleary’s family a nity intramural sports, winning the Ham- That was the day her lifelong friend and full honors burial in Arlington National ilton Golf Intramural Championship. He then-boyfriend asked her to be his wife. Cemetery. wanted to enlist in Special Forces imme- It was the last full day they spent to- Jack Cleary said the family is honored by diately after the attacks of September 11, gether. The next day, Cleary shipped off to the request, but will likely decline. but chose to follow the advice of his mother finish his tour after a two-week leave at ‘‘Our feeling is home,’’ he said with a and stayed in school until completing his home, she said. pause. ‘‘We want Mike home.’’

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00008 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.015 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2375 HONORING OUR ARMED FORCES which is that First Lieutenant Cleary J. Cleary at this time, and we wish for FIRST LIEUTENANT MICHAEL CLEARY was the fourth generation of that fam- him and for his family all of God’s Mr. CASEY. Mr. President, I rise this ily to serve his country. His father, blessings. morning to speak about a young man Jack Cleary, was a decorated Army Mr. President, I yield the floor. from my home region of northeastern veteran from the Vietnam war, and The ACTING PRESIDENT pro tem- Pennsylvania who lost his life in the then two generations before that. So pore. The assistant majority leader. war in Iraq, 1LT Michael J. Cleary of this is a family who has sacrificed in Mr. DURBIN. Mr. President, pending Dallas, PA. He was born April 4, 1981, generation after generation, and we are before the Senate is an amendment to and we are thinking of him today for so thinking of them today. Tomorrow, the housing bill, which I offered earlier many reasons, not the least of which is they should have been able to celebrate and on which I have asked the Repub- a birthday tomorrow. I want to provide Michael’s birthday, which would have lican side to consider a unanimous con- somewhat of a biographical sketch, and been his 27th birthday, but they can- sent request so that we can debate and then talk a little bit about his life. not. They are strong people. They un- vote on it still this morning. I hope Michael Cleary was a graduate of derstand the sacrifice he made, and we they will consider that in a timely Dallas High School in Luzerne County, are thinking about them this morning manner. I am prepared to offer an PA, in June of 1999. He was captain of and tomorrow and on so many other equal amount of time to both sides of two teams there, both soccer and ten- days. the aisle on the substance of this nis. He was an active member of so I think sometimes it is very difficult amendment and then accept a vote at many organizations, including a proud for us to fully comprehend—those of us 12:15. member of the National Honor Society. who have not had a close family mem- We have proffered this unanimous He had opportunities at several col- ber lost in combat—what this means to consent request, and I hope, in the in- leges, but he chose Hamilton College in a family, what it means to a commu- terest of time and fairness, that the the State of New York. While at Ham- nity such as northeastern Pennsyl- Republican minority will accede to ilton, he participated in varsity soccer vania, in Luzerne County, even years this request, or if they wish to modify and received letters in varsity tennis. later now. It is difficult because in so it, let us know as quickly as possible. He was the chapter president of the many parts of our State, as is true of Here is what this amendment is all Sigma Phi fraternity. And despite all the whole country, when we lose one about. We have 2 million people about of his college and academic interests, soldier, especially in a small town, in a to lose their homes. These are people he also had a feeling in his heart for his smaller community, the impact is dev- who bought a home with a subprime country, and he wanted to serve. He astating. And not only the initial im- mortgage. A subprime mortgage usu- wanted to enlist in special forces im- pact of that, but months and years ally meant some exotic brew of terms mediately after the attacks of Sep- later. for a mortgage which didn’t exist tradi- tember 11 but chose to follow the ad- I think it is important we don’t just tionally or historically. It might be an vice of his mother—which for all of us look back and remember and pay trib- adjusted rate mortgage where you pay is the right thing to do—and she urged ute to the day they died and to the sac- a low interest rate on the front end and him to stay in school and to complete rifice they made, as important as that then, after 1 year, 3 years, or 5 years his studies. is, but we should be remembering, as that interest rate would go up. There He did that, and he graduated in May well, their life, their life of achieve- were even mortgages offered that were of 2003 with honors from the economics ment and triumph, and their life of interest only, so that people were pay- program. Ultimately, his dream was service because when these families ing low monthly payments of interest fulfilled when he joined the military. look back on these young people, they but not retiring the debt on the house. Unfortunately, he lost his life in De- are not just going to remember their The principal debt remained the same. cember of 2005. His military decora- The theory was that as long as the tions include the following: the Combat service in the military. Family mem- Action Badge, the Bronze Star, the bers know our fighting men and women value of real estate was going up in Purple Heart, the Army Commendation weren’t born into divisions and pla- America, you couldn’t go wrong. No Medal, the Air Force Commendation toons. They weren’t born with a uni- matter what deal you signed up for to Medal, the Army Achievement Medal, form on; they were born into families— get into a house, if the house was going the Good Conduct Medal, and three families of mothers and fathers and to appreciate in value, don’t worry campaign medals. brothers and sisters and aunts and un- about it. It is hard to describe in a short cles and cousins and friends and so There were also people who took that amount of time, even in a writeup in many others we all know are part of all mortgage on their home and consoli- the newspaper, as local papers did at of our families. So I think it is impor- dated a lot of other debts they had on that time, but probably the best way to tant to remember these young men and cars and other things, home improve- encapsulate what Michael Cleary’s life women, to the extent that we can, on ments, and put it all in that mortgage has meant to this country is to remem- their birthday or some other signifi- so that they had a mortgage debt that ber the words of Abraham Lincoln cant moment in their life. was actually greater than the current when he talked about the sacrifice of Finally, let me say this: The news ar- value of the home. our soldiers. When he spoke about the ticle I cited from December of 2005 These so-called subprime mortgages battle of Gettysburg, he spoke of those talked about the plans Michael Cleary were being written right and left. In who gave the last full measure of devo- had to be married to Erin Kavanagh. I the old days, going back to when I first tion to their country. We now can say will not review the whole article, but bought a home, there used to be pretty that about so many of our young men suffice it to say that it is a powerful close scrutiny of your credit record. and women who fought in Iraq, and one story of what one soldier’s hopes and They used to require 10 percent of the of them was Michael Cleary. He indeed dreams were—to serve his country but value of the home as a downpayment, gave the last full measure of devotion to come home and then start a new life or 5 percent. You had to pay points; in to the country he loved. and to be married. So we are remem- other words, thousands of dollars at He didn’t have to do it. He had a bering her as well today and remem- the closing. It was pretty tough in great career ahead of him because of bering they graduated together from those days. his academic achievements and be- Dallas High School in that year of 1999. Well, the whole climate of home cause of his leadership qualities. He We are grateful this day in so many lending changed with the subprime could have pursued another path, but ways, but it is difficult to fully explain mortgages. More and more people he chose to give back. He chose to sac- how grateful we are for his life of serv- moved into homes. The values of homes rifice for his country, knowing full well ice and sacrifice, his life of courage and were mushrooming, and it looked as that he could be asked by God to give commitment, and his life which was fo- though we were just riding the crest of the last full measure of devotion, and cused on the future, his own future but a wave. Well, guess what happened. The he did. also the future of our country. So to- wave crested and started to fall. And We are thinking of his family today morrow, as his family celebrates his when it fell with the subprime mort- for so many reasons, not the least of birthday, we are remembering Michael gages, a lot of people were hurt. The

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00009 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.016 S03APPT1 ccoleman on PRODPC75 with SENATE S2376 CONGRESSIONAL RECORD — SENATE April 3, 2008 so-called adjustment of the mortgage are afraid the $500,000 home today will If I walk into a bankruptcy court and took place and an affordable monthly be worth $450,000 next year—not a I own a farm and I say I cannot make payment became unaffordable. All of a smart deal. my farm payments, my mortgage on sudden, the low interest rate blossomed As long as this mentality is out my farm, the bankruptcy court has the into a much larger interest rate. Or there, the housing industry is flat. legal authority to change the mortgage perhaps a family stumbled—somebody That doesn’t hurt just your realtors terms on my farm or on my ranch or on lost a job, a divorce, a serious illness in and your developers, it hurts home- my vacation condo—I don’t own one— the family—and with that stumble, builders, skilled craftsmen, people who or on the big boat I just bought and on they missed a few payments. supply homes—from those who are gar- which I can’t make the payments. The Well, now, add this up into a nation deners and do the landscaping, to fur- bankruptcy court can change every of 300 million people, and we end up niture—you name it. All of these re- single one of those, but it cannot with 2 million folks who face the pros- lated industries are slowing down into change or modify the mortgage on your pect of losing their homes. Now, a lot this recession which Mr. Bernanke fi- home. Why? Of all of the things in the of people say, well, isn’t it a darned nally conceded yesterday may be on world they can change, why not that? shame. But why did they sign up for the horizon. That is why addressing It turns out that by tradition it has those crazy things to start with? They this home crisis is important—not just never happened. So I bring the amend- should have used better judgment. for 2 million people who had the mort- ment and propose the court be given They should accept their medicine at gages, but if we do not deal with those that authority. this point and maybe they will be a lit- 2 million people losing their homes, it The group that is opposed to this, tle smarter the next time around. is going to have a dampening effect on screaming bloody murder, is none If it were that easy, we could write it our entire economy. It is going to hurt other than the mortgage bankers, the off as the moral hazard of making a all of us. same people who brought us the bad decision, of irresponsible bor- A recession is a period of time in subprime mortgage mess. They do not rowing. But it turns out to be more sig- which businesses fail, jobs are lost, want to see the terms of their subprime nificant. Two million people losing consumer confidence is low, the econ- mortgages changed in court. And they their home in a nation of 300 million omy slows down. It happens in a free say: If you change them, interest rates doesn’t sound like much, but 2 million market economy. But you do not want will go up. people losing their home will affect the it to go on too long because it can have What I did, working with that indus- value of homes around them. a long-term negative impact. try, is say: I will apply this to a narrow What is the value of my home in What we are trying to do today is to group of people, the most limited group Springfield, IL? Well, if you ask an ap- pass a bill to breathe some life back I can find that still has some impact on praiser or realtor, they will say: I don’t into the housing industry and housing this issue, and I will narrow the discre- know, but I will tell you what I will do. market in America. The bill is good, tion of the bankruptcy court. So listen I will look at other homes in the neigh- and it has a lot of good provisions. I am to where this amendment takes us. First, you have to qualify to go into borhood that have gone for sale—com- happy to support it. I think there are court. We changed the law sometime a parable sales, comparable values. So things in this bill which will be of few years ago. To qualify to go into they look up and down the block and value to us as a nation. I think vir- bankruptcy court you have to have a around the block, in the neighborhood, tually every one of them has some im- certain income; you have to go through and look at what homes are selling for, pact, some positive impact. But there certain processes and disclosures—even is not a single one of them that will comparing them to my home, and they credit counseling. All that is required have the positive impact of the amend- come up with a valuation on my home. before you can walk into the court. Well, if down the block and around ment I offer. Here is what the amend- Second, this only applies to your the corner a home was foreclosed ment says. home. I don’t want a person walking in upon—in other words, the people were Currently—now—if you find you can- saying: I bought 100 acres down in forced out of the home, there was a not pay your bills and you still have a southern California and I need help—no forced sale of the home, and it was sold job, you can go into chapter 13 in bank- way. Just your home. for less than fair market value—that ruptcy. You go to the bankruptcy court Third, it only applies to existing value will be calculated into the ap- and say: I am in a mess. I am in over mortgages as of the date of the enact- praisal of my home. The experts tell us my head. I have more debt than I can ment of this bill. A mortgage you enter that 2 million people losing their take care of. Will the bankruptcy court into after the day this bill is enacted homes in America will drag down the work with my creditors so I can have would not apply. value of 44 million homes. It is a ripple an arrangement to pay off my debts? I Fourth, the court can only reduce effect. would have to change the terms of the principal on the mortgage—the As the value of homes declines, more some of the debts, but at the end of the amount that you owe—no lower than people face the reality that the mort- day I will get out of this mess. the fair market value of the home. You gage principal, the amount they owe on The bankruptcy court takes a look at protect the lender. If you go through the mortgage, is greater than the value it and decides whether it is going to foreclosure and have an auction, it can of their home. The shorthand term work. You may be dreaming. You may sell for a lot less than fair market they use is, you are ‘‘underwater.’’ not even have a chance. Your creditors value. So fair market value is the bot- Your mortgage value, your mortgage may not want to cooperate. So this tom line. principal is greater than the value of chapter 13 is just an effort to try to Fifth, the interest rate the bank- your home, so you can’t borrow against help people get out of this mess. ruptcy court can impose can be no the value of your home anymore. You We think about 600,000 people facing lower than the prime rate plus a pre- are already in debt over the value of mortgage foreclosure will take this op- mium for risk. your home. That is the third ripple. tion and go to bankruptcy court. If Sixth, the term of the mortgage can Then there is the fourth, the men- they go into the bankruptcy court and be no more than 30 years. tality of buyers across America. This is try to work out their debts and keep And then, seventh—and we did this the one that troubles me the most. For their homes, they have a problem. saying to the banking industry: What over 70 percent of people in America, if Under current bankruptcy law, you more can you ask? If in the next 5 you ask them are they going to buy a cannot modify the terms of the mort- years you sell that home and it has ap- home, and they say no, when you say: gage on your home. In other words, at preciated in value, any increase in Can’t you get a mortgage, they say: the end of the day, you are still stuck value over the fair market value as of Yes, we can get a mortgage. Why won’t with that same subprime mortgage the date of the bankruptcy goes to the you buy a home? They say: I don’t that may have toppled you in the first lender, not to the owner. What more think it is a good investment. place. The reason I offer this amend- can we do to protect these bankers— Seventy percent of people in America ment and the reason I want to change fair market value on one end, any ap- today say buying a home, real estate, that one provision is because it is fun- preciation in value on the other end. is not a good investment. Why? They damentally unfair. And they still oppose it.

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00010 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.017 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2377 I hope my colleagues in the Senate not have done what they did with re- There are plenty of communities in will take a look at this. The credit spect to Bear Stearns and other invest- America where we have already seen unions support this because they don’t ment banks because the implications those kinds of reductions, all of which get into the crazy loan business that of their failure could have had a pro- run completely counter to how we some of these mortgages did. A group found impact, spilling down into our build a community and to what we are that includes the AARP, groups all economy. But when the pain is trick- trying to do in order to restore eco- across America, consumer groups, they ling up to a Bear Stearns, and finally nomic strength in the country. understand this is only reasonable. The the administration notices—that very Just this last weekend I attended, New York Times has editorialized in same pain has been felt for over a year with Mayor Menino, at a high school in favor of it. I think this is an approach now by people being foreclosed on in Roxbury, in Massachusetts, in Boston, which will help a number of people. It the economy—it really is an under- a homeowner foreclosure prevention is narrow and focused. It is limited in scoring of the degree to which an ad- workshop. I was literally stunned at its scope, and it is really directed to- ministration is out of touch with the the numbers of people who had come ward giving people another chance to real concerns and realities in the life of into this high school on a Sunday stay in their homes. They still have to the American people. afternoon, bringing all their financial pay the mortgage. They don’t get off We need to show that commitment, records because they had been unable the hook, but they can stay in their here and now, in passing this fore- to get hold of a real human being to homes. closure act to deal with the problem talk to in order to try to work out a Stabilizing the housing market, sta- nationally. We need to do it now. It is reasonable agreement for what they bilizing your neighborhood and my long overdue. As many as 8,000 fore- could pay and be able to stay in their neighborhood, breathing some life back closures are occurring daily. Some of homes. into this housing industry, that is the these loans we know were absolutely Rather than face one of those endless way to turn this recession around. This predatory; almost, I believe, criminal. phone calls where you press 2 to talk to amendment I offer on the Bankruptcy People knowingly went out, knowingly somebody who will tell you to press 4 made loans to people they knew were Code will help more people than all of who will give you an automated re- not capable, ultimately, of meeting the the provisions combined in the rest of sponse to press 7 or whatever it is—we adjusted rate mortgages, but because this housing act. This reaches a lot of have the lenders there. We brought the of the benefit to them and the imme- people. Hundreds of thousands could various lenders there and people were diate take in terms of the points they qualify. I urge my colleagues on both able to go through a screening process would make and the commissions and sides of the aisle to please consider this and then go back to a room, sit down returns on those transactions, they amendment. with the lenders, tell them their pre- went ahead and did it. Frankly, some Mr. President, at this point I see two dicament, and actually negotiate a re- of those came from the very same peo- of my colleagues on the Senate floor, financing. ple who have just been bailed out by Senator SMITH of Oregon and Senator I met people that afternoon who were the Federal Government. KERRY of Massachusetts, and I would I commend our majority leader for smiling, who said to me: Thank you for like to yield to them for whatever peri- his efforts to bring this to the Senate getting us together. Now I can stay in ods they would like to speak and then floor now and his efforts, together with my home. reclaim the floor on my amendment. That is all it takes, that kind of ef- Senator DODD, to try to work through Mr. President, let me make a unani- this particular legislation. Let me fort. I talked to one woman who, to- mous consent request that when the share with my colleagues, last week- gether with her husband, is paying two Senators have completed their re- end—things have gotten so bad in Bos- $5,000 a month for their home, for their marks I be recognized again on my ton that Mayor Tom Merino recently mortgage. They have two mortgages amendment. opened a war room where city officials now. They are both working, both of The ACTING PRESIDENT pro tem- are working together on a day-by-day them are working. pore. Without objection, it is so or- basis to fight the wave of foreclosures But I asked her what her rate was. dered. The Senator from Massachusetts that we have seen in recent days. What are you paying for a rate? She is recognized. A few months ago I was in the city of said: Well, I am paying 7.25 percent on Mr. KERRY. Mr. President, I thank Brockton in Massachusetts and met one, and I am paying 9.25 percent on the distinguished assistant leader for with the mayor. He said: You have to the other. Nobody, with the current his comments and his leadership in this take a moment and come upstairs and discount rates in America, is paying area. As he may recall, we were to- meet with me with these folks who are those kinds of rates. It is absurd. gether at a meeting at the White House here, and impromptu we went upstairs I also had the woman next to that a month and a half, 2 months ago now and there was a group of people from particular one who was waiting in line, with the President, with Secretary the community who came together in who, when she heard the 7.25 and 9.25 Paulson, Vice President CHENEY, and a desperation to try to figure out how said: That is nothing. I am paying 13.25 small group of Senators there to talk they were going to deal with the fore- percent on mine. So if we were to re- about the stimulus package. As I know closures in Brockton. This mayor had negotiate, according to a fair standard he may recall, I raised at that time the already processed some 400 foreclosures of what the rate is, with what the na- housing crisis, saying to the President in Brockton, and he was staring at an tional interest rates are today, and that the entire cause of everything additional 800 or so that were going to fixed rates that are available to people, that was bringing us there to discuss come at them. a lot of those folks could stay in their the stimulus was in fact the subprime What happens to a community al- homes, and they can afford to service crisis and that no stimulus package ready struggling to get their economy their mortgage. should be passed that didn’t in effect back on track when they face that kind What we need do is stop the greed stem the tide of foreclosures and ad- of wave of foreclosures is, street by and unbelievable sort of arrogance of dress the uncertainties in the market- street, house by house, as they get some of these companies, some of those place and the lack of confidence. So I boarded up and people leave the homes, people who asked literally to be able to know he joins me in expressing regret the rest of the property values start to renegotiate: We were told no. I will tell that not withstanding the nodding go down—the local gas station, the you in a moment about a woman I met heads and comments of affirmation, local 7–Eleven, the pharmacy—every- in Lawrence, MA, where this predica- absolutely nothing happened. Nothing body begins to feel the impact. ment is also going on. happened. But most important, from the may- The fact is that nationwide, by last Sadly, it is not until the Federal or’s point of view and from the Govern- year, we all knew that 2.5 million Government puts up $400 billion to bail ment’s point of view, they begin to see mortgages were already in default. out Bear Stearns and other investment a decline in revenues. The only place That was 40 percent more than 2 years banks that you really get some kind of mayors can go in any kind of wholesale earlier. And despite a 40-percent in- response from the Federal Government. fashion to deal with a decline of reve- crease, there was no response from this I am not complaining that they should nues is to cut fire, police, and schools. administration. Communities across

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00011 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.018 S03APPT1 ccoleman on PRODPC75 with SENATE S2378 CONGRESSIONAL RECORD — SENATE April 3, 2008 the country are being hit hard. Last I talked with a woman by the name me in this effort as a member of the Fi- year the mortgage foreclosures in Mas- of Rosa Hernandez, who has four chil- nance Committee. We both passed an sachusetts alone were up 128 percent, dren, works two jobs, one as a nursing amendment in the Finance Committee and the foreclosure rates of five Massa- assistant at the local nursing home, in to the stimulus package. We had hoped chusetts metro areas were in the top order to support her family and to be this would have been included in the 100 in this country. able to earn enough to own her home. stimulus package a few months ago so How did we get here? Well, we got She did everything she could in order this good could have begun to take here because lenders lowered their to make her house a home. She fixed hold so that families who have been standards for lending but did not ap- the roof, she bought a new boiler, she foreclosed on in the last few months propriately plan for the increased risk updated the electrical system of her would not have been. Regrettably it did they incurred when they lowered the new house, and she did it with this in- not happen. But we are here now. standards. They flooded the market crease in value that the company came I am appreciative of him and his ef- with mortgage loans, ignoring the and loaned her. After she was hospital- forts to help include that in the bill to risks to borrowers and to their own ized twice last year she could no longer provide an additional $10 billion. We bottom line. afford to work two jobs. At the same originally sought $15 billion of tax-ex- As usual, most of these people turn time her subprime mortgage interest empt private activity bonds that fi- around and expect us to bail them out; rates went up from 4.5 percent 5 years nance our housing agencies. What the in most cases to bail them out first. ago to 7.5 percent. She told me, housing agencies would do with this For some time, some of us here in Con- through a translator, that when she money is take the proceeds from the gress have been screaming about preda- could not make the payments, she bonds and use them directly to refi- tory lending practices. I happen to went to her lender. Her lender refused nance subprime loans, provide mort- think it is usury to allow 30 percent to make loan modifications that would gages for first-time home buyers, for rates. A whole bunch of Americans do allow her to stay in her home. Her multifamily rental housing. not know they are actually paying 30 lender told her they were going to de- In the case of Massachusetts, that percent rates after a group of penalties value her home down to about $99,000. I would mean about $211 million of tar- geted mortgage relief to the home- on their credit cards. think she had a total of $220,000 in the owners of our State. Similarly, every There are even more Americans, mil- home. They are going to devalue it to State in the country would benefit lions of them, who are paying 18 per- $99,000 and put it on the market and from this provision. I thank Chairman cent. I urge any American to go back sell it. She said: I can afford to pay BAUCUS and Senator DODD for their ef- and look at what their rate is at the $99,000. Let me stay in it for that. They forts to include this provision in the bottom in the fine print on their credit refused to let her stay in, even though final bill because of what it can do to card or ATM statements and they will she could service that payment with be shocked by the levels of interest help struggling families. the job she has with a family of four, they are paying. In 2006, State and local governments stay in her home. They are prepared to I think these are excessive. These are financed 120,000 new homes with mort- wrong. Many people I know, all those kick her out and then put it on the gage revenue bonds. With the addi- of us who went to law school, learned market and sell it to someone else for tional $10 billion in funds, States and about ‘‘buyer beware,’’ ‘‘caveat the same price. That is disgraceful. localities can equal that amount and emptor.’’ That is one of the first things That is disgusting. And that is the kind finance approximately 80,000 more you learn in law school. of unregulated practice that is taking home loans. According to the National But the fact is, we put standards in place out there because people have Association of Home Builders, every place through the years as to what is walked away from any sense of com- mortgage revenue bond new home loan an unfair practice. We have unfair mon decency and responsibility. produces almost two full-time jobs, trade practice laws in many States, The fact is that thousands of families $75,000 in additional wages and salaries, and they are simply not being applied. such as hers have been through the $41,000 in new Federal, State, and local But legislators in this case have same kind of predicament where they revenues. Each new home then results backed up and turned a blind eye to are forced to start all over again. Each in an average of about $3,700 that gets what are unfair practices in the mar- time a house is foreclosed on, a fam- spent by the new occupants on appli- ketplace. Now, were there abuses on ily’s economic dream lies in tatters. ances, furnishings, property alter- the other side of the ledger? The an- But it is not only the family that faces ations, all of which provide a real shot swer is: Yes, there were. Some home- the foreclosure that suffers; the entire in the arm to our economy. owners inflated their income. Some community suffers. I have talked to po- The reason this mortgage revenue misrepresented themselves to get a lice officers who tell me about the in- bond proposal is so important is that bigger home than they could afford, creased work they have now to try to to many lower income families, they and obviously we are not talking about patrol by houses that they know are are having difficulty refinancing their bailing out people from those kinds of abandoned and boarded up. The prop- existing mortgages. This additional situations. But there is blame enough erty values of entire streets and com- funding makes it easier for families to go around. munities start to drop, which affects facing foreclosure. It will make it easi- I will tell you what has not been the entire ability of that community to er for first-time home buyers to buy a enough to go around, and that is a be able to function. As I described ear- home, which means that the glut in the rapid and appropriate response from lier, crime rates go up, neighborhoods marketplace today of all of those the Federal Government in order to get torn apart, schools are disrupted homes that have already been fore- deal with this problem. Lenders are because when the family gets kicked closed will finally find a group of peo- now getting help. But homeowners are out, kids are yanked out of the class- ple because of these bonds who will be still struggling. The fact is there are a room and you end up with a complete able to take those houses off the mar- lot of homeowners out there who have disruption to the school system. ket and become part of the community. the ability to pay for a mortgage. They According to the census, by late 2007 The goal is simple. We want to pro- cannot carry the increased rates and a higher percentage of houses in the vide assistance to those who need it they cannot necessarily carry the in- Northeast sat vacant than at any time most. The extra $10 billion for this pro- flated levels that some of them have in the last 50 years, probably since the gram is a proven way to help Rosa Her- been put into because of these preda- Great Depression. nandez or others be able to stay in tory practices. So today we are debating the Fore- their homes. I might add also, before I Let me give you an example. This closure Act of 2008. This has the oppor- close and cede the floor to my col- week I went to Lawrence, MA and met tunity to be able to deal with this cri- league, there is in this bill also $4 bil- with homeowners who are facing fore- sis. It reflects a bipartisan com- lion for the community development closure. Approximately 700 homes were promise. It is a good first step toward block grant, which a number of us have foreclosed in Lawrence last year alone. addressing this crisis. It includes a pro- advocated strongly for, that will also I am told that number is going to rise vision, and I thank Senator SMITH from help local communities to deal with for this year. Oregon for his long participation with the effects of the housing crisis.

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00012 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.020 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2379 As we all know, the community de- produces in surplus actually goes to ernments are permitted to issue tax-ex- velopment block grant is the only real the general revenue. Some of us believe empt bonds, called qualified mortgage flexibility mayors get in dealing with money produced by housing, that cre- bonds, to finance new mortgage loans crises in their community. So I am de- ates a profit in effect or a surplus for to first-time home buyers. What our lighted that is here and that we can the Federal Government, ought to go legislation does is temporarily expand help local governments be able to deal back into housing rather than contin- the use of this program to include refi- with this crisis. ually have housing be the stepchild of nancing of existing subprime loans. It Finally, there is a provision I fought American policy. We hope we will ulti- would also provide a $10 billion in- for in this legislation that I am pleased mately be able to do that. crease in tax-exempt bond authority is in it, which is the proposal I put for- I urge my colleagues to vote for this which could be used to provide these ward to address the foreclosure con- legislation. I thank my colleague from refinancing loans, issue new mortgages cerns of our returning veterans. Those Oregon for his patience and, most im- for first-time home buyers, and, fi- who have served our country in Iraq portantly, for his coefforts in this ini- nally, invest in multifamily rental and Afghanistan should never come tiative. housing. Our proposal would also ex- home to a home that is in danger of I yield the floor. empt mortgage revenue bonds from the foreclosure. But some are. You have a The PRESIDING OFFICER (Mr. alternative minimum tax to make lot of National Guard folks who are WHITEHOUSE). The Senator from Or- them more attractive to investors and doing their second or third deploy- egon. to cut home-buyer mortgage costs fur- ment, and many of these people are in Mr. SMITH. Mr. President, I thank ther. small businesses, or in some cases even Senator KERRY, my colleague from For Oregon, the increased bond cap sole proprietors. They have taken a Massachusetts, for his kind words. We will translate to roughly $122 million pay cut, in many cases, to serve their come to the floor today as Republicans in new bond authority to address the country. They do not get paid as much and Democrats trying to work out a State’s housing needs. Our neighbors in for serving on active duty. The result bill that will make a difference on the Washington State will receive roughly is that many of them have been put central plank of the current economic $210 million in new bonding authority, into difficulty. slowdown. It is a time, frankly, to note enough to produce more than 1,300 What we do is extend the foreclosure we are finally working in a way that loans. In Arizona, where the delin- grace period from 90 days to 9 months, will make a difference and make quency rate has jumped from 2.9 per- and we extend the freeze on mortgage progress for the American people. cent in the fourth quarter of 2005 to 5.45 interest rates for the first year a sol- Tuesday evening, I went home and percent in the fourth quarter of last dier is home. This is one of the ways we TiVo’d the news. I saw Senator REID year, an estimated 1,400 new mortgage can make good on the rhetoric which is and Senator MCCONNELL standing to- loans will be generated by this bill. present all over the country about how gether before the cameras. Behind Michigan, which had a delinquency we care for the veterans but, in fact, them were Senators DODD and SHELBY, rate of 8.9 percent at the end of the whether it is the VA budget or coun- as well as Senator BAUCUS and Senator fourth quarter of last year, will have seling or post-traumatic stress syn- GRASSLEY from the Finance Com- its bond cap increased by more than drome, or a host of other things, we mittee, who have worked with Senator $332 million, enough to generate more have rarely put enough money there to KERRY. When I saw these Senators to- than 3,300 new home loans or refi- keep pace with that rhetoric. gether in a joint press conference, I nancing. This helps to do it. I do thank Sen- thought I also heard a collective sigh Another example, Arkansas, with a ator DODD for his work to include those of relief from the American people that delinquency rate of 6.6 percent as of provisions in this bill. I do not think finally the Senate was proceeding in a last December, will receive more than anybody wants to see an Iraq or Af- way they expect. I, for one, was breath- $92 million in increased bonding au- ghanistan or any other area veteran ing a sigh of relief that there was thority which would lead to more than join their brothers and sisters who agreement and that we are here pro- 1,100 new loans. Nationwide it is esti- served in Vietnam, too many of whom ductively engaged in finding a solution. mated our proposal would lead to were in the ranks of the homeless or I also thank Senator KERRY. He and I roughly 80,000 new loans. the dispossessed during those years. We have been at this amendment now for To anyone who questions whether ad- owe them more for their plights. This months. I have had the privilege of dressing the housing crisis is economic helps to do that. working with him on many issues over stimulus, I would say each one of these I close by drawing attention to the a long time. I am currently on the Fi- new home loans is projected to produce fact that a record 37.3 million house- nance Committee, and this amendment almost two full-time jobs; $75,000 in ad- holds currently pay more than 30 per- we actually got approved in the Fi- ditional wages and salaries; $41,000 in cent of their income on housing costs, nance Committee in the last stimulus new Federal, State, and local revenues; and more than 17 million Americans package. I wish it had survived that and an average of $3,700 in new spend- are paying more than half of their in- process because it would already be ing on appliances, furnishings, and come to be in their homes. So as we making a difference. But with the help property alterations. consider additional remedies down the of leaders on the Finance Committee Our proposal is not going to solve all road, I hope we are going to deal with and the approval of the Banking Com- that ails the housing economy, but it is the fact that we can create jobs while mittee, it has now been included in the an important and good start, and it easing the affordable lending housing underlying bill. I thank all of them for will provide real relief to working fam- crisis if we were to pass this and pay this. ilies at risk of losing their homes. This more attention. As I noted back in January, we of- relief is targeted, not a bailout to in- I used to be chairman of the Housing fered this legislation as an amendment. vestors who were looking to cash in on Subcommittee on Banking before I The committee approved our amend- the housing boom. The new housing went over to Finance. ment with an overwhelming 20-to-1 bi- bond authority will be subject to the I know for almost 10 years we were partisan vote. Again, we were not able program’s income and purchase price struggling to get one voucher or two to keep it in the package, but it is in requirements. In 2006, mortgage rev- for housing. It wasn’t until 1999 that we the package today. enue bond borrowers had an average in- got the first 50,000 vouchers in 10 years Across the country, rising interest come of $45,000 and bought first-time and the year after 100,000. But we have rates and slumping home values are homes with an average purchase price neglected housing as a matter of na- creating the perfect financial storm for of $137,000. tional policy for almost 20 years now. many American families. The legisla- I wish to say, again, how pleased I What some of us wish to do is create a tion Senator KERRY and I authored is am the Senate is finally moving to de- housing trust fund that takes money aimed at stemming this tide and pro- bate on this housing package. If we are from the surplus that comes through viding homeowners an option to avoid serious about stimulating the econ- the FHA lending program, insurance foreclosure and stay in their homes. omy, we need to take a look at the root program. But the money that housing Under current law, State and local gov- causes of this slowdown. First among

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This is something Sen- mortgages in the future because lend- which I have proposed will apply only ator CANTWELL and I have been advo- ers will be unwilling to loan money to mortgages given, borrowings, prior cating and will continue to work this where there is the prospect that Con- to the date of the introduction of my week to see if we can add to the bill. gress will intervene and grant author- bill and will sunset in 7 years. I hope we can work quickly, though, ity to bankruptcy courts similar to I think it is important the legislation as Americans, as Republicans and that suggested by Senator DURBIN now pending in the Senate deal with Democrats, to get this bill to the Presi- today. the so-called little guy, the guy who dent, a bill he can sign, so we can, The core of the consideration was ar- lives on Main Street. We have already through common sense and common ticulated by Justice Stevens in a case seen very substantial relief for Wall ground, achieve some common good for captioned Nobleman v. American Sav- Street in the Bear Stearns bailout. I the American people. ings, in 1993, where Justice Stevens am opposed to bailouts. If the entre- I yield the floor. said: preneurs on Wall Street are making in- The PRESIDING OFFICER. The Re- At first blush it seems somewhat strange vestments with the prospect or the ex- publican leader. that the Bankruptcy code should provide less pectation or the hope of big profits, Mr. MCCONNELL. I ask unanimous protection to an individual’s interest in re- and they find their judgment is bad and consent to proceed as in morning busi- taining possession of his or her home than of those profits are not realized and in- ness. other assets. The anomaly is, however, ex- stead there are losses, it seems to me The PRESIDING OFFICER. Without plained by the legislative history indicating that favorable treatment of residential they ought not to be coming to the objection, it is so ordered. mortgages was intended to encourage the taxpayers for a bailout. Where they are (The remarks of Mr. MCCONNELL are flow of capital into the home lending mar- looking for big-time speculative prof- printed in today’s RECORD under ket. its, and they are wrong, they ought to ‘‘Morning Business.’’) So you have the anomalous situa- sustain those losses instead of having The PRESIDING OFFICER. The Sen- tion, as articulated by Justice Stevens, the losses sustained by the taxpayers. ator from Pennsylvania. that on the principal home the bank- It is understandable that the Federal AMENDMENT NO. 4388 ruptcy court does not have such au- Reserve took an exceptional view of Mr. SPECTER. Mr. President, I have thority. That is for a very sound public the Bear Stearns situation in order to sought recognition to comment on the policy reason: that if the bankruptcy avoid a potential ripple effect and dev- pending Durbin amendment. court did have that authority, then astating consequences on the economy. Mr. CORNYN. Mr. President, before lenders would be unwilling to lend It was not a gigantic bailout, in any the Senator begins, I wonder if he will money for first-home mortgages. So if event, when Bear Stearns stock was yield for a unanimous consent request. you have a second home or if you have selling for $150 or thereabouts a year Mr. SPECTER. I will. a yacht or if you have other assets, the ago, and the initial bailout was for $2 Mr. CORNYN. Mr. President, I ask bankruptcy court does have that au- and the prospect of increasing that to unanimous consent that following the thority, but for good reason it does not $10. comments of the Senator from Penn- have the authority on first homes. But I believe the current legislation sylvania, the Senator from Montana be There have been a number of studies pending before the Senate is unduly recognized and then I be recognized fol- on the subject concluding that the im- balanced for the big guy as opposed to lowing the Senator from Montana. pact of the Durbin amendment would the little guy or the person who oper- The PRESIDING OFFICER. Without be deleterious to the ability of people ates on Wall Street as opposed to the objection, it is so ordered. to get mortgages because of the reluc- person who lives on Main Street. That The Senator from Pennsylvania. tance of lenders to put up the money. is why I support the focus of attention Mr. SPECTER. Mr. President, I com- Professor Joseph Mason of Drexel which Senator DURBIN has brought mend the distinguished Senator from University testified before the Senate with his bill—although for the reasons Illinois for offering this amendment Judiciary Committee that ‘‘it is I have stated I disagree, and my bill and for initiating very considerable straightforward to conclude’’ that takes a much more modest approach— discussion on the plight now being cramdowns will increase the cost of Senator DURBIN and I worked long and faced by many individuals who are mortgage credit. hard to try to reach some accommoda- faced with mortgage foreclosure. In its analysis of economic stimulus tion and some compromise, and we He and I have had very extensive dis- options, the Congressional Budget Of- could not do it because our approaches cussions on his proposal and my legis- fice noted that one of the costs of are so basically different. lative proposal, which has been intro- cramdown proposals ‘‘could be higher We finally had a vote on our bill in duced as S. 2133, which differs from the mortgage interest rates.’’ the Judiciary Committee today. Our Durbin amendment in that it provides Federal Chairman Bernanke testified legislation was introduced last fall and authority for the bankruptcy court to before Congress that modification of could have been acted on by the Senate change the variable interest rate mort- mortgages ‘‘would probably lead to a long time ago. We could have brought gages which have caused so much con- concern about the value of existing this matter to the floor and stimulated fusion and so much difficulty in lead- mortgages and probably higher interest other amendments and other discus- ing to foreclosures by people who could rates for mortgages in the future.’’ sion. The delay of months has resulted not pay the increases which were noted In studying the impact of cramdowns in many foreclosures. In the Judiciary by the variable interest rate mort- for farm real estate in Chapter 12 bank- Committee today, on a 10-to-9 party- gages. ruptcy, the U.S. Department of Agri- line vote, my bill was defeated, and the There have been a number of situa- culture estimated that cramdowns Durbin bill was passed for action on tions where the mortgage rate has raise the interest rates on farm real es- the floor. But events on the floor have jumped far in excess of what the bor- tate loans by between 25 and 100 basis finally overtaken the committee ac- rower had anticipated. points. tion. The committee did act today. A homeowner in Lithonia, GA, who Even the report cited by supporters Mr. DURBIN. Mr. President, will the borrowed on a variable interest rate of Senator DURBIN’s bill concluded in- Senator yield for a question? mortgage, found the interest payments terest rates will increase. In their Mr. SPECTER. I do. rising from $1,079 to $1,444, which the paper, ‘‘The Effect of Bankruptcy Mr. DURBIN. Mr. President, if I borrower could not afford. Strip-Down on Mortgage Interest could very briefly, because I know oth- A first-time home buyer in De Soto, Rates,’’ Georgetown law professor ers are here to speak, I would like to TX, found their variable interest rate Adam Levitin and Joshua Goodman ac- distinguish, if I can, three or four ap- mortgage moving from $1,400 to $1,900. knowledge that allowing bankruptcy proaches where we differ between us.

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00014 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.022 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2381 The first element that is important— Mr. SPECTER. Mr. President, the mittee tax package as part of the pend- and I wish to make sure it is clear for Senator from Illinois is correct. It may ing consensus amendment assembled the record—my amendment gives to be that my proposal is too modest in by the two leaders and by Senators the bankruptcy court the authority to that respect. I am not in concrete on DODD and SHELBY. modify the mortgage. But under your that specific provision because I think Today, many American families find amendment, or your approach, the ulti- that could be modified to accommodate their home is threatened. A weak hous- mate decision on whether a mortgage different markets without dealing with ing market has spread weakness is going to be modified still has to be the underlying principles I am con- throughout the larger economy. More approved by the lending institution; is cerned with. than 5 million households now owe that not correct? Mr. DURBIN. I thank the Senator for more than their house is worth. That is Mr. SPECTER. Mr. President, I an- yielding. about 1 out of every 10 home mort- swer the distinguished Senator from Il- I might say to the Chair, I have spo- gages. As prices fall, that number is ex- linois through the Chair by saying that ken to the Senator in the hopes that pected to grow. is correct. My bill does allow for the we can bring this to a vote. I have spo- Our tax package seeks to stabilize modification of the principal sum but ken to the minority leader, Senator the housing market by providing tem- only where the lender is in agreement. MCCONNELL, and he has said there are porary, targeted, and timely tax relief I do not do that to give the lender con- other Members who wish to come to to the housing market. We have devel- trol of the situation. I do that to avoid the floor to speak on this amendment, oped a consensus package that is lim- having a principle established where and I hope they will. There is no point ited to four provisions and these provi- lenders in the future will be unwilling in dragging this out indefinitely. There sions focus solely on our ailing housing to loan money for mortgages if they are many other amendments that are sector. The Finance Committee passed think the bankruptcy court has the au- going to be offered and I wish to bring the first two provisions early this year thority to reduce the principal over this to a vote. as part of the economic stimulus pack- their objection. But if the lender agrees I thank the Senator from Pennsyl- age. First, our package increases the to it—and I think it is important be- vania for yielding for a question. number of mortgage revenue bonds. cause the bankruptcy court would not Mr. SPECTER. Mr. President, I Mortgage revenue bonds are tax-ex- have the authority to reduce the prin- thank the Senator from Illinois for the empt bonds issued by State and local cipal unless there is the provision I questions. I think the questions clarify housing finance agencies. With the pro- have by obtaining the lender’s agree- the positions. It is almost like debating ceeds, these agencies can extend mort- ment. an issue in the world’s greatest delib- gages to home buyers at interest rates But the principle that the Senator erative body. Too often speeches are below the market rate. This will help. from Illinois seeks to reduce the prin- made with no one present except the It will help homeowners avoid fore- cipal sum, I think, is sound, so long as Presiding Officer and perhaps someone you do not destroy the ability of the closure and will increase first-time who is listening on C–SPAN 2, besides home purchases. lender to control it so as to not dis- my sisters. But we need more of this courage future lenders. So my answer The subprime and affordable mort- kind of a discussion in the Senate to il- gage markets have virtually collapsed. is yes. luminate and provide a little life and a Mr. DURBIN. Mr. President, if the As a result, demand for mortgages fi- little spontaneity besides Senators who Senator will yield for only two or three nanced by housing finance agencies is rise and read from a text, and fre- more questions. increasing. State housing agencies can I might acknowledge the fact that quently reading badly from a text. respond immediately to the growing currently those lenders can renegotiate I agree with the Senator from Illinois risks of foreclosure. These agencies can the terms of a mortgage without a that we ought to move ahead on this issue more mortgage revenue bonds. bankruptcy court and that giving them bill and vote as soon as possible, and I That can provide States the option to the last word is going to diminish, I be- join him in urging people who have refinance subprime mortgages, and ad- lieve, the likelihood that they would amendments to come to the floor. It is ditional mortgage revenue bonds can agree to anything by the bankruptcy my intention to offer another—my help clear out the glut of existing court. amendment, S. 2133, and to have a vote homes on the market through first- I might also say that under chapter on that after we conclude with the time home purchases. 12 bankruptcies and on farm loans a amendment by the Senator from Illi- Our proposal includes a second provi- few years ago, we gave this authority nois. sion that the Finance Committee to the Bankruptcy Court and the lend- I yield the floor. passed earlier this year. That is ex- ers said: Oh, interest rates will go up, The PRESIDING OFFICER. The Sen- tending the carryback period for net and they didn’t. ator from Montana is recognized. operating losses, otherwise known as But I wish to ask this specific ques- Mr. BAUCUS. Mr. President, I agree NOLs, from 2 years to 4 years. tion. My amendment limits these with the Senator from Pennsylvania. Generally, cyclical businesses have modifications to mortgages that are The last 10, 15 minutes has been one of profitable years followed by loss years. subprime mortgages, and the Specter the more edifying, constructive, and During a loss period, a company will bill, S. 2133, says these modifications helpful explanations on various ap- carry back the net operating losses would apply to any type of loan, even proaches. He made the statement that from the loss years to their prior prof- prime fixed rate mortgages. Is that not perhaps there should be more of that itable years. They will file a quick re- correct? on the Senate floor, a point with which fund claim and that quick refund claim Mr. SPECTER. It would apply only I strongly agree. I thank both Senators will act as a cash infusion that will as long as they are variable interest for that dialog. allow the company to survive a loss pe- rate mortgages. Mr. BAUCUS. Mr. President, Charles riod. Mr. DURBIN. Mr. President, I wish to Dickens wrote: The housing industry in particular also ask the Senator from Pennsyl- Home is a name, a word, will greatly benefit from an increased vania, through the Chair: Is it true it is a strong one; NOL carryback period. The expanded that the Senator limits the application stronger than a magician ever spoke, period will allow builders to avoid sell- of his modification of mortgages by the or a spirit ever answered to, ing land and houses at distressed Bankruptcy Court to families earning in the strongest conjuration. prices, and it will provide less costly fi- less than 150 percent of State median Simply put, we are here today to help nancing. income, which would be somewhere in families keep their homes. We are here An increased NOL carryback period the range of $60,000 to $70,000 a year in today to move a package of tax provi- will improve business conditions for most States—annual income of most sions that will help those families to the eventual return of the housing States—and would not cover those, for keep their homes. Our package does so market, and the expanded period would example, in the State of California and with tax relief for homeowners, for give the housing industry cash to meet other States where they have higher home buyers, and for home builders. payroll, which would certainly limit incomes and higher mortgages? We are offering this Finance Com- additional job losses.

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00015 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.024 S03APPT1 ccoleman on PRODPC75 with SENATE S2382 CONGRESSIONAL RECORD — SENATE April 3, 2008 Third, our proposal provides broad- I urge my colleagues to support the actually go in and rewrite the interest based tax relief for low-income individ- package. rate so people could afford their home. uals and those who have already paid I yield the floor. As a matter of fact, the cramdown ex- off their mortgages. Under our pro- The PRESIDING OFFICER. The Sen- ception, which this amendment would posal, homeowners would be allowed to ator from Texas is recognized. eliminate, actually helps people buy deduct local real estate property taxes Mr. CORNYN. Mr. President, the homes. It is pretty clear—Senator from their Federal tax return, even if Senator from Georgia has asked me to SPECTER from Pennsylvania quoted a they don’t itemize. According to the yield 1 minute of my time, and I will do U.S. Supreme Court opinion relative to Joint Committee on Taxation, more so without yielding the floor. this, but it is pretty clear that the con- than 28 million taxpayers pay property The PRESIDING OFFICER. Without gressional intent to exclude home taxes but don’t itemize. Our proposal objection, it is so ordered. mortgages from cramdown was in- would provide these 28 million tax- Mr. ISAKSON. Mr. President, I thank tended. Some have disputed that Con- payers a deduction for the amount of the Senator from Texas. gress was pursuing a policy of making their property taxes up to $500 for indi- While the chairman of the Finance home mortgages more available when viduals and $1,000 for married filers. Committee is on the floor, I express my we created the cramdown exception. Most often, nonitemizers are low or appreciation to him, Chairman BAUCUS, Senator DURBIN, I believe, has said middle-income people. Our proposal on the hard work that has been done on that the cramdown exception for home mortgages makes no sense whatsoever. will also benefit those who are not this particular legislation, in par- The record from the 1978 act clearly likely to itemize because they have al- ticular, the tax credit on foreclosed shows that Congress viewed exceptions ready paid off their mortgages. Senior homes, and to praise his staff for the to cramdown as a means of making citizens clearly would benefit. The late night concentrated hours Tuesday mortgages more available. The Senate Congressional Research Service esti- night and early Wednesday morning when this was put together. It was a re- Judiciary Committee report explained mates that nearly 130,000 property tax- that the purpose of the real estate ex- payers could benefit in my home State markable effort and I wanted the chair- man to know how much I appreciate it. ception was to: ‘‘afford greater protec- of Montana alone. tion’’ to real estate financing ‘‘by cre- Fourth, our package provides a home Mr. BAUCUS. Mr. President, if I might respond to the Senator from ating a safe harbor that would facili- ownership tax credit for the purchase tate, rather than discourage, this type of homes subject to foreclosure. Behind Georgia, I certainly appreciate those remarks. He is to be complimented for of financing.’’ each foreclosed property is a family As I alluded, the courts have recog- bringing the idea forward to me person- kicked to the curb, and the suffering nized this policy in interpreting the ally and to others. It is a major con- does not end there. Foreclosed and va- act, most notable in Justice Stevens’ tribution to the solution we are pro- cant homes are a blight on the neigh- concurrence in Nobleman v. American viding here. We did have to tailor it borhood. They drag down home prices. Savings Bank. So I would say that the down a little bit within the confines of They are targets for vandalism and Democratic Congress of 1978, President the package. I thank the Senator from burglaries. Congress should encourage Carter, and Justice Stevens all have Georgia for being agreeable and for people to purchase those properties. acknowledged that this policy of ex- That will help to stabilize home prices working with us to find a way to make cepting home mortgages from and get the housing industry back on this work. cramdown makes sense and helps keep The PRESIDING OFFICER. The Sen- track. mortgage rates low, which I think Our proposal provides a one-time ator from Texas is recognized. ought to be our policy. credit for taxpayers of $7,000. The cred- Mr. CORNYN. Mr. President, I want Inadvertently, I think this amend- it will be claimed over 2 years and the to address the Durbin amendment be- ment would also encourage more peo- home purchase would have to be made cause I am concerned that the Durbin ple to seek bankruptcy as a way to deal in the following 12 months. The short- amendment would hurt low and mid- with their financial difficulties. It has term nature of this credit is critical to dle-income families by making home been argued that this provision would providing immediate stimulus. It also mortgage interest payments higher, actually encourage borrowers to nego- ensures that we do not oversubsidize make them more expensive, by discour- tiate with their lender. The one prob- the housing industry or exacerbate the aging credit counseling and mortgage lem with that is, as we all know, most current oversupply of residential renegotiations and inadvertently steer- mortgages these days are actually sold homes. ing more American homeowners into by the lender; they are packaged and This focused package of four pro- bankruptcy. then purchased as securities and sold posals will go far. It will go far to ad- Let me try to quantify what I mean on the open market. It is, in fact, what dress the housing downturn and eco- in terms of the expense. It is estimated has happened in the subprime mort- nomic weakness in our country. I am that the so-called cramdown provision gage market, which has created this proud we have all pulled together on would raise interest rates on average crisis. The people who actually bought this with Senator GRASSLEY and oth- by about 11⁄2 percent. In Texas the aver- those securities now find that they are ers, and I hope the Senate can pass it age home loan is $122,000 a year. The worth dramatically less than they into law expeditiously. monthly payment for a 30-year fixed thought because of the problems these A lot of irresponsible actions led to home mortgage at 6 percent is $734. If mortgage holders are having. So it is the housing crisis, but now a lot of re- you add a percentage point and a half certainly not a given that they will be sponsible homeowners, home buyers to that, it goes up by $122 a month. So in a position to negotiate with the and home builders are caught up in it. if these estimates are correct—and I lender, who no longer even holds that Tax relief and mortgage help to folks think they are the best information we mortgage. who played by the rules in the housing have available to us now—the average I am concerned, though, that the market is the right thing for Congress increase to Texas homeowners would amendment goes too far in those rare to do. The tax provisions in this pack- be almost $1,500 a year. It would be cases where negotiations are still pos- age will keep property values up, keep $1,465 a year. For that reason, among sible to remove the homeowner’s incen- folks in their homes, and keep busi- others, I oppose the Durbin amend- tive to negotiate and, instead, steer nesses afloat, and those are all keys to ment. them into bankruptcy. The Durbin handling the housing crisis. The bill actually risks increasing the amendment would, in fact, create a si- In sum, this is an effort to provide cost of owning a home for every Amer- ren’s song that would lure struggling tax relief to homeowners, home buyers, ican, and not just for people in my families onto the rocks of bankruptcy. and home builders. It is an attempt to State, in Texas. There has been a little For most Americans, our homes are help families keep their homes. It is an history to this provision as well. our largest and most-cherished invest- effort to preserve an important word The Democratic Congress and Presi- ment. The chance to have their mort- stronger than any magician ever spoke dent Jimmy Carter back in 1978 had a gage decreased by a bankruptcy court, or any spirit ever answered to—the reason for excluding from cramdown basically to renegotiate what a nego- word called ‘‘home.’’ the ability for a bankruptcy judge to tiated interest rate is, would encourage

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00016 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.026 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2383 struggling families to seek bankruptcy would increase annual costs about monthly payments were $5,300 every protection instead of trying to nego- $1,500. So I must oppose it. month. They called about it, and they tiate and get their finances back in Mr. DURBIN. Will the Senator yield were told it just wasn’t true. The paper order in a way that will preserve their for a further question? they signed was for $5,300 every month credit and will not lure them into Mr. CORNYN. I will. for the length of the mortgage. Then bankruptcy. Mr. DURBIN. Is the Senator aware they learned that not only was there I think it is worth noting that bank- that my amendment limits the modi- no cash back, but this broker walked ruptcy itself has lasting and serious fication of mortgages in bankruptcy to off with $20,000 in his pocket. These are consequences to the credit rating of those on primary residences, existing retired people. They were confronted the people who seek it. Bankruptcy is as of the date of the enactment of this with hundreds of pages of loan docu- not in the long-term interest of every law, and that it would not apply to any ments, filled with small print. They family who falls behind on their mort- future mortgages and would not have trusted their broker. gage. We should encourage negotiation an impact on future mortgages, those Not too long ago, my husband and I where possible. In fact, we know that is that are going to be issued. So the bought a home. We trusted our broker. what happens anyway. Very few mort- credit industry is saying: We are afraid He went through the papers with us. gage holders refuse to negotiate with this is going to apply to everybody. Candidly, I do not believe most people the borrower when they get behind in There is a limited application of a nar- read every line of what amounts to a their payments because, frankly, they row class of people who would be eligi- stack about 6 inches high of papers don’t want the property back. They ble. when you buy a home. want to continue the loan in effect, if Mr. CORNYN. Mr. President, I appre- For the Simmons family, they dipped possible. ciate the clarification. I also note that into their life savings. They are afraid So I think the Durbin amendment ac- the tendency in Washington and in they may lose their home. This is ex- tually discourages negotiation and cre- Congress, and the Federal Government actly the type of situation our bill ates an effective magnet, attracting generally, is for things to get bigger would prevent. people into bankruptcy. I have already rather than to contract. So while I ap- Let me give you another story of talked about why I think that is a bad preciate the clarification, I am not Steve and Valvina McFatten. They live idea. consoled by the current limitation. in Fresno, and they are in this photo Of course, this amendment also The PRESIDING OFFICER (Mrs. with their children and dog in front of waives the bankruptcy law’s coun- MCCASKILL). The Senator from Cali- their house. They have two teenage seling requirement when a home is in fornia is recognized. daughters. Steve is an assembly-line foreclosure, which is inconsistent with Mrs. FEINSTEIN. Madam President, worker. Valvina is an office assistant. the underlying Shelby-Dodd com- I am a cosponsor of the Durbin amend- They both work. promise that provides $100 million to ment and am very happy to support it. In 2005, a bank told them they could encourage credit counseling. Later, Senator MARTINEZ and I will be handle a mortgage of up to $135,000. The goal of the bill should be to help submitting an amendment. The Sen- When they saw their dream home the struggling families get back on their ator is in the Banking Committee now next year—listed at $250,000—they feet, not encourage bankruptcy filings and will come to the floor shortly. thought it was out of reach. But a that would raise mortgage rates for ev- I wish to take this opportunity to broker steered them into two mort- erybody, ruin the credit of the bor- speak about this amendment. It is also gages for $250,000 for only $1,000 down, rower, and ultimately not solve the supported by Senators BOXER, OBAMA, with an adjustable interest rate. Their problem it is intended to solve. For SALAZAR, DOLE, DURBIN, and CLINTON. combined monthly payments were that reason, I oppose the Durbin Essentially, this amendment deals with $1,600. Now, the McFattens have weak amendment and encourage my col- the fact that today there is a very thin credit, modest income, and two chil- leagues to do likewise. patchwork of State licensing for bro- dren to raise. They told their broker Mr. DURBIN. Will the Senator yield kers. It is insufficient. There are no na- they could not afford this loan. The for a question? tional standards for the licensing of a broker told them not to worry, that Mr. CORNYN. Yes. mortgage broker in this subprime mar- their monthly payments included their Mr. DURBIN. Mr. President, I ac- ketplace. In many States, there are property taxes, their mortgage insur- knowledge that the Senator is correct really no requirements. What that has ance, and a warranty for home repairs. that this modification of a mortgage done is enabled bad actors to flourish. Well, did that turn out? No. Here is on a primary residence would be a I wish to give you two examples of what the real deal was: no money to- change in bankruptcy law. I ask the what a bad actor as a subprime mort- ward property taxes, no money toward Senator from Texas, is he aware that gage broker means. insurance, and no warranty. It was can- in the 1980s we created chapter 12 bank- I met this family in the picture in celed without their knowledge. ruptcy for farms and created the oppor- Los Angeles this past week. This is the These are two examples of what is tunity for the bankruptcy court to Simmons family. Mr. Simmons worked happening in California. Many Ameri- modify mortgages on family homes and for Northrop Grumman for 20 years, cans trying to get a piece of the Amer- farms, and at the time the banking in- and Mrs. Simmons has been a checker ican dream have actually been sold a dustry said the same thing about that at Alpha Beta for 26 years. They are re- bill of goods by unscrupulous brokers change as they have about my amend- tired. They have owned this home in and lenders. When I was in Los Ange- ment—that it would raise interest Los Angeles for 39 years. Mr. Simmons les, the San Bernardino district attor- rates? Is the Senator aware of the fact had a stroke. When he had this stroke, ney, the Los Angeles district attorney, that there was no significant increase they obviously had additional medical and the State attorney general had in interest rates on farms as a result of expenses. Last year, they were in the just arrested nine bad actors in the the creation of chapter 12 bank- market for a better rate than the 8 per- mortgage broker business. So it is ruptcies? cent they were paying on the loan on going on all of the time. People are Mr. CORNYN. I accept what the Sen- their house which remained and was told: Don’t worry, you don’t need a big ator says. I have no reason to dispute $550,000. They got a cold-call from an downpayment. You can get into a zero- it. I, frankly, have no knowledge of it. unlicensed broker, who offered them a interest loan. Don’t worry about what I know that currently we have roughly $629,000 loan with these terms: $25,000 you are getting into. Home values al- 2 percent of the mortgages in America cash back, a 4.5-percent interest rate, ways rise. Don’t worry about the ad- that are in foreclosure proceedings. and monthly payments of $2,000 after justable interest rate; you can always While there is undoubtedly a serious four months at $5,300 to lower the in- refinance. Don’t worry, you cannot problem, I don’t think this is the right terest rate. They studied it and said, lose. solution to it. I said that some esti- ‘‘We can afford this.’’ And so they did Well, the fact is that you can lose, mates are that it would increase inter- it. Here is what really happened. The and you can lose big. I can say that ev- est rates by 1.5 percent on mortgages. interest rate was 11.2 percent, not 4.5 erybody should read the fine print and On a $122,000 mortgage in Texas, it percent. There was no cash back. The take the time to understand exactly

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00017 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.029 S03APPT1 ccoleman on PRODPC75 with SENATE S2384 CONGRESSIONAL RECORD — SENATE April 3, 2008 what their mortgage documents say. The bill would also establish a na- This is going on, and it is going on The fact is that people have difficulty tional database so individuals buying a all over California. The areas I just understanding these very legal docu- home who wanted to use a subprime pointed out, the 4 out of the 10 highest ments. They tend to depend on their mortgage broker could go on the Inter- areas are not the most affluent places mortgage broker. So the damage is net and find out if that broker is, in in my State. They are places where staggering. fact, licensed. families just like the Simmons have There were more than 2 million fil- The State would have the responsi- heard the rhetoric: We can put you into ings last year, and another 2 million bility to carry out these minimum the American dream; we can enable are expected this year. Senator standards and could add any standards you to buy a home; and here, I, the BOXER’s and my State is ground zero, they wished. But State regulators mortgage broker am willing to sit with 4 of the 10 metropolitan areas would be required to develop a satisfac- down and make you all these commit- with the highest foreclosure rates in tory licensing system within 1 year fol- ments. Then they find out the commit- the Nation. No. 2 is Stockton. No. 4 is lowing the enactment of this legisla- ments are ashes. San Bernardino. No. 5 is Sacramento. tion. If this does not occur, the Hous- This has to stop. There is no place for No. 7 is Bakersfield. It just so happens ing and Urban Development Secretary the predator in this industry. I know that these are areas with a lot of mid- is empowered to quickly develop a na- Citibank told me they oppose the legis- dle-class, hard-working families who tional database and license-generating lation. I say to Citibank: Are you tend to trust their broker. Both people revenue for its implementation proud of this? Is this the way you want in the family work. They may not all through fees to license applicants. to do business? be college graduates. They may have a There is broad bipartisan support for And I say to realtors who do not tough time understanding the fine this amendment. Our amendment is want these brokers to be licensed: Is print, and they depend on the person similar to a provision authored by Rep- that the way you want to do business? who comes to them as a professional resentative SPENCER BACHUS, a Repub- If it is, I am against what you want. and makes personal representations to lican from Alabama, the ranking mem- I hope this amendment is adopted. It them. ber of the House Committee on Finan- My State accounts for more than 20 has been talked about, it has been cial Services. dealt with in general terms in a past percent of the Nation’s foreclosure fil- The national licensing concept for ings. It is very serious. We have now bill that passed the House. The Presi- mortgage lenders and brokers was in- dent’s working group said we should learned how easy it is for anyone to get cluded in the comprehensive mortgage consider it. We now have the chance to into the mortgage business in some reform bill which passed the House in do it. States and, quite frankly, it is aston- November. And last month, the Presi- ishing. A simple Internet search will We face 2 million additional fore- dent’s working group on financial mar- closures, and we have to do something show how easy it is. kets recommended a similar proposal about predatory lenders and brokers, These are statements taken right off in their report on the housing crisis. and this amendment is a beginning. the Internet for a broker. Here is the I will conclude. The emergence in re- Mr. DURBIN. Madam President, will source: http://www.cflicense.com. We cent years of subprime and other exotic the Senator yield for a question? accessed this site on the 27th of Feb- mortgage products have put many Mrs. FEINSTEIN. I certainly will. ruary of this year. Here is what they American home buyers at great finan- Mr. DURBIN. Through the Chair, I advertised: cial risk, and many of these products am happy to be a cosponsor of the Sen- No experience, education or exam is nec- require little or no downpayment. They ator’s amendment. The last point she essary. allow people with bad credit to get in made is the one I found almost nothing To sell subprime mortgages in the over their head. They do not verify short of amazing: that the largest State of California. their wages. Many have exaggerated banks that are involved in the mort- And here is also what we learned: wages on the loan documents. And gage business, and the realtors who are You can hire unlicensed sales agents to most lenders and brokers offered these involved, obviously, in these trans- originate loans under your company license. mortgages, though, in a responsible actions are resisting Senator FEIN- In fact, a lot of the real estate indus- fashion. But many others used preda- try is opposed to mortgage licensing. tory tactics, such as failing to disclose STEIN’s amendment that would provide They want to be able to do that. But the full risk in order to place some basic standards for the licensure our job is to decide, is this in the best unsuspecting borrowers into mortgages of mortgage brokers. That is the point interest of the consumer? I don’t be- they could not afford. I would like to make, through the lieve it is. As a matter of fact, I find it Madam President, my heart broke Chair, to the Senator from California. I rather outrageous. I say to the real es- when I met the Simmons family. When continue to wonder why these noble tate industry: This does you no good to I think of somebody working for 20 professions are protecting the bottom have unlicensed subprime mortgage years for a defense firm in California, feeders of our economy, those who are brokers who give bogus information to his wife working for 26 years as a preying on people such as the Sim- your clients. checker in a supermarket so they could mons. So here is what this bipartisan buy and sustain a home which, as we I have stories in Illinois I can tell amendment would do. First, it would can see, they have kept in pristine con- that will match each one of the Sen- establish some minimum, basic Federal dition, having a health problem—name- ator from California, where there is license requirements. They would en- ly, a stroke by Mr. Simmons; it is dif- basic exploitation of people by those sure mortgage brokers and lenders are ficult for him to get around, it is dif- who mislead people in terrible finan- trained in ethics, consumer protection, ficult for him to speak—costing them cial circumstances, people of limited lending laws, and the subprime mar- extra, using the home as a basis to try experience and education who are try- ketplace. To be licensed, you would to refinance to take some money out of ing to understand the complexity of have to have no felony convictions, this house to pay for medical bills. mortgages and closings and interest have no similar license revoked, dem- What is happening now? A bad actor rates and all of the matters that have onstrate a record of financial responsi- got hold of them. They did not realize to be understood well. bility, successfully complete edu- what they were getting into. He prom- I ask the Senator from California, cational requirements, at least 20 ised certain things which did not come Madam President, does she have the hours of approved courses—it seems to through. And now this couple faces los- support of any financial institutions or me that is pretty basic—pass a com- ing their home. any of these professions that should be prehensive written exam, and meet an Fortunately, we were able to hook in support of State licensing of these annual license review and renewal re- them up last week with a community mortgage brokers? quirement. It would also require that pro bono law firm that will now rep- Mrs. FEINSTEIN. Let me answer all mortgage brokers and lenders pro- resent them and deal with their mort- that. Not to the best of my knowledge. vide fingerprints, a summary of work gage company and try to see if they Let me also say—and perhaps I do, but experience, and consent to a back- can recondition some of this loan back I will find out—let me also say ground check to authorities. to what they were promised. Citibank and even the California real

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00018 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.030 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2385 estate establishment want exemptions. nanced and on with the rest of their large community that will come in and Well, I am not willing to give exemp- lives. work with the homeowner and with the tions. I say for shame if this is the way That is the kind of relief I offered on lending agencies to try to work out you want to practice your business. It behalf of several of my Republican col- terms. is not acceptable. leagues in the Security Against Fore- Many of these will be able to get refi- Mr. DURBIN. I thank the Senator closure and Education Act, or SAFE nanced. It has to be voluntary on both from California. Act, of 2008. It provided help for fami- sides, but as has been said earlier on Mrs. FEINSTEIN. I yield the floor. lies to refinance distressed subprime this floor, lenders have a real disincen- The PRESIDING OFFICER. The Sen- mortgages, help for neighborhoods for tive for foreclosing. They got into the ator from Missouri. the purchase of foreclosed homes, help business not to own homes, they got in Mr. BOND. Madam President, too for returning war vets coming home to the business to receive payments. Very many families in Missouri and across the threat of foreclosure, and reform of often this means there is common the Nation are feeling the pain of the the Federal Housing Administration ground which can be agreeable to the housing crisis. They need our help now. that we all agreed upon last year and homeowners and the lenders to stay This Senate is coming together on a bi- still have not been able to pass. the costs and the risks of foreclosure. partisan basis to provide some relief to These proposals, I am very happy to Foreclosure not only is devastating deal with some of the real problems we say, form the core of the Foreclosure to the family, it is very devastating to find in communities throughout our Prevention Act substitute amendment the neighborhood. The neighbors see Nation. that is before us today. I thank Sen- their home values go down, and the Over the Easter break, I traveled ators DODD and SHELBY who came to- whole community suffers. That is why around the State. I talked with a lot of gether and assembled this bipartisan I had mayors and council members and folks who have a real and deep interest package of relief for families and city aldermen coming out and saying, in this housing crisis. I met with fami- neighborhoods. They took proposals what can we do? I said: Get good edu- lies struggling under the threat of fore- from our SAFE Act, housing proposals cation. closure, neighborhood groups coun- from our Democratic colleagues, and As the Senator from California said, seling families on how to keep their provisions from our friends on the Fi- we need better education for people be- homes, government officials at the nance Committee to make this relief fore they seek to buy a home, and cer- local level—mayors and council mem- package. tainly we need education and coun- bers—who were trying to find ways Most importantly, this measure will seling for those who see mortgage pay- they could assist, community leaders help struggling families refinance their ments rising above their reach. asking for our help. They told me subprime mortgages by authorizing Back to the provisions in this bill. about the neighborhoods devastated by State housing finance agencies to issue We supported on our side—and this foreclosures. More critically, they told $10 billion in tax-exempt bonds and use measure includes—help for struggling me of the personal problems faced by the proceeds for refinancing. neighborhoods by providing tax credits families running into foreclosure where I happen to know very well how effec- for that purpose over the next year of their adjustable rates had risen so high tively our Missouri Housing Develop- a home in or facing foreclosure. It is they could no longer afford them. And ment Corporation functions, and if $7,000 available for families moving in they talked to me about the devasta- they have this authority and if they and living in the home over 2 years to tion of family after family being can sell their bonds, then they will be keep the neighborhoods from being threatened with losing their home. able to refinance where people have flooded with properties in foreclosure, I did not hear from speculators who seen their mortgage payments escalate which drags down property values for overbuilt and are now caught with too beyond their ability to pay. This is the everyone. These tax credits should help much inventory. I did not hear from in- kind of assistance we expect from our all homeowners in the neighborhood by vestors who bought a second or third housing finance agencies, and we need stabilizing property values as families vacation home, expecting that the to empower them. get back into vacant homes and add price would go up more than they paid Secondly, to help families know their value. for it and now regret their bad deci- options to avoid foreclosure and keep Not surprisingly—not surprisingly— sions. And I did not hear from the them in their homes, it provides an ad- when I laid out this proposal to the greedy lenders who went out and of- ditional $100 million for loan coun- roundtables and the discussion groups I fered terms that were too good to be seling. I was proud to be able to join had around the State, one of the things true. Some of the worst ones were the with my colleague from Connecticut, the mayors and the city councilmen no-downpayment loans. Many others Senator DODD, in the Housing and liked the most was this ability to get offered unbelievable teaser rates and Urban Development appropriations bill those homes in foreclosure sold and oc- then put out paper that was absolutely last year to put $180 million in coun- cupied by borrowers who would be con- unaffordable by the borrowers. They seling. Congress passed it in December. tributing members of the community spread this toxic paper throughout the The first of these funds has gone out, and helping to stabilize those commu- system. It is putting at risk not only and they tell me already they are hav- nities. They recognize the importance our national financial system, but that ing a great effect. Many say that this has for their communities as well toxic stuff has spread to international knowledge means power. Housing coun- as the families who would be living markets, and markets across the world selors I met with over the recess told there. are feeling the pain of our subprime me how these counseling funds are One other part of this proposal that crisis. helping families know how to renego- is very important to me is that the In Missouri, I heard from mothers tiate with their banks to get good refi- measure proposes new loan disclosure and fathers who want to keep their nancing and keep their homes. requirements with a prominent, plain home. I heard from fixed-income sen- The message all of us ought to carry English explanation of key loan condi- iors who thought they had a deal they back to our home States when we talk tions. I want the borrowers to see in could live with until the rates started to people who are threatened by these big type any teaser rates or introduc- adjusting and the mortgages got out of problems is that if you see your mort- tory rates, anything that will change their ability to pay. These folks do not gage rates going up beyond your abil- the terms of their payments or limit want a government handout. They do ity to pay, if you have concerns about their ability and lead to foreclosure. not want a bailout. They do not want whether you can meet the terms of the I have had the distinction of living in the Federal Government buying their financing, don’t wait until foreclosure several houses in the last few years. As mortgage or buying the homes around proceedings are initiated. Don’t wait we have moved from house to house them. They are hard-working Ameri- until you get hauled up on the court- and purchased homes, I have seen that cans who want to be able to meet their house steps to see your property sold. stack of documents. As the occupant of original commitments and keep the There are counseling agencies that we the chair, I used to be a lawyer. I am promises they made. They need tar- have funded and will be funded addi- recovering from it now. I have looked geted temporary help to get them refi- tionally across the country in every at those documents and tried to make

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00019 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.032 S03APPT1 ccoleman on PRODPC75 with SENATE S2386 CONGRESSIONAL RECORD — SENATE April 3, 2008 sense of them, and I tell you there is would get rid of the idea that it is the attorney, and I have been one in the not enough time if you are purchasing American dream to put somebody into past, we know what happens at a real a house. It took me about 45 minutes a house with no equity in it. That is estate closing. You give people a stack to sign all the pieces of paper that asking for trouble, and that is one of of papers and you turn the corners and came before me. Now, that doesn’t help the sources of the trouble we face. say: Keep signing until you are fin- anybody. The Truth in Lending Act has I would say one other thing. A lot of ished. If someone has the nerve to ask: gone to ridiculous extremes. Unfortu- people are now realizing that this hous- What am I signing? Nine times out of nately, we let lawyers draft that, and ing crisis is the basis of financial chal- ten, it is going to be dismissed by the there ought to be a law against lawyers lenges and financial difficulties in the realtor or the lawyer in the room: Oh, drafting any kind of disclosure docu- United States and possibly even inter- it is another Federal form required by ments. We need to have those simple, nationally. I said earlier, this toxic law. Just sign it. Everything is fine. in plain English, so you know what paper has been spread throughout the At the end of the day, let’s be honest. your rate is, what it could rise to, world, and there are banks in other No one has read all of those forms. No whether there is a prepayment penalty, countries, there are investment houses one understands all those forms, par- and whether you can refinance it. That in other countries that are suffering ticularly those who are borrowing is on the first or second page. because of it. There had to be steps money. But the fine print in those Tell me something I need to know. taken at the Federal level, and some of forms is going to dictate their lives, Don’t make me sign 30 pages saying I the steps were a little bit breath- and they do not even know it. How have read all the fine type or all the taking. I was not wild about seeing the many of us take the time to carefully fine print. Fed have to move in and wipe out Bear read the back of our monthly credit Everybody knows that is a joke. Let Stearns and provide the guarantees, card statement? Not me. And the print us put disclosure in plain terms. That but I am willing to accept what the is so fine, even with these glasses should be a help in the future. Chairman said, and what others have which I have all over my house, I can’t keep up with it and understand it. We also have a provision from Sen- said, that this was necessary to stop So what Senator JACK REED proposed ator COLEMAN of Minnesota in this bill the domino effect of collapsing Federal to give returning war veterans more was that there be a cover sheet to the institutions and federally insured insti- disclosing documents which says: You time to avoid home foreclosure. Cur- tutions, and it is necessary to stop a rently, they have a 3-month window are borrowing X number of dollars, the worldwide panic from subprime loans. interest rate is X, the monthly pay- from their return to work out any There are other steps that have been ment will be X, the interest rate can mortgage difficulties they have. This taken as well—lowering the Fed rate to increase to X number, your monthly may not be enough time for them. So 1 1 3 ⁄4, 2 ⁄4. These steps are necessary on a payment can increase to a certain this proposed measure would extend macro level. But let me tell you one the protection against foreclosure to 6 amount, and there is or is not a pen- thing. This macro problem has a micro alty for repaying your mortgage. Pret- months after arrival home. That is the problem basis. The problem we face is ty simple, right? Well, you ought to see least we can do for our returning he- not just what happens in Washington what the financial institutions did to roes. or happens in New York or happens at JACK REED’s very simple proposal—one We have included provisions of the the Federal Reserve. This problem de- Federal Housing Act reform bill, which that made sense. pends upon how we solve the problems The reason it caught my attention is passed the Senate 93 to 1 last year. of the families facing foreclosure, of it amends the Truth in Lending law in That bipartisan, near unanimous re- the communities seeing a wave of fore- America. I have kind of a special at- form bill deserves to become law. FHA closures driving down property values. tachment to this, because the first per- is one of our key financing insuring This problem requires also that we son I ever worked for on Capitol Hill agencies for lower income people. We work for a solution that begins at the was Senator Paul Douglas, who tried to need to make sure it works. We have ground up; that takes care of the fami- pass the Truth in Lending Act for 18 heard about the possible application of lies in need; that takes care of the years. He was fought by the banks and FHA Secure to assist borrowers whose communities facing these problems and never succeeded. He left Congress in mortgage payments have gone beyond not do only what has been done nation- 1966, and Senator William Proxmire of their reach, but it is too limited. They ally, what we read about in the head- Wisconsin passed it. can’t use it. We need to loosen up the lines, but what we can only see in com- It was, I am sure, a good-faith effort terms so that the terms are not so munity newspapers back home, as to for better disclosure at closing, but the strict that FHA is in the position of how we help families and communities law is so complicated, so arcane, that what some people used to characterize struggling with foreclosure. at the end of the day it did not serve as a bank being a place that lends you This housing bill before us represents the ultimate purpose Senator Douglas an umbrella and takes it back when it the needs and values of our families sought. So I was anxious to read what starts to rain. The FHA holds out great and neighborhoods. It doesn’t provide the banking institutions would agree promise for being able to insure loans for any government buyouts of mort- to as part of the compromise bill before and get people in houses, but when gages, as some propose. It does not pro- us. I hope my colleagues will take a they say, if you do anything, if there is vide for refinancing of vacation or in- few minutes and go to section 501 of anything, if you miss any step, you vestment homes, as some fear. To- this bill and try to make sense out of can’t get the protection, it seems to me gether, our housing proposal will help this. What I described to you, in Sen- maybe we have tightened it down too families and neighborhoods across this ator JACK REED’s proposals, I could ex- hard. country get through the crisis and help plain at any town meeting in Illinois— I believe, however, for the future, it our financial systems to maintain sta- any Senator could—and people would ought to be the policy of the FHA—and bility. But most of all, for our families, say: Sure, why shouldn’t we know this? I would hope it would be the policy of for our neighborhoods, for our commu- We might have avoided some of the any responsible mortgage broker or nities, I urge my colleagues to support problems we have today if the bor- lender—not to make any no-downpay- this measure. rowers actually knew what they were ment loans. No-downpayment loans are Madam President, I yield the floor. getting into. one of the most significant contribu- The PRESIDING OFFICER. The Sen- Try to make sense out of what the fi- tors to housing foreclosures and failure ator from Illinois. nancial institutions agreed to in this to be able to meet those terms. If you Mr. DURBIN. Madam President, I bill. I have read through it. I don’t get don’t have the money to buy a house, thank the Senator from Missouri for it. I mean, it does try my patience that there is nothing wrong with living in a his statement. He made reference to at this moment in history, with so rented house. I have lived in rented something which I thought was so ob- many people facing mortgage fore- houses. You can save up the money to vious. Senator JACK REED of Rhode Is- closures, we do not have an appetite in buy a house. But to buy a house re- land had an amendment to the original the Senate to change the basic laws sponsibly, you need to have some bill, and since Senator BOND is an at- and rules to have more oversight and downpayment. I hope that the FHA torney, and the Presiding Officer is an avoid this happening again.

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00020 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.033 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2387 If it is uncomfortable for us to be someone challenges it or they say owners will have to go into bankruptcy plowing through all this legislation, something and I challenge it. Wouldn’t to get it. That is no news. He has made think about how uncomfortable it is that be exciting? C–SPAN might adver- that very clear. I believe otherwise; for 2 million homeowners facing the tise that is going to happen on the that voluntary efforts and programs loss of their homes. floor of the Senate, it is so rare. outside of bankruptcy will be quicker Senator FEINSTEIN was here a few I am ready. I hope, if the Senator and more efficient, in terms of helping moments ago, talking about these from Iowa is here on my amendment, people keep their homes and shoring up homeowners in her State. I have met that we can be engaged in a debate the housing market. We need to let them in my State. They are in Mis- shortly. these efforts work. souri, they are in Iowa. These are I yield the floor. Also, people will not risk ruining unsuspecting people, many of them re- The PRESIDING OFFICER. The Sen- their credit history by filing for bank- tired, many of them with limited expe- ator from Iowa is recognized. ruptcy just because they think that rience and education, drawn into com- Mr. GRASSLEY. Madam President, I this is the only way maybe they are plicated loans that have traps every rise for two purposes. One, to state going to be able to keep their home. time you turn. If you reach a situation some views on the Durbin amendment The mortgage banking industry needs where you have lost a job, where you and, No. 2, to give very short remarks to be doing all it can to make sure that have a serious medical bill, where on tax provisions that are part of the all homeowners in distress, not just the something has occurred here, you could underlying housing bill. I would like to ones in bankruptcy, are getting help in lose your home. A lifetime of savings speak on the Durbin amendment for making their payments. could be gone. the reason that I am the author of the I think more importantly, we have That isn’t right. I understand people bankruptcy reform provisions that been told the cramdown provision in have to accept responsibility for their passed here, maybe 3 or 4 years ago, Senator DURBIN’s amendment will in- actions, but you know a lot of these and are now law. I would like to speak crease the cost of mortgages for all people are being preyed upon, they are on the tax provisions as ranking Re- borrowers in the form of higher inter- being deceived. I have seen it happen. I publican on the Senate Finance Com- est rates or higher downpayments, or have talked to the families back in Illi- mittee. both. Independent experts, as well as nois. We had a chance, with this bill, to Senator DURBIN and I have had op- the Congressional Budget Office—and I put a very important and simple provi- portunities to work together on many like quoting the Congressional Budget sion in, on which the Senator from issues, and in fact we are working to- Office because they are not partisan— Missouri spoke. We didn’t do it. I gether on other things this very day, have concluded that there will be an might say, I see the Senator from Iowa, unrelated to this bill. I appreciate the interest rate increase for all home and I don’t want to take any additional opportunities to cooperate in a bipar- mortgages, between 1 and 2 percent. time, but I wish to say through the tisan way with Senator DURBIN. Sen- Higher interest rates will deny many Presiding Officer: We convened this ator DURBIN, many months ago, was Americans the ability to buy a home morning at 9:30. My amendment, which very polite, coming to me and asking and will make it more expensive for is pending, has been on the floor for me to take a look at his bankruptcy other Americans to get a home loan. virtually 3 hours now—almost 3 hours. language. It is probably similar to the So, in effect, this will put up barriers— I have stayed that entire period of time one that is before us right now. I know maybe unintended barriers, but real to entertain any questions or to engage the language has been changed some barriers, the experts tell us—to the in any debate related to this amend- since then, but it is basically the same American dream of owning a home. The fact is, in 1978, a Democratic- ment. concept. He asked me to consider it. There have been a lot of speeches I and my staff did consider it, and I controlled Congress and a Democratic about other issues. I don’t wish to be am standing here now to speak against President specifically—and I wish to emphasize ‘‘specifically’’—exempted critical of my colleagues. I have done it. But Senator DURBIN was very cour- primary residences from cramdown to the same thing. They have issues that teous in giving me a heads up, not just keep interest rates low for primary are important to them relating to this a few weeks ago but a long time ago. I homes and to ensure credit was avail- bill and other subjects. That is their want my colleagues to know Senator able for low-income borrowers. In fact, right. DURBIN is an easy Senator to work U.S. Supreme Court Justice Stevens I tried to get an agreement that at with, even if you disagree with him. 12:15 we would vote on my amendment, So I am here to voice opposition to explained, in the Nobleman case, that the legislative history of the 1978 bank- up or down, win or lose; let’s debate it Senator DURBIN’s bankruptcy amend- ruptcy law indicated very clearly that: and vote on it. I asked the Republican ment. While I appreciate Senator DUR- . . . favorable treatment of residential minority leader and he said: Too soon. BIN’s sincerity in trying to alleviate mortgages was intended to encourage the Other Members want to come and the home mortgage crisis, I believe his flow of capital into the home lending mar- speak to this amendment. I don’t want amendment is misguided and will have ket. to foreclose anyone’s opportunity to serious unintended consequences. So I Debate surrounding the Senate speak on the floor for or against this am going to point out some of my con- version of the 1978 act indicates that amendment, but why are we wasting cerns. exceptions for real estate liens were al- this time? That is my question. This is First, the proposal would make filing lowed with the explicit goal of making an important bill. There are a lot of bankruptcy a deceptively attractive home mortgages more available and very important amendments. Let’s get option for people trying to keep their more affordable than other kinds of on with it. Three hours should be homes. But we do not want to encour- credit. So I think, from the history of enough for this amendment. It is way age people to go into bankruptcy for the 1978 act, there is a sound policy too much. We could have debated this the sole reason of keeping their homes. basis for this decision to not allow thoroughly in a matter of an hour. Un- Rather, we should be working on solu- cramdown for primary homes in bank- fortunately, a lot of Members have not tions outside of bankruptcy to address ruptcy. come to the floor. this issue, and that is what a great part Mr. DURBIN. Will the Senator yield There should reach a point where the of the other provisions of this housing for a question? minority leader says to his colleagues: legislation before us is all about. That Mr. GRASSLEY. Yes. You had your chance. Now let’s vote. is what a lot of the things the Federal Mr. DURBIN. I would like to ask the That is kind of the normal consequence Reserve and the Secretary of the Senator—I don’t question what he has in life—you snooze, you lose, whether Treasury are trying to do, both said, but after that, in the 1980s, we you are in the Senate or not. So I en- through public policy as well as created a new chapter in bankruptcy, courage those who support or oppose through encouraging private sector Chapter 12. my amendment, come to the floor. I policy. Mr. GRASSLEY. Now you are getting am here. Let’s have something unprec- Other solutions need to be sought be- personal. edented, a debate, an actual debate in fore bankruptcy. In order to get the re- Mr. DURBIN. That is why I wish to the Senate, where I say something and lief Senator DURBIN wants, home- make this point. Because we said that

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00021 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.046 S03APPT1 ccoleman on PRODPC75 with SENATE S2388 CONGRESSIONAL RECORD — SENATE April 3, 2008 when it came to the so-called cant at this point. According to the Mr. DURBIN. I am saying your state- cramdown or modification of mort- USCOURTS.GOV Web site, the Federal ment should be modified. gages, we would make an exception and courts Government Web site, for fiscal Mr. GRASSLEY. I am looking at my the exception would apply to the year 2006 there were only 348 Chapter 12 staff because I am not a lawyer. My homes of farmers and their farm prop- filings; in fiscal year 2007, there were staff would disagree with you that my erty. We said if they go into bank- only 361 Chapter 12 filings. This would statement is inaccurate. But I will not ruptcy, they can have the mortgage on compare to what, at least I believe, you go into that now. their farm home crammed down or are saying are possibly at least 600,000 Furthermore, according to the Dur- modified. filings under your amendment. bin amendment, subprime loans are de- At the time, the banking industry Moreover, it took Congress over two fined to be any loan with an interest said this is a terrible decision because decades to make Chapter 12 a perma- rate of 3 to 5 percent over the Treasury we are going to have to raise interest nent part of the Bankruptcy Code be- yield rates for comparable loans. It is rates on farms. You are going to regret cause people were concerned about the my understanding that this definition this. We did it anyway, and there was possible negative consequences to al- could include prime loans and home eq- no significant increase in interest lowing cramdown for family farms. uity lines of credit, which would en- rates. Chapter 12 was initially only enacted compass a large number of loans. I would like to ask, through the as a temporary provision. The cramdown provision is just one In addition, I would like to say that Chair, whether the Senator from the of several problematic provisions in great agricultural State of Iowa ob- the definition of family farm which can Senator DURBIN’s amendment. The jects to cramming down mortgages on file under Chapter 12 is very limited. In amendment will increase bankruptcy farm homes under Chapter 12. fact, Chapter 12 only applies to a lim- filings, something I really do not think Mr. GRASSLEY. Madam President, I ited number of farms—those that have we should encourage. We should be am glad to answer that. First, let me less than $3.2 million in debt; debt has doing everything we can to keep people explain why I said he is getting per- to arise out of the farming operation; out of bankruptcy. It ought to be very sonal. I am the author of that Chapter 50 percent of income within the last 3 much a last resort, particularly be- 12 bankruptcy provision. I am going to years has to come from farming in- cause filing bankruptcy in and of itself address it very soon. So if you would come; and 80 percent of the assets in hurts a consumer’s credit rating. I listen, I think I will answer your ques- the estate have to be related to farm- think we can all agree that bankruptcy tions. I appreciate what you are saying ing operations. Those are some of the should be a last resort and one should and, in fact, I anticipated that, and I requirements. not file for bankruptcy unless it is ab- hope I am ready for it. I am sure it is So probably Chapter 12 ended up, solutely necessary. The amendment going to be difficult to satisfy the Sen- quite frankly, being a lot more narrow will increase mortgage interest rates ator from Illinois, though. than maybe I originally intended. But I and downpayments for other home- The amendment of Senator DURBIN think it is working. will not only increase interest rates on Finally, I want to go to the owners and potential home buyers. The mortgages and make home ownership cramdown that is allowed for boats, be- Durbin bankruptcy amendment will in- more expensive for everyone, many ex- cause boats are like cars: their values ject greater risk into and negatively perts tell us this proposal will also diminish rather than increase, which is impact our financial markets. have an adverse impact on financial very different from real estate, where I would like to be clear: I want to markets because of difficulties and un- values are expected to rise over the help homeowners weather the storm certainty in valuing the mortgages long term. just as much as the next Senator. I that back up securities. In addition, in- Proponents of Senator DURBIN’s want to support constructive solutions nocent investors would be hurt. So the amendment argue that the way the to help homeowners meet their obliga- Durbin amendment would cause other amendment is now drafted, only a very tions so they do not lose their homes. adverse impacts beyond higher costs of limited number of loans will qualify for In fact, I have worked very hard with home loans. cramdown in bankruptcy. Now, while other Senators to craft tax provisions Proponents of this amendment, par- the amendment does attempt to limit that I am soon going to address that ticularly the cramdown provisions, the scope of the legislation from how it are currently contained in the under- argue that primary residences should was originally drafted when Senator lying housing proposal before us. But I be crammed down in bankruptcy just DURBIN introduced his bankruptcy pro- am concerned that the Durbin bank- as second homes, family farms, and posal as a stand-alone bill—that was ruptcy amendment we are considering boats are. But there are good reasons probably soon after he had talked to right now—if we adopt that, we are why primary homes are treated dif- me about it several months ago—the going to pass legislation that would do ferently from these other things. reality is that the language still is ex- a great deal of harm. I am concerned First, interest rates and tremely broad. Cramdown and other about the possibility of the amendment downpayments for vacation homes are loan modifications are available for helping some, but hurting many oth- significantly higher than for primary many loans, both nontraditional and ers. I am not alone in my concerns. homes. If we are to start treating pri- subprime as defined by Senator DUR- Many experts agree that the Durbin mary homes the same as vacation BIN’s amendment, made before the bankruptcy cramdown proposal is prob- homes, I am told that then interest amendment’s effective date. That is, of lematic and could have serious adverse rates are certain to rise to the same course, a lot of loans. Since there is no consequences. So I am asking my col- level of second homes where cramdown sunset date in the amendment, bor- leagues to vote against the Durbin is permitted. rowers could file for bankruptcy and bankruptcy amendment. Second, Chapter 12, referred to by the still get this cramdown relief years and I said that I am the ranking Repub- Senator from Illinois, only applies to years from now. lican on the Senate Finance Com- very small commercial farming and Mr. DURBIN. Would the Senator mittee. I now wish to give a short ranching operations, not all farms and yield for a question? statement about some of the tax provi- not all ranches. There are very specific Mr. GRASSLEY. Yes. sions. I may have to be more specific requirements that need to be met in Mr. DURBIN. I ask the Senator, when we get into debate on this, so this order to be able to file under Chapter through the Chair, if he is aware of the is kind of a preliminary notice of where 12. So we are not talking about the fact that this only applies to mort- the committee is coming from. First of same number of loans that could be eli- gages, subprime mortgages on a pri- all, as usual, I find it very necessary to gible under the Durbin amendment. I mary residence that had been entered thank Chairman BAUCUS for his cour- would be glad to give some statistics into as of the date of the enactment of tesy and hard work in the legislative on that, but I am going to wait and see legislation, not to any future mort- effort. Our goal was to develop a bipar- if the Senator from Illinois is satisfied. gages of any kind? tisan tax package that responds to the Actually, I will give these numbers Mr. GRASSLEY. So then you are needs of Americans and, in particular, now because I think they are signifi- saying my statement was wrong? the housing market.

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00022 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.047 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2389 Americans are struggling to keep This bill also offers a tax credit to is the problem: If banks today, if mort- their homes and their jobs. As eco- help people buy homes that are in fore- gage lenders today were jumping for- nomic conditions continue to worsen, closure. These homes are depressing ward to renegotiate these mortgages, it is appropriate that Congress act to home values in the marketplace. It is we would not be standing here in this enact tax laws that address the hous- important that this inventory is moved debate. They are not. People are in a ing problem. After all, the housing so as to help retain home values. position where they are about to lose problem is at the root of the current This bill also increases the cap on their homes, and these mortgage insti- economic turmoil and anxiety that mortgage revenue bonds to give people tutions are not responding. people have. in distressed loans additional options I will give you an example. A woman Last year, we responded to the call for refinancing. This is not a bailout named Carol Thomas in Peoria, IL, re- for help. Congress enacted the Mort- for homeowners; this is a provision tired as a drugstore clerk, spent her gage Debt Relief Act of 2007 which was that helps enable people to keep their lifetime in that very basic job, retired signed into law by the President. This homes and to pay mortgages. with her husband, who worked at a fac- law excludes from income discharges of As we proceed on this bill, I am ask- tory. They bought a little home in Peo- indebtedness incurred by taxpayers to ing everybody to keep in mind what I ria. After they retired, her husband got acquire homes. It also extends the tax said at the beginning: We need to ad- sick. He could not climb the stairs any- deduction for mortgage insurance pre- dress the housing downturn, but we more. She wanted to keep him home as miums. need to show restraint. We need to long as possible and knew he could not Earlier this year, Congress acted at limit the relief so that it eases the get upstairs to the bedroom, so she lightning speed to enact a stimulus problem, but does not create new ones. went looking for another house, a package that delivers additional relief We need to be considerate of the many smaller house but one floor. She found to American taxpayers. As a result of Americans who worked hard to save one near where she lived, and she ended that legislation, Treasury will be send- and buy homes and who will ultimately up buying the house. ing out rebate checks in a few weeks pay the price for this relief, if the relief Unfortunately, the medical bills got that will give the economy a much is used, and we expect it will be. They the best of them. She ended up needing needed boost. should benefit, too, in that any tar- some money to pay off medical bills. We have carefully balanced this tax geted relief will, in fact, give the econ- Now, this is the No. 1 reason people do relief package being considered today omy a boost and not be a drag on the file bankruptcy in America: medical on the floor. It addresses the housing economy, drag it down even further. bills. But to avoid bankruptcy, she downturn but is limited so as to ensure We want to keep people employed, and thought: Maybe I can borrow more that it helps the problem and does not particularly the taxpayers who were money on my home. She got ahold of simply create new problems. We are conservative in their financial plans one of those mortgage lenders. And mindful that any relief that benefits should not be harmed as a result of this is why I support Senator FEIN- one sector of the public does not do so this. STEIN’s effort to license these mortgage at the expense of another sector. The I yield the floor. brokers. She could not have received other sector is the taxpaying popu- The PRESIDING OFFICER. The Sen- worse advice. This poor woman who lation that carefully managed their ator from Illinois is recognized. was no business expert, no college family budget, especially as it is re- Mr. DURBIN. Madam President, I graduate, just a hard-working woman lated to housing costs. Taxpayers bear thank my colleague from Iowa. He and who deserves a decent retirement, was the burden of a bailout of these risky I are friends. We have worked together advised to consolidate her debts in her mortgages that went south. So it is im- and continue to work together on new mortgage. They brought together portant that we have a compassionate many issues. We have profound dis- all of the debts she had and lumped view that recognizes taxpayers possibly agreements on some issues, but we them into a new debt on her home. picking up some of the tab. have managed to maintain our friend- They were so unscrupulous and so de- Once again, the Senate is stepping in ship regardless. ceptive that they brought into this to help Americans in distress. The tax We had the responsibility for a num- package of consolidated loans a zero- relief package helps encourage home ber of years of dealing with the Bank- percent loan she had from the city of ownership and encourages the basic ruptcy Code. I will say to my friend Peoria for home improvements. Can businesses that are tied to the housing from Iowa, for a man who is not an at- you imagine? This woman was paying industry to recover some losses. Keep torney, I was always impressed by his off that home-improvement loan with in mind that those businesses create knowledge of the issues and his ability zero percent, and this unscrupulous jobs. More jobs means a stronger econ- to articulate his position effectively mortgage broker and lender ended up omy. whether his opponents were attorneys putting that debt into her home where In 2002, Congress passed a stimulus or not. So I thank you very much for she was paying interest on it now. bill that provided some of the very your comments today. I respect very Thanks so much for the help for Mrs. same relief that is contained in this much your point of view, although I Thomas. bill. In 2002, Congress passed, with disagree with the conclusions. It did not take but a year for the bot- overwhelming support, a provision to The purpose here is not to send peo- tom to fall out. The reset came in. Her extend the net operating loss ple to bankruptcy court, it is the oppo- husband has since passed away. She carryback. This provision passed with- site. Going to bankruptcy court these was trying to get by on meager savings out controversy. Hopefully, there will days is not a trip to Disney World. It is and Social Security. Her mortgage pay- be no controversy this time. Then, a problem. You have to go through ment doubled, and there she stood, again, earlier this year the Senate Fi- credit counseling, you have to gather about to lose her home and her retire- nance Committee passed a similar pro- all of your documentation, walk into a ment, thinking about going back to vision to extend the net operating loss courtroom, usually with a lawyer, and work to save the home. carryback once again, with over- be prepared for a pretty tough ordeal. That is when she showed up at that whelming support by the committee. And then, if you successfully complete little gathering I had to talk about this Relying on our successes in the past, the bankruptcy, you carry that stigma issue. It is a heartbreaking situation. we have included similar provisions in with you for years. Whenever you want She said to me ahead of time, before this bill. However, the net operating to apply for a loan, one of the ques- the press conference got started: I hope loss provision in this bill is even more tions asked is: Have you ever filed for I do not cry. I said: Just be as strong as conservative than the relief offered in bankruptcy? So I do not believe people you can. And she did not cry. the past. Instead of a 5-year carryback, are gleefully jumping at the chance to She contained her emotions but al- this proposal offers a 4-year carryback. go to bankruptcy court. For most of most lost it when she talked about her This provision, of course, is a no- them, it is an embarrassing experience, husband and what he went through. brainer. It helps the very industries it is a humbling experience, and it is She then said: I don’t know which way suffering from this housing downturn one they want to avoid. to turn. I call this mortgage company. and will help Americans continue to be The purpose of this bankruptcy pro- I will not give their names here be- employed. vision is to avoid that experience. Here cause there is a good ending to this.

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Then they sent subprime mortgage mess which was a it to hear both sides of the story, to me a notice and said: You are in de- catalyst for this recession, which we hear me defend my amendment and fault. You are facing foreclosure. I are sadly heading into according to Mr. those who are critical of it express can’t win. I follow their instructions; Bernanke, and these same mortgage their point of view. It doesn’t happen they tell me they are going to fore- bankers still rule the debate in the much. It should happen more. I hope it close. Senate. Doesn’t this tell you a great will happen soon. She had some counselors helping her, story about this institution; that the I am going to renew my request of and the counselors said to me: Would mortgage bankers responsible for this the Republican leader after the lunch you call the mortgage institution and mortgage foreclosure crisis are telling period which many Senators now are see if you can talk to them? people: Don’t vote for that Durbin involved in to try to bring this to a So I did. I called and left a message amendment. We are opposed to that. vote. I think we have given Senators for the vice president of this major And Senators say: That is what mort- over 3 hours to come to the floor, and company. If I gave their name, it would gage bankers say, and that is where I exactly three Republicans have come be recognized instantly. am going to be. to speak to this amendment. If it is one I said: Please give this woman We have a responsibility beyond the an hour, then we have 46 more hours to straight advice and figure out if there special interest groups that line the go because there are 49 Republican is any way she can stay in her home. hallways in nice silk suits. We have a Senators. That is unfortunate. It is un- Within 24 hours this vice president responsibility to a lot of people like necessary. I hope those who do come to said: We will take care of it. Ms. Thom- Carol Thomas and Irene Hernandez. the floor will read this amendment as can stay in her home, new interest These are hard-working people who de- carefully. rate, much lower percent interest rate, serve a break. Many of them were ex- The argument that this change in the and she is OK. Don’t worry about it. ploited, deceived. They deserve a bankruptcy law is going to raise inter- Why did she have to go through that? chance. That is all I am asking. The est rates is one that cannot be sus- Why did I have to make that call? Do tained. When I asked Senator GRASS- vast majority of them will never end Senators have to get on the phone, all LEY about the provision relating to up in bankruptcy court, will never 100 of us, and call on behalf of 2 million farmers’ homes being allowed to be have the benefit of this proposal. But home owners to get this straightened treated this way, he said it was a lim- some of them will. Some of them are out? I had to make that call because ited number of farmers who have filed going to be able to keep their homes that mortgage company wouldn’t step for bankruptcy. He is right. But if the up and do that until somebody pushed because of this. principle is sound for a farmer’s home, I cannot imagine what it would have them. I didn’t have any threat I could why is it not sound for a person living meant to my family when I was raising hang over their head other than the in town? If a farmer can go into court them if I thought I was going to lose embarrassment to their company of and ask the bankruptcy court to my home—not only the embarrassment not helping this poor woman out. But change the terms of the mortgage so of it, the uncertainty of where they they finally did it. Why did I have to that they can stay on the farm, why is would go, but moving out of the neigh- make that phone call? Why did she this inappropriate when it comes to borhood, changing schools, leaving have to go through month after month those living in town? The principle is of being beaten up by people on the their friends. That is something we the same, and the principle is sound. phone giving her conflicting advice? should not just look on as a routine oc- It is true that chapter 12 bank- That is why this is needed, not so currence in life. It is something they ruptcies for those facing agricultural that Carol Thomas and people such as will never, ever forget. That is why shortcomings are restricted, but so is her end up in bankruptcy court but so this bill is important. this provision, restricted to those who that the mortgage lenders know if they I have been on the Senate floor now qualify for bankruptcy; to those who will not sit down and work with people, for 3 hours and 10 minutes with my have a primary residence, a home at those folks may end up in bankruptcy amendment. I have invited every Sen- stake; for existing mortgages, as of the court and the bankruptcy judge may ator who wants to come to this floor to date of enactment of this law, not modify the terms of the mortgage. If oppose or support this amendment to after; to provide, as well, that the they know that is coming, they might come on down. The Senate floor is mortgage terms can only be reduced sit down and talk to Carol Thomas or empty but for the Presiding Officer, for the principal to fair market value, somebody before it reaches that point. whom I thank very much for being no lower; that the interest rate on the Some of my colleagues may have here. There have been three Senators new mortgage modification cannot be been listening or on the Senate floor on the other side of the aisle who have lower than the prime rate plus a pre- earlier when my colleague from Massa- come to speak against my amendment. mium for risk; that the term of the chusetts, Senator KERRY, told his When I asked the Republican minority new mortgage modification cannot be story. Isn’t this a great story? Irene leader if we could schedule this for a more than 30 years; that we protect the Hernandez of Lawrence, MA, a mother vote up or down, let’s have the decision lending institution; if the property ap- trying to raise her children, ends up of the Senate, he said: Senators want preciates in value over the next 5 years over her head with a mortgage. They to speak. Well, good. That is appro- after the bankruptcy, any appreciation come in and tell her that since she has priate. There should be speeches, and I in value goes to the lender, not to the defaulted, they are going to have to hope even debate. But I have to urge owner of the property. We have put all foreclose on her mortgage and toss her my colleagues, if they believe there is of these provisions in there. We keep out of the house. a sense of urgency about the housing narrowing it down to what I think is a They say: Your $210,000 house is now crisis, please come to the floor. Please very discrete group of people. It is not only worth $99,000. So we are going to join us in a conversation for or against prospective. It does not apply to things toss you out and we are going to sell the provision. in the future. your house for $99,000. I respect Senator GRASSLEY of Iowa Once every 60 years or so we have a Irene Hernandez says: I will buy it. I who opposes my provision. I respect housing crisis in America. I am glad it can pay a mortgage on $99,000. You the fact that he came to the floor and doesn’t occur more often. To respond in know that. I have been paying this expressed his point of view and sub- a temporary, focused, and narrowly mortgage. So why don’t you let me buy mitted to a question or two. For some gauged way is appropriate. I think it it? who don’t follow the Senate, this is a gives people a fighting chance. They said: No. You are disqualified. rare occurrence. A Senator actually al- I have taken the floor most of the You are disqualified because you de- lowed another Senator to ask a ques- morning. I know my colleague from

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00024 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.042 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2391 Louisiana is here and has a very impor- lies. Some of them, in my opinion, de- In Jefferson Parish, LA, it is 2.6 per- tant statement to make regarding this serve help. Maybe some of them don’t. cent. bill and her region of the country. I I hope this bill will sort the wheat from In St. Tammany Parish, LA, it is 2.4 thank Senator LANDRIEU for being such the chaff because maybe some of these percent. a strong advocate for the State of Lou- people entered into the kind of loans In Vermilion Parish, LA, it is 1.0 per- isiana and for their recovery from Hur- they shouldn’t have. Maybe they cent. ricane Katrina. should have read the fine print, and So my amendment is drafted to ad- I yield the floor. they didn’t. I am not here saying every dress something that will help these The PRESIDING OFFICER. The Sen- single one deserves a handout, but I am families. ator from Louisiana. saying they deserve this Senate to talk After the storm, when these homes Ms. LANDRIEU. I thank my col- about what help they might need to re- were destroyed, we passed a special league from Illinois for those com- ceive and the ramifications. community development block grant, ments. I do appreciate his help because If the whole financial establishment extra grants to Mississippi and Lou- from the beginning of the catastrophe could get together and have a debate isiana and Alabama and Texas, sort of we faced from Hurricanes Katrina and about Bear Sterns and Wall Street and like we did right after the Twin Towers Rita, the anniversaries of which we what it might mean, what it would fell in New York, there was some extra will not celebrate, by any chance, but mean to the country if Bear Sterns col- community development block grants mark by the end of August of this year lapsed, and they debated and came up sent. The Congress did the same. Not and, of course, 3 weeks later in Sep- with a solution, we most certainly need everything we did was perfect in that tember, we still are struggling. I thank to be on this Senate floor talking regard. There were still some discrep- the Senator from Illinois for his con- about what solutions might be appro- ancies in how it was allocated. But suf- stant help and support as we work priate for homeowners. I understand fice it to say for this discussion that through how to recover, how to rebuild the Bear Sterns issue was that they money was sent, and out of that with a Federal agency, FEMA, that were all intertwined and, if they failed, money, Mississippi created the Home- was caught flat footed and poorly maybe all the other banks would fail. owners Assistance Program and Lou- staffed and poorly resourced and dis- Let me say for the record that in isiana created the Road Home Pro- organized. Initially, it made some im- places such as Detroit, if all of these gram. provements, but we still have great homes fail, it will put such a burden on These were grants that were given to challenges when it comes to the re- that city or that area that others who homeowners to try to help them be- building of the gulf coast. had nothing to do with any of this may tween what their insurance would That is why I am here to take this also fail. That is the principle. It is the pay—and many of these homes were opportunity, while we are on a housing same principle for which the Fed sort fully paid. These are problems where bill for the Nation, and there is some of bailed out Bear Sterns. And we most the mortgages were completely paid real urgency to get real help to real certainly need to be on the floor of the off. Some of these properties had insur- people who need the Federal Govern- Senate talking about not trying to ance. Some of these properties did not ment to act to help stabilize markets save people who did the wrong thing have insurance because they were not appropriately. And as we are talking but trying to help people who did noth- in a flood plain, and they were not re- about this, I wanted to offer an amend- ing wrong and may get pulled down by quired to have insurance. So these are ment that I would like to speak on, one maybe whatever people want to charac- homeowners who did not do anything amendment that I intend to offer to terize as our inaction or inappropriate wrong. The homeowners I am talk make sure this bill, in its attempt to regulation, whatever. But this is not talking about did just about every- help homeowners struggling to get normal. We are on the floor talking thing right. Some of them maybe back in their homes, as this bill tries about these numbers because they are should have had insurance and did not, to help neighborhoods stabilize from high. but, believe me, they are suffering the Detroit to California to the east coast, Let me show you what the gulf coast consequences of that. We are not bail- as this bill attempts to do other things, numbers, though, look like because it ing everybody out. is striking. that we do continue to give appropriate But what we did do was allow them Let’s take St. Bernard Parish. Let’s aid and support to the hundreds of to take this Road Home grant. Then in look at this chart with the other one so the tax law they can also take a cas- thousands of homeowners who are still we can get a comparison. Remember, struggling despite the good work this ualty deduction. This is the problem: If Detroit has 41,000 homes, or 4.9 percent, my amendment, which I am going to Congress has done to give them help. that were destroyed. That is basically A chart illustrates this, if I could put offer when I can, and ask for a vote on this Detroit, Livonia, Dearborn area. it—and I will offer this amendment not it up. We have heard a lot about the Let me tell you about what the peo- just for myself but for Senator COCH- city of Detroit and a region which has, ple from St. Bernard are still reeling RAN, Senator VITTER, and Senator outside of Stockton, CA, and Las from. It is not a 5-percent, it is not a WICKER. All of us are together in a bi- Vegas, NV, the highest percentage of 10-percent, it is a 54-percent destruc- partisan way asking the Congress to foreclosures, almost 5 percent in this tion rate—54 percent. There is no coun- give us some relief. If this amendment region, which is a significant percent- ty or parish in the country that is ex- I am going to offer is not adopted, age. Stockton, CA, almost 5 percent; periencing right now the devastation of these families—I am going to give you Las Vegas, 4.2; other communities from homes, including those that are closed, an example of the Jones family and the Sacramento to Miami, FL, to the Den- empty or vacated. ver-Aurora area, Fort Lauderdale, a Now, we are recovering from a dis- Smith family—will end up paying fairly significant percentage of homes aster, which is not necessarily the much more in taxes than they can af- that are foreclosed. In some areas, it is same thing as a foreclosure. But I hold ford, and it will be counterproductive quite a few people. these charts up to show the nature and to our recovery effort. Let’s look at San Bernardino, CA. the scope of the problem. Let’s take the Jones family. They This is 51,000 homes. That is a lot of In Cameron Parish, it is not 4 per- earn $75,000 a year. Their home was homes, a big place, lots of people, lots cent, it is not 10 percent. It is 46 per- substantially damaged. They did not of children. You can imagine in your cent. take a casualty deduction as the cur- mind, if you are from a community of In Plaquemines Parish, it is 44 per- rent law allows. They paid the full 50,000, how big that could be. They are cent. In Orleans, it is 78,000 households, amount of the taxes. Then out of the not all in this situation, clustered, 41 percent. community development block grant— 51,000 foreclosures all in the same In Hancock County, MS, it is 27 per- let’s say they are in Mississippi—they block. Some of them are spread cent. received a grant from the State of Mis- throughout a great area. But that is In Harrison County, MS, it is 10 per- sissippi of $75,000, from the Mississippi still a large number. cent. Homeowners Assistance Program. This is why we have come to the In Jackson County, MS, it is 4 per- Their Road Home grant will not be floor to try to bring help to these fami- cent. taxed. This family is fine.

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00025 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.043 S03APPT1 ccoleman on PRODPC75 with SENATE S2392 CONGRESSIONAL RECORD — SENATE April 3, 2008 But for this family, the Smith fam- encing some difficulty with their mort- broad precedent that the Government ily—which makes the same amount of gages. But I have to ask this Congress will simply bail people out whenever money, and their house was completely to please continue to know that we they lose money or face tough times in damaged—they did take the deduction. still have homeowners who are strug- the housing market. Financial invest- They got about a $7,000 benefit. Be- gling after 21⁄2 years to get back into ments involve both risk and reward, cause of what we did, they got their their homes, with some very com- and contracts are legal documents; we $75,000 grant, but if they have to pay plicated help that we and the States need to reinforce accountability taxes on this, their tax could be as high and the parishes are trying to give amongst all parties for these elements. as $24,000. them. I also believe that any efforts to ad- Now, the people whom I represent in So my amendment will correct that. dress foreclosures should be done in a Louisiana—and I am sure this is the I will offer it when we move to that thoughtful, comprehensive manner. same for Mississippi—can barely pay part of the legislation. I will also have Any effort to provide foreclosure relief their utility bills right now, their in- several other amendments that will must carefully address any risk to tax- surance bills. They most certainly can- help the recovery process move for- payers. not pay a $24,000 tax bill. ward. They are all about housing. They As part of the housing package before If my amendment is not adopted— are all about helping people get back in the Senate, we are considering an and I think it has good support from their houses. They are not necessarily amendment which would give bank- Finance on both sides—this family that on a different subject or anything be- ruptcy judges the ability to modify I told you about that makes only cause I realize we will have other dis- mortgage contracts after the fact. $75,000 a year, that had their home de- cussions later. The bankruptcy modification provi- stroyed—through no fault of their But while we are on housing and sion would undermine the recovery of own—because of a confluence of things while we are trying to fix it for every- the housing market and the economy we have done, will end up having to body in the country, let’s please stay by creating a credit crunch: It would pay $24,000. focused and give a few tweaks here and have a negative impact in the financial So you may ask me: Senator, how ex- there to keep this recovery going in markets, making it difficult to value pensive is your amendment? It is not the right direction on the gulf coast be- mortgages that underlay securities. cheap. The score for this amendment is cause we have a long way to go. The provision will discourage $1 billion. It is not cheap. But we have I see my colleague from Kansas, and securitization, and securitization en- to provide this support for these gulf I yield the floor. courages homeownership. coast families or you will have thou- Mr. ALLARD. Madam President, Securitization frees up capital to go sands and thousands of families suffer homeownership has long been the back into making more mortgages. Ap- who arguably need the most help in the American dream, and over the last dec- proximately 84 percent of primary country. ade record numbers of families have home mortgages are securitized; how- These are families who at one time been able to achieve the dream of ever, looking at second homes, where owned homes such as this, as shown in homeownership. Unfortunately, too the mortgage can be modified in bank- this picture. This happens to be a dou- many homeowners now find themselves ruptcy, we see that only 9 percent are ble. I will show you another picture of in mortgages they can’t afford. Many securitized. Justice Stevens of the Su- another home. These are people who of them knowingly or unknowingly preme Court reiterated in the Noble- did not do anything wrong. They did took out exotic mortgages that made man case that ‘‘the favorable treat- not take out any subprime loan. They wildly unrealistic assumptions about ment of residential mortgagees was in- did not try to take out a low adjustable the housing market; namely, that tended to encourage the flow of capital mortgage. They took out their regular housing values would continue to dra- into the home lending market.’’ 30-year mortgage. They paid off their matically increase. The cramdown amendment would sig- regular 30-year mortgage. They paid in- As we all now know, home price nificantly increase the cost of home- surance their whole life. They will have growth was unsustainable. Unfortu- ownership: This provision will inject to end up paying $24,000 in taxes, and it nately, too many families are now fac- risk into the lending process. Whether will be the straw that breaks the cam- ing the possibility of foreclosure. Just the other side likes it or not, the mar- el’s back. as ownership brings many benefits to kets will price to this risk by increas- So you have heard me speak before families and neighborhoods, fore- ing the cost of mortgages for primary about this issue. I know it can be a lit- closures have dramatic negative con- residences in the form of higher inter- tle complicated. We are not trying to sequences for both individual home- est rates, down payments, points and ask for double dipping or anything. But owners and the economy as a whole. fees. It is a basic tenant of the free I am going to be offering this amend- We have seen a rapid increase in the markets that more risk requires a risk ment. It is important to remember, if number of foreclosures, and many ex- premium. Even the Congressional we do not do this, we will have thou- perts predict that the number will con- Budget Office noted in a recent report sands of people, homeowners, who are tinue to climb in the near future. Obvi- that one of the costs of the bill ‘‘would trying to stay in their homes, rebuild ously, this creates great hardships for be higher mortgage interest rates.’’ Es- these neighborhoods that are virtually the families facing this possibility. Ac- timates are that the provision will in- destroyed, not on a beach—even though cordingly, Congress is currently con- crease mortgage interest rates by 1.5 that is the case in some places in Mis- sidering various proposals to help pre- percent to 2 percent. Assuming an in- sissippi—in the middle of the city, not vent foreclosures. crease of 1.5 percent, for a Colorado close to any water or any beach, 5 min- As part of any proposal, though, I family with an average sized loan— utes from the Super Dome, where the think we must be careful not to reward $184,362—their monthly mortgage pay- Hornets will be playing in one of their irresponsible behavior. Borrowers have ment would increase by $184. For those division championship games in a cou- a responsibility to understand the families who can still afford a home, it ple days, 5 minutes from the Super terms of their loan, and lenders have a will cost them anywhere from $23,000, Dome. responsibility to provide them with in rural areas, to well over $500,000, in They did not even know the levees clear, accurate information in order to many metropolitan suburbs, in extra were going to break. The Federal lev- help them understand the terms. Bor- interest over the life of a 30-year mort- ees broke and put their homes under- rowers have a responsibility to only gage. That money should be used for water. As shown in this picture, this is borrow what they can repay, but lend- bills, their children’s education, or where the water line is. These families ers have a responsibility to only lend other expenses. will have to pay $24,000 in taxes if we to those who can repay. The other side likes to claim that the cannot get this fixed. Should Congress choose to provide talk of increased interest rates is little So the bottom line is this: I am relief, it should not do so in a manner more than a scare tactic. They couldn’t happy to try to vote for this bill for that is simply a ‘‘bail out’’ for either be more wrong. These effects are not Michigan and California and places lenders or borrowers who acted irre- merely a hypothetical. We have seen that have families that are experi- sponsibly. We should also not set a the effects in a real life case example:

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00026 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.044 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2393 secondary homes. A bankruptcy judge The PRESIDING OFFICER (Mr. lating as well. The oath is very simple. can currently change the balance on a SALAZAR). The Senator from Kansas. It is, ‘‘First, do no harm.’’ That is the mortgage for a second home. As a re- Mr. BROWNBACK. Thank you very first premise that you operate on: sult of this, the cost of buying a second much, Mr. President. ‘‘First, do no harm.’’ home is higher—interest rates, down- I thank my colleague from Lou- I appreciate the amendment my col- payment, shorter repayment period— isiana. I appreciate the information she league from Illinois has up on the re- than a primary home. Title IV will in- has put forward. I will certainly be structuring of loans within bank- crease the cost of buying a primary looking at it and considering it. ruptcy, cramdown provisions on resi- home similar to the cost of buying a I am delighted we are on the housing dential homes people own. I understand second home. bill. Chairman Bernanke of the Federal the provision. As to my background in The bankruptcy provision would have Reserve, who was in front of the Joint the law practice I had, such as it was— a price far too high: Every quarter Economic Committee yesterday, I I am not bragging about a fabulous law point increase in mortgage interest thought did a nice job testifying. There practice; it was a pretty simple pedes- rates will prevent 1.1 million Ameri- are lot of interesting things going on trian law practice in Manhattan, KS— cans from being able to afford a home. as to what he was talking about taking we did bankruptcies and we had provi- This provision could price homes out of place. But he was saying the primary sions similar to these in other areas. reach for 9 million Americans. Those thing to watch in the economy right They were not existing on the loans. So advocating for this ill-advised provi- now is housing, the price of housing, it I think I have some familiarity with sion have estimated that it could help is holding or declining—it is declining the impact of this. I believe this one as many as 600,000 families, although in a number of key areas—but to watch violates the oath of: ‘‘First, do no more realistic estimates put this num- that marketplace because that is the harm.’’ ber closer to only 15,000. We can surely linchpin issue. He urged Congress to I know my colleague from Illinois find a better way to help a small num- act on housing. has all the right intentions, and I have ber of families than to deny home- So I am delighted we have this bill worked closely with him on a number ownership to 9 million families and in- up. I am delighted we have a bipartisan of issues. He is a very successful, able crease costs for millions more. Quite bill that I can look at and say a num- legislator. I believe this one violates simply, the cost for this provision, in ber of the provisions look pretty good. that oath of: ‘‘First, do no harm.’’ I say terms of what it will mean for families, We do not try to get too one-sided one that advisedly. A number of people is far too high. Congress shouldn’t be way or the other so it gets held up. Be- looking at this believe this provision, forcing families into bankruptcy for cause this is something we need to act if added to this bill and becoming the mortgage relief. on. I think it would be a good con- law of the United States, will drive up The bankruptcy amendment is bad fidence builder for the housing market mortgage interest rates on residential policy: The provision would reopen the homes 1 to 2 percent because it intro- bankruptcy code and would undo the across the country if we can get some- duces a degree of uncertainty. Markets 2005 requirement for prebankruptcy thing through here, through the House, and signed by the President. do not like uncertainty, so they factor counseling. Senator DURBIN’s proposal Having confidence is a key part of would grant new powers to bankruptcy in for uncertainty. It is believed this judges to change the terms of primary the marketplace. Confidence is a key would increase mortgage interest rates mortgages. Judges have little, if any, part of what they did on the Bear 1 to 2 percent. I think there could be expertise in the complexity in mort- Stearns bailout. He said a year ago some fluff in that number. It could be gage terms. The bankruptcy code is not they probably would not have done it. low, initially. Typically, as well, mar- the right area to address the subprime A year from now, they probably would kets will look at things, and at first issues and mortgage markets. The Sen- not do it. But right now things are too they will factor more risk in until they ate Banking Committee, the House Fi- shaky and it could cause things to have had some practice with this and nancial Services Committee, Federal crumble. The key piece to watch is seen how it hits in the numbers. So banking regulators, and industry are housing. maybe over a period of time it would all working. These are the appropriate So it is good we are working on this not have as much of an impact. But areas. legislation. It is good we are working earlier on it could have more of an im- The bankruptcy provision will dis- in a bipartisan fashion. I will be filing pact. Right at the point in time when courage other alternatives: It will un- an amendment that I think can be very we are trying to stimulate the housing dermine efforts to put the two parties helpful in the pay-fors on this because market, you up your mortgage interest to the mortgage contract together. we need to pay for this. We are in a dif- rates on your primary residence 1 to 2 Borrowers must file for bankruptcy in ficult budgetary situation, so we have percent, possibly more, because early order for the proposed changes to work. a commission bill to look at all spend- on the market has not factored in: The HOPE NOW Alliance has helped ing within HUD and within Treasury What will this actually do? more than a million homeowners and to make recommendations for pro- The other thing it could well do on through workouts and repayment grams to be eliminated and then re- top of increasing interest rates is re- plans. In Colorado, the Foreclosure quiring a vote of Congress, up or down, duce the number of people who could Hotline received thousands of calls and whether to eliminate these programs borrow to buy a home. In fact, in 1978 has been able to help 80 percent who and then use those funds to pay for Congress specifically barred cramdown called. The hotlines are not perfect, some of the efforts that are taking on primary residences to keep interest and they cannot help all borrowers, but place here. rates low for primary homes and to en- they are helping many. The 1 million I think this is the sort of thing we sure that lenders provide credit to low- plus families helped didn’t have to pay ought to look at and the sort of thing income borrowers. As many people are a bankruptcy attorney; they didn’t we ought to do in paying for this be- in a low-income situation, a more frag- have to deal with the long-term prob- cause nobody wants the deficit to go up ile economic situation, if things go lems caused by filing for bankruptcy; further. I think that is everybody’s ob- south for them on a set of items, they the Federal Government didn’t have to jective. So we are going to be putting have no choice but to pursue bank- spend taxpayer dollars. That is a far forward that amendment and at the ap- ruptcy. So now then you introduce an- better approach. Drying up the credit propriate time bring that up. other set of risk factors on low-income markets and making loan terms less One of the key things we need to look individuals where it is going to make it favorable will make it far more dif- at and to do on this is something every harder for them to get a mortgage to ficult for homeowners to refinance physician in the United States does buy a home. their loans, thus creating new prob- when they become a physician. They We want people to be able to buy lems where none existed previously. take an oath. We take an oath of office. homes. We want particularly low-in- I know that many families are hurt- We swear to uphold and abide by the come individuals to be able to buy ing from foreclosures, but this amend- Constitution. A physician takes an homes. If we introduce another factor ment isn’t the right approach, and I oath. It is a very simple, very old oath. of uncertainty that is going to drive in- urge my colleagues to oppose it. I think it is a very good one for legis- terest rates up, it could well end up

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00027 Fmt 4624 Sfmt 0634 E:\CR\FM\A03AP6.006 S03APPT1 ccoleman on PRODPC75 with SENATE S2394 CONGRESSIONAL RECORD — SENATE April 3, 2008 working out that a low-income indi- arguments on the other side. I have to the Senator from Kansas that if we vidual will have their interest rates used cramdown provisions in other are talking about a limited group of driven up even more than the 1 to 2 bankruptcy settings, in business set- people who fit the description I have percent, as the factors for risk are tings. It does introduce a factor of risk. given here, how can you project this to built into it. It does allow restructuring to take have an impact on real estate mort- Again, I add, these are things that place. gages of 1 and 2 percent into the fu- are unknown. I have groups that are I think where we are right now, with ture? saying this is indeed the case. I don’t his statements and with our ability to The last time we dealt with this issue think we particularly know on this move a piece of legislation, the key in Congress was 30 years ago. The last provision. But you are introducing that thing we should do is to get the base time we had a housing crisis was 60 period of uncertainty with it. legislation moving forward, add things years ago. It isn’t as if we are meeting If I could say to my colleague: I know where we can get broad bipartisan sup- every 6 months to change the law on you have talked a long time and you port, not introduce more risk into the mortgages and bankruptcy. I ask the know this issue very well; I wish to fin- marketplace and possibly limit mort- Senator: How much more can I do to ish my statement and then I am happy gageholders. I am presuming my col- deal with his concern and the stated to take questions or comments, be- league from Illinois has facts he is put- concerns of the banking industry about cause I know there will be extensive re- ting forward which say this is not uncertainty? buttal taking place on it. going to take place. I think it is too Mr. BROWNBACK. Mr. President, re- I am talking about my experience. I much of a possibility that it will take sponding to my colleague through the am talking about what I believe will place, and that it will first do harm. Chair, a couple of things. I appreciate happen in this marketplace. I know it For those reasons, with all due respect that the Senator has narrowed this is intended to have a positive effect, to its supporters, I don’t think this is a down from when he started, because he but I think it violates this first ‘‘do no wise provision. Of course, I don’t think started with a much broader amend- harm’’ provision. this is the time for us to do it. I think ment; no question about it. I think I wish to add some other comments. we ought to spend a lot more time what the Senator has done is advisable What we are trying to do here is to studying and thinking about this. I be- and good. stimulate a housing market, not intro- lieve this is not the bill for this amend- The base of the concern remains then duce factors of risk into the housing ment, and I object to the Durbin the same, that now you have narrowed market. We have a good bipartisan pro- amendment. this in on a smaller class that you are posal that is being put on the floor by Mr. DURBIN. Mr. President, would going to raise the interest rates on be- Senators DODD and SHELBY, two senior the Senator yield for a question? cause of the uncertainty that is going Members of this body who have seen a Mr. BROWNBACK. I am happy to to be conducted there, or the likelihood lot and who have worked on a lot. I yield. of this having impacts on the mortgage think our wisest course at this point in Mr. DURBIN. I have two questions. I marketplace and reducing their ability time would be to work together on know the Senator from Massachusetts, to get these houses on the market, those provisions where we can get bi- Senator KENNEDY, wishes to speak on which could further depress the prices partisan support rather than intro- an unrelated issue. First, I wish to ask on those houses. I think this is first do ducing factors that are highly likely to the Senator from Kansas, through the no harm. I appreciate that the Senator slow down a bill. We need to encourage Chair, on the issue of uncertainty: Is has narrowed this and he has narrowed the market by showing an ability to the Senator from Kansas aware that on it substantially. work together. this amendment I am offering, I have I would also point out—and it was This amendment, I believe, will be narrowed the class of people eligible 1978 when we did the overall—we took highly controversial and will continue for this benefit, which would be modi- up bankruptcy reform. We did that to have the effect of slowing this bill fication of mortgage in Bankruptcy within the last 5 or 6 years where we down. The amendment would actually Court, to those who first qualify to go had broad bankruptcy reform, and this create an ability for unsecured credi- into Bankruptcy Court which, in many sort of provision could have come for- tors as well of an individual, to reduce instances, requires credit counseling; ward in that bankruptcy reform at that their exposure, at the expense of a secondly, that they must be talking point in time. I voted against that mortgageholder in consumer bank- about property that is their primary bankruptcy reform. I didn’t think that ruptcy proceedings. I think this is an residence, not a piece of real estate overall was the way to go and that unintended consequence, but it is a they happen to own; third, that it be again was based on the experience I consequence of it. This would be bad subject to a mortgage which is a had in dealing with bankruptcy. policy. This was considered in 1978. We subprime mortgage, not a prime rate I appreciate the Senator’s efforts. I want these mortgages to have as low a mortgage; and fourth, that it has to be think the basic issue he is introducing rate as we possibly can. a mortgage that exists as of the date of here continues to be the same even if it Potentially 4.5 million Americans the enactment of this legislation and is within a narrow marketplace. could be priced out of the housing mar- none in the future? Also, that if there Mr. DURBIN. Will the Senator yield ket for every 1 percent increase in is to be a modification of the mortgage, for one more question? mortgages. That is according to home it can be to a principal level no lower Mr. BROWNBACK. Yes. builders. They are saying that. So if than the current fair market value; Mr. DURBIN. I wish to ask the Sen- you have a 2-percent increase, you are that the interest rate imposed by the ator from the great farming State of looking at the possibility of keeping 9 court be no lower than the prime rate Kansas if, in his private practice expe- million Americans priced out of the plus a premium for risk; that the term rience with bankruptcy, he ever dealt housing market at a time when we of the modification of the mortgage with a chapter 12 bankruptcy involving want them in the housing market. can be no more than 30 years, and that farm real estate and whether he be- That is not going in the right direc- if within 5 years of bankruptcy the lieves that the change in the bank- tion. property is sold at a price higher than ruptcy law in the 1980s, which allowed Having said all of that, I think there the fair market value at the time of cramdown or modification of the mort- are people who could look at this an- bankruptcy, all of the proceeds will go gages on farm homes, was unreason- other way. Indeed, I asked Chairman to the lender—not to the owner, but to able; whether he believes that the Bernanke about this particular provi- the lender? banking institutions which fought that sion, because he said we ought to do I say to the Senator from Kansas chapter 12 bankruptcy saying it would work on the housing market. I asked that every time the banking and finan- raise interest rates 1 or 2 percent on him about this particular provision and cial institutions came to me and said: farmers—and it didn’t turn out to be he did not take a stance on it. He just It is too uncertain, too many people the case—whether we ought to believe said he didn’t take a stance on prior could benefit from this, every time those financial institutions again bankruptcy reform. He said there are they did that I would narrow this more today when we talk about using the arguments on both sides. So I recognize and more and more. I would further say same provision—or a similar provision,

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00028 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.054 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2395 I should say—as chapter 12 to deal with that we can schedule it for a vote. I of billions of dollars flow out of the the current housing crisis? Did the have asked repeatedly for that. I don’t Treasury, and when you stand up and Senator from Kansas feel it was unfair know what more I can do other than be say: Can we not this afternoon help to allow cramdowns or modifications of here and be available for any debate stop some of these foreclosures of mortgages in farm bankruptcies in his they want to take place. homes of working-class people, they own State under chapter 12? This is a critically important bill. say: No go, no way, we are not going to Mr. BROWNBACK. Mr. President, if I There are several important amend- let you take action, but we are fine could respond to my colleague through ments, and I think mine might be one with the hundreds of billions of dollars the Chair, again in my limited back- of them. But if Members won’t come to that have flowed out of the Treasury in ground—I have actually taught agri- the floor and debate it, apparently they the last several days. What possible cultural law and written a book on it. either don’t have an interest in the justification is there for that? It is not very good. I doubt my col- amendment or the bill. I hope they will Finally, when I asked the Federal Re- league has read it. I would recommend seriously consider coming to the floor serve—I said: Well, we have the imme- this chapter of it for him if he wishes in the very near future. diate crisis, but we are also going to The PRESIDING OFFICER. The ma- to read it. have the crisis in the States. States In the provisions that were done at jority leader is recognized. Mr. REID. Mr. President, we have an have two options: they can either raise that time before either of us were in their taxes or cut services. What are the Senate, what you were doing was interesting situation. We have a sub- stitute amendment that has been laid they going to cut? Medicaid is first. taking business bankruptcy reorga- They are the poorest of the poor. When nizations and allowing for farm appli- down. We have worked hard to get it here. We started on the bill at 9:30 this we ask the leader of the Federal Re- cation because it was a different busi- serve, the architect—because he is the ness type of setting that was taking morning. It is now 2 o’clock. We have one amendment that has been laid man in charge—whether he believes we place. It did introduce risks that are ought to reach out and help those fami- even still factored in today, because down. I even tried to arrange a vote on a resolution honoring the 4,000 Ameri- lies, he said he did not have a position this is a provision that is allowed with- on that and that is a position that will in it. cans who have been killed in Iraq. We can’t even get that up for a vote. I have to be taken up by the Congress of Now, as I mentioned earlier, over a the United States. Why doesn’t he tell period of time as markets get adjusted don’t know what is going on. We are going to work through this. I asked for that to the Republican leaders? Why? to these, they say: Well, OK, this factor Here you are trying to take some kind is only going to happen in this series of a consent agreement that any amend- ments that would be offered would be of a position, and this is the old Chi- cases. Or they looked at lower end in- cago movie that I remember so well come clients and they said this is a related to the housing bill. No, we can’t do that yet. I realize the majority where they talk about ‘‘Give us the old more likely situation where we are razzle-dazzle. I will razzle-dazzle me, going to see this taking place. There- we have is very slim, but we do have the majority and that gives us certain too.’’ We are finding out that the fore, we are not going to loan to this rights. I am going to exercise those American homeowners, who are hard guy, or it only goes to a bank that is rights. pressed, are being given the old razzle- willing to get into a more aggressive I would like to have a housing bill. I dazzle. loan position and is desirous to do it. think it is important to the country. I I applaud the determination and res- So it does have those impacts. hope the American people see what we But what you were doing with that olution the leader has shown on this have put up with now during the last 15 chapter reorganization during the farm issue. Real people are hurting. We are months. Every step of the way is a here this afternoon waiting to take crisis was taking a business reorganiza- struggle. We are not able to legislate. tion and allowing for the differences in some action, ready to move ahead on a We are constantly trying to figure a proposal that has broad support, and agriculture which are substantial. Now way procedurally to get past the mi- you are getting into the basic housing we find out the emptiness and vacuous- nority, which is still upset about the ness of the Republican response. market with this. This isn’t a business November 2006 elections. That is what Mr. REID. Will the Senator yield for reorganization; this is a housing mar- this is all about. We are in the major- a question? ket issue, and you are introducing the ity, as slim as it might be, and they very factors I talk about—in a limited have to get over this. Let us work to- Mr. KENNEDY. I will yield. fashion; I appreciate that greatly. I gether. We want to work. We want to Mr. REID. Does the Senator from think it is less harmful potentially pass things. My friend has offered an Massachusetts realize that today, this than the original design of the Durbin amendment. day in April, April 3, 2008, almost 8,000 amendment. I appreciate your heart on Let’s vote on it. people will be pushed out of their it. It is going to have an introduction The PRESIDING OFFICER. The Sen- homes because their foreclosure has of factors of uncertainty and will drive ator from Massachusetts is recognized. been completed? They are gone—8,000 interest rates up, and it will drive lend- Mr. KENNEDY. Mr. President, I see today and 8,000 tomorrow. Now, fore- ers out in this situation. That is what our leader leaving the floor. He was ex- closures usually don’t happen on week- will happen. I don’t think we should go pressing his frustration about the lack ends; it is during the week. So this that route. of action. I join him in underlining week, 5 times 8,000 is 40,000 people, ap- The PRESIDING OFFICER. The Sen- what he has stated here. Yesterday, a proximately, who will be out of their ator from Illinois is recognized. number of us, including the chairman homes while we have been here this Mr. DURBIN. Mr. President, before I of the Joint Economic Committee, lis- week. If we don’t get something done yield the floor, as I see Senator KEN- tened to Mr. Bernanke. Mr. Bernanke today, we will start tomorrow, and NEDY is here and wishes to speak, I was before the Joint Economic Com- there will be another 8,000. Is the Sen- wish to make a point for the RECORD. mittee talking about how they had let ator aware of that? We introduced this amendment 4 go more than $200 billion over the pe- hours ago. I have come to the floor, riod of these last weeks—$200 billion in Mr. KENNEDY. Well, I have been and but for a brief period off the floor, secret transactions, without any guar- aware of it because we have listened to to entertain any debate on this amend- antees to the American taxpayers. And our good leaders, including yourself, ment. In 4 hours there have been four here we have a proposal that the Sen- Senator DURBIN, Senator SCHUMER, and Republican Senators who have come to ator from Illinois, Mr. DURBIN, and Senator DODD, talking about between the floor, one each hour, to oppose this Senator DODD and others are involved 8,000 and 12,000. amendment. At this rate, with 49 Re- with in the Banking Committee, trying I had a chance to be out in Youngs- publican Senators, in 45 hours we to do something about the fact that town, OH, recently. Five-thousand should be able to close this amendment homes are being foreclosed while we homes are empty there, and it is in- and vote on it. I say that facetiously. are here on the floor of the Senate. creasing every single day just in that I hope those who have an interest in What is it about the other side that one community. That is being rep- the amendment will come forward and they are quite prepared to see hundreds licated in my State. People are saying:

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00029 Fmt 4624 Sfmt 0634 E:\CR\FM\G03AP6.055 S03APPT1 ccoleman on PRODPC75 with SENATE S2396 CONGRESSIONAL RECORD — SENATE April 3, 2008 Where is the action? Where is the lead- when we could bring the membership Mr. KENNEDY. Mr. President, I ership? When are you going to do some- together to honor those names? What thank the majority leader for his lead- thing on this issue? We are interested is the possible problem? Where is the ership in making this all possible. in getting something done. Republican leader? Can he explain to Mr. President, the war in Iraq has Mr. Bernanke was asked, after he be- the American people why we cannot deeply divided our country. But what- came Chairman of the Federal Reserve: have that? Usually, if they are going to ever our views are about the war, we How are things going in terms of our object, at least they indicate why. Why know our soldiers are serving nobly economy? ‘‘Fine,’’ he said. He never ex- don’t they take the floor? Why can’t under extraordinarily difficult cir- ercised the bully pulpit to stop the ex- they give an explanation to the Amer- cumstances and that far too many are plosiveness that is taking place in the ican people? Look at these pages. On making the ultimate sacrifice for our housing market and put so many each one of these pages is 50 names. country. The war continues to impose homeowners at risk. Look at these pages. There are 50 an enormous human toll on our sol- This is as bad as Katrina and as bad names on each and every one of them diers, their families, and their loved as the Iraq war. We have a similar re- with their home addresses. We ought to ones. Our men and women in uniform sponse from the administration, and be able to take a few moments for have served with great courage and that is a failure of leadership and a those who want to speak to be able to honor for 5 years, and last week, during failure of action. The American people express themselves and pass this reso- the recess of Congress, we reached a sad milestone—the loss of 4,000 service ought to understand that. lution and include it in the RECORD at Mr. REID. Will the Senator yield for this time, where we have paused as a men and women in support of Oper- another question? Nation out of respect for the loss of ation Iraqi Freedom. An additional Mr. KENNEDY. Yes. some 4,000 Americans. 30,000 service men and women have Mr. REID. Did the Senator hear me I thank the majority leader for all he been wounded. We have also lost nearly when I said we have asked for an agree- has done. Since I have the floor, I will 500 service men and women in support ment that the only amendments that just take a few moments here, obvi- of Operation Enduring Freedom in Af- will be offered on this bill are relating ously, before the Senator from Illinois, ghanistan. This loss of life is deeply distressing, to housing? Is he aware that they said whose amendment is pending. I will and the impact of the wars in Iraq and no deal? And is the Senator aware that withhold at any time he thinks he can Afghanistan continues to be dev- Senator DURBIN had offered an amend- get action. ment at approximately 10 o’clock this Mr. President, this is the resolution astating to families and communities morning, and there have only been four we will be offering. It honors the sac- around our Nation. We honor their service, and we pray that God’s grace speakers, with not long speeches, and rifice of the members of the Armed and mercy may ease the anguish of that we are not voting because of the Forces who were killed in Iraq and Af- those they have left behind. speeches, because they are gone? Is the ghanistan: Senator aware that I said: Okay, how It is fitting, therefore, that today we Whereas 4,009 members of the United honor and remember the courageous about voting on a resolution offered by States Armed Forces have lost their lives in men and women who gave the last full the Senator from Massachusetts that support of Operation Iraqi Freedom and 487 honors the lives of 4,000 Americans who members of the United States Armed Forces measure of their devotion to our coun- have been killed in Iraq? Is he aware have lost their lives in support of Operation try in these wars. From Lexington and that we could not get a vote on that? Enduring Freedom; Concord and Gettysburg, to Normandy Mr. KENNEDY. Well, it is difficult to Whereas we honor the ultimate sacrifice and Iwo Jima, to Korea and Vietnam, that these men and women made for our to Iraq and Afghanistan today, these believe, Mr. President. We had our mo- country; ment just last week in which those of heroes are part of a long line of coura- Whereas the sacrifices of the fallen are in geous patriots who stood their ground us who were there in the Rotunda lis- keeping with the highest traditions of the tened to our leader, who spoke so well, United States Army, Navy, Marine Corps, with uncommon valor and sacrificed for all of us. so movingly, as well as the other lead- Air Force, and Coast Guard; Since the terrorist attack by al- ers, both Republicans and Democrats, Whereas, as their families and loved ones Qaida on September 11, millions of to honor the anniversary of the war. have sacrificed as well, we honor them in commemorating the memory of those that Americans have proudly and volun- Now, in the last few days, we have an- lost their lives; tarily defended our country and our other moment of special significance, Whereas the following 4,009 members— Constitution by serving in our Armed and that is the 4,000 soldiers—just with It starts off listing the fallen mem- Forces, our Reserves, and our National regard to Iraq—who have been lost and bers of the Armed Forces. Guard. Their devotion to duty is be- 500 more in terms of Afghanistan. I was Mr. REID. Mr. President, will my yond question, and their valor is prov- very grateful to the Senator and to our friend yield? en. They volunteered to serve and help other colleagues—and I am sure on the Mr. KENNEDY. Yes. us meet the immense challenge we other side as well—who thought it Mr. REID. Mr. President, progress in face. They knew the vast danger to life would be useful to memorialize in the this body is sometimes very hard to and limb and were well aware that at CONGRESSIONAL RECORD the names of come by, but progress has been made. I any moment they might make the ulti- these extraordinary men and women, appreciate Senator KENNEDY coming to mate sacrifice. And as of today, 4,496 listing their names, hometowns, their the floor. As those of us who have such have made that sacrifice in Iraq and ranks, and their service, and that we affection and love for him know, once Afghanistan. They were all patriots. could include that in the RECORD at in a while he raises his voice. As a re- They put themselves in harm’s way to this time. We are trying to do it at an sult of raising his voice, I ask unani- protect us all. And because of their appropriate time because we have been mous consent that at 2:45 p.m. today, dedication and sacrifice, we continue reminded about the loss of the 4,000— the Senate proceed to vote on the adop- to enjoy the freedoms we cherish in our not as an add-on to some other kind of tion of S. Res. 501, honoring the sac- democracy. action here but to give respect and dig- rifice of the members of the U.S. Each of these men and women has a nity and honor to these individuals and Armed Forces who have been killed in poignant story to tell. Just as poignant do so by having a rollcall vote to send Iraq and Afghanistan; that upon adop- are the fond memories of their loved a special message to their families and tion of the resolution, the preamble be ones here at home. I know something friends in their communities that we agreed to, with no intervening action of that feeling. I was 12 years old when honor their service. Why is it that we of our debate; and that no amendments my mother became a Gold Star moth- cannot get an agreement on that? be in order to the resolution or the pre- er. It still seems like only yesterday The good Senator—I will not insult amble. when that knock on our door came in his intelligence. I read the resolution, The PRESIDING OFFICER. Is there 1944, and we learned that my oldest and it may be 8 lines long. It is hon- objection? Without objection, it is so brother, Joe, had been lost in World oring these extraordinary men and ordered. War II. women and in tribute to their valor. Mr. REID. Mr. President, I appreciate I know there is no easy way to mend Why is it that we cannot have a time the Senator yielding. these broken hearts, no way to lift the

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There this resolution and thank him for his loved one, but I hope the families may were six or eight personal stories of leadership on this important issue. find some comfort in the words of their lives. I took the time to read it Mr. President, I suggest the absence Abraham Lincoln in that famous letter carefully to try to absorb what was of a quorum. he sent to a bereaved mother during happening to these men and women The PRESIDING OFFICER. The the Civil War. He wrote: and their families. clerk will call the roll. Dear Madam, I feel how weak and fruitless I think I can speak for the Senator The assistant legislative clerk pro- must be any words of mine which should at- from Massachusetts. We have cast be- ceeded to call the roll. tempt to beguile you from the grief of a loss tween us thousands of votes on the Mr. DURBIN. Mr. President, I ask so overwhelming. But I cannot refrain from floor of the Senate, myself in the tendering to you the consolation that may unanimous consent that the order for be found in the thanks of the Republic they House of Representatives as well. I can- the quorum call be rescinded. died to save. I pray that our Heavenly Father not think of another vote more pro- The PRESIDING OFFICER. Without may assuage the anguish of your bereave- found and more important than the objection, it is so ordered. ment, and leave you only the cherished vote to authorize the invasion of Iraq Mr. DURBIN. Mr. President, earlier, memory of the loved and the lost, and the in October 2002. Senator KENNEDY and I when I was speaking to Senator KEN- solemn pride that must be yours to have laid joined 21 of our colleagues in voting NEDY’s resolution, I made reference to so costly a sacrifice upon the altar of free- against that authorization to go to dom. a New York Times article. It is an arti- war. At the time, it was not the most cle from Tuesday, March 25. It tells in The consequences of the decisions we popular vote, but it turned out to be make in Congress profoundly affect our a very graphic way the correspondence the right vote. Not to take anything of fallen soldiers and the cir- military, their families, and the com- away from these brave men and women munities they have left. We have an ob- cumstances they faced in Iraq before who have given so much for our coun- they died. As I mentioned before, I read ligation to our soldiers to make sen- try, but this war may be the most fatal sible decisions that will not place them this article in its entirety and was foreign policy mistake of the modern moved by it. needlessly in harm’s way. era, and we continue to pay for it every It is fitting that we now pause to rec- I ask unanimous consent to have day in American lives and blood and ognize, remember, and honor those who printed in the RECORD this New York treasure and in our reputation and have lost their lives far from home for Times article so my colleagues and safety in the world. our grateful Nation in Iraq and Afghan- others have an opportunity to read it The fact that the Senator from Mas- istan. as well. sachusetts would take some time—even The PRESIDING OFFICER. The Sen- There being no objection, the mate- ator from Illinois. a brief period of time—to remind us is rial was ordered to be printed in the Mr. DURBIN. Mr. President, I thank something that should be done and I RECORD, as follows: am glad is being done. I know this will my colleague from Massachusetts. I [From the New York Times, Mar. 25, 2008] have been a Senator for a number of receive an overwhelmingly unanimous vote of support, as it should. We all SIX OF THE FALLEN, IN WORDS THEY SENT years and have visited Iraq and Af- HOME ghanistan on three separate occasions. want to be on record. But I hope that also, the next time this matter comes FROM LATEST 1,000, WORDS BY E-MAIL, AND IN I try my best to meet with as many of JOURNALS TO THOSE AT HOME up for a debate about the policy of this our soldiers as possible—but, of course, [By Lizette Alvarez and Andrew W. Lehren] focus on those from Illinois—to sit and war in Iraq, some of our colleagues who By the time Specialist Jerry Ryen King de- eat lunch with them and talk about the want to just continue this indefinitely for years and years will reflect on how cided to write about his experiences in Iraq, Cubs, the White Sox, the Bears, the the teenage paratrooper had more to share Bulls, the news back home. The thing many more American lives will be sac- than most other soldiers. that haunts me—and I thank the Sen- rificed if that happens. That is the sad In two operations to clear the outskirts of ator from Massachusetts for reminding reality of where we are. the village of Turki in the deadly Diyala me—the thing that haunts me are the The Senator could not, because his Province, Specialist King and the rest of the frequent conversations where they say: stack of papers would be dramatically Fifth Squadron faced days of firefights, gre- Does anybody know we are still here? larger, include the names of all those nade attacks and land mines. Well-trained Does anybody back home know what who have been seriously wounded or in- insurgents had burrowed deep into muddy canals, a throwback to the trenches of World we are going through? It really is jured in this war. They deserve our thanks and our recognition as well. War I. As the fighting wore on, B–1 bombers heartbreaking to think that these men and F–16s were called in to drop a series of and women are risking their lives Many of them will carry scars for a powerful bombs. every day while we go about our safe, lifetime. Some are very visible scars Once the area was clear of insurgents, the secure, normal, daily routine and how and some not visible. They are strug- squadron, part of the 82nd Airborne Division, little focus we put on this war and the gling with lives, facing blindness, burns uncovered hidden caches of weapons. men and women who are fighting it for and amputations, traumatic brain inju- Two months later, Specialist King, a hand- us and particularly those who have ries, and post-traumatic stress dis- some former honors student and double-sport given their lives. order. I visit these veterans hospitals athlete from Georgia, sat down at this com- and see those veterans of past wars who puter. In informal but powerful prose, he We have lost almost 150 soldiers in Il- began a journal. linois. I took an inspiration from the are still paying the price today, alive— Senator from Massachusetts and said I maybe barely alive—but paying the After 232 long, desolate, morose, but some- what days of tranquility into deployment, was going to send a note to every fam- price for their service. I’ve decided that I should start writing some ily in Illinois who loses a soldier. I I hope beyond the resolutions we will of the things I experienced here in Iraq. I thought after a year or two that task have the resolve to make sure we keep have to say that the events that I have en- would have been completed. After 5 our word to these veterans, that when countered here have changed my outlook on years, it is not. Sadly, in our State and they come home they will receive the life . . . every other State we are still losing best medical care, they will receive our The most recent mission started out as a lives. The fact that the Senator from help to continue their lives, to go to 24–36 hour air-assault sniper mission in a Massachusetts would take the time to school or to own a home. When I read known al-Qaida stronghold just north of about the percentages—half the home- Baghdad. We landed a few hours before day- come to the floor today as a solemn re- break and as soon as I got off the helicopter minder of what this means to us, less people in America are veterans— my night vision broke, I was surrounded by should mean to us, and what it means when I read that the unemployment the sound of artillery rounds, people scream- to these families is something I deeply rate among returning veterans is so ing in Arabic, automatic weapons, and the appreciate. high, it is a grim reminder that those terrain didn’t look anything like what we

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The worst feeling in side his combat outpost, an abandoned but no less important rhythms of home. the world is having lost one of your own and school in Sadah, when suicide bombers ex- They fire off comments about holiday cele- not being able to fight back. The more I go ploded two dump trucks just outside the brations, impending weddings, credit card on patrol, the more alert I tend to be, but re- building. The school partly collapsed, killing bills, school antics and the creeping anxiety gardless of the situation here in Iraq is that Specialist King on April 23, 2007, along with of family members who are coping with one we are never safe. No matter the counter- eight other soldiers, and making the blast deployment too many. measures we take to prevent any attacks. one of the most lethal for Americans fight- At other moments, the service members They seem to seep through the cracks. Every ing in Iraq. describe the humor of daily life down range, day a soldier is lost or wounded by enemy at- In that instant, Specialist King became as they call it. Hurriedly, with little time to tacks. I for one would like to make it home one of 4,000 service members and Defense De- worry about spelling or grammar, they riff to my family one day. Pray for us and keep partment civilians to die in the Iraq war—a on the chaos around them and reveal mo- us in your thoughts . . . for an infantry- milestone that was reached late Sunday, five ments of fear. As casualties climb and the vi- man’s life is never safe. years since the war began in March 2003. The olence intensifies, so does their urge to share Juan Campos, Myspace Blog last four members of that group, like the their grief and foreboding. majority of the most recent 1,000 to die, were A LAST GOODBYE Sergeant Campos, a member of the First killed by an improvised explosive device, Hey beautiful well we were on blackout Battalion, 26th Infantry, Charlie Company known as a I.E.D. They died at 10 p.m. Sun- again, we lost yet some more soldiers. I cant out of Germany, was one of thousands of in- day on a patrol in Bagdad, military officials wait to get out of this place and return to fantrymen assigned to stabilize Baghdad and said; their names have not yet been released. you where i belong. I dont know how much the surrounding areas last year during the The next day we cleared an area that made more of this place i can take. i try to be hard troop buildup. Troops were sent deep into in- me feel as if I were in Vietnam. Honestly, it and brave for my guys but i dont know how surgent neighborhoods, where they lived in was one of the scariest times of my life. At long i can keep that up you know. its like small outposts, patrolled on foot, cleared one point I was in water up to my waist and everytime we go out, any little bump or houses, mingled with Iraqis and rebuilt the heard an AK fire in my direction. But all in sounds freaks me out. maybe im jus stressin infrastructure. The extra 30,000 service members—160,000 all the day was going pretty good, no one is all. hopefully ill get over it . . . was hurt, I got to shoot a few rounds, toss a you know, you never think that anything in all—were deployed to Iraq to help quell grenade, and we were walking to where the is or can happen to you, at first you feel in- the runaway violence that threatened large- helicopter was supposed to pick us up. vincible, but then little by little things start scale civil war. Most soldiers spent 15 Jerry Ryen King, Journal Entry, to wear on you. . . months in Iraq, a length of time that mili- March 7, 2007 well im sure well be able to save a couple tary commanders have said is unsustainable. of bucks if you stay with your mom . . . and Many had fought in the war at least once. A The year 2007 would prove to be especially at the same time you can help her with some few had been in Iraq multiple times. hard on American service members; more of of the bills for the time being. it doesnt My only goals are to make it out of this them died last year than in any other since bother me. as long as you guys are content is place alive and return you guys and make the war began. Many of those deaths came in all that matters. I love and miss you guys you as happy as I can. the midst of the 30,000-troop buildup known like crazy. I know i miss both of you too. at Juan Campos, E-Mail Message to his Wife, as ‘‘the surge,’’ the linchpin of President times id like to even just spend 1 minute out Dec. 15, 2006 Bush’s strategy to tamp down widespread vi- of this nightmare just to hold and kiss you olence between Islamic Sunnis and Shiites, guys to make it seem a little bit easier. im But to Sergeant Campos and the rest of much of it in Baghdad. In April, May and sure he will like whatever you get him for Charlie Company in Adhamiya, a north June alone, 331 American service members xmas, and i know that as he gets older he’ll Baghdad stronghold for Sunni insurgents, died, making it the war’s deadliest three- understand how things work. well things the buildup seemed oddly invisible. The men month period. here always seem to be . . . uhm whats the patrolled almost every day, sometimes 16 to But by fall, the strategy, bolstered by new word . . . interesting i guess you can say. 18 hours a day for months, often in 120-degree alliances with Sunni tribal chiefs and a deci- you never know whats gonna happen and weather. Exhaustion was too kind a word for sion by the Shiite cleric Moktada al-Sadr to thats the worst part. do me a favor though, their fatigue. order his militia to stop fighting, appeared when you go to my sisters or moms or wher- More than 150 soldiers lived in a two-story to be paying off as the country entered a pe- ever you see my family let them know that house with portable toilets, no air-condi- riod of relative calm. Military casualties and i love them very much..ok? well i better get tioning and temperamental showers. Sleep Iraqi civilian deaths fell, and the October- going, i have a lot of stuff to do. but hope- came only a few hours at a time. The fight- December period produced the fewest casual- fully ill get to hear from you pretty soon. ing was vicious. Adhamiya was such a mag- ties of any three months of the war. The past *muah* and hugs. tell mijo im proud of him net for sectarian bloodletting that the mili- month, though, has seen an uptick in too! tary built a wall around it to contain the vi- killings and explosions, particularly suicide love always, olence. bombings. The violence has traveled north to your other half ‘‘They walled us in and left us there,’’ Staff Mosul, where the group calling itself Al Juan Campos, E-mail Message to His Wife, Sgt. Robin Johnson, 28, said of the 110 men in Qaeda in Mesopotamia remains strong. Dec. 12, 2006 Charlie Company. ‘‘We were a family. I Everything changed in a matter of 15 min- would die for these guys before I die for my utes . . . About the time I was opening my When Staff Sgt. Juan Campos, 27, flew own blood brother.’’ MRE (meal ready to eat) I heard an explo- from Baghdad to Texas for two weeks last On patrol, sniper fire rang out so routinely sion. Everyone started running towards the year, there was more on his mind than rest that soldiers in Sergeant Campos’s platoon sound of the explosion. Apparently a suicide and relaxation. He visited his father’s grave, seldom stood still for more than four sec- bomber had blown himself up killing four which he had never seen. He spent time with onds. They scoured rooftops for Iraqi chil- soldiers from my squadron and injuring an- his grandparents and touched base with the dren who lobbed grenades at American sol- other. Our 36 hour mission turned into an- rest of his rambling, extended family. diers for a handful of cash. Roadside bombs other air-assault into a totally different The day he was scheduled to return to war, burst from inside drainage pipes, impossible city, the clearing of it, and 5 more days. We Sergeant Campos and his wife went out danc- to detect from the street. The bombs grew did find over 100 RPG’s, IED making mate- ing and drinking all evening with friends. larger by the month. rials, insurgents implacing IED’s, artillery Calm and reserved by nature, Sergeant Last year, these powerful improvised ex- rounds, a sniper rifle, and sort of like a ter- Campos could out-salsa and out-hip-hop plosive devices were responsible for a major- rorist training book and cd’s. most anyone on the dance floor. At the air- ity of American fatalities, a new milestone. Jerry Ryen King, Journal Entry, port, his wife, Jamie Campos, who had grown The bombs also killed multiple soldiers more March 7, 2007. used to the upheaval of deployment, sur- often than in the past, a testament to their prised herself. potency. Unlike the soldiers of some previous wars, ‘‘I cried and I have never ever cried be- ‘‘It was the most horrible thing you could who were only occasionally able to send let- fore,’’ said Mrs. Campos, 26, who has a 9- possibly imagine,’’ Sergeant Johnson said. ters back home to loved ones, many of those year-old son, Andre. ‘‘It was just really real- ‘‘As soon as you left the gate, you could die who died left behind an extraordinary elec- ly weird. He knew, and I kind of knew. It felt at any second. If you went out for a day and tronic testimony describing in detail the different.’’ you weren’t attacked, it was confusing.’’ labor, the fears and the banality of serving We both felt that it was the last goodbye,’’ Charlie Company soldiers found a steady in Iraq. she said. stream of Iraqis killed by insurgents for

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00032 Fmt 4624 Sfmt 0634 E:\CR\FM\A03AP6.014 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2399 money or revenge. Some had their faces my clothes were being worn by other people. I try not to cry. I have never cried this wiped clean by acid. Others were missing I couldn’t figure it out so I knew right off much my entire life. Two great men got their heads or limbs. the bat to go to Hill. I saw him walking down taken from us way too soon. I wonder why it ‘‘IT COULD HAVE BEEN ME’’ the hall wearing five of my winter jackets. was them and not me. I sit here right now To tell the story of iraq is a hard one. He sold half my wardrobe right off his back wondering why did they go to the gates of Ryan Wood, Myspace Blog to people in our company and my mattress heaven and not me. I try every night to was in someone else’s room. So then I had go count my blessing that I made it another Sgt. Ryan M. Wood, 22, a gifted artist, pro- to around and buy all my stuff back. (Now I day but why are we in this hell over here? lific writer and a sly romantic from Okla- think he won). Why? I can’t stop asking why? homa, was also one of the bluntest soldiers Daniel J. Agami, Charlie Company. Eulogy Ryan Hill, Myspace Blog, inside Charlie Company. Sent via e-mail Message to his Mother, Nov. 1, 2006 Jan. 29, 2007 it is fighting extreme boredom with the Private Hill was riding in a Humvee on lingering thought in the forefront of your Jan. 20, 2007, when an I.E.D. buried in the mind that any minute on this patrol could be To keep their spirits up, combat soldiers middle of the road detonated under his seat, my last endeavour, only highlighted by learned to appreciate the incongruities of killing him instantly. times of such extreme terror and an adrena- war in Iraq. Jokes scrawled inside a Port-o- Sergeant Campos was riding in a Humvee line rush that no drug can touch. what [ex- Potty quickly made the rounds. Situational on May 14, 2007, two weeks after returning pletive] circumstances thinking ‘‘that humor, from goofy to macabre, proved plen- from Texas, when it hit an I.E.D. The bomb should’ve been me’’ or ‘‘it could’ve been me’’. tiful. lifted the Humvee five feet off the ground wondering if that pile of trash will suddenly A really girly guy who was a cheerleader in and engulfed it in flames. ‘‘That’s when we explode killing you or worse one of your be- high school, got knocked down and nearly just left hope at the door,’’ Sergeant John- loved comrads . . . only backed by the past hurt by the wind of the helicopter. Listening son said. Severely burned over 80 percent of thoughts and experiences of really losing to Dickson recite what was in every single his body, Sergeant Campos lived two weeks. friends of yours and not feeling completely MRE was pretty funny. A cow charged and He died June 1. Another soldier, Pfc. Nich- hopeless that it was all for nothing because nearly trampled one of my friends when we olas S. Hartge, 20, of Indiana, died in the all in all, you know the final outcome of this were raiding a compound. And lastly, I same attack. war. it is walking on that thin line between thought that it was pretty comical that I Private Agami was driving a Bradley fight- sanity and insanity. that feeling of total shot at a guy a long ways out but missed and ing vehicle on June 21, 2007, when it hit an abandonment by a government and a coun- later after taking his house and using it as a I.E.D. The explosion flipped the 30-ton vehi- try you used to love because politics are patrol base he offered me Chai and rice. cle, which also carried Sergeant Wood. Both fighting this war . . . and its a losing battle Jerry Ryen King, Diyala Province men were killed, along with three other sol- . . . and we’re the ones ultimently paying diers and an Iraqi interpreter. the price. Even a trip to the dentist, with its fringe ‘‘Obviously, it came to a point, you didn’t Ryan Wood, Myspace Blog, Adhamiya benefits, is cause for amusement in a war care anymore if it got better,’’ said Staff zone. Sgt. Jeremy S. Rausch, 31, one of Sergeant For the soldiers in Iraq, reconciling Campos’s best friends in Charlie Company. Last Sat. I had two of my wisdom teeth ‘‘You didn’t care about the people because Adhamiya with America was not always pulled. After taking double the prescribe easy. One place was buried in garbage and they didn’t care about themselves. We had percocot and morphine pills that the doctor already lost enough people that we just gore and hopelessness. The other seemed gave me for the pain I decided to catch a unmoored from the war, fixated on the minu- thought, you know, ‘why?’’’ flight back to my FOB (forward operation During their time in Adhamiya, the sol- tia of daily life and the hiccups of the fa- base). It was the coolest Blackhawk ride I’ve mous. The media was content to indulge. diers of Charlie Company caught more than had, I was absolutely ripped and I talked the two dozen high-value targets, found nearly 50 What the Hell America?? pilots into leaving the doors open. We had ‘‘What the hell happened?’’ any intelligent weapons caches, detained innumerable insur- four more guys die a couple days ago. They gents and won countless combat awards. American might ask themselves throughout hit an IED, it killed everyone in the humvee. their day. While the ignorant, dragging They lost 14 men. Their mission was hailed a It’s starting to get a little scary. We made it success. themselves to thier closed off cubicle, con- our first six months with just two deaths and template the simple things in life such as that was plenty. But now just in the past JUST IN CASE ‘‘fast food tonight?’’ or ‘‘I wonder what moti- two and a half weeks we’ve had nine more Texan to the core, enamored of the mili- vated Brittany Spears to shave her un- guys get killed, and over 50 wounded. I’m tary, Specialist Daniel E. Gomez, 21, an sightly, mishaped domepiece?’’ just hoping that I can make it the 75 more Army combat medic in the division’s Alpha To the simpleton, this news might appear days or so that we have left of combat oper- Company, relied on his books, his iPod and ‘‘devastating.’’ I assume not everyone thinks ations before we start packing. an Xbox to distract him from the swirl. this way, but from my little corner of the Jerry Ryen King, Journal Entry, April 11, 2007 Strange but this place where we are at is earth, Iraq, a spot in the world a majority of unreal almost. I hope I come back mentally Americans could’nt point out on the map, it Among the guys in Charlie Company, Pri- in shape. LOL. certainly appears so. . . . To all Americans I vate Agami, 25, was one of the boldest and Daniel Gomez, Myspace Blog, have but one phrase that helps me through- most resilient. He was the kind of guy who Sept. 9, 2006 out my day of constant dangers and ever joined an endurance ski contest on a whim. present death around the corner, ‘‘WHO THE He took pride in being the guy who tended He came in fourth. He had never skied in his to wounded soldiers under fire, patching [expletive] CARES!’’ Wow America, we have life. truly become a nation of self-absorbed re- them up to help them survive. Private Agami had time for everyone, and As the violence intensified, Specialist tards. . . . This world has serious problems everyone had time for him. Affectionately and it’s time for America to start addressing Gomez set aside thoughts of a free Iraq or a called G.I. Jew, he held his religion up to the safer America and, like generations of sol- them. light. He used it to build tolerance among Ryan Wood, Myspace Blog, diers before him, simply started fighting for the troops and shatter stereotypes; few in his the soldier next to him. May 26, 2007 unit had ever met a Jew. He flew the Israeli A few days ago I realized why I am here in flag over his cot in Adhamiya. He painted The somberness of the job was hard to Baghdad dealing with all the gunfire, the the words Hebrew Hammer onto his rifle. He shake off. But, day to day, there was no more rocket attacks, the IEDs, the car bombs, the even managed to keep kosher, a feat that re- reliable antidote than Pfc. Daniel J. Agami, death. I have only been here going on a quired a steady diet of protein shakes and ce- a South Floridian with biceps the size of can- month and a half. Already I have seen what real. taloupes, and Pfc. Ryan J. Hill, a self-de- war really is. . . but officially it’s called scribed hellion who loved his ‘‘momma’’ and Commander Mom, I can’t wait to come ‘‘full spectrum operations.’’ No, I don’t down hailed from what he called the ‘‘felony flats’’ home and when I do, don’t worry I’ll have a Bush, he is my CinC, and I think he is doing of Oregon. Funny men in the best sense of lot to say to the congregation. Don’t worry a good job with what Clinton left him. I the word, the two provided a valuable and es- about my mental state either, we all receive don’t debate why we are involved in Iraq. I sential commodity in a war zone. counseling and help from doctors when some- just know why I am here. It is not for the Their mother jokes—the kind that begin, thing like this happens. I am a strong indi- smiling Iraqi kids, or even the feeling of ‘‘your mother is so . . .’’—were legendary, vidual physically and mentally and if there wearing the uniform ( it feels damn good culminating in a Myspace joke-off. It ended is one thing the army teaches you, it is how though:). I am here for the soldier on patrol abruptly after an enough-is-enough phone to deal with death. Every day that passes it with me. call from Private Hill’s mother, who ranked gets easier and easier. I miss you guys very But why are you there in the States? Why No. 1 on his list of heroes in Myspace. Pri- much and I love you! are you having that nice dinner, watching vate Agami proclaimed victory. Daniel Agami, e-mail Message to his Mother, TV, going out on dates. . . . About a month later . . . I went to my Oct. 28, 2006 Daniel Gomez, E-mail to Friends and Family, room and my mattress was missing and all It did not get easier. Sept. 27, 2006

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00033 Fmt 4624 Sfmt 0634 E:\CR\FM\A03AP6.016 S03APPT1 ccoleman on PRODPC75 with SENATE S2400 CONGRESSIONAL RECORD — SENATE April 3, 2008 And then Specialist Gomez fell in love. An Mr. SANDERS. Mr. President, I ask People who are borrowing money to e-mail flirtation with Katy Broom, his sis- unanimous consent to speak as in send their kids to college are paying ter’s close friend, gradually led to a cyber ex- morning business. outrageously high rates, and certainly change of guarded promises about the future. The PRESIDING OFFICER. Without we know, given the crisis we are debat- Headed home for a rest break in May, the objection, it is so ordered. tentativeness lifted and they began to rely ing today, that mortgage interest rates on each other to get through the day. The Mr. SANDERS. Mr. President, I con- are off the charts. two joked about ‘‘the best sex we never had.’’ gratulate Majority Leader REID and With this amendment I will be offer- . . . this R&R there is someone new in my Minority Leader MCCONNELL, as well as ing, it would cap all interest rates at 8 life. Exactly what she is to me, and what I Committee Chairman DODD, and rank- percent above what the IRS charges in- am to her is uncertain, but it’s not really ing committee member SHELBY for come tax deadbeats. That is the for- important at the moment. Just the thought their hard work in beginning the proc- mula we are using. Currently, the IRS that I could spent a second of my life with ess of trying to bring relief to families charges a 6-percent interest rate to her, before I have to come back here makes who are struggling to hold on to their Americans who are late on paying their everything worth it. homes. I think they are taking a good income tax returns. That is what we Daniel Gomez, Myspace Blog, step forward. I think we have to do a May 9, 2007 are doing today. The IRS adjusts these lot more to address this very serious rates every quarter based on the Fed- crisis. eral funds rate. If the Federal funds Rest and relaxation in Georgia went better It is no secret to anyone that the than expected. He fell in love with the love rate rises, the interest rate the IRS of his life all over again, this time in person. middle class in this country is in great charges late filers goes up. If the Fed- The couple shared one kiss during his leave. danger. It is shrinking. Some think it eral funds rate goes down, so does the ‘‘He was everything I expected and more,’’ is on the verge of collapse. Workers interest rate the IRS charges late fil- said Ms. Broom, 20, who spent one week and today who are going to fill up their ers. two days with him. ‘‘It was kind of surreal car’s gas tank are paying $3.20 for a If the amendment I am offering were when we met. It’s almost like a perfect love gallon of gas in the State of Vermont, signed into law today, all interest rates and war story.’’ and there is a fear that may go higher. in this country would be capped at 14 Not many soldiers leave behind a just-in- People are paying higher and higher case letter. Specialist Gomez did. He handed percent, including subprime mort- Ms. Broom an envelope at the airport with prices for food. Since President Bush gages, credit cards, auto loans, payday the ’words, ‘‘Don’t read unless something has been President, some 8 million loans, and income tax refund anticipa- happens to me.’’ Americans have lost their health insur- tion loans. Why 14 percent? Why do we On July 18, 2007, two months after his ance, health care costs are soaring, and pick that number? It is an interesting leave, Specialist Gomez died in Adhamiya a college education is unaffordable. In point. I am glad you asked that ques- when the Bradley fighting vehicle he was in the meantime, wages, the real median tion, Mr. President, and here is the an- struck a roadside bomb. The explosion and family income for the average Amer- swer. Because 14 percent happens to be flames also killed three other soldiers. ican family is going down, and the gap Ms. Broom waited three days after she got the same level that former Senator Al word to open the letter. She sat alone in the between the very rich and everybody D’Amato chose when he offered an couple’s favorite spot, her apartment bal- else is getting wider. So we have some amendment in 1991 to cap credit card cony. very serious problems. Among other as- interest rates. Al D’Amato, Senator ‘‘I was very thankful that he wrote it,’’ she pects of that crisis is that the personal from New York, offered that amend- said of the letter. ‘‘I have opened and closed savings rate today is below zero, which, ment. it so many times, I’m surprised it hasn’t fall- up until 2005, hasn’t happened since the Do you know what the vote was on en apart.’’ Great Depression. So what is hap- that bipartisan amendment, offered by R+R 2007 pening is that people are working the Republican Senator from New Hey baby. If you’re reading this, then longer and longer hours, their wages York? That amendment passed the something has happen to me and I am sorry. are going down, we are losing good- Senate by a vote of 74 to 19—74 to 19— I promised you I would come back to you, paying jobs, and they do not have a huge bipartisan vote. And among but I guess it was a promise I could not keep. enough money to survive on so they those Members who are today in the You know I never believe in writing ‘‘death are borrowing more and more money. letters.’’ I knew if I left one for my folks it Senate, and who cosponsored that would scare them. Then I met you. We were That is the reality. amendment, were Senators SPECTER, supposed to meet, darling. I needed someone There is a lot, to my mind, that we LIEBERMAN, and DOMENICI, among oth- to make me smile, someone that was an old have to consider as a country to begin ers. Unfortunately, that amendment romantic like I was. I was going through a addressing the fact that poverty is ended up not being signed into law. very rough time in Iraq and I was starting to going up, the middle class is declining, Like my amendment, the D’Amato doubt my mental state. Then one day after a and the gap between the rich and ev- amendment was also pegged slightly patrol, I go to my facebook and there you erybody else is growing wider. There is above the interest rates for late income were.... a lot we have to do. But as we now tax filers. I have the feeling that in my I can’t stop crying while I am writing this focus on the mortgage crisis, we have letter, but I have to talk to you one last career in the Senate I will not often be time, because maybe the last time I heard to take a hard look at interest rates in quoting former Senator D’Amato, prob- your voice I did not know it would be the this country. I intend to offer an ably won’t be doing that, but let me last time I heard your voice.... amendment to the housing bill that I quote what Senator D’Amato said on I Love You. Go be happy, go raise a family. want to say a few words on now and I the Senate floor in 1991. This is what Teach your kids right from wrong, and have will speak to at greater length later. he said. faith, darling. l think I knew I loved you be- My amendment will clearly not solve Fourteen percent is certainly a reasonable fore I met. I love you, Katy. * Kiss * Goodbye all of the problems facing the middle rate of interest for banks to charge cus- Mr. DURBIN. Mr. President, I yield class, but it will do one very important tomers for credit card debt. It allows a com- the floor and suggest the absence of a thing: It will take one action that is fortable profit margin, but keeps banks in quorum. long overdue, and that is it would stop line so that interest rates rise and fall with The PRESIDING OFFICER. The big banks, credit card companies, pay- the health of the economy. clerk will call the roll. day lenders, mortgage bankers, and He was then the chairman of the The assistant legislative clerk pro- other lenders from ripping off Amer- Banking Committee. ceeded to call the roll. ican consumers by charging outrageous I say to my colleagues that if the The PRESIDING OFFICER (Mr. NEL- interest rates. Senate in 1991 thought that interest SON of Nebraska). The Senator from I do a national radio show every Fri- rates should be capped, trust me, we Vermont. day afternoon where people call in. And should at least do as much today, be- Mr. SANDERS. Mr. President, I ask you know what they say? They say: We cause the problem is in fact much more unanimous consent that the order for are sick and tired of paying 20, 25, 30 severe. the quorum call be rescinded. percent interest rates when, in fact, we A recent report, published by Tamara The PRESIDING OFFICER. Without pay our debt on time every single Draut, the Director of the Economic objection, it is so ordered. month. That is what they are saying. Opportunity Program at Demos, found

VerDate Aug 31 2005 07:12 Apr 04, 2008 Jkt 069060 PO 00000 Frm 00034 Fmt 4624 Sfmt 0634 E:\CR\FM\A03AP6.018 S03APPT1 ccoleman on PRODPC75 with SENATE April 3, 2008 CONGRESSIONAL RECORD — SENATE S2401 that one-third of all credit card holders Mr. SANDERS. Unfortunately, in Vietnam, Korea, Gettysburg, and Tren- in this country are paying interest many cases interest rates for con- ton. rates above 20 percent and as high as 41 sumers are going up at the worst pos- We have lost 69 brave volunteers percent—more than double what they sible time. One of the reasons for this from Kentucky. They are not forgotten paid in interest rates in 1990. In other is the virtual lack of regulation when by their families, they are not forgot- words, if we had a problem then, the it comes to interest rates. For exam- ten by the U.S. Senate, and they are problem today is much more severe. ple, credit card companies are able to not forgotten by those who carry on Between 1989 and 2006, Americans’ raise interest rates at any time for any the fight. overall credit card debt grew by 315 reason, and recently that is exactly percent from $211 billion to $876 billion. what, for example, the Bank of Amer- The PRESIDING OFFICER. The Sen- One-third of low- and middle-income ica has done. According to a recent ator from Massachusetts is recognized. families reported going into credit card Business Week article: Mr. KENNEDY. Mr. President, I ask debt to pay for rent, utilities, and food Bank of America sent letters notifying for the yeas and nays. in 2006. some responsible card holders that it would The PRESIDING OFFICER. Is there a Now, I don’t know about Nebraska, more than double their rates to as high as 28 but I will tell you that in the State of percent, without giving an explanation for sufficient second? There is a sufficient Vermont there are a lot of people who the increase. Fine print at the end of the let- second. The question is on agreeing to are buying their food with credit cards. ter advised calling a 800 number for the rea- the resolution. The clerk will call the They do not have the cash. They have son, but consumers who called said they roll. were unable to get a clear answer. What is to go in debt to buy food and pay for striking is how arbitrary the Bank of Amer- The assistant legislative clerk called other basic necessities. All of this— ica rate increases appear, credit industry ex- the roll. high interest rates—has resulted in perts say. Mr. DURBIN. I announce that the credit card companies earning $90.1 bil- This is unacceptable. Lenders should Senator from New York (Mrs. CLIN- lion in interest in 2006 alone—credit not be able to raise interest rates at TON), the Senator from Hawaii (Mr. card companies ripping off the Amer- any time for any reason. INOUYE), and the Senator from Illinois ican people and earning huge profits. There are Biblical references to what (Mr. OBAMA) are necessarily absent. But credit card companies aren’t the can be described as usury; that when only ones charging outrageous interest Mr. KYL. The following Senators are people are down and in need of money, necessarily absent: the Senator from rates, and that is why my amendment there is a strong moral objection to Georgia (Mr. CHAMBLISS) and the Sen- expands on the D’Amato amendment to charging them sky-high interest rates. ator from Arizona (Mr. MCCAIN). cover all forms of loans. For example, In the ‘‘Divine Comedy’’ by Dante, the Center for Responsible Lending has there is reserved a special place for The result was announced—yeas 95, found that some American consumers people who charge usurious interest nays 0, as follows: are paying interest rates for payday rates, the inner ring of the Seventh [Rollcall Vote No. 87 Leg.] loans as high as 800 percent. And if you Circle of Hell. want to know why these outrageous I don’t wish this on the credit card YEAS—95 levels of interest on credit cards and companies or the mortgage lenders, but Akaka Domenici Menendez payday loans are relevant to the debate this is what I do say. In this country Alexander Dorgan Mikulski on foreclosure, let me quote from two Allard Durbin Murkowski today, especially as interest rates go Barrasso Ensign Murray articles on the subject. The first is a down from the Fed, it is an outrage Baucus Enzi Nelson (FL) recent Reuters article entitled ‘‘Pay that millions of our fellow Americans Bayh Feingold Nelson (NE) Day Loans Exacerbate Housing Crisis.’’ Bennett Feinstein Pryor are paying 25 percent or 30 percent in- Biden Graham According to this article: terest rates, and our amendment would Reed Bingaman Grassley Reid As hundreds of thousands of American begin to address this issue. The time is Bond Gregg Roberts Boxer Hagel homeowners fall behind on their mortgage long overdue for us to move in that di- Rockefeller Brown Harkin payments, more people are turning to short- Salazar rection. I ask at the appropriate time Brownback Hatch term loans with sky-high interest rates just Sanders for the support of my colleagues. Bunning Hutchison to get by. While figures are hard to come by, Schumer Burr Inhofe f Sessions evidence from nonprofit credit and mortgage Byrd Isakson Shelby counselors suggests that the number of peo- HONORING THE SACRIFICE OF Cantwell Johnson ple using these so-called ‘‘pay day loans’’ is Smith MEMBERS OF THE UNITED Cardin Kennedy growing as the U.S. housing crisis deepens, a Carper Kerry Snowe negative sign for economic recovery. STATES ARMED FORCES WHO Casey Klobuchar Specter HAVE BEEN KILLED IN IRAQ Coburn Kohl Stabenow The second article is from a recent Stevens AND AFGHANISTAN Cochran Kyl front-page story from USA Today. The Coleman Landrieu Sununu title of the article says it all. ‘‘Facing The PRESIDING OFFICER. Under Collins Lautenberg Tester Thune losses on bad loans, banks boost credit the previous order, the Senate will pro- Conrad Leahy Corker Levin Vitter card rates.’’ According to the article: ceed to the consideration of S. Res. 501, Cornyn Lieberman Voinovich Even as the Federal Reserve has aggres- which the clerk will report. Craig Lincoln Warner sively slashed short-term interest rates, The assistant legislative clerk read Crapo Lugar Webb banks are raising rates on credit cards. as follows: DeMint Martinez Whitehouse Dodd McCaskill Wicker Federal Reserve lowering; banks in- A resolution (S. Res. 501) honoring the sac- Dole McConnell Wyden creasing. This should not happen. When rifice of members of the United States the Federal Reserve has slashed the Armed Forces who have been killed in Iraq NOT VOTING—5 and Afghanistan. Federal funds rate five times, from a Chambliss Inouye Obama high of 5.25 percent down to 2.25 per- Mr. MCCONNELL. Mr. President, the Clinton McCain cent, credit card interest rates should resolution before the Senate honors the sacrifice of the members of our Armed The resolution (S. Res. 501) was be going down, not up. Interest rates agreed to. for payday loans should be going down, Forces who have given their lives in not up. Mortgage interest rates should Iraq and Afghanistan. It is fitting that The preamble was agreed to. be going down, not up. we honor their service and their sac- The resolution, with its preamble, is The PRESIDING OFFICER. If the rifice. printed in todays RECORD under ‘‘Sub- Senator can suspend for just a second? The resolution states that sacrifices mitted Resolutions.’’ Mr. SANDERS. I ask unanimous con- of the fallen are in keeping with the sent for an additional 2 minutes, highest traditions of the U.S. Army, Mrs. LINCOLN. Madam President, I please. Navy, Marine Corps, Air Force and move to reconsider the vote and lay The PRESIDING OFFICER. Without Coast Guard. These selfless Americans that motion on the table. objection, it is so ordered. Please pro- have upheld the fine traditions of those The motion to lay on the table was ceed. who fought at Guadalcanal, Inchon, in agreed to.

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