AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009; Congressional Record Vol. 155, No. 22
(Senate - February 04, 2009)

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[Pages S1474-S1538]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of H.R. 1, which the clerk will 
report.
  The legislative clerk read as follows:

       A bill (H.R. 1) making supplemental appropriations for job 
     preservation and creation, infrastructure investment, energy 
     efficiency and science, assistance to the unemployed, and 
     State and local fiscal stabilization, for the fiscal year 
     ending September 30, 2009, and for other purposes.

  Pending:

       Reid (for Inouye-Baucus) amendment No. 98, in the nature of 
     a substitute.
       Murray amendment No. 110 (to amendment No. 98), to 
     strengthen the infrastructure investments made by the bill.
       Vitter amendment No. 179 (to amendment No. 98), to 
     eliminate unnecessary spending.
       Isakson-Lieberman amendment No. 106 (to amendment No. 98), 
     to amend the Internal Revenue Code of 1986 to provide a 
     Federal income tax credit for certain home purchases.
       Feingold amendment No. 140 (to amendment No. 98), to 
     provide greater accountability of taxpayers' dollars by 
     curtailing congressional earmarking and requiring disclosure 
     of lobbying by recipients of Federal funds.

  The ACTING PRESIDENT pro tempore. The Senator from Tennessee is 
recognized.
  Mr. ALEXANDER. Mr. President, I ask unanimous consent that I be 
permitted to engage in a colloquy with my colleagues for 30 minutes, if 
that is acceptable to the Democratic leader.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Mr. INOUYE. I have no objection.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. ALEXANDER. I thank the Senator from Hawaii.
  Mr. President, Republicans believe we ought to fix housing first, and 
we would like to talk about that for the next 30 minutes. Mr. Kyl, the 
Senator from Arizona, is here for that purpose. Senator Ensign is here, 
who is the author of an amendment that would provide 4 to 4.5 percent 
mortgages for up to 40 million Americans so they could buy new homes or 
refinance their homes. Senator Isakson is here, who is the author of an 
amendment to provide a $15,000 tax credit for the next year to home 
buyers. We believe these proposals would provide instant jobs. Housing 
got us into this economic mess and housing will help get us out of the 
economic mess.
  The Republican leader, Senator McConnell, stated that this is a big 
spending bill. I was on the telephone last night with the former budget 
chairman, Senator Domenici of New Mexico, who has been counting in his 
retirement. He said it took our country from the time of its founding 
until the mid-1980s to build up a national debt of $850 billion, which 
was the size of this so-called stimulus package when it came over here. 
So we are talking about real borrowed money, and our goal is to 
reorient the whole discussion: first, to housing; second, to letting 
taxpayers keep more of their own money; and, third, to get out of the 
bill those items that don't belong in the bill.
  The former Congressional Budget Office director in a previous 
Democratic administration, Alice Rivlin, said we needed two bills: one 
that would include legislation that created jobs now, and the second 
would be legislation that might take care of long-term investments that 
might help our country. She also said there should be a very high 
standard before we borrow money to spend on anything. Especially, as 
the Republican leader said, at a time when next week we may be hearing 
from Secretary Geithner that we need several hundred billion more for 
banks, and then more for housing, and then more for the annual 
appropriations bill, and then, on down the road, more for a health care 
bill.
  I see the Senator from Arizona, and he is a leading member of the 
Finance Committee, and as we think about reorienting toward housing, it 
would seem to me, Senator Kyl, that we should focus whatever money we 
do have on the problem we have, rather than borrowing money to dribble 
away on good-sounding projects that don't actually create jobs.
  Mr. KYL. Mr. President, if I may respond to the Senator from 
Tennessee, I appreciate his focusing laser-like on this subject 
because, in many respects, we are treating the symptoms of the problem 
rather than the cause of the problem. While treating the symptoms can 
have some salutary effect, we are not going to ultimately solve the 
problem until we get to the root cause. I think virtually everybody 
agrees on what the root cause of our current problem is: the collapse 
in the housing market.
  That caused a cascade of other effects, and some of those can be 
dealt with simultaneously, but the bottom line is, as the Senator from 
Tennessee noted, we have to fix housing first. Because until that is 
done, all of these other symptoms are going to remain.
  There are a lot of smart people whose comments I am going to quote in 
a moment because they are well-respected--they are Democrats, they are 
Republicans--but I would like to turn, first, to my folks in Arizona, 
whom I like to go to for advice. So last weekend I met with Marge 
Lindsey and her group of realtors from Arizona. I started out by 
saying: All right, tell me how it is. She said: It is not good. They 
went on to point out that between 40 and 50 percent of what they are 
doing right now is dealing with foreclosed homes, or what they call the 
short sales--getting ready for foreclosure--and that the rest

[[Page S1475]]

of the market has virtually collapsed. She said something has to be 
done to prevent the continual decline in housing values.

  My home is in a perfectly good neighborhood, I pay my mortgage and 
all, but it is out of my control because all around me others are 
having problems first, and because they are having problems, it is 
drawing down the value all around. So the people who play by the rules 
and are not doing anything wrong are along for the ride down. Until 
that is arrested somehow, all of these other symptoms are going to 
exist. That was their analysis.
  Now, if I can quote some other really smart people, if the Senator 
would allow me? The New York Times editorialized toward the end of last 
year, November 11:

       Clearly, the [financial] system won't stabilize until house 
     prices stabilize, and banks won't lend freely until losses on 
     mortgages abate. . . .All roads, into and out of this crisis, 
     run through the housing market.

  Exactly the point the Senator from Tennessee is making.
  Very recently, January 28, the new CBO Director, Director Elmendorf, 
said this in testimony:

       Turmoil in the housing and financial markets is likely to 
     continue for some time, even with vigorous policy actions and 
     especially without them. Most economists think that to 
     generate a strong economic recovery in the next few years, 
     further actions to restore the health of the housing sector 
     and the financial system are needed.

  A lot of folks rely on the advice of Warren Buffett. I probably 
should have relied more on the advice of Warren Buffett in my 
investments. I wouldn't be where I am today. Here is what he said in 
April of last year:

       Things connected with housing, whether it's in brick or 
     whether it's in carpet, those businesses have shown no uptick 
     at all.

  His point is that once housing is affected, everything else that has 
anything to do with it is affected.
  He made this comment as well:

       The market won't really come back until you get a close to 
     normal ratio of vacant homes, homes up for sale, compared to 
     current sales, and that's a ways off.

  We all listened with interest to Alan Greenspan. Here is what he 
testified to in October of last year before Congress:

       A necessary condition for this crisis to end is a 
     stabilization of home prices in the United States.

  Here is how I conclude all of this. The experts back home agree. They 
are seeing it on the ground. The experts who look at this from an 
economic standpoint, from a national macroeconomic standpoint, all 
agree. We need to heed their advice and address the housing crisis 
first. We cannot wave a magic wand and stop housing prices from falling 
further. Would that we could--we would do that. That is the market, and 
we cannot stop it.
  What is happening is that home values, in a ratio to mortgages, are 
declining. So the other point the realtors told me was a lot of folks, 
through no fault of their own, are now paying mortgages on homes that 
exceed the value of the homes. That is the upside-down element. We can 
affect that part of the equation. That is to say, we can't stop home 
values from going down until we do something else first. The thing we 
can affect is that ratio--what people are paying in their monthly 
mortgage payments. I am going to leave that to my colleagues. The 
Senator from Nevada is here. The Senator from Georgia is here. They 
will talk about a better Republican idea of how we can address the 
costs people pay every month in their mortgages as a way of making them 
more healthy, able to pay the mortgage, not going to foreclosure, and 
ultimately fix that value of homes, and then we are on the road to 
recovery.
  The last thing I wanted to say is that the secondary market is a big 
part of this. When people lend money, they want to then be able to sell 
that mortgage to somebody. That has been the whole cause of this, the 
toxic loans in the secondary market.
  In the Financial Times of August 26 of last year, Dr. Martin 
Feldstein said:

       Mortgage-backed securities cannot be valued with any 
     confidence until there is more certainty about the future of 
     house prices.

  That is precisely what this better Republican idea will get to. As my 
colleagues discuss these ideas of how to relate to this, remember what 
the original cause of the problem is, what we can affect and we cannot 
affect, and how we want to focus laser-like on fixing housing first.
  I appreciate the efforts of my colleagues.
  Mr. ALEXANDER. I thank my colleague for so clearly outlining the 
nature of the problem.
  I ask the Chair to let me know when we are about 3 minutes from the 
expiration of the time.
  There are two proposals we want to discuss which will be voted on 
here which will help fix housing first. The first is by the Senator 
from Nevada, Mr. Ensign. Senator Ensign's idea will create instant jobs 
and give a jolt to the economy by giving an opportunity for lower 
mortgage interest rates to those persons who can afford to buy or 
refinance their home.
  There are other proposals, such as one by Senator McCain, to help 
people who are in trouble with their mortgage. The focus of my 
colleague is primarily on creditworthy Americans who could refinance 
their homes, save money, and get the economy moving?
  Mr. ENSIGN. The case has been made that we need to fix housing first 
because it is the underlying cancer that is affecting our economy, and 
that cancer is spreading to other parts of the economy. If we don't fix 
the underlying problem, it will not matter what we do with the rest of 
the spending bill. The spending bill will not help the economy. It is 
going to continue to get worse and worse. If home values continue to go 
down, no amount of money will help. We will have to have three or four 
TARP funds, trillions of dollars, and it is not going to help because 
we have not fixed the underlying problem.
  Several of us got together. I happen to be the lead author on the 
bill, but this is really a compilation of many minds trying to fix 
housing. We have incorporated one of the ideas from Senator Isakson. I 
will let him describe that.
  One of the hallmarks of the bill is we try to fix housing in the 
bill. We eliminate the wasteful spending, and we have some targeted tax 
credits for families and small businesses to create jobs. We try to 
take care of the whole package, and we do it in a fiscally responsible 
way, so the total cost will be under $500 billion. It is not the $1.1 
trillion the other side of the aisle has put forward. Such spending 
would put a tremendous burden on future generations.
  What we have said is that we are going to allow anybody who has at 
least a 5-percent equity in their home, or if they already have a 
Fannie Mae-Freddie Mac-backed loan, would be able to refinance at about 
4 to 4.2 percent interest. The average American family who refinances 
will save over $400 a month. That is not a one-time saving, that is a 
saving through a 30-year fixed loan. That is like a permanent tax cut.
  All of the economists have told us that one-time tax rebates give a 
little bit of stimulus, but they cost more in the long run. Permanent 
tax relief is really what stimulates the economy. If a family only 
receives a one-time check, all they are going to do is pay down debt or 
save the money. But if they know they have over $400 per month, that is 
something they can count on. They can budget that. They can start 
spending that money. That will actually help stimulate the economy.
  The economists who have done the studies are Glenn Hubbard and 
Christopher Mayer. They said this proposal will stabilize housing 
prices next year because they expect housing prices to go down by about 
12 percent. If you lower interest rates on the average of about 1 
percent, that historically has meant housing prices will rise about 7 
to 8 percent. If we can get them down about a point and a half, they 
figure, instead of going down by 12 percent, housing prices next year 
will stabilize. We all know that if you do not stabilize housing prices 
in the United States, the economy is going to continue to go down.
  I see the Presiding Officer from Colorado. Colorado is one of those 
States that is having pretty severe housing problems now. These housing 
problems started in my State, Nevada, and in Arizona, Florida, and 
California. They have spread to the rest of the country, so we need to 
fix this problem.
  We have also put a limit on it. This is not for the rich. This is for 
loans of $750,000 or less. That is going to take

[[Page S1476]]

care of about 40 million Americans. That is what this takes care of, 40 
million people refinancing their homes--40 million households, not 
Americans--40 million households getting on average of over $400 a 
month. Put the numbers to that. That is a huge amount of money.
  Mr. ALEXANDER. If I understand the proposal, if I am a creditworthy 
person, I can either refinance my home or buy a new home at this lower 
interest rate, which today would be between 4 and 4.5 percent for a 30-
year mortgage. I would have that fixed mortgage all during that 30-year 
period of time.
  Mr. ENSIGN. That is correct, this is a 30-year fixed. This is not an 
adjustable rate mortgage where there are catches and in a couple of 
years it is going to go up again and I am going to have to worry about 
that. This is a 30-year fixed mortgage that can be very significant to 
the average family's budget.
  We believe this is going to be one of the big fixes. You combine this 
with the other proposals, such as Senator Isakson's proposal, and the 
other things Senator McCain and Senator Martinez have come in with, 
with mitigation for those who are underwater--ours does some for houses 
that are underwater if they are backed by Fannie and Freddie right now. 
But all of the proposals together--I believe we can do exactly what we 
say needs to be done, and that is fix housing first.
  But our proposal also takes out all of the spending in the bill that 
does not create jobs. We still have tax incentives in there for 
families and small businesses to create jobs, but we take out all of 
the $200 billion in new entitlement spending, all of the other 34 new 
programs that are created. There are some worthy programs in there that 
most of us would support. At this time, we should not be spending money 
on new programs, especially without eliminating other programs.
  We believe this is fiscally responsible. It is going to help the 
economy. It is going to help the housing problem. I appreciate your 
leadership, Senator Alexander, for bringing this colloquy together so 
we can talk about the underlying problem.
  Mr. ALEXANDER. I thank Senator Ensign for his leadership and the 
others on his proposal for their leadership. We hope it will attract 
significant Democratic support because I have heard a number of them 
say we need to reorient this toward housing.
  Senator Isakson was in the real estate business, and he often reminds 
us that this is not the first housing crisis we have had. As I 
understand, Senator Isakson, the proposal you made, which would be a 
tax credit to homeowners, was originally tried in the 1970s and worked?
  Mr. ISAKSON. That is right, and I am delighted the Senator from 
Tennessee called this colloquy today so we could talk for a few minutes 
about what Jon Kyl and John Ensign said is the heart of the problem, 
and that is the U.S. housing market. Our houses are down 25 percent in 
the last 18 months. Equity lines of credit are dissolved because houses 
are underwater. One in five houses in the United States is worth less 
than what is owed on it.
  It is rare when you come to the Senate at a time of crisis that you 
have a roadmap to success. Most of the time, we are trying to feel our 
way through to find out what to do that is right. We have a roadmap to 
success.
  I ask unanimous consent to have printed in the Record two articles 
from the New York Times, one from April of 1975 and one from July of 
1975.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Apr. 7, 1975]

             New Housing Tax Credit Prompts Rise in Buying

                            (By James Feron)

       White Plains.--The recently enacted Federal tax credit on 
     the purchase of new homes and condominiums signed into law 
     last weekend seems to be achieving or even surpassing its 
     goal, according to initial reports on the situation in the 
     metropolitan area.
       Robert Jacobs, marketing director of One Strawberry Hills, 
     a 118-unit condominium in Stamford, Conn., said today that 
     the idea was to reduce the number of empty and unsold housing 
     units, ``and to that we can only say, ``Amen.''
       Mr. Jacobs closed deals on four apartments yesterday and 
     today, he said. ``All were borderline cases where the $2,000 
     tax credit was evidently the deciding factor. We expect to 
     sell at least 10 of our 35 unsold units the same way.''
       He reported that ``one man who had been renting in this 
     area, who was married but with no children, said he was in a 
     50 per cent tax bracket and the $2,000 credit would mean more 
     like $4,000 to him.''
       The new Federal law calls for a 5 per cent tax credit up to 
     a maximum of $2,000 on the purchase of a new home providing, 
     among other things that the title be taken or the purchase be 
     made between March 12 and Dec. 31 of this year, that 
     construction began before March 26 and that the house or 
     condominium is the purchaser's principal residence.


                            builders pleased

       Builders interviewed in several suburban areas were 
     generally delighted with the law although they agreed that 
     one provision in particular would create difficulties until 
     the Internal Revenue Service produced a clarified regulation.
       The difficult clause provides that purchases eligible for 
     the tax credit be made at the lowest price the home was 
     offered for sale. There is vast uncertainty over how to 
     determine ``lowest price'' in an industry where prices listed 
     in prospectus offerings can be adjusted upward, where rebates 
     and other incentives change price levels and where subsequent 
     additions to unsold units change their value.
       John Tedesco, president of Kaufman and Broad Homes of New 
     Jersey, said a few days ago that ``if the I.R.S. doesn't set 
     some limit, such as `lowest price since Jan. 1, 1975,' for 
     example, the incentives will evaporate.''
       Potential buyers, meanwhile are said to have been visiting 
     housing developments and condominiums throughout the 
     metropolitan area in increasing numbers since last Sunday, 
     the day after the measure became law. Martin Berger, 
     president of. Robert Martin Corporation, Westchester's 
     largest builder, said a few days ago:
       ``We couldn't believe it. Easter Sunday is not usually a 
     big day and the weather was bad, but people came to us asking 
     about the credit and others reported the same thing. This 
     could provide a tremendous boost to the sagging residential 
     construction business and to the economy in general.''


                             interest grows

       The initial interest of last weekend was intensified 
     yesterday and today, especially where builders linked the 
     $2,000 credit to their advertisements in today's newspapers.
       At Applehill Farm, in Chappaqua, Westchester County, where 
     56 homes are being built in a ``cluster'' development on a 
     former estate, Tom Bisogno said couples shopping for the 
     $70,000 to $90,000 units were asking if they qualify for the 
     rebate. ``We believe they do,'' he said, ``because ours is a 
     new development, less than a year old.''
       Mr. Bisogno said he expected the real crush to come when 
     the I.R.S. clarified its ``lowest price'' ruling: Louis 
     Buonpane of the Parker Imperial, a condominium on the 
     Palisades in North Bergen, NJ, opposite 86th Street in 
     Manhattan, said traffic increased ``right after the President 
     signed the bill.''
       Like Strawberry Hill, Parker Imperial is adding the tax 
     credit to previously announced price reductions necessitated 
     by a sluggish market. ``It's a good selling tool, this tax 
     credit, added to everything else,'' Mr. Buonpane said.
       Another question puzzling some builders was how to define 
     when construction began. Many felt that the I.R.S. would 
     refer to putting down a ``footing,'' or pouring concrete, but 
     Mr. Tesdesco asked, ``If you clear the plot and install 
     services have you started construction on a house?''
       Builders said that setting Dec. 31 as the cut-off date 
     would force quick decisions, which they liked. One builder 
     said, ``We're going to begin `countdown' advertising as soon 
     as we can--`You have only 100 days to make up your mind, 
     etc.,'--to encourage decisions. It could be dynamite for this 
     market.''
                                  ____


                [From the New York Times, July 27, 1975]

                    Home Buyers Get A New Enticement

                         (By Ernest Dickinson)

       Thousands of new housing units throughout the nation that 
     failed to meet the price qualification for 5 per cent Federal 
     tax credit will do so now because of an amendment 
     liberalizing the law.
       The change, builders predict, will give an added boost to 
     new-home buying, especially between Labor Day and the end of 
     the year.
       The law as it was passed in March specified that new 
     houses, condominiums and mobile homes had to be sold at the 
     lowest price for which they had ever been offered if their 
     buyers were to be eligible for the credit of as much as 
     $2,000.
       But some builders with units that had been on the market 
     many months did not roll back prices to their original levels 
     because, they said, they could not do so without losing 
     money.
       Under the amendment, which was signed into law June 30, the 
     builder must certify only that the price is the lowest at 
     which the home has been offered since Feb. 28, 1975.
       The change greatly enlarges the number of qualifying 
     properties from which home buyers can choose this summer and 
     fall. The increase is most apparent among high-rise 
     condominiums.
       At The Greenhouse In Cliffside Park, N.J., for example, 100 
     of the 340 units remain

[[Page S1477]]

     unsold. None of them qualified for the tax credit previously, 
     but all of them do now.
       Ira Norris, the president of the Kaufman and Broad 
     Development Company, the builder, explained why. A high-rise 
     condominium is a large project, he noted, and once 
     construction starts, the entire building must be completed. 
     During the two-year construction period, however, many costs 
     escalated month by month. So completed apartments cannot be 
     sold at the price for which they were offered two years 
     earlier.
       Ordinarily, builders of low-rise or single-family detached 
     housing can avoid that trap. If houses are not selling, the 
     builder can simply stop construction.
       The new tax-law provision helps not only future buyers but 
     some past buyers as well. Its benefits are retroactive. A 
     buyer who closed a deal in the spring but did not qualify for 
     a tax credit then may now be able to obtain it.
       This will be true if the only reason the property was not 
     eligible then was that the builder had sold it at a price he 
     raised before Feb. 28. A recent buyer who believes that his 
     new-home purchase may now entitle him to a tax credit should 
     contact his builder or local Internal Revenue Service office.
       Some developers are taking the Initiative in such 
     situations. The builder of High Point of Hartsdale, in 
     Westchester County, for example, will soon be sending letters 
     of congratulation and the required certificates to about 
     eight buyers who previously purchased condominium apartments 
     that only now qualify for the credit.
       Leland Zaubeler, a vice president of the Robert Martin 
     Corporation of Elmsford, which is building the 500-unit High 
     Point, said that about 15 per cent of the unsold partments 
     that previously did not qualify for a tax credit do qualify 
     now. ``The amendment is beneficial,'' Mr. Zaubeler said. ``It 
     helps carry out the original intent of the law--to move new 
     housing.''
       The biggest problem with the legislation, according to many 
     builders, is that many people still do not understand what a 
     tax credit is.
       According to Mr. Norris, they refuse to believe it is not 
     simply a tax deduction. ``We've had people bring lawyers into 
     our offices because they think we are trying to sell them a 
     bill of goods,'' he said. A tax credit is subtracted from the 
     final sum one owes the Government. If a home buyer qualified 
     for a $1,750 tax credit and his tax bill came to $1,750 or 
     less, he would not pay any tax.
       Despite widespread misunderstanding, however, people are 
     starting to shop around again at last,'' said a spokesman for 
     U.S. Home Corporation in Clearwater, Fla., one of the 
     nation's largest builders. ``The tax credit has gotten people 
     out looking, though they may end up buying homes that don't 
     qualify.''
       George A. Frank, who heads the Builders Institute of 
     Westchester and Putnam counties, agrees.
       Westchester has about 800 new unsold condominium units but 
     very few new single-family homes, he said, adding: ``Because 
     of costs, with new houses bringing about $75,000 here, there 
     has been no large-scale building.''
       But Mr. Frank and others believe that a ``countdown 
     psychology'' will develop in the fall as more and more buyers 
     realize that they have only until the end of the year to get 
     a tax credit.
       ``It's a very persuasive opportunity,'' said one builder. 
     ``If the average condominium sells for $50,000, you can put 
     down $5,000, or 10 per cent, because most developers offer a 
     90 per cent mortgage. Then the $2,000 off your income tax 
     represents 40 per cent of the down payment''
       The amount of the tax credit is figured by taking 5 per 
     cent of the total cost of acquisition (including closing 
     costs), minus any profit the buyer might realize in selling 
     his old house. The credit cannot exceed the total tax 
     liability. If a buyer qualifies for a maximum $2,000 credit 
     but his Federal tax totals only $1500, the latter amount is 
     all he can claim.
       In general, homes that were never before occupied and that 
     were under construction or completed before March 26, 1975, 
     qualify for the credit.

  Mr. ISAKSON. I will read the headlines: ``New Housing Tax Credit 
Prompts Rise in Buying; Consumers Respond to Federal Law by Closing 
Deals on Condominiums and Homes Here, Builders Say,'' and ``Home Buyers 
Get a New Enticement.''
  In 1975, when the average price of a house was $35,000, the United 
States was in worse shape than we are in today. We are fast approaching 
it, but we were worse. There was a 3-year supply of unsold houses on 
the market, and there were no buyers.
  Congress, the Democratic Congress, and Gerald Ford, a Republican 
President, passed a housing tax credit of $2,000 for a family who 
bought and occupied as their home a standing vacant house in inventory 
at the time, which is because all the inventory was new homes. That 
$2,000 tax credit spurred people to go to the marketplace, spurred them 
to buy those houses, and in 1 year's time we went from a 3-year supply 
of housing to a 10-month supply of housing. We solved 70 percent of the 
problem with a tax credit.
  What we are talking about in our legislation is a bill I introduced 
in January of last year. Everybody said it cost too much. Then, it cost 
$11.4 billion. We have now spent $3 or $4 trillion, and we have not 
solved the problem yet. I suggest it is time we looked at an economical 
solution.
  What we have offered is a $15,000 or 10 percent of the purchase price 
of the house, whichever is less, tax credit which could be claimed 
against the 2008 tax return that will be filed in April or can be taken 
50 percent in 2009, 50 percent in 2010. What the family gets is a 
$15,000 tax credit or, as I said, 10 percent of the purchase price, 
whichever is less.
  This is going to benefit mainstream America. When they receive it, 
they have to live in the house for 3 years as their home. If for some 
reason they move out during that time, it is prorated. But what will 
happen in America now is what happened in 1975 when these articles in 
the Times reported: Sales will come back, the floor will be put under 
the housing market, values will stabilize, and they will begin to 
appreciate. And, as they do, equity will return to America's families; 
stability will return to the basic biggest asset our families have, 
their home; and we will begin to work our way out of this deep downward 
spiral we are currently in.
  As has been said, it is not a catch phrase and it is not a slogan. If 
we do not fix housing first, it does not matter what else we fix 
because throwing money at the symptoms, as Jon Kyl said, will not work. 
If you are a doctor and you are trying to cure a patient, you go to the 
root of the infection or the root of the problem, and you cut it out or 
you deal with it.
  This proposal, providing good, efficient, effective mortgage money 
for refinance for Americans with good credit or those with Freddie Mac 
and Fannie Mae loans, this will bring borrowers who are in the market 
back to the market and will solve the problem.
  My last comment to the Senator from Tennessee--I call people who used 
to work for me all the time to see how it is going. I call them in 
various States, including the State of Tennessee.
  In Atlanta, GA, a couple of weeks ago, I talked to Glennis Beacham, 
who is very successful. I said: Glennis, have you got a lot of buyers?
  She said: I have a lot of buyers, Johnnie. They have money. They want 
one of two things: They want a foreclosure or a short sale.
  Right now you have a bottom-fishing market. You do not have people 
who see any opportunity, and the buyers who are in are exploiting; they 
are not investing. It is time we incentivize all American families with 
their own money because it is their tax money against which the credit 
will be taken to go out and buy a house. When we do, we will begin to 
fix housing first, and we will begin to stabilize a very teetering 
economy.
  I commend the Senator from Tennessee.
  Mr. ALEXANDER. I thank the Senator from Georgia. Just to make sure it 
is clear, sometimes we confuse tax deduction and tax credit. This is a 
$15,000 tax credit. That means cash money, real money, that you can, 
instead of paying it to the IRS, put in your pocket. Am I correct?
  Mr. ISAKSON. You can invest it in your house.
  Mr. ALEXANDER. You can invest it in your house. The Senator from 
Wyoming is here.
  Mr. President, how much time remains?
  The ACTING PRESIDENT pro tempore. The Senator has 7 and a half 
minutes remaining.
  Mr. ALEXANDER. Mr. President, please let me know when 2 minutes is 
remaining.
  I thank the Senator from Georgia. We have now heard a proposal to 
give to all creditworthy Americans, which can be up to 40 million, the 
opportunity to buy or refinance a house with a Treasury-backed 4- to 
4.5-percent mortgage. We have heard Senator Isakson's proposal to give 
everyone who buys a home within this next year up to a $15,000 tax 
credit.
  The Senator from Wyoming was a small businessman before he came to 
the Senate and is our only accountant here. What is the Senator's 
reaction to that, and how does he see housing fitting into the economic 
stimulus package that is being discussed?

[[Page S1478]]

  Mr. ENZI. We need to pass a bill that will fix housing first. We 
recognized the problem about a year and a half ago, but Congress has 
not focused on the housing piece of that and come up with a solution 
that will work to fix housing.
  ``Fix Housing First,'' the slogan the Senator came up with, I 
appreciate the efforts of the Senator from Tennessee and the 
understanding that he has of this and the ability to pull people 
together. I thank Senator Ensign for all of the work he has done on a 
substitute bill. I particularly thank the Senator from Georgia, Mr. 
Isakson, for an idea that he has seen work before and knows will work 
again and has done the math on it to update it to today. But we have to 
fix housing first. That is what started the problem, that is what is 
continuing the problem, that is what has tightened the pocketbooks of 
Americans.
  A realtor from Buffalo, WY, was in my office yesterday. He said the 
banks do have some money, that they had made 50 loans, they were 
processing 50 loans at the moment. He said, unfortunately, only two of 
those were for house sales. The rest of them were all refinancing as 
the interest rates have come down.
  Even people who can afford to buy a house are not buying a house 
because they do not know where the bottom is in the housing market. So 
until we do something to put a bottom in the housing market and assure 
people who have bought houses as part of their retirement that their 
value is not going to go clear through the floor, America is not going 
to recover from this. People are not going to start spending. It is not 
Government spending that solves the problem, it is individual spending 
that solves the problem. And the individuals have stopped spending.
  Government money spends twice, circulates twice; private money 
circulates seven times. We have to get the private money, the 
individual money, the personal money, back into the economy again, and 
that will make a difference.
  The crisis began with the decline of housing prices in our Nation, a 
rising tide of foreclosures from homeowners who could no longer afford 
to make mortgage payments. The decline in the housing market sent 
shockwaves through our financial system as everybody realized their 
triple-A-rated investments looked more like junk bonds. With banks 
unwilling to lend against assets of an unknown value, our credit market 
came grinding to a halt. That is where we are today.
  Now, the original plan of TARP was to buy toxic loans, to get those 
out of the market, to stabilize the banks. That did not happen. When we 
work in a hurry to pass something around here, particularly if it deals 
with a lot of dollars, we can often wind up in a different direction 
than where we thought we were going. Right now this bill is not focused 
on housing. It needs to be focused on housing, and focused on housing 
first.
  Government spending by itself will not solve the problem. We cannot 
spend our way out of it. We have tried that before. We tried it in the 
1930s. Government interference did not help. So we need to take some of 
this money and devote it to stemming foreclosures, invigorating the 
housing market, and getting our financial institutions and individual 
investors to step back into the market without fear.
  I have a lot more I would like to say, but I know our time is 
limited. I would like the Senator from Tennessee to be able to conclude 
this discussion, conclude the beginning of the long discussion I hope 
will put housing first. Until we solve housing first, we do not have a 
solution.
  Mr. ALEXANDER. Mr. President, how much time is remaining?
  The ACTING PRESIDENT pro tempore. The Senator from Tennessee has 3 
minutes remaining.
  Mr. ALEXANDER. I thank the Senator from Wyoming for his leadership 
and his understanding of business that has come the hard way, through 
experience in his town.
  The Senator from Arizona, Mr. McCain, is on the Senate floor to speak 
on a different amendment. But he, too, has a proposal that will deal 
with fixing housing first. So our point is this: We understand 
Americans are hurting, that our economy is in a slump. But we also 
understand that if we do not deal with the national debt, we will be 
doing the worst thing that we could ever do to the working men and 
women of America: that is, having long-term inflation where dollars do 
not amount to anything and you cannot buy anything.
  So our focus, instead of adding to the debt by over $1 trillion, is 
to reorient the stimulus package toward a true stimulus and fix housing 
first. That is what the 4-percent mortgage for creditworthy Americans 
is for. That is what the $15,000 tax credit for home buyers is for. 
That is what the Republican proposals to help people with foreclosures 
are for. That is part 1, fix housing first.
  Part 2 is let people keep more of their own money. Those are tax 
reductions. Then part 3 is take off this bill all of the spending items 
that do not have anything to do with creating jobs now. So we welcome 
the calls for bipartisan work. We are ready to work. We have good 
ideas: fix housing first, let people keep more of their own money, and 
focus the bill on spending projects that create jobs today, not those 
that do not.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Oregon.
  Mr. WYDEN. Mr. President, I appreciate the courtesy of Senator 
Feingold and Senator McCain, who I know have a very important 
amendment. They have allowed me to come to the floor before them and 
speak about the amendment Senator Snowe and I will be offering later.
  I thank Senator Feingold and Senator McCain, and it is not my 
intention to give a lengthy speech at this point.
  Last week, Americans were horrified to hear the news that Citigroup 
and other companies receiving taxpayer money from the Troubled Asset 
Relief Program were paying their employees billions and billions of 
dollars in bonuses.
  Today, along with Senator Olympia Snowe, our colleague from Maine, I 
will offer a bipartisan amendment to this legislation that makes it 
clear it is not enough to say these Wall Street bonuses are wrong; they 
have to be paid back.
  Taxpayers must be protected, and that is what the amendment Senator 
Snowe and I are offering will do. Our proposal gives the institutions 
that received Troubled Asset Relief Program money and paid these 
outlandish bonuses a simple choice: The institutions will pay back the 
cash portion of any bonus paid in excess of $100,000 within 120 days of 
the amendment's enactment or those institutions would face an excise 
tax of 35 percent on what is not repaid to the Treasury.
  The money can be repaid by buying back the preferred stock the 
Federal Government owns in these companies or in any other fashion the 
institution chooses. Senator Snowe and I have had extensive legal 
review with respect to the constitutionality of this provision. We 
believe it passes constitutional muster.
  Mr. President, I ask unanimous consent to have printed in the Record 
a letter sent to me yesterday by Edward Kleinbard of the Joint 
Committee on Taxation.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Dear Senator Wyden: You have asked me whether I believe 
     that there is a constitutional issue associated with your 
     legislative proposal to impose an excise tax on certain 2008 
     bonuses paid by TARP recipients that do not repay the amount 
     of those bonuses in 2009 (through redeeming the preferred 
     stock issued to the United States). There are many Supreme 
     Court and other cases that have considered the question of 
     when a tax might be held to be unconstitutional by virtue of 
     its retroactive application, and as a result I am not able to 
     answer your question definitively without more time to read 
     the extensive jurisprudence. As a very preliminary matter, 
     however, I believe that your proposal would be held to be 
     constitutional if challenged in court.
       First, I believe that there is a powerful argument that 
     your proposal is simply not retroactive. Taxpayers can avoid 
     the tax completely by repurchasing shares they sold to the 
     United States; the excise tax would be imposed, not on prior 
     bonuses, but on the taxpayer's affirmative post-enactment 
     decision not to repurchase those shares at the same price 
     that the shares were sold to the United States. Moreover, the 
     timing, repurchase price and amount of shares that must be 
     repurchased are not punitive, and are commensurate with the 
     conduct that Congress can rationally find to be contrary to 
     the purpose and intent of the EESA legislation that 
     authorized the Treasury's investments.
       Even if the excise tax were (contrary to the conclusion 
     suggested above) viewed as having retroactive effect, the 
     Supreme Court

[[Page S1479]]

     has generally given a high level of judicial deference to 
     economic legislation and has repeatedly upheld retroactive 
     taxation as constitutional, so long as the legislation is 
     ``supported by a legitimate legislative purpose furthered by 
     rational means . . .'' Pension Benefit Guaranty Corp. v. R.A. 
     Gray & Co., 467 U.S. 717 (1984). For example, under the Tax 
     Reform Act of 1969, an individual was permitted a $30,000 
     exemption in calculating his minimum tax liability. The 
     Revenue Act of 1976, passed in October of 1976, reduced the 
     exemption to $10,000 and applied the change retroactively to 
     all tax years beginning after December 31, 1975. The Supreme 
     Court upheld this retroactive amendment in United States v. 
     Darusmont, 499 U.S. 292 (1981).
       As another example, the Tax Reform Act of 1986 granted a 
     special deduction for the sale of employer securities by an 
     estate to an employee stock ownership plan (``ESOP''). In 
     December of 1987 Congress amended the statute to provide that 
     the securities sold to an ESOP must have been directly owned 
     by the decedent immediately prior to his or her death, and 
     made the amendment effective as if it had been contained in 
     the statute as originally enacted. In United States v. 
     Carlton, 512 U.S. 26 (1994), the Supreme Court once again 
     upheld the retroactive application of the tax, in this case 
     against an estate that had relied on the original language to 
     engage in a transaction that it believed would have reduced 
     its tax liability by several million dollars. There are 
     numerous other appellate and Supreme Court cases to similar 
     effect.
       Your legislative proposal presents a particularly strong 
     case for constitutionality since it has only a modest look-
     back period, as was the case in Darusmont, and is arguably a 
     curative measure (with regard to the executive compensation 
     provisions of TARP), as was the case in Carlton.
       Please let me know if you have any further questions.

                                                 Edward Kleinbard,
                                      Joint Committee on Taxation.

  Mr. WYDEN. I will read briefly now from the letter from Mr. 
Kleinbard. I will quote from the second paragraph:

       There is a powerful argument that your proposal is simply 
     not retroactive.

  It is his judgment, based on what he has been able to look at thus 
far, it would be constitutional.
  Mr. Kleinbard states specifically:

       Taxpayers can avoid the tax completely by repurchasing 
     shares they sold to the United States; the excise tax would 
     be imposed not on prior bonuses, but on the taxpayer's 
     affirmative post-enactment decision not to repurchase those 
     shares at the same price that the shares were sold to the 
     United States. Moreover, the timing, repurchase price and 
     amount of shares that must be repurchased are not punitive, 
     and are commensurate with the conduct that Congress can 
     rationally find to be contrary to the purpose and intent of 
     the EESA legislation that authorized the Treasury's 
     investments.

  I think anyone who looks at the letter from the Joint Committee on 
Taxation will see that the bipartisan amendment Senator Snowe and I 
will be offering with respect to excessive cash bonuses is a matter 
that does pass constitutional muster and clearly is in the taxpayers' 
interest.
  I note my colleagues, particularly from Tennessee and Georgia, have 
made a number of good points that I happen to feel strongly about with 
respect to the need to address the current housing crisis, and one of 
the things we have seen with respect to housing and all of the other 
economic challenges we have is we have to get people's confidence back 
in the American economy.
  I believe the Snowe-Wyden amendment will help to generate that 
confidence by saying at some point we are going to say excessive 
bonuses are being paid, in effect, with taxpayer money. I mean these 
are companies who received billions and billions of taxpayer dollars.
  If we are going to have the confidence we need to promote housing, as 
the distinguished Senators from Tennessee and Georgia both noted, we 
have to make sure taxpayers do not say: This is wrong. This is not 
right to give these excessive bonuses with taxpayer money.
  I would note that Senator Snowe and I set the limit for bonuses at 
$100,000. So, clearly, we want to be sensitive to the young person 
getting started in financial services, someone, perhaps, who was a 
secretary. But it is the outlandish bonuses that we are concerned 
about.
  I would also note these TARP institutions have not yet paid their 
2008 taxes. So what we have is a situation where a number of these 
companies have not yet paid their 2008 taxes. In other parts of this 
economic recovery legislation we are giving retroactive tax benefits. 
Certainly, that is the case with the net operating loss provisions, the 
carryback provisions, with respect to business.
  So it seems to me, if you are giving those kinds of retroactive tax 
breaks, you surely ought to take steps to protect taxpayers, as Senator 
Snowe and I seek to do with our legislation. The bottom line is, the 
Wall Street firms that took bailout money knew they were not supposed 
to pay their executives lavish bonuses, but they went ahead and paid 
out more than $18 billion in bonuses anyway.
  The Wyden-Snowe amendment makes sure these firms can't take the money 
and give the Congress and taxpayers the runaround. If they took the 
bailout money, the Wall Street firms either have to pay taxpayers back 
for the excessive bonuses, or they ought to pay a tax on these bonus 
payments. Either way, they should not be allowed to pay outrageous 
bonuses to executives and stick taxpayers with the bill. It is 
fundamentally wrong to reward with billions of taxpayer dollars this 
kind of conduct. We have all heard about handing out of bonuses to 
executives at firms responsible for the current economic meltdown. But 
what happened a couple of weeks ago takes this to a completely 
different level. At a time when the Congress is faced almost on a 
weekly basis with requests for billions of dollars of additional money, 
how in the world can we allow these kinds of bonuses, with taxpayer 
money, to stand, as if the economy were booming?
  My colleagues from Wisconsin and Arizona have been waiting patiently. 
I hope Members will look at the amendment Senator Snowe and I are 
offering. I hope they will look at the legal analysis provided by the 
Joint Committee on Taxation with respect to how and why this particular 
proposal passes constitutional muster. I hope the Senate will say it is 
not enough to just give speeches about how it is wrong to hand out 
these bonuses with taxpayer money but will back bipartisan legislation 
to correct it and to protect taxpayers at a critical time when we must 
increase confidence in how major economic decisions are made.
  I yield the floor.


                           Amendment No. 140

  The PRESIDING OFFICER (Mrs. Shaheen). The Senator from Wisconsin.
  Mr. FEINGOLD. I ask unanimous consent that the pending business be 
set aside and that we take up amendment No. 140.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FEINGOLD. Madam President, I am pleased to be working with a 
tripartisan group on this issue: Senators McCaskill, Graham, Lieberman, 
Burr, and Coburn and, of course, most significantly, how great it is to 
be working again with my friend John McCain. This is an issue, in 
addition to ones we have worked on over the years, that he and I care 
deeply about, trying to deal with the abuse of earmarks. It is a real 
cancer in our budget system.
  Our amendment is straightforward. It establishes a 60-vote point of 
order against unauthorized earmarks in appropriations bills. It also 
requires that recipients of Federal funding disclose what they spend on 
lobbying.
  Before arguing the need for the amendment, I want to briefly 
acknowledge that we have actually come a long way in recent years in 
disclosing earmarks. In the last Congress, we passed the Honest 
Leadership and Open Government Act of 2007, more commonly referred to 
as the ethics and lobbying reform bill. That measure was the most 
significant earmark reform Congress has ever enacted, and it reflected 
what I think is a growing recognition by Members that the business-as-
usual days of using earmarks to avoid the scrutiny of the authorizing 
process or of competitive grants are coming to an end. It was no 
accident that the two Presidential nominees of the two major parties 
were major players on that reform package. It would be a mistake not to 
acknowledge how far we have come. The Honest Leadership and Open 
Government Act was an enormous step forward. I commend the majority 
leader, Senator Reid, as well as our former colleague from Illinois, 
President Obama, for their work in ensuring that landmark bill passed. 
But it would be a mistake not to admit that we still have a long way to 
go.
  Our amendment will build on the significant achievements of the 110th 
Congress by moving from what has largely

[[Page S1480]]

been a system designed to dissuade the use of earmarks through 
disclosure to one that actually makes it much more difficult to enact 
them. The principal provision of this amendment is the establishment of 
a point of order against unauthorized earmarks on appropriations bills. 
Obviously, to overcome the point of order, supporters of the 
unauthorized earmark will need to obtain a supermajority of the Senate. 
As a further deterrent, the bill provides that any earmarked funding 
which is successfully stricken from the appropriations bill will be 
unavailable for other spending in the bill. It isn't the sort of a 
thing where you can borrow from one piece and fix it with another. You 
have to reduce the bill by that amount.
  As I mentioned earlier, the amendment also requires all recipients of 
Federal funds to disclose any money spent on registered lobbyists. It 
is only fair that the American people know which entities receiving 
Federal funding are spending money to lobby Congress. There may be no 
connection between the lobbying and the Federal funding, but a little 
transparency would help everyone decide that for themselves.
  I truly am delighted that President Obama is committed to keeping 
this stimulus package free of earmarks. We can ensure that his 
commitment is made good on future appropriations bills by adopting this 
amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Madam President, I am pleased to join with my good friend 
Senator Feingold in offering this fiscally responsible amendment, along 
with Senators McCaskill, Burr, Lieberman, Graham, Coburn, and others. 
May I say that I find there are very few pleasant aspects of losing an 
election, but one of them that I most value is going back to work with 
my friend from Wisconsin, Senator Feingold, whom, for now many years, I 
have had the great honor and privilege of working with as we attempt to 
bring about the reforms which will help restore the confidence and 
trust of the American people in the way we do business in Washington 
but also in our stewardship of their tax dollars. I am pleased to join 
with my good friend Senator Feingold.
  Senator Feingold outlined the provisions of the amendment so I don't 
want to repeat them. But I also want to point out that some people are 
saying: Why should we have this on this legislation, when this stimulus 
package does not directly apply? We know there is an omnibus 
appropriations bill coming down the pike. The House of Representatives 
intends to take it up soon. There is apparently, unfortunately, another 
TARP that may be coming, not to mention the other appropriations bills 
that will be coming. So the sooner we address this issue, the better 
off we will be. I also think one of the reasons why support for the 
stimulus package is rapidly eroding is because you don't have to call 
it an earmark and it doesn't have to be technically an earmark, but 
when you see many of the provisions in this stimulus bill, they have 
nothing to do with stimulus and everything to do with spending. They 
are fundamentally earmarks as well, certainly in their effect.
  It is not only appropriate but necessary to adopt this amendment so 
that the American people will know in the future, when we make tough 
decisions, this kind of practice of adding absolutely unnecessary, 
unwarranted spending of their tax dollars on appropriations bills 
without a proper process of scrutiny and ability to reject them will 
not occur. It will not restore their confidence. The stimulus package 
before us is important, but right now the American people see it not as 
a stimulus but a spending package. That is why this provision will 
restore some confidence in the future way we address their tax dollars.
  Every time Senator Feingold and I have tried to kill off a specific 
unwanted and unnecessary and, many times, outrageous appropriation, if 
we had succeeded, it would have taken down the whole bill. So one of 
the important aspects of this legislation is to allow us to rifleshot 
and remove unnecessary and wasteful spending.
  I don't have to go through the list, but it is always kind of fun to 
do it. Even though we passed in January 2007, by a vote of 96 to 2, an 
ethics and lobbying reform package that had meaningful reforms, by 
August of 2007, we were presented with a bill containing very watered-
down earmark provisions and doing far too little to rein in wasteful 
earmarks. Since we adopted the much heralded reforms of January 2007, 
we have spent $188,000 for the Lobster Institute, which includes a 
lobster cam at the bottom of the ocean, which so far we have been 
unable to make work; $98,000 to develop a walking tour of Boydton, VA, 
population 454; $212,000 for olive fruit fly research in Paris, France; 
$1.95 million for the Charles B. Rangel Center for Public Service; 
$150,000 for the Montana Sheep Institute--almost every one of these 
earmarks location specific required--$345,000 for tree planting in 
Chicago; $196,000 for the renovation of an historic post office in Las 
Vegas; $150,000 for the STEEED program, Soaring Towards Educational 
Enrichment via Equine Discovery, a youth program in Washington, DC; 
$100,000 for Cooters Pond Park in Prattville, AL; $50,000 for 
construction of a National Mule and Packers Museum in Bishop, CA; 
$244,000 for bee research in Weslaco, TX.

  The point is, some of these projects I am talking about may have 
virtue. It may be of the utmost national importance in this time of 
record deficits that we have a lobster cam at the bottom of the ocean 
and that we should spend $188,000 for it. But it should be subject to 
debate and discussion and amendment and acceptance or rejection.
  What Senator Feingold and I are seeking is a process where these 
earmarks can be judged on their value, their contribution to the 
overall economy, and whether they are necessary. Under the present 
system, they are still inserted without the Congress having the ability 
to carefully examine them.
  It also would require recipients of Federal dollars to disclose any 
amounts that the recipient has expended on registered lobbyists. There 
is a new game in town--not so new, it has been going on for some years, 
but it grows--and that is that special interests, universities, others 
will go to a specific lobbying group, and they will then seek the 
earmarks this interest desires and believes is required. There are 
certain, obviously, amounts of money given to those lobbyists for their 
work. We are not saying they should not do that. We are saying that the 
amounts of money given to the lobbyists as a result of the recipients 
of Federal dollars obtaining those funds should be revealed.
  Again, $446,500 for horseshoe crab research at Virginia Tech in 
Virginia; $500,000 for a maritime museum in Mobile, AL; $360,000 for 
Hawaii rain gauges; $401,850 for the Shedd Aquarium in Chicago, IL.
  This process has got to end. The American people do not trust the 
Congress to dispose of their tax dollars without these billions of 
earmarks, or at least a process where they are scrutinized and Members 
of Congress have the ability not to just vote on an appropriations bill 
that appears on the Member's desk shortly before the vote takes place. 
The appropriators will tell us these are all worthwhile projects. They 
are not, and they have resulted in corruption. There are former Members 
of Congress residing in Federal prison today because this process--this 
process--has corrupted people. It has to be fixed.

  So I could go in citing examples of unauthorized earmarks and policy 
riders in appropriations bills and conference reports. But I think you 
have the picture. By the way, an egregious example that is being 
investigated today is that for one of the appropriations bills, 
appropriations were inserted after the bill was passed and signed by 
the President of the United States--a remarkable occurrence--a 
remarkable occurrence. It shows how far we have gone in our obligations 
to the American people.
  I would like to say a word to my own side of the aisle. We just lost 
an election, and I will take the responsibility for that. But I can 
assure my colleagues on this side of the aisle that one of the reasons 
why Republicans lost the last election is because our base, who are 
concerned about our stewardship of their tax dollars, believes we got 
on a spending spree which has mortgaged our children's futures.

[[Page S1481]]

  If there is a future on this side of the aisle, then we have to clean 
up our act on spending. Time after time, when some of us said: You have 
to veto these spending bills, the answer was: Well, we have to please 
Members. What we did was we alienated those American citizens--frankly, 
of all parties--who feel strongly we have lost our sense of obligation 
to them as far as careful stewardship of their tax dollars is 
concerned.
  I wish to mention one other thing. I had a very good conversation 
with the President of the United States. We all want to work together 
to pass this stimulus, a stimulus package that will get our economy 
going again. I look forward, as do other Members on this side of the 
aisle, as well as the other side, to sit down, and let's have some 
serious negotiations so we can eliminate wasteful and unnecessary 
spending that is part of the stimulus package that is before the Senate 
today.
  We should make sure we adopt an amendment that as soon as the GDP 
improves for two quarters by 2 percent, we will then enact spending 
cuts to put us on the road to a balanced budget. We need to do that. We 
used to talk about millions of dollars and then we started talking 
about billions of dollars and now we are talking about trillions of 
dollars of deficits that will be run up that we will lay on future 
generations of Americans.
  With this stimulus package, there must be a commitment to stop this 
spending and to reduce spending once our economy recovers, so we can 
have some sense of ability to put this Nation on a path to a balanced 
budget to eliminate the debt and deficit we are laying on future 
generations of Americans.
  Americans are beginning to turn against the stimulus package as it is 
presently designed. They are doing that because they do not believe it 
is a stimulus package. They believe, correctly, it is a spending 
package. I urge my colleagues to help restore confidence in whatever 
the outcome is, that we adopt this amendment, so in the future the 
American people can be sure we will have done our very best to 
eliminate unnecessary, wasteful, and corrupting spending that has 
characterized the expenditures we have made in the past on 
appropriations bills that contained those unwanted, unnecessary 
spending practices.
  I thank the Senator from Wisconsin, again, and my friend, Senator 
Lieberman, and Members on both sides of the aisle who will support this 
amendment.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. LIEBERMAN. Madam President, I thank the Chair.
  I rise to speak in favor of the Feingold-McCain amendment. I heard my 
friend from Wisconsin refer to this as an amendment with tripartisan 
support. Hearing that, I rushed to the floor to validate his 
description of it.
  I am proud to be a cosponsor of this legislation. It is quite 
appropriate that this amendment is being offered on this Economic 
Recovery and Reinvestment Act. I support this act strongly. It is 
critically important. It is gravely important we adopt this 
legislation, and adopt it soon, to kick start our economy, to start 
creating and protecting jobs again.
  But there is an awful lot of money in this measure that has to be 
spent quickly. There are oversight actions and institutions that have 
been made part of the Economic Recovery and Reinvestment Act. But it 
gives us an opportunity to deal directly with what has become known as 
the earmark problem or the earmark crisis or the earmark scandal to 
some.
  I support this amendment and have cosponsored it because it does not 
end what has begun to be described as earmarks. It reforms the process. 
It creates a legislative vehicle for any 1 of 100 of us to stand and 
say: Hey, wait a second. What is this appropriation without 
authorization that has been put into this bill and to essentially 
demand, by raising a point of order, that 60 of the 100 of us agree 
that it is worth spending taxpayers' money on this particular 
appropriation.
  This is necessary because we have taken a legitimate constitutionally 
created function of Congress--the power to appropriate--and we have 
misused it in too many cases that it now requires us to create a 
process to basically say, at times when it is justified: Stop. Stop 
this particular appropriation, this particular earmark.
  When I talk about a constitutionally ordained process, I am talking 
about the fact that the Constitution gives Congress, uniquely, the 
power to appropriate public funds. It is simply a matter of record, 
which my colleagues from Wisconsin and Arizona have made more than 
clear this morning again, that the power we have been given to 
appropriate has, in some cases, been misused in what now are called 
earmarks. So we need to create this checkpoint to say: No, let's demand 
60 votes for this one.
  The amendment would also require all recipients of Federal dollars to 
disclose any amounts the recipient has expended on registered 
lobbyists. This is a way also to create some transparency--the sunlight 
that Justice Brandeis, I believe it was, said was the best disinfectant 
for bad behavior in Government.
  So I am proud to be a cosponsor. I hope we take this moment, as we 
appropriate necessary funding--hundreds of billions of dollars--to say 
that on all other appropriations bills coming along, every Member of 
this Senate will have the opportunity to ask something very reasonable 
and sensible: If they doubt the necessity, the validity of a particular 
appropriations earmark, that 60 of us have to say: No, we think it is 
OK.


                           Amendment No. 106

  Madam President, I am not sure, at this point, what the regular order 
is. I also have come to the floor to speak about an amendment the 
Senator from Georgia, Mr. Isakson, and I have offered. If it is 
appropriate, now I would speak for a few minutes on it. If not, I will 
wait until that amendment comes up.
  The PRESIDING OFFICER. The Senator has that right.
  Mr. LIEBERMAN. I thank the Chair, and I promise my colleagues I will 
be brief.
  Senator Isakson and I have offered an amendment which will create a 
$15,000 tax credit for any purchaser of a home within a year after the 
date of enactment. There is no recapture clause for that. We do so to 
offer one of what we hope will be a series of measures to revive the 
housing market and housing values as a critical part of reviving our 
economy and creating jobs.
  Very briefly, it was the subprime mortgage scandal, the bubble in 
housing prices, the collapse of housing prices, that has been at the 
heart of the follow-on collapse in our financial institutions and the 
collapse in confidence, particularly, the confidence of the American 
consumer, whose demand, whose consumption, drives 70 percent of the 
American economy.
  So bottom line: I saw a statistic from a reputable economist about a 
week ago, 2 weeks ago now, that estimated in the last year there had 
been a loss of $4 trillion in the value of real estate in our country--
$4 trillion. We are talking about $4 trillion of value in houses, which 
for most Americans--middle-income, lower middle, and lower income--who 
could afford to own a house, was the major asset they had, the major 
asset of value, the major source within them for which they had 
economic confidence because it was worth something beyond what the 
mortgage was. That is part of what gave them the confidence then to go 
out and consume, to drive our economy forward.
  The collapse of housing values, the dramatic drop in activity--
housing purchases and sales--is at the heart of the collapse in 
confidence and the spiraling downward of our economy today, and we 
simply will not get our economy going again unless we get that moving.
  This credit Senator Isakson and I are proposing--we are not saying is 
going to solve all the problems. There has to be action in other ways. 
There has to be action through the Treasury Department in the second 
tranche of the so-called TARP money to help people stay in their homes, 
particularly those who are in homes that are now worth less than the 
mortgage they have. There has to be action to try to lower interest 
rates and so on.
  But we think this action will really kick start the housing market by 
giving a $15,000 tax credit, refundable, to anybody who buys a house 
within a

[[Page S1482]]

year of the date of enactment. That will drive sales. As you watch the 
interest rates coming down--and interest rates are at a low of many 
years, when you can get a mortgage--and then with the action through 
the Treasury Department to increase liquidity, and you add on a $15,000 
tax credit, I think people are going to go out and buy homes. That is 
going to begin to raise the value of homes. If a home sells on the 
street, everybody else's house goes up in value. Then people's sense of 
their own wealth, their own economic well-being, is going to increase, 
and I think it will give them the confidence to go out and begin to 
consume.
  In 2008, I can tell you, Connecticut's housing market experienced its 
sharpest decline in home sales and median home prices in 20 years. 
Single family home sales fell nearly 24 percent. This proposal Senator 
Isakson and I are making obviously costs some money. But compared to 
other proposals that have been made, this one will pay a return on the 
dollar.
  Although we are waiting for a final estimate, I would anticipate the 
amendment could cost as much as $20 billion. However, we have had 
economic estimates from credible economists who have looked at the 
amendment Senator Isakson and I are offering and said they believe it 
could lead to as many as 1.1 million home purchases within this year, 
that it would generate 539,000 new jobs, mostly in construction, and 
$14 billion in Federal tax revenues. So that is a tremendous return on 
what this will cost the Treasury. Senator Isakson will show it in his 
comments, because we have talked about this--this has been tried once 
before in a terrible housing crisis in the 1970s and worked very well.

  I am proud to stand with my friend from Georgia. This is a bipartisan 
amendment; perhaps I should say tripartisan. It deserves to have 
tripartisan and, I would hope, unanimous support as something that has 
been proven in the past and will work again today to get people's home 
values rising, because there will be the demand to buy houses in 
America once again.
  I thank the Chair, I thank my colleagues, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Georgia is recognized.
  Mr. CARDIN. Madam President, will the Senator yield for a moment?
  Mr. ISAKSON. I will.
  Mr. CARDIN. Madam President, I ask unanimous consent to be recognized 
after the Senator from Georgia has completed his comments.
  The PRESIDING OFFICER. Is there objection?
  Mr. ISAKSON. Reserving the right to object, would it be good to lock 
in the speakers who are here at the same time?
  Mr. GRASSLEY. Madam President, I don't want to do that because I am 
the manager for this bill and I have been waiting to speak. I want the 
floor after the Senator from Maryland completes his remarks, and I 
think I am entitled to it.
  Mr. ISAKSON. I would never cross the Senator from Iowa.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Georgia is recognized.
  Mr. ISAKSON. Madam President, first, I want to thank Senator 
Lieberman for his very responsive remarks and for his cosponsorship for 
this legislation that creates a floor for housing once again and for us 
to end what has become a terrible economic crisis.


                     Amendment No. 106, As Modified

  I called this amendment up last night and now I wish to ask unanimous 
consent to send a modification of the amendment to the desk for 
replacement of the existing amendment.
  The PRESIDING OFFICER. Are there objections to the modification?
  Without objection, the amendment is modified.
  The amendment (No. 106), as modified, is as follows:

       On page 449, beginning on line 16, strike through page 450, 
     line 22, and insert the following:

     SEC. 1006. CREDIT FOR CERTAIN HOME PURCHASES.

       (a) Allowance of Credit.--Subpart A of part IV of 
     subchapter A of chapter 1 is amended by inserting after 
     section 25D the following new section:

     ``SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES.

       ``(a) Allowance of Credit.--
       ``(1) In general.--In the case of an individual who is a 
     purchaser of a principal residence during the taxable year, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter an amount equal to 10 percent of the purchase 
     price of the residence.
       ``(2) Dollar limitation.--The amount of the credit allowed 
     under paragraph (1) shall not exceed $15,000.
       ``(3) Allocation of credit amount.--At the election of the 
     taxpayer, the amount of the credit allowed under paragraph 
     (1) (after application of paragraph (2)) may be equally 
     divided among the 2 taxable years beginning with the taxable 
     year in which the purchase of the principal residence is 
     made.
       ``(b) Limitations.--
       ``(1) Date of purchase.--The credit allowed under 
     subsection (a) shall be allowed only with respect to 
     purchases made--
       ``(A) after the date of the enactment of the American 
     Recovery and Reinvestment Tax Act of 2009, and
       ``(B) on or before the date that is 1 year after such date 
     of enactment.
       ``(2) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) for the taxable year.
       ``(3) One-time only.--
       ``(A) In general.--If a credit is allowed under this 
     section in the case of any individual (and such individual's 
     spouse, if married) with respect to the purchase of any 
     principal residence, no credit shall be allowed under this 
     section in any taxable year with respect to the purchase of 
     any other principal residence by such individual or a spouse 
     of such individual.
       ``(B) Joint purchase.--In the case of a purchase of a 
     principal residence by 2 or more unmarried individuals or by 
     2 married individuals filing separately, no credit shall be 
     allowed under this section if a credit under this section has 
     been allowed to any of such individuals in any taxable year 
     with respect to the purchase of any other principal 
     residence.
       ``(c) Principal Residence.--For purposes of this section, 
     the term `principal residence' has the same meaning as when 
     used in section 121.
       ``(d) Denial of Double Benefit.--No credit shall be allowed 
     under this section for any purchase for which a credit is 
     allowed under section 36 or section 1400C.
       ``(e) Special Rules.--
       ``(1) Joint purchase.--
       ``(A) Married individuals filing separately.--In the case 
     of 2 married individuals filing separately, subsection (a) 
     shall be applied to each such individual by substituting 
     `$7,500' for `$15,000' in subsection (a)(1).
       ``(B) Unmarried individuals.--If 2 or more individuals who 
     are not married purchase a principal residence, the amount of 
     the credit allowed under subsection (a) shall be allocated 
     among such individuals in such manner as the Secretary may 
     prescribe, except that the total amount of the credits 
     allowed to all such individuals shall not exceed $15,000.
       ``(2) Purchase.--In defining the purchase of a principal 
     residence, rules similar to the rules of paragraphs (2) and 
     (3) of section 1400C(e) (as in effect on the date of the 
     enactment of this section) shall apply.
       ``(3) Reporting requirement.--Rules similar to the rules of 
     section 1400C(f) (as so in effect) shall apply.
       ``(f) Recapture of Credit in the Case of Certain 
     Dispositions.--
       ``(1) In general.--In the event that a taxpayer--
       ``(A) disposes of the principal residence with respect to 
     which a credit was allowed under subsection (a), or
       ``(B) fails to occupy such residence as the taxpayer's 
     principal residence,
     at any time within 24 months after the date on which the 
     taxpayer purchased such residence, then the tax imposed by 
     this chapter for the taxable year during which such 
     disposition occurred or in which the taxpayer failed to 
     occupy the residence as a principal residence shall be 
     increased by the amount of such credit.
       ``(2) Exceptions.--
       ``(A) Death of taxpayer.--Paragraph (1) shall not apply to 
     any taxable year ending after the date of the taxpayer's 
     death.
       ``(B) Involuntary conversion.--Paragraph (1) shall not 
     apply in the case of a residence which is compulsorily or 
     involuntarily converted (within the meaning of section 
     1033(a)) if the taxpayer acquires a new principal residence 
     within the 2-year period beginning on the date of the 
     disposition or cessation referred to in such paragraph. 
     Paragraph (1) shall apply to such new principal residence 
     during the remainder of the 24-month period described in such 
     paragraph as if such new principal residence were the 
     converted residence.
       ``(C) Transfers between spouses or incident to divorce.--In 
     the case of a transfer of a residence to which section 
     1041(a) applies--
       ``(i) paragraph (1) shall not apply to such transfer, and
       ``(ii) in the case of taxable years ending after such 
     transfer, paragraph (1) shall apply to the transferee in the 
     same manner as if

[[Page S1483]]

     such transferee were the transferor (and shall not apply to 
     the transferor).
       ``(D) Relocation of members of the armed forces.--Paragraph 
     (1) shall not apply in the case of a member of the Armed 
     Forces of the United States on active duty who moves pursuant 
     to a military order and incident to a permanent change of 
     station.
       ``(3) Joint returns.--In the case of a credit allowed under 
     subsection (a) with respect to a joint return, half of such 
     credit shall be treated as having been allowed to each 
     individual filing such return for purposes of this 
     subsection.
       ``(4) Return requirement.--If the tax imposed by this 
     chapter for the taxable year is increased under this 
     subsection, the taxpayer shall, notwithstanding section 6012, 
     be required to file a return with respect to the taxes 
     imposed under this subtitle.
       ``(g) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to the 
     purchase of any residence, the basis of such residence shall 
     be reduced by the amount of the credit so allowed.
       ``(h) Election to Treat Purchase in Prior Year.--In the 
     case of a purchase of a principal residence during the period 
     described in subsection (b)(1), a taxpayer may elect to treat 
     such purchase as made on December 31, 2008, for purposes of 
     this section.''.
       (b) Clerical Amendment.--The table of sections for subpart 
     A of part IV of subchapter A of chapter 1 is amended by 
     inserting after the item relating to section 25D the 
     following new item:

``Sec. 25E. Credit for certain home purchases.''.
       (c) Sunset of Current First-Time Homebuyer Credit.--
       (1) In general.--Subsection (h) of section 36 is amended by 
     striking ``July 1, 2009'' and inserting ``the date of the 
     enactment of the American Recovery and Reinvestment Tax Act 
     of 2009''.
       (2) Election to treat purchase in prior year.--Subsection 
     (g) of section 36 is amended by striking ``July 1, 2009'' and 
     inserting ``the date of the enactment of the American 
     Recovery and Reinvestment Tax Act of 2009''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to purchases after the date of the enactment of 
     this Act.

  Mr. ISAKSON. Madam President, the amendment is merely a technical 
amendment on dates and no other substantial change.
  It is rare that we have a roadmap to success in times of difficulty, 
but this country has once before realized a housing crisis every bit as 
bad as the one we have today and economic troubles and unemployment 
every bit as dangerous, and that was in 1974. In 1975, the Democratic 
Congress and a Republican President, Gerald Ford, came together for the 
American people and passed a $2,000 tax credit for the purchase of any 
standing, vacant, new house and in one year's time a 3-year inventory 
had been dissipated to 10 months, housing was restored, values 
returned, and the economy again began to prosper.
  Thirteen months ago, in January of last year, I introduced this same 
amendment. It was scored at that time by Joint Tax at a cost of $11.4 
billion. The Finance Committee in its wisdom elected not to include 
this in the proposal because they said it was too expensive. Since they 
said that was too expensive, we have spent $4 trillion between the 
Federal Reserve and the Congress and the U.S. Treasury, and the problem 
is worse. So I would submit this is a very small price to pay for a 
solution that at least we have an historical precedent that it works.
  The score on this legislation is $18.9 billion. The legislation 
provides a $15,000 tax credit, or 10 percent of the purchase price, 
against either 2008 income where one can monetize it at the closing 
date this year, or half in 2009 and half in 2010, for anyone who buys 
as their principal residence any single-family dwelling or single-
family condominium or attached townhouse available in the United States 
of America. We have a pervasive housing problem, and the worst hurt 
right now are the people who are paying their mortgages, the people who 
are in decent shape, the people who are having to sell because of a 
transfer; they have no market and they don't because everybody is going 
for short sales or they are going for foreclosures or they are going 
bottom fishing. They are bottom fishing with your equity and mine. They 
are bottom fishing to find the best deal they can get at the bottom of 
the trough. It is going to keep spiraling down until this Congress and 
this country address the root of the problem which is the death of the 
housing market, puts a floor under it, stabilizes it, and gives it a 
motivation to improve.
  Senator Lieberman's quote is absolutely correct. Right now, we are at 
a housing sale rate of a half a million houses a year. This country 
averaged 1.2 million in the last 10 years. This bill will take us back 
to 1.2 million, as his statistics prove. We have tremendous 
unemployment. This legislation will bring about estimates of 500,000 to 
600,000 jobs back to America, not in 2 years, not in 10 years, but now. 
So I respectfully submit we have a chance to join together, learn from 
history, repeat history that worked, and adopt this amendment.
  I thank Senator Lieberman for his support. I thank Senator Chambliss 
for coming on as a cosponsor and Senator Corker and, as I understand 
from the calls I have had in the last day, many more from both sides of 
the aisle. It is time to fix America's problem, not throw money at the 
symptoms. It is time to fix housing first in the United States of 
America.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. CARDIN. Madam President, let me comment on the underlying bill 
and then I will ask unanimous consent to set aside an amendment so I 
can offer an amendment.
  First, let me comment on the underlying bill. We need to give 
President Obama the tools necessary for our economic recovery. 
President Obama said 2 weeks ago in his inaugural address the 
challenges we face are real, they are serious, and they are many. They 
will not be met easily or in a short span of time, but they will be 
met.
  I think our responsibility is to make sure he has the tools necessary 
in order to be able to deal with our economic crisis. The current 
status of our economy is worse than any of us have seen in our 
lifetime. The gross national product fell 4 percent in the final 
quarter of 2008; our unemployment rates are at 7.2 percent.
  Regarding home ownership and foreclosure, I know my Republican 
colleagues have had some discussion about trying to do more in that 
regard. This bill will save homeowners their homes. In my State of 
Maryland, we had 41,500 foreclosures in 2008, an increase of 71 
percent. I need to point out that last year, it was the Senate 
Republicans who required seven cloture votes on the Foreclosure 
Prevention Act before we could take it up. At that time, 8,500 families 
were in some stage of foreclosure every day. The five months of 
stalling caused 1.2 million families to receive some form of 
foreclosure filings. The Republicans blocked amendments to provide 
additional funding for housing counseling and to let bankruptcy judges 
modify terms of subprime mortgages which could have kept 600,000 
families in their homes.
  So let me make it clear. We all want to preserve home ownership. We 
all want to prevent foreclosure. The underlying bill will help us get 
to that moment which we should have done earlier, and I regret that the 
filibusters prevented us from doing that.
  Now, it is not only home ownership. People are losing their jobs. 
Retailers, automobile dealers, and restaurants are feeling the pinch. 
Small business owners are closing their doors. We need jobs and we need 
consumer confidence. The underlying legislation will allow for job 
growth. That is the No. 1 objective: Create more jobs in America 
because we are losing them today. President Obama made it clear the 
criteria for this bill must be that the investments we make must be 
targeted to new job growth. He does that through targeted tax credits 
and tax cuts, through aid to our local governments to avoid the layoffs 
that each one of our States will confront with State workers. In my 
State of Maryland, Governor O'Malley is having a very difficult time 
with the State budget. He knows we need help in order to preserve State 
employment and to preserve the type of services that the State must 
provide for essential services during a recession.
  This legislation provides direct investment for projects that are 
ready to go, that will create jobs, and that are the right investments 
for America's future. I don't disagree with my colleagues as we look at 
each individual request that is made here. There are no earmarks in 
this legislation, but we

[[Page S1484]]

want to make sure there are right investments for America's future, 
whether it is improving education, educational facilities, energy so we 
can become energy independent, broadband so that we can compete in the 
future, health care technology so we can become more efficient in the 
way we deliver health care, our transportation system--I particularly 
mention public transportation which is critically important for our 
communities--or whether it is preserving home ownership. Also, the 
underlying bill must be temporary. We need to get back to balancing the 
budget; we understand that.
  So what does this bill mean for the people of Maryland? Well, our 
State will receive directly $3.1 billion. We will receive $420 million 
for highways, $240 million for transit projects, $27 million for 
drinking water improvements, $96 million to improve wastewater facility 
plants, which is in desperate need in Maryland. The State energy 
program will get $8.5 million; weatherization assistance so that 
homeowners can have their homes much more efficient as it relates to 
the use of energy, $56.5 million. Many of the infrastructures that are 
being improved by this bill are 30, 40, 50 years old. A lot of our 
wastewater treatment facilities are in need of modernization. They are 
ready to go. The money has not been there for it. These are capital 
improvements so we can compete and have a better society. Once it is 
done, we can get back to being more competitive and get back to the 
budget discipline that is so necessary in this Congress.
  Let me talk for a moment about the real estate market. The real 
estate market triggered this recession. We know that. I was listening 
to my colleagues talk about that on the floor and I agree with them. It 
is difficult for people to get into the mood to buy a home. They don't 
know whether we have hit bottom. So I particularly appreciate the 
Finance Committee for bringing out in this legislation the first-time 
homeowners tax credits, legislation that I introduced last Congress. It 
was included in the bill we passed in the last Congress, but it was a 
noninterest-bearing loan of $7,500. The Finance Committee has now 
changed that to a credit, which I think will be much more effective. 
First-time home buyers now know that if they get into the home buying 
market, the Federal Government is going to help them with a credit. 
That is what it should be, and I know there will be some additional 
efforts made to strengthen that amendment.
  In regards to small business, I said earlier small businesses are the 
heart of America. It is where our economic strength is. The American 
dream is not only owning a home; the American dream is also owning a 
small business, being your own boss. Unfortunately, too many small 
businesses today have on their front door ``going out of business.'' We 
have to do more to protect small businesses. At the end of the day, 
when we pull out of this recession, we need to have small businesses in 
place because they are the economic engine of America. Madam President, 
99.7 percent of the businesses in Maryland are small businesses and 80 
percent of all new job growth is created by small businesses.
  We had in the Small Business Committee a roundtable where we talked 
to small businesses in our State, in our country. It is interesting 
that a year ago, one out of every seven small business owners used 
their personal credit cards in order to get credit for their business. 
We understand that. Today that is 50 percent. It is the only place they 
can get credit. It is the most expensive and it can be pulled at any 
time. We have to help small business owners with their credit problems. 
We have to make sure the government procurement actually gets down to 
the small business owner. In this underlying legislation, the SBA 
loans, the 504 program, the 7(a) loans, there are major provisions to 
make it less expensive for small businesses. That is good. I support 
that. There is a microborrowing provision in this legislation for small 
businesses. That is important. That is going to help. But we need to do 
more. We need to do more to help small businesses, minority businesses, 
women-owned businesses, veterans' businesses.


                 Amendment No. 237 to Amendment No. 98

  For that reason, I ask unanimous consent to set aside the pending 
amendment so that I may offer amendment No. 237.
  The PRESIDING OFFICER. Is there objection to setting aside the 
pending amendment?
  Without objection, it is so ordered.
  The clerk will report.
  The bill clerk read as follows:

       The Senator from Maryland [Mr. Cardin], for himself and Ms. 
     Landrieu and Ms. Snowe, proposes an amendment numbered 237 to 
     amendment No. 98.

  Mr. CARDIN. Madam President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To amend certain provisions of the Small Business Investment 
       Act of 1958, related to the surety bond guarantee program)

       On page 105, between lines 3 and 4, insert the following:

     SEC. 505. SURETY BONDS.

       (a) Maximum Bond Amount.--Section 411(a)(1) of the Small 
     Business Investment Act of 1958 (15 U.S.C. 694b(a)(1)) is 
     amended--
       (1) by inserting ``(A)'' after ``(1)'';
       (2) by striking ``$2,000,000'' and inserting 
     ``$5,000,000''; and
       (3) by adding at the end the following:
       ``(B) The Administrator may guarantee a surety under 
     subparagraph (A) for a total work order or contract amount 
     that does not exceed $10,000,000, if a contracting officer of 
     a Federal agency certifies that such a guarantee is 
     necessary.''.
       (b) Size Standards.--Section 410 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 694a) is amended by adding 
     at the end the following:
       ``(9) Notwithstanding any other provision of law or any 
     rule, regulation, or order of the Administration, for 
     purposes of sections 410, 411, and 412 the term `small 
     business concern' means a business concern that meets the 
     size standard for the primary industry in which such business 
     concern, and the affiliates of such business concern, is 
     engaged, as determined by the Administrator in accordance 
     with the North American Industry Classification System.''.
       (c) Sunset.--The amendments made by this section shall 
     remain in effect until September 30, 2010.

  Mr. CARDIN. Madam President, let me very briefly explain this 
amendment.
  This amendment improves the SBA program for surety bonds for small 
businesses. In the underlying bill the committee has brought out an 
additional $15 million that will allow SBA to help with the surety 
program.
  The challenge today is that for small business to get a government 
contract of over $100,000, they have to put up a surety bond. It is 
very difficult for them to get that surety bond. The SBA has a program 
to help them obtain a surety bond. The challenge is that the current 
limit is $2 million. For any contract over $2 million the program 
cannot be used. Well, with the underlying bill and the types of 
procurement we are anticipating, there are going to be larger 
contracts. What this amendment does is increase the $2 million to $5 
million.
  Secondly, in order to qualify for a small business, your annual 
revenue must be below the Federal guidelines or State guidelines if it 
is a State contract.
  What the underlying amendment does is use the Federal guidelines, 
which is $31 million, for construction contractor businesses and $13 
million for specific trades as the standard for being eligible for the 
Federal SBA program on your surety bond. I am very pleased that this 
amendment has the support of the leadership of the Small Business 
Committee, Senators Landrieu and Snowe. It is bipartisan. The CBO 
scored this at no cost, so it will not cost money. I urge my colleagues 
to support it.
  Lastly, Senator Snowe will be offering an amendment to make sure 
Federal procurement laws and regulations apply to all the contracts 
awarded under this legislation and that SBA regularly reports on these 
contracts to Congress. I am a cosponsor of that amendment; I strongly 
support that amendment. I hope we will also consider that amendment.
  In conclusion, I am optimistic about our future, but we have a lot of 
work to do. We need to pass this legislation quickly and give President 
Obama the tools he needs so we can see that our economy is rebuilt and 
grown to its full capacity. I am confident we will reach that day by 
acting on this legislation, and it will be sooner rather than later.
  I thank my colleague and yield the floor.

[[Page S1485]]

  Ms. SNOWE. Mr. President, I rise today to speak in support of this 
amendment I have cosponsored with Senators Cardin and Landrieu. This 
amendment would reinvigorate the Small Business Administration's, SBA, 
Surety Bond Guarantee Program, to ensure that small businesses are able 
to secure the surety bonds they need to compete for contracts, grow, 
and hire more employees. In our current economic recession, small 
businesses are finding it even more difficult to secure the credit 
lines necessary to get bonds in the private sector.
  As a result, the SBA surety bond program is more important than ever. 
Surety bonds are critical to small companies' survival and 
competitiveness. Our bipartisan amendment would increase, on a 
temporary basis, the limits on the SBA Surety Bond Guarantee Program 
from $2 million to $5 million for contracts awarded under the SBA 
program. This amendment would also raise the current small business 
size standards for state and local contracts in order to update and 
modernize the surety bond guarantee eligibility.
  I encourage my colleagues to support this crucial small business 
surety amendment. This amendment was written after consulting with 
small business owners across the country, the SBA, and surety bonding 
companies on how best to revitalize this critical program. Without 
these changes, fewer small businesses will have the opportunity to 
participate on the plethora of construction and infrastructure projects 
that are likely to occur across the nation because of this stimulus 
package. Without these bonds many small businesses will be unable to 
compete for contracts and government work. For new companies, obtaining 
a surety bond will become a barrier to entry and competition they are 
unable to overcome.
  I urge my colleagues to support this amendment.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.


    Amendments Nos. 168, 197, and 238, En Bloc, to Amendment No. 98

  Mr. GRASSLEY. Madam President, on behalf of our leadership, I ask 
unanimous consent to temporarily set aside the pending amendment, and I 
call up three amendments and ask that they be reported by number. They 
are DeMint, No. 168; Thune, No. 197; and Thune, No. 238.
  I further ask that Senator Thune be the next speaker on the 
Republican side and that Senator Johanns follow him, with a Democrat in 
between.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The clerk will report.
  The bill clerk read as follows:

       The Senator from Iowa [Mr. Grassley], for Mr. DeMint, 
     proposes an amendment numbered 168.
       The Senator from Iowa [Mr. Grassley], for Mr. Thune, 
     proposes amendments numbered 197 and 238.

  The amendments are as follows:


                           AMENDMENT NO. 168

                (Purpose: In the nature of a substitute)

       In lieu of the matter proposed to be inserted, insert the 
     following:

     SECTION 1. REDUCTION IN CORPORATE MARGINAL INCOME TAX RATES.

       (a) General Rule.--Paragraph (1) of section 11(b) of the 
     Internal Revenue Code of 1986 is amended--
       (1) by inserting ``and'' at the end of subparagraph (A),
       (2) by striking ``but does not exceed $75,000,'' in 
     subparagraph (B) and inserting a period,
       (3) by striking subparagraphs (C) and (D), and
       (4) by striking the last 2 sentences.
       (b) Personal Service Corporations.--Paragraph (2) of 
     section 11(b) of such Code is amended by striking ``35 
     percent'' and inserting ``25 percent''.
       (c) Conforming Amendments.--Paragraphs (1) and (2) of 
     section 1445(e) of such Code are each amended by striking 
     ``35 percent'' and inserting ``25 percent''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 2. REDUCTION IN INDIVIDUAL MARGINAL INCOME TAX RATES.

       (a) In General.--Paragraph (2) of section 1(i) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(2) Reduction in rates after 2008.--In the case of 
     taxable years beginning after 2008, the tables under 
     subsections (a), (b), (c), (d), and (e) shall be applied--
       ``(A) by substituting `25%' for `28%' each place it 
     appears, and
       ``(B) without regard to--
       ``(i) the rates on taxable income in excess of the amount 
     with respect to which the 25 percent rate (determined after 
     the application of subparagraph (A)) applies, and
       ``(ii) any limitation on the amount of taxable income to 
     which the 25 percent rate (determined after the application 
     of subparagraph (A)) applies.''.
       (b) Repeal of EGTRRA Sunset.--Title IX of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 (relating to 
     sunset of provisions of such Act) shall not apply to section 
     101 of such Act (relating to reduction in income tax rates 
     for individuals).
       (c) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 3. REPEAL OF ALTERNATIVE MINIMUM TAX.

       (a) In General.--Section 55(a) of the Internal Revenue Code 
     of 1986 (relating to alternative minimum tax imposed) is 
     amended by adding at the end the following new flush 
     sentence:
     ``No tax shall be imposed by this section for any taxable 
     year beginning after December 31, 2008, and the tentative 
     minimum tax for any such taxable year of any taxpayer which 
     is a corporation shall be zero for purposes of this title.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 4. PERMANENT REDUCTIONS IN INDIVIDUAL CAPITAL GAINS AND 
                   DIVIDENDS TAX RATES.

       Section 303 of the Jobs and Growth Tax Relief 
     Reconciliation Act of 2003 (relating to sunset of title) is 
     repealed.

     SEC. 5. ESTATE TAX RELIEF AND REFORM AFTER 2009.

       (a) Restoration of Unified Credit Against Gift Tax.--
     Paragraph (1) of section 2505(a) of the Internal Revenue Code 
     of 1986 (relating to general rule for unified credit against 
     gift tax), after the application of subsection (f), is 
     amended by striking ``(determined as if the applicable 
     exclusion amount were $1,000,000)''.
       (b) Exclusion Equivalent of Unified Credit Equal to 
     $5,000,000.--Subsection (c) of section 2010 of the Internal 
     Revenue Code of 1986 (relating to unified credit against 
     estate tax) is amended to read as follows:
       ``(c) Applicable Credit Amount.--
       ``(1) In general.--For purposes of this section, the 
     applicable credit amount is the amount of the tentative tax 
     which would be determined under section 2001(c) if the amount 
     with respect to which such tentative tax is to be computed 
     were equal to the applicable exclusion amount.
       ``(2) Applicable exclusion amount.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable exclusion amount is $5,000,000.
       ``(B) Inflation adjustment.--In the case of any decedent 
     dying in a calendar year after 2009, the $5,000,000 amount in 
     subparagraph (A) shall be increased by an amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting 
     `calendar year 2008' for `calendar year 1992' in subparagraph 
     (B) thereof.
     If any amount as adjusted under the preceding sentence is not 
     a multiple of $10,000, such amount shall be rounded to the 
     nearest multiple of $10,000.''.
       (c) Flat Estate and Gift Tax Rates.--
       (1) In general.--Subsection (c) of section 2001 of the 
     Internal Revenue Code of 1986 (relating to imposition and 
     rate of tax) is amended to read as follows:
       ``(c) Tentative Tax.--The tentative tax is 15 percent of 
     the amount with respect to which the tentative tax is to be 
     computed.''.
       (2) Conforming amendments.--
       (A) Paragraphs (1) and (2) of section 2102(b) of such Code 
     are amended to read as follows:
       ``(1) In general.--A credit in an amount that would be 
     determined under section 2010 as the applicable credit amount 
     if the applicable exclusion amount were $60,000 shall be 
     allowed against the tax imposed by section 2101.
       ``(2) Residents of possessions of the united states.--In 
     the case of a decedent who is considered to be a `nonresident 
     not a citizen of the United States' under section 2209, the 
     credit allowed under this subsection shall not be less than 
     the proportion of the amount that would be determined under 
     section 2010 as the applicable credit amount if the 
     applicable exclusion amount were $175,000 which the value of 
     that part of the decedent's gross estate which at the time of 
     the decedent's death is situated in the United States bears 
     to the value of the decedent's entire gross estate, wherever 
     situated.''.
       (B) Section 2502(a) of such Code (relating to computation 
     of tax), after the application of subsection (f), is amended 
     by adding at the end the following flush sentence:
     ``In computing the tentative tax under section 2001(c) for 
     purposes of this subsection, `the last day of the calendar 
     year in which the gift was made' shall be substituted for 
     `the date of the decedent's death' each place it appears in 
     such section.''.
       (d) Modifications of Estate and Gift Taxes to Reflect 
     Differences in Unified Credit Resulting From Different Tax 
     Rates.--
       (1) Estate tax.--
       (A) In general.--Section 2001(b)(2) of the Internal Revenue 
     Code of 1986 (relating to computation of tax) is amended by 
     striking ``if the provisions of subsection (c) (as in effect 
     at the decedent's death)'' and inserting ``if the 
     modifications described in subsection (g)''.

[[Page S1486]]

       (B) Modifications.--Section 2001 of such Code is amended by 
     adding at the end the following new subsection:
       ``(g) Modifications to Gift Tax Payable to Reflect 
     Different Tax Rates.--For purposes of applying subsection 
     (b)(2) with respect to 1 or more gifts, the rates of tax 
     under subsection (c) in effect at the decedent's death shall, 
     in lieu of the rates of tax in effect at the time of such 
     gifts, be used both to compute--
       ``(1) the tax imposed by chapter 12 with respect to such 
     gifts, and
       ``(2) the credit allowed against such tax under section 
     2505, including in computing--
       ``(A) the applicable credit amount under section 
     2505(a)(1), and
       ``(B) the sum of the amounts allowed as a credit for all 
     preceding periods under section 2505(a)(2).
     For purposes of paragraph (2)(A), the applicable credit 
     amount for any calendar year before 1998 is the amount which 
     would be determined under section 2010(c) if the applicable 
     exclusion amount were the dollar amount under section 
     6018(a)(1) for such year.''.
       (2) Gift tax.--Section 2505(a) of such Code (relating to 
     unified credit against gift tax) is amended by adding at the 
     end the following new flush sentence:
     ``For purposes of applying paragraph (2) for any calendar 
     year, the rates of tax in effect under section 2502(a)(2) for 
     such calendar year shall, in lieu of the rates of tax in 
     effect for preceding calendar periods, be used in determining 
     the amounts allowable as a credit under this section for all 
     preceding calendar periods.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2009.
       (f) Additional Modifications to Estate Tax.--
       (1) In general.--The following provisions of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001, and the 
     amendments made by such provisions, are hereby repealed:
       (A) Subtitles A and E of title V.
       (B) Subsection (d), and so much of subsection (f)(3) as 
     relates to subsection (d), of section 511.
       (C) Paragraph (2) of subsection (b), and paragraph (2) of 
     subsection (e), of section 521.
     The Internal Revenue Code of 1986 shall be applied as if such 
     provisions and amendments had never been enacted.
       (2) Sunset not to apply to title v of egtrra.--Section 901 
     of the Economic Growth and Tax Relief Reconciliation Act of 
     2001 shall not apply to title V of such Act.
       (3) Repeal of deadwood.--
       (A) Sections 2011, 2057, and 2604 of the Internal Revenue 
     Code of 1986 are hereby repealed.
       (B) The table of sections for part II of subchapter A of 
     chapter 11 of such Code is amended by striking the item 
     relating to section 2011.
       (C) The table of sections for part IV of subchapter A of 
     chapter 11 of such Code is amended by striking the item 
     relating to section 2057.
       (D) The table of sections for subchapter A of chapter 13 of 
     such Code is amended by striking the item relating to section 
     2604.

     SEC. 6. INCREASE IN CHILD TAX CREDIT MADE PERMANENT.

       Title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 (relating to sunset of provisions 
     of such Act) shall not apply to sections 201 (relating to 
     modifications to child tax credit) and 203 (relating to 
     refunds disregarded in the administration of federal programs 
     and federally assisted programs) of such Act.

     SEC. 7. BASE BROADENING.

       (a) In General.--Section 63 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     subsection:
       ``(h) Restriction of Itemized Deductions After 2008.--In 
     the case of any taxable year beginning after 2008, no 
     itemized deductions shall be allowed under this chapter other 
     than--
       ``(1) the deduction for qualified residence interest (as 
     defined in section 163(h)(3)), and
       ``(2) the deduction allowed under section 170.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.


                           amendment no. 197

  (The amendment is printed in the Record of Tuesday, February 3, 2009, 
under ``Text of Amendments.'')


                           amendment no. 238

 (Purpose: To ensure that the $1 trillion spending bill is not used to 
   expand the scope of the Federal Government by adding new spending 
                               programs)

       At the appropriate place, insert the following:
       In General.--Notwithstanding any other provision of this 
     Act, for each amount in each account as appropriated or 
     otherwise authorized to be made available in this Act, the 
     Office of Management and Budget shall make determination 
     about whether an authorization for that specific program had 
     been enacted prior to February 1, 2009, and if no such 
     authorization existed by that date, then the Office of 
     Management and Budget shall reduce to zero the amount 
     appropriated or otherwise made available for each program in 
     each account where no authorization existed.

  Mr. GRASSLEY. Madam President, our Nation's fiscal outlook is very 
grim. The Congressional Budget Office projects the Federal budget 
deficit will exceed $1 trillion. Despite this enormous deficit, 
President Obama is urging Congress to enact a massive stimulus plan 
that would add another $1 trillion in Government debt over the next 10 
years. The President and his advisers insist that we must spend this 
money as quickly as possible in order to save our economy.
  In the grassroots of my State, I don't think people argue with things 
that are in this bill that are truly stimulus, but I am getting outrage 
from my constituents about the large part of this bill that is strictly 
big-time spending.
  In normal times, such fiscal excess, stimulus or otherwise, would be 
widely criticized and promptly rejected. But we all know these are not 
normal times. Our economy faces the worst recession since the Great 
Depression. Such comparisons may be overblown but everybody is 
understandably concerned about the present state of our economy. 
Congress needs to take action--and we are doing that--to address 
declining growth and rising unemployment. But we must not let our 
desire for a quick fix undermine our ability to address the real 
challenges we face.
  A sustainable fiscal policy depends on a growing economy. A sound 
economy depends on a sound fiscal policy. Unfortunately, there doesn't 
seem to be any consensus on what constitutes sound policy. But I think 
we can all agree that Government doesn't create wealth; Government only 
expends wealth. So we have to be about the business of having an 
environment that creates wealth.
  There are two opposing views on how to help the economy. Some people 
say consumption is the key to economic growth. When people go shopping, 
the economy is good, so we need to spend more, they say. Other people 
say investment is the key. When businesses invest, the economy is good, 
so they say we need to save more.
  Some economists try to reconcile these opposing views by suggesting 
the correct route depends upon the circumstances. When workers are 
fully employed and factories are fully utilized, they say we need to 
save more and increase supply. But when workers are unemployed and 
factories are idled, they say we need to spend more and increase 
demand. While this explanation is appealing, it doesn't withstand 
careful scrutiny.
  We are told that in order to stimulate the economy, all the 
Government has to do is put more money into the hands of consumers and 
they will spend it back into prosperity. The problem with this approach 
is that the only way the Government can put money into somebody else's 
hands is by taking it from somebody else's pockets--either in the form 
of taxes or borrowing. Now, this is a zero-sum game in which one 
person's loss is another's gain. Some economists try to obscure this 
fact by introducing a concept known as the marginal propensity to 
consume. In my judgment, that is just a fancy way of saying some people 
spend more of their money than others.
  According to this concept, low-income people are more likely to spend 
an extra dollar than higher income people; thus, taking from the rich 
and giving it to the poor will stimulate consumer demand and boost the 
overall economy. It is the Government kind of playing the role of Robin 
Hood.
  This concept is flawed because it ignores the very important role of 
people saving. Money that is saved does not disappear; it flows back 
into the economy in the form of business loans or consumer credit. 
Saving is just another form of spending--specifically spending on 
capital goods, such as factories and equipment, or consumer goods such 
as cars and houses.
  Of course, the critics say this is not always true. During a 
recession, banks are less willing to lend and businesses are less 
willing to borrow. Thus, some of the money previously available in the 
economy is no longer being used, like right now with the credit crunch. 
It has been stuffed, in some cases, under the proverbial mattress, 
whether that is in anybody's home or in a bank vault. Thus, advocates 
of fiscal stimulus claim the Government can borrow and spend during a 
recession without crowding out other private sector spending. This is 
true only in a very narrow sense that increasing money

[[Page S1487]]

supply allows the Government to borrow and spend without reducing the 
amount of money available to the rest of our population. That is 
monetary policy masquerading as fiscal policy. Moreover, when the 
Government borrows money, whether it is new money or old money, what 
the Government is really borrowing is the resources it acquires; thus, 
every dollar the Government spends has an ``opportunity cost'' in terms 
of the potential uses of those resources.
  Much of the confusion over this point comes from the failure to 
recognize the nature of money in our economy. Economists often talk 
about the multiplier effect in order to explain how each dollar of 
Government spending can result in more than a dollar of economic 
activity. But the multiplier effect is simply a way of illustrating the 
fact that if I give you a dollar, you will spend part of it and save 
part of it. The portion you spend goes to someone, who spends a portion 
and saves a portion, and so on and so on; thus, $1 effectively 
multiplies into many dollars.
  Contrary to what some people might have you believe, the multiplier 
effect applies to every dollar, not just the dollar spent by the 
Government. According to Federal Reserve data over the past 50 years, 
the ratio between gross domestic product and our money supply--defined 
as currency plus bank reserves--has ranged from a ratio of 10 to 1, to 
20 to 1. In other words, every dollar in our economy supports between 
$10 and $20 of economic activity.
  During a recession, there are fewer workers producing fewer goods and 
services. That is why this is called a recession. Because the level of 
output is lower, the level of spending is lower as well. That means the 
available dollars are being used less. Economists often refer to this 
as a decline in the velocity of money. The money no longer being used 
reflects the goods and services no longer being produced. With fewer 
goods and services available to buy, Government efforts to borrow and 
spend will increase the money supply. Instead of the Federal Reserve 
increasing bank reserves to boost private lending, the Government will 
increase borrowing to boost private spending. But this is really 
monetary policy disguised as fiscal policy.
  The success or failure of this policy will depend upon how the 
additional money is used. Unfortunately, when some advocates of 
Government stimulus talk about priming the pump, they give the 
impression that we can grow our economy by simply spending money and it 
doesn't matter in any way how you spend that money.
  Consider the following comments by the great economist John Maynard 
Keynes, whom I don't agree with very much. He said this:

       If the Treasury were to fill old bottles with banknotes, 
     bury them at suitable depths in disused coal mines . . . and 
     leave it to private enterprise . . . to dig the notes up 
     again . . . there need be no more unemployment. . . .

  People are probably laughing at that. Nearly everyone would recognize 
the ill effects of printing up $1 trillion and dropping it from 
helicopters. But what if the Government hired 10 million Americans to 
dig holes and fill those holes back up and paid them each $100,000? 
Would this prime the pump and get our economy moving again? The answer 
should be obvious: It would be a complete waste of resources.
  The 19th century economist Fredrick Bastiat once observed:

       There is only one difference between a bad economist and a 
     good one: the bad economist confines himself to the visible 
     effect; the good economist takes into account both the effect 
     that can be seen and those effects that must be foreseen.

  When the Government borrows money for some activity, that is what is 
seen. But what is not seen is what could have been created had those 
workers and resources been used in some different way. The benefit of a 
Government stimulus plan must then be weighted against cost. So far, 
there has been no comprehensive cost-benefit analysis of this proposed 
stimulus bill.
  I may have talked about a lot of economic philosophy, but it is 
pertinent to what we are doing on the Senate floor this week, the 
stimulus bill. There is a glaring omission given in recent comments 
that have been made by President Obama. So I want my colleagues to take 
into consideration what my President says.
  Shortly before his inauguration, President Obama gave a series of 
speeches and interviews. I will read a couple sentences from them. 
According to the January 16 Washington Post:

       Obama repeated his assurance that there is ``near 
     unanimity'' among economists that government spending will 
     help restore jobs in the short term, adding that some 
     estimates of necessary stimulus now reach $1.3 trillion.

  The President-elect said he believes that direct Government spending 
provides the most ``bang for the buck'' and that his advisers have 
worked to design tax cuts that would be most likely to spur consumer 
spending.
  They quote President Obama:

       ``The theory behind it is I set the tone,'' Obama said. 
     ``If the tone I set is that we bring as much intellectual 
     firepower to a problem, that people act respectfully toward 
     each other, that disagreements are fully aired, and that we 
     make decisions based on facts and evidence as opposed to 
     ideology, that people will adapt to that culture and we'll be 
     able to move together effectively as a team.''
  Going on to quote President Obama:

       I have a pretty good track record at doing that.

  I was quoting from the Washington Post, but also quoting within that 
article what the President said.
  Now I want to go to a January 10 radio address by then-President-
elect Obama, now our President:

       Our first job is to put people back to work and get our 
     economy working again. This is an extraordinary challenge, 
     which is why I've taken the extraordinary step of working--
     even before I take office--with my economic team and leaders 
     of both parties on an American recovery and reinvestment plan 
     that will call for major investments to revive our economy, 
     create jobs, and lay a solid foundation for future growth.
       I asked my nominee for chair of the Council of Economic 
     Advisers, Dr. Christina Romer, and the Vice President-elect's 
     chief economic adviser, Jared Bernstein, to conduct a 
     rigorous analysis of this plan and come up with projections 
     of how many jobs it will create--and what kind of jobs they 
     will be. . . .
       The report confirms that our plan will likely save or 
     create 3 to 4 million jobs. . . .
       The jobs we create will be in businesses large and small 
     across a wide range of industries. And they'll be the kind of 
     jobs that don't just put people to work in the short term, 
     but position our economy to lead the world in the long term.

  That is a quote from the January 10 radio address by then-President-
elect but now our President.
  These comments from President Obama are noteworthy for several 
reasons. First, he is our President, and we ought to respect his views, 
not always agreeing with them but consider them. First, he suggests a 
level, in these quotes I just gave, of unanimity among economists, and 
that unanimity does not exist. Second, he suggests his administration 
will make decisions based on the facts instead of ideology. Third, he 
suggests his plan will create jobs that are more than just temporary.
  In that regard, I note that the Congressional Budget Office released 
an analysis of the House stimulus bill. According to the Congressional 
Budget Office, the House stimulus bill will create between 3 million 
and 8 million new jobs over the next 3 years, depending on whether the 
multiplier assumption is low--that will be 3 million--or high--that 
will be 8 million.
  Given the cost of the House bill, these figures imply a very 
surprising and a very troubling result. The CBO estimate shows it will 
cost between $90,000 and $250,000 per job created. These numbers should 
be contrasted to those under the CBO baseline which show the gross 
domestic product per worker is about $100,000.
  In other words, the jobs being created by the House bill could cost 
as much as 2\1/2\ times more than the jobs that would be created 
without the stimulus bill. There has been a lot of talk about ``bang 
for the buck,'' particularly during this debate. But there doesn't seem 
to be any interest in actually making sure it happens. In other words, 
that it actually happens, we get bang for the buck. Before we spend 
another $1 trillion, we ought to make sure we are getting our money's 
worth.
  It should also be noted that the Congressional Budget Office's 
analysis only covers the years 2009 through 2011, but if you assume the 
ratio of employment to Government spending remains the same throughout 
the 10-year projection period that we always have in our bills, there 
will be only a few thousand new jobs. Moreover, if you adopt the 
standard assumption that increasing the national debt by $1 trillion 
will

[[Page S1488]]

crowd out private sector investment, the net result will be fewer jobs 
because of this stimulus bill.
  I have written a letter to the Congressional Budget Office Director 
requesting an analysis of both the House and Senate stimulus bills. 
This analysis will cover the full 10-year period, consistent with the 
January baseline.
  The Director has indicated to me that this is a very complicated 
process, and their analysis may not be completed until next week. I 
strongly encourage my colleagues to have the CBO analysis before we 
have a final vote on this bill. The Senate must have the opportunity to 
carefully review the Congressional Budget Office analysis.
  Let me repeat what I said at the beginning. Congress needs to take 
action to address declining growth and rising unemployment. At the 
grassroots of America, there may not be consensus on that, but there is 
an overwhelming feeling that Congress can do things that will help the 
economy. But for sure, before we spend another $1 trillion, Congress 
must take time to look before we leap.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Hawaii.


                           Amendment No. 140

  Mr. INOUYE. Madam President, I rise in opposition to the Feingold-
McCain amendment. Yesterday, I received a message from the Obama 
administration that concludes that the economy faces its most serious 
crisis since the Great Depression, and I think that is something to 
which we all agree.
  It goes further and says the economic recovery package now being 
considered by this body is an essential step in putting the economy 
back on the path of growth.
  Our President, President Obama, has asked the Congress to send a bill 
to him before the February recess, and I believe we have that 
responsibility to act quickly and responsibly. Therefore, I believe now 
is not the time to debate controversial legislation that is not 
relevant to economic recovery.
  There are no earmarks contained in the American Recovery and 
Reinvestment Act that we are now considering before the Senate. I 
maintain that now is not the time to debate Senate floor procedures for 
the consideration of appropriations bills.
  However, I oppose this amendment on its merits. This amendment is an 
attempt to undermine Congress's power of the purse. Under this 
amendment, congressionally directed spending items that are not 
specifically authorized could be stripped from legislation.
  As Senators are well aware, Congress is often called upon to approve 
spending that is not yet authorized. In a January 15, 2009, report the 
Congressional Budget Office concluded that in recent years, the total 
amount of unauthorized appropriations averaged between $160 billion and 
$170 billion per year.

  In fact, for the current fiscal year, there are over $718 billion 
worth of authorizations that expire before September 30, 2009. This 
includes funding for housing programs, energy programs, environmental 
programs, transportation programs, the Low-Income Home Energy 
Assistance Program, homeland security programs, public health programs, 
veterans programs, and on and on.
  This amendment could tie the Senate in knots. Conference reports 
could be amended and returned to the other body, and once amended the 
House could further amend the bill. The regular order for producing 
spending bills is the best prescription for producing responsible 
spending bills, not creating new rules that will make the process so 
cumbersome that we will not be able to complete our work.
  This legislation would also hand over to the President the authority 
to determine what spending should be considered by the Senate. Under 
this amendment, if the President requests funding for an unauthorized 
program, the funding would not be subject to a point of order. The 
Senate should not give such power to any President.
  Nor is it clear to me why it would be all right for authorizers to 
authorize earmarks, for the President to earmark funds, but Members who 
are not authorizers could not earmark funds in spending bills.
  I remind the Senate that the last highway authorization bill 
contained over 6,474 earmarks, and the last water authorization bill 
contained over 600 earmarks.
  I believe Congress took significant action during the 110th Congress 
to add unprecedented levels of transparency and accountability to the 
process of earmarking funds for specific projects.
  Under the rules in 2007, each bill must be accompanied by a list 
identifying each earmark that it includes and which Member requested 
it. Those lists are made available online before the bill is ever voted 
on.
  In the Senate, each Senator is required to send the committee a 
letter providing the name and location of the intended recipient, the 
purpose of the earmark, and a letter certifying that neither the 
Senator nor the Senator's immediate family has a financial interest in 
the item requested. This certification is available on the Internet for 
at least 48 hours prior to a floor vote on the bill.
  We also significantly reduce the level of funding for earmarks. In 
the 2008 bill, the total dollar amount of earmarks for nonproject-based 
accounts was reduced by 43 percent. In the fiscal year 2009 
appropriations bill, we will further reduce earmarks.
  In our continuing effort to provide unprecedented transparency to the 
process, the chairman of the House Appropriations Committee and I 
announced new reforms to begin in the 2010 bills.
  To offer more opportunity for public scrutiny of Member requests, 
Members will be required to post information on their earmark requests 
on their Web sites at the time the request is made, explaining the 
purpose of the earmark and why it is a valuable use of taxpayers' 
funds.
  To increase public scrutiny of committee decisions, earmark 
disclosure tables will be made publicly available the same day as the 
Senate subcommittee or the full committee takes action.
  We are committed to keeping earmark funding levels below 1 percent of 
discretionary spending in subsequent years.
  The new requirements included in this amendment will hamstring the 
Senate from fulfilling its responsibility. The amendment says no funds 
can be included in appropriations bills unless already included in an 
authorization bill that has passed the Senate during this session.
  I remind my colleagues the Senate has not passed a foreign affairs 
authorization bill in many years. All these measures aren't authorized. 
In the past 7 years, we haven't enacted an intelligence authorization 
bill. We don't have one for last year or the year before. It has been 7 
years since the Senate passed an authorization bill for Customs. Should 
we stop funding the construction of ports of entry on our borders? The 
Environment and Public Works Committee does not report legislation 
through the Senate to authorize specific Federal buildings. Does that 
mean we should stop repairing and improving the security or 
constructing Federal buildings that house over 1 million Federal 
employees? The Agricultural Research Service has never been authorized. 
Yet it has existed for 56 years. Should we stop funding agricultural 
research? The National Oceanic and Atmospheric Administration has never 
been authorized--NOAA has never been authorized--so does that mean we 
should stop funding for hurricane forecasting and severe weather 
forecasting, tsunami forecasting? Congress has not authorized juvenile 
justice funding for the last 2 years. Does that mean we stop funding to 
keep kids out of gangs and in school?

  Under this amendment, the Senate would be required to defer action on 
all items which it feels are important when the companion authorization 
bill is tied up. Are we going to allow the filibuster of an 
authorization bill to stop Congress from exercising its 
constitutionally mandated power of the purse? This amendment also 
applies to items which have been approved by the House. Any such item 
could be stricken if the authorization bill has not been completed.
  Last year, we faced a situation on the Defense Subcommittee, which I 
am privileged to chair, in which we completed action on the 
Appropriations Act before we completed action on the Authorization Act. 
We were told by the President, the Department of Defense, the 
commanders on the field in Iraq

[[Page S1489]]

and Afghanistan: You cannot stall this. So we passed the appropriations 
bill before the authorizing bill. Yet under this amendment, all the 
House items could be stricken by the Senate.
  The Constitution gives the power of the purse to the Congress. It is 
our job to use that power responsibly. We have put procedures in place 
to make the process transparent and to hold Members accountable for 
their spending decisions. Rule XVI already establishes rules against 
funding and including unauthorized spending in general appropriations 
bills. Rule XLIV already establishes rules concerning congressionally 
directed spending items.
  I can't speak for all my colleagues, but I can say this much. I was 
not elected by my constituents in Hawaii to be a rubberstamp. They 
expected me to use my initiative and to address my colleagues and tell 
them about the urgent requests we need. I could go on and on and tell 
you about many of the projects that have been part of the law today 
because we took congressional initiative. Therefore, I urge a ``no'' 
vote on the Feingold-McCain amendment.
  I yield the floor.
  The PRESIDING OFFICER (Mrs. Hagan). The Senator from South Dakota is 
recognized.


                           amendment no. 238

  Mr. THUNE. Madam President, I wish to speak to an amendment that I 
introduced and filed and was made pending at the desk earlier today. 
What that amendment will do is eliminate new Government programs that 
are created by the proposed $1 trillion stimulus legislation that is 
before the Senate today.
  Earlier yesterday, I presented some information about the size and 
scope of this legislation and tried to put in very visual terms the 
immense amount of money we are talking about when you start looking at 
$1 trillion. It is $900 billion, but when you add interest on top of 
this--$340 billion, $350 billion in interest--you have $1.2 trillion in 
new spending included in the stimulus bill. I say that because I think 
it is important to point out that is not the end; it is, frankly, the 
beginning.
  We know for a fact the Omnibus appropriations bill--the sort of 
catchall appropriations bill we didn't complete last year--is going to 
be coming before the Congress, before the House first and then before 
the Senate. For the first time ever, that is going to exceed $1 
trillion. So we have $1 trillion in the catchall appropriations bill. 
We expect at least a request from the administration for additional 
TARP authority--emergency funding to provide stabilization to the 
financial markets--to the tune of several hundred billion dollars. We 
don't know exactly what it will be, but we know it will be in the 
multiples with respect to hundreds of billions of dollars. We also have 
a supplemental appropriations bill that will be coming shortly after 
that to fund the ongoing conflicts in Iraq and Afghanistan.
  My point simply is this: This is trillions of dollars of spending. 
This is a spending spree that is unprecedented even in this city, which 
is known for spending lots of money on lots of programs. What this 
amendment attempts to do is to put a little bit of restraint on some of 
that spending in the stimulus bill. Granted, many of us believe there 
are some things we should be doing, some steps we should be taking that 
would help the economy to recover, that would stimulate the economy and 
create jobs. Regrettably, the stimulus bill that is in front of us goes 
way beyond that.
  The President's top economic adviser suggested when this whole debate 
began that whatever we do in terms of stimulus, it should be temporary, 
it should be targeted, and it should be timely. Much of what is 
included in this bill is none of the above. In fact, it is slow and 
unfocused and unending. So I am attempting, with this amendment, to say 
that new programs that are created in this bill have to have been 
authorized by February 1 of this year. In other words, earlier this 
week. So if there is not an authorization for this new program--and we 
would ask OMB to make that determination--that spending would be 
knocked out of the bill, essentially.
  The whole purpose of the amendment is, again, to say that if we are 
going to do something that is meaningful in terms of stimulating the 
economy, it should be temporary and it should be targeted and it should 
be focused. Much of the spending that is in this bill is anything but 
that. History has shown, time and again, when you put new programs on 
the books, you almost always take a long time to get those programs off 
the ground. In fact, the Congressional Budget Office has examined this 
issue and they offered this insight:

       Brand new programs pose additional challenges. Developing 
     procedures and criteria, issuing the necessary regulations, 
     and reviewing plans and proposals would make distributing 
     money quickly even more difficult--as can be seen, for 
     example, in the lack of any disbursements to date under loan 
     programs established for automakers last summer to invest in 
     producing energy-efficient vehicles. Throughout the Federal 
     Government, spending for new programs has frequently been 
     slower than expected and rarely been faster.

  Again, that is the Congressional Budget Office. Given the current 
state of the economy, we simply can't afford to enact costly new 
programs that have little hope of making any real meaningful impact 
now, when the American people need it the most.
  There may be programs in this proposed legislation that are worthy of 
support--I am not arguing that point--but surely not under the guise of 
economic stimulus. There are new programs that are created that will 
add to the size of this, and many of us have reacted to the size of it. 
As I have said already, we know for a fact there is going to be a lot 
of additional spending coming down the pike that we are going to be 
asked to consider. But adding to that $1 trillion for something that 
arguably does not create economic stimulus, does not create jobs, seems 
to me to be the wrong direction in which to head.
  My amendment would simply prevent any new funding under the economic 
stimulus plan from going toward new programs that were not authorized 
before February 1 of this year--2009. As I said before, the amendment 
calls on the Office of Management and Budget to determine if a program 
was authorized before February of 2009. If the program fails to meet 
that standard, the program will not receive funding from the economic 
stimulus proposal.
  Now, I would argue that this is a very commonsense proposal that 
protects the taxpayer and ensures funds are spent in a timely and 
effective manner. That isn't to say--and I will repeat myself--as I 
said earlier, that many of these programs are not worthwhile and, 
frankly, we ought to consider them. But we ought to do it under the 
regular order and procedures that we have in the Senate. We ought to 
have committee action, we ought to have hearings, we ought to have the 
necessary oversight, and we ought to be able to put these things on the 
floor where they can be debated. We have a process for doing that.
  There are lots of programs that are included in the stimulus bill 
which, I would argue, don't meet that criteria. They aren't stimulus 
because they are not targeted, they are not timely, and they are not 
temporary. They are, in fact, creating new programs which, as I said 
earlier, the Congressional Budget Office has told us sometimes take a 
very long time to roll out. I think any of us can speak from experience 
on that point; that whenever we create any sort of a new Federal 
program, we have agencies that have to interpret it, regulations have 
to be promulgated, in many cases we are setting up new bureaucracies 
and people have to be hired and it makes no sense to me whatsoever for 
us to, in the context of an economic stimulus bill, start talking about 
new programs.
  I would also say the whole purpose of this exercise, in my opinion at 
least, is job creation. It is to get the economy back on track and 
recovering and creating jobs. We have been losing jobs. The economy is 
hemorrhaging and a lot of people are hurting throughout the country. 
What they don't need is more spending on Government programs in 
Washington, DC. What we ought to be doing, on the other hand, is 
getting more money into the hands of the American people so they can 
spend it--more incentives for small businesses to begin to invest and 
create jobs because that is what they do best. In fact, two-thirds to 
three-fourths of all the jobs created in our economy are created by 
small businesses.

  Now, $900 billion, the principal amount--and with interest it is over 
$1

[[Page S1490]]

trillion in new spending--is proposed in the stimulus legislation. If 
you divide that by the number of jobs that are proposed to be created--
somewhere around 3 million--that comes out to $300,000 per job. The 
average annual wage in my State of South Dakota is under $30,000 a 
year. It is very difficult to explain to a constituent of mine in South 
Dakota how the Federal Government proposes to spend $300,000 of their 
tax dollars to create one job at a time when we are handing the largest 
burden of debt to the next generation in American history.
  Many of these jobs that are proposed are Government jobs. The 
Government can create Government jobs, and many of the spending 
programs in this bill do put money into Federal agencies which create 
Government jobs but at an enormous cost. I will use the example of the 
State Department, where it is over $1 million--I think $1.3 million, 
something to that effect--per job created. That doesn't seem to be a 
very good use of taxpayer dollars, and it doesn't get us the bang for 
the buck everybody has been coming to the floor and talking about.
  As I said, it is a straightforward amendment. All it simply says is: 
No new Government programs created in the stimulus. If that program was 
not authorized by February 1 of this year, then any funding for it in 
the economic stimulus proposal would be denied. It is a commonsense 
proposal that does protect the taxpayers, ensures the funds will be 
spent in a timely and effective way, and that we focus on keeping jobs 
out there in the economy, putting people back to work. It is not 
spending on new Government programs in Washington DC which, however 
well intended, needs to go through a normal regular order process where 
Members of the Senate have an opportunity to evaluate those at the 
committee level and go through all the appropriate oversight that we 
normally include when it comes to create a new Government program.

  Frankly, I do not think creating new Government programs, in the 
first place, is the way to do this, but at least this amendment brings 
some semblance of sanity to a bill which, as I said, is sort of a 
shotgun approach. It throws money at all kinds of different programs in 
hopes it will do something to stimulate the economy--knowing full well, 
I believe, that many of these are not going to be stimulative but on 
the other hand are creating new programs that people have wanted for a 
long time but have never had the opportunity.
  That is not what this is about. This economic stimulus debate ought 
to be focused on creating jobs and getting the economy on the pathway 
to recovery.
  That is the amendment. I encourage my colleagues to support it. I 
think it is very straightforward, very commonsensical, and, hopefully, 
it will meet with the approval of the majority of the Members of the 
Senate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. JOHANNS. Madam President, let me start out and indicate I am 
aware of the fact that Senator Baucus has deferred so I can speak now. 
I appreciate that professional courtesy.
  I rise today to address the decision that is before us and to maybe 
share some insight that I hope is relevant. I believe it is relevant to 
the legislation we are debating, the stimulus package. Maybe I can 
offer some insight that is a bit unique from the perspective of a 
former mayor and a former Governor.
  The so-called stimulus would send a financial windfall to cities and 
States. The hope is that somehow that will filter into the economy. I 
will readily acknowledge that I have been on the receiving end of those 
kinds of windfalls--nothing this large--as both a mayor and as the 
Governor of Nebraska. In my home State, fiscal responsibility is not 
just a worthy goal that we aspire to achieve. It is demanded of our 
elected officials by Nebraska taxpayers. So when the Federal Government 
sent an infusion of money for education or social programs, whatever it 
was, the first place I looked as Governor or as a mayor was to the 
bottom line in my budget. I examined how much the State was budgeting 
for these programs, and I examined whether the State should save those 
State dollars.
  Today's Governors, mayors, and school boards have many budget options 
also. They might allow this Federal money to pass on through. In the 
alternative, they might decide taxpayers are best served by allowing 
Federal funds to replace the State or local dollars. This would 
maintain existing funding levels and allow them to tuck away their 
State dollars in anticipation of tougher times ahead. Perhaps they 
would choose to pay down debt.
  Keep in mind, choosing to turn on the Federal funding faucet means 
facing the challenges that will occur when the funding faucet is later 
turned off. Just imagine the tremendous difficulty of that. It would 
cause yet a new crisis.
  If Governors choose to hold on to their cash, or some of them, it is 
true it may provide them some security as they work through very 
difficult budget issues. But to be very candid about this--and, again, 
I was in this position--it would do absolutely nothing to stimulate the 
economy. The money simply would never reach the economy.
  The first tranche of the TARP funds does illustrate the point I am 
trying to make today. The Federal Government sent hundreds of billions 
of dollars to banks to get credit flowing. The expectation was that 
this money would translate very quickly into car loans, student loans 
and operating loans for businesses. What happened? Lending has 
declined--for a variety of reasons, many legitimate, and some banks 
that have received Government money have actually reduced lending more 
sharply than banks that chose not to take the money.
  If we truly want to maximize our chances of boosting the economy, 
then we must minimize the filters through which we send that money. In 
my career I have had an opportunity to manage enormous bureaucracies. I 
have watched as they devoured resources in the name of delivering 
resources to others. It seemed that no matter how forcefully and 
sternly I demanded effective operations, those filters oftentimes 
became very narrow funnels.
  Tax relief, I would suggest, puts dollars directly in the hands of 
taxpayers and businesses. That is not necessarily a guarantee it will 
flow to the economy, but it is very clearly the most direct route to 
the people who are most in need.
  I must also admit that I am deeply troubled by the rush to approve 
the largest spending bill in history with no plan to pay for it. There 
really is, literally, no plan--no plan at all. There is not even an 
attempt at a plan. It seems these days in Washington something can be 
deemed an emergency and suddenly all fiscal restraint is checked at the 
door and everything in the bill becomes a piece of solving the 
emergency. I cannot imagine how we justify passing the cost of this to 
our children. It is as if some believe we can use a credit card and 
history will somehow forgive the debt.
  Just last year when the deficit reached a half trillion dollars it 
sent a shockwave across this country. Yet the spending machine just 
rolled on. For this year, that number doubled to more than $1 trillion, 
and there was a collective outcry to rein in spending. Now we are faced 
with legislation that would double the deficit in the blink of an eye. 
How many times can it be doubled before the debt becomes insurmountable 
and, tragically, the dollar becomes worthless?
  A group of Nebraskans came to see me recently. They brought me a 
beautiful picture. I have it on display in my office. It was drawn by a 
2-year-old girl. We talked about the stimulus package, and I certainly 
reached the conclusion that they were advocating that somehow, if we 
passed this, it would deliver a benefit to this child. But I wondered 
out loud how our young people would feel about being asked to pay the 
$1.2 trillion pricetag. I wondered how they would manage a national 
debt that now grows at a rate of $3 billion a day. I contemplated how 
this little 2-year-old's quality of life would be so different from 
what we enjoy. If we do not take responsibility for spending, her 
quality of life will never match ours. She might never dream of going 
to college or owning a home, and here is why. As tough as the economy 
is today--and I do not debate anyone about how tough it is--there is a 
day of reckoning, when the burden of debt is crushing. If investors 
finally lose confidence in our ability to manage our debt, who then 
bails us out? It

[[Page S1491]]

is even more remarkable to me that we are contemplating the largest 
spending bill in history at a time when every one of us is aware that 
the current level of spending is not sustainable. It is not an abstract 
problem. It is real and it is growing with the passage of time. We 
cannot keep passing the buck with a promise to make tough decisions in 
the year to come. It does begin with the decisions we make today.
  Like every single Member of this body, I am proud of the State I 
represent. I want Nebraskans to know every day that I support them. But 
that does not mean I support this bill. Some might be disappointed when 
I vote against this spending bill, but I believe Nebraskans understand 
what it means to take responsibility. They expect that of me today, 
just as they expected it when I served as their Governor.
  The Nebraska State Constitution requires a balanced budget. That is 
not unusual. But the constitution of the State also basically bans any 
borrowing of money. So when the economy collapsed post-9/11, we made 
difficult decisions while other States issued debt. I not only had to 
balance the budget, I had to do it without borrowing a dime. It was not 
easy, but we did it and the tough choices were worthwhile. When I came 
to the Cabinet, I did not have to turn to the Lieutenant Governor and 
tell him that I had left a pile of debt behind. The State has 
steadfastly adhered to the principle of fiscal responsibility, and 
because of that it is better positioned to face the challenges of 
today.
  I want to wrap up with this: I understand the significance of trying 
to do all we can to boost this economy. Of course I want people to have 
jobs. I want them to be able to pay the bills. But this is not a 
stimulus plan; it is a spending plan. It will not create the promised 
jobs, and it will not activate our economy. What it will do is place a 
punishing debt on our children and grandchildren.
  I could not vote for this bill and still claim that I represent the 
principles and values of the State I come from, the State of Nebraska. 
I do want to say I will meet with my colleagues, any colleagues, across 
the aisle, to roll up our sleeves to set a fiscally responsible course, 
not only today but for the future. While we cannot solve all of our 
financial problems or balance the budget overnight--and no one is 
expecting that we can--we must begin this important work today. I want 
to be a partner in that.
  I yield the floor.
  The PRESIDING OFFICER. The Republican leader is recognized.
  Mr. McCONNELL. Madam President, I just had the opportunity to hear 
the initial--what we used to call the maiden speech around here--of the 
new Senator from Nebraska. I want to congratulate him on an 
extraordinarily insightful presentation that melded his own personal 
history in government with his thoughts about this massive bill that we 
will be considering this week, and his feelings about it, which he 
expressed to his constituents today. On behalf of all of us, I welcome 
the Senator to the Senate. I would say he just made a great start, and 
I know he is going to have an incredibly effective career representing 
the people of Nebraska and America.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Madam President, I first want to congratulate the Senator 
from Nebraska. I have known him as Agriculture Secretary. He served the 
people of his State as Governor and also as mayor. I compliment Senator 
Johanns for his service to his State and to his country. I very much 
look forward to working with him in the Senate. Again, I extend my 
congratulations.


                 Amendment No. 200 to Amendment No. 98

  On behalf of Senator Dorgan I ask unanimous consent the pending 
amendments be temporarily laid aside so we can call up Senator Dorgan's 
amendment No. 200 on runaway plants.
  The PRESIDING OFFICER. Without objection, it is so ordered. If the 
Senator will suspend, the clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Montana [Mr. Baucus], for Mr. Dorgan, 
     proposes an amendment numbered 200.

  Mr. BAUCUS. I ask unanimous consent the reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To amend the Internal Revenue Code of 1986 to provide for the 
 taxation of income of controlled foreign corporations attributable to 
                           imported property)

       On page 570, between lines 8 and 9, insert the following:

     SEC. ___. TAXATION OF INCOME OF CONTROLLED FOREIGN 
                   CORPORATIONS ATTRIBUTABLE TO IMPORTED PROPERTY.

       (a) General Rule.--Subsection (a) of section 954 (defining 
     foreign base company income) is amended by striking the 
     period at the end of paragraph (5) and inserting ``, and'', 
     by redesignating paragraph (5) as paragraph (4), and by 
     adding at the end the following new paragraph:
       ``(5) imported property income for the taxable year 
     (determined under subsection (j) and reduced as provided in 
     subsection (b)(5)).''.
       (b) Definition of Imported Property Income.--Section 954 is 
     amended by adding at the end the following new subsection:
       ``(j) Imported Property Income.--
       ``(1) In general.--For purposes of subsection (a)(5), the 
     term `imported property income' means income (whether in the 
     form of profits, commissions, fees, or otherwise) derived in 
     connection with--
       ``(A) manufacturing, producing, growing, or extracting 
     imported property;
       ``(B) the sale, exchange, or other disposition of imported 
     property; or
       ``(C) the lease, rental, or licensing of imported property.

     Such term shall not include any foreign oil and gas 
     extraction income (within the meaning of section 907(c)) or 
     any foreign oil related income (within the meaning of section 
     907(c)).
       ``(2) Imported property.--For purposes of this subsection--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the term `imported property' means property which 
     is imported into the United States by the controlled foreign 
     corporation or a related person.
       ``(B) Imported property includes certain property imported 
     by unrelated persons.--The term `imported property' includes 
     any property imported into the United States by an unrelated 
     person if, when such property was sold to the unrelated 
     person by the controlled foreign corporation (or a related 
     person), it was reasonable to expect that--
       ``(i) such property would be imported into the United 
     States; or
       ``(ii) such property would be used as a component in other 
     property which would be imported into the United States.
       ``(C) Exception for property subsequently exported.--The 
     term `imported property' does not include any property which 
     is imported into the United States and which--
       ``(i) before substantial use in the United States, is sold, 
     leased, or rented by the controlled foreign corporation or a 
     related person for direct use, consumption, or disposition 
     outside the United States; or
       ``(ii) is used by the controlled foreign corporation or a 
     related person as a component in other property which is so 
     sold, leased, or rented.
       ``(D) Exception for certain agricultural commodities.--The 
     term `imported property' does not include any agricultural 
     commodity which is not grown in the United States in 
     commercially marketable quantities.
       ``(3) Definitions and special rules.--
       ``(A) Import.--For purposes of this subsection, the term 
     `import' means entering, or withdrawal from warehouse, for 
     consumption or use. Such term includes any grant of the right 
     to use intangible property (as defined in section 
     936(h)(3)(B)) in the United States.
       ``(B) United states.--For purposes of this subsection, the 
     term `United States' includes the Commonwealth of Puerto 
     Rico, the Virgin Islands of the United States, Guam, American 
     Samoa, and the Commonwealth of the Northern Mariana Islands.
       ``(C) Unrelated person.--For purposes of this subsection, 
     the term `unrelated person' means any person who is not a 
     related person with respect to the controlled foreign 
     corporation.
       ``(D) Coordination with foreign base company sales 
     income.--For purposes of this section, the term `foreign base 
     company sales income' shall not include any imported property 
     income.''.
       (c) Separate Application of Limitations on Foreign Tax 
     Credit for Imported Property Income.--
       (1) In general.--Paragraph (1) of section 904(d) (relating 
     to separate application of section with respect to certain 
     categories of income) is amended by striking ``and'' at the 
     end of subparagraph (A), by redesignating subparagraph (B) as 
     subparagraph (C), and by inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) imported property income, and''.
       (2) Imported property income defined.--Paragraph (2) of 
     section 904(d) is amended by redesignating subparagraphs (I), 
     (J), and (K) as subparagraphs (J), (K), and (L), 
     respectively, and by inserting after subparagraph (H) the 
     following new subparagraph:
       ``(I) Imported property income.--The term `imported 
     property income' means any income received or accrued by any 
     person which is of a kind which would be imported

[[Page S1492]]

     property income (as defined in section 954(j)).''.
       (3) Conforming amendment.--Clause (ii) of section 
     904(d)(2)(A) is amended by inserting ``or imported property 
     income'' after ``passive category income''.
       (d) Technical Amendments.--
       (1) Clause (iii) of section 952(c)(1)(B) (relating to 
     certain prior year deficits may be taken into account) is 
     amended--
       (A) by redesignating subclauses (II), (III), (IV), and (V) 
     as subclauses (III), (IV), (V), and (VI), and
       (B) by inserting after subclause (I) the following new 
     subclause:

       ``(II) imported property income,''.

       (2) The last sentence of paragraph (4) of section 954(b) 
     (relating to exception for certain income subject to high 
     foreign taxes) is amended by striking ``subsection (a)(5)'' 
     and inserting ``subsection (a)(4)''.
       (3) Paragraph (5) of section 954(b) (relating to deductions 
     to be taken into account) is amended by striking ``and the 
     foreign base company oil related income'' and inserting ``the 
     foreign base company oil related income, and the imported 
     property income''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after the date of the enactment of this Act, and to 
     taxable years of United States shareholders within which or 
     with which such taxable years of such foreign corporations 
     end.

  Mr. BAUCUS. Madam President, for the benefit of Senators, I would 
like to take a moment to talk about where we are in consideration of 
the bill. Today is the third day of Senate consideration. Yesterday was 
quite productive. We had a full debate and very little downtime, which 
I especially appreciate.
  The Senate considered nine amendments and had rollcall votes on four. 
One was adopted by voice vote. The Senate adopted a Republican 
amendment by Senator Coburn to strike a tax amendment related to film 
production.
  And with an overwhelming bipartisan 71-to-26 vote, the Senate adopted 
a Mikulski-Brownback amendment to allow a deduction for interest on the 
purchase of motor vehicles.
  By voice vote, the Senate adopted a Harkin amendment on which Senator 
Specter played a very important role, who worked very hard, Senator 
Specter did, on the Harkin amendment, to provide additional funding for 
the National Institutes of Health.
  So where are we now? Pending are a Murray amendment to strengthen 
infrastructure investments--these are all pending--a Vitter amendment 
to strike several spending items; an Isakson-Lieberman amendment to 
provide a tax credit for home purchases; a Feingold-McCain amendment to 
provide greater accountability of congressional earmarks; a Cardin 
small business bonds amendment; a DeMint amendment making a series of 
tax cuts in lieu of the pending substitute; a Thune amendment in the 
nature of a substitute; a Thune amendment on new programs in the bill; 
and a Dorgan amendment on runaway plants.
  I might add that the Democratic caucus is conducting an issues 
conference today, but the floor is open for business. We expect a 
number of Republican amendments and also Democratic amendments. We hope 
to have several votes on amendments this afternoon and evening after 
the Democratic issues conference concludes, perhaps starting about 5:30 
today, although I cannot say that that is going to be an exact time. 
That is for the leaders to determine.
  For the information of Senators, let me say I expect that we hope to 
have as many as 12 amendments pending today, and we hope to stack votes 
on these at the end of the afternoon and into the evening. In addition 
to the Republican amendments that we expect to be offered, we also 
expect Senator Bingaman, who has expressed an interest in offering an 
amendment, as well as I mentioned Senator Dorgan's runaway plants. 
Senator Wyden also spoke to me about his amendment on bonuses that he 
intends to offer with Senator Snowe.
  Once again, I urge Senators, let the managers know of their 
intentions to offer amendments. We want to give Senators as much notice 
as possible. I reemphasize notice is efficient. It helps us get our 
amendments passed here.
  I thank all Senators for their cooperation.


                           Amendment No. 168

  I wish to say a word or two on the DeMint amendment. I remind 
Senators that the DeMint amendment strikes the whole underlying bill 
and replaces that language with his amendment, which reduces the 
corporate rate to 25 percent, and it makes permanent the 2001 and 2003 
tax cuts, including capital gains. That is a big item, as we all know.
  It further repeals, permanently repeals the alternative minimum tax 
provisions in the Code today. It changes the estate tax treatments by 
creating an exception up to $5 million per person. I do not know what 
he does with the rates, but it is an estate tax reduction below what 
estate taxes are today.
  I remind all Senators that next year, in the year 2010, the Federal 
estate tax is zero. If Congress does nothing, it reverts to quite a 
higher level. The DeMint amendment takes the current 2009 level and 
lowers it even further. I do not know this, but I suspect it also is 
permanent.
  The DeMint amendment further makes the child tax permanent. It 
repeals all itemized deductions currently in the Code which itemizers 
often take, except for the mortgage interest deduction and the 
charitable deduction; otherwise, all other deductions, if you itemize, 
are repealed; for example, State and local taxes, everything else in 
the bill before us.
  What is the effect of that? There are several effects. First, we are 
trying to begin to address our health care system, and the DeMint 
amendment strikes all the health information technology provisions in 
the bill. We are trying to get health information technology up and 
running. I think it is a bad idea to strike health information 
technology. We have to get that started if we are going to begin to 
lower health care costs in this country.
  It strikes the Medicaid provisions through aid to the States. It does 
not take a rocket scientist to know what effect that would have on the 
States. The States are in a recession. I think it was the Government 
Accountability Office that estimated about $230 billion is being cut by 
States because they are in recession, and that basically comes out of 
Medicaid and other low-income programs.
  The DeMint amendment says, oh, sorry, States, you do not get any 
assistance, which means all of those people getting cut are not going 
to have health care.
  It strikes the changes to TANF. That is the program we put in place 
years ago to reform the welfare program. It is a great program. It 
works very well. It gets people off of welfare in a very solid way.
  It also strikes provisions that extend unemployment insurance to 
people who have lost their jobs. I cannot believe it would do something 
like that, but that is what the DeMint amendment does.
  It also strikes the COBRA provisions. That is very important. I can't 
believe that is what he wants to do. In current law, when somebody 
works for a company and is laid off for reasons not of his or her own 
making, they are laid off and there are more than 20 people in that 
firm, that person is entitled to keep health insurance offered by that 
firm if that firm does offer health insurance, I think it is for 18 
months.
  But that person who is laid off can keep that health insurance only 
if the person laid off pays 102 percent of premiums, that is, the 
person laid off has to pay for all of that health insurance, plus 2 
percent administrative costs.
  Now, clearly not many people who are laid off, not working, can 
afford to pay 102 percent of the health insurance premiums, especially 
when the premiums these days are going up at such a rapid rate.
  We, in the underlying bill, say a person laid off in that situation 
gets a 65-percent subsidy so that person can keep health insurance for 
18 months. I think that is the right thing to do, given the current 
circumstances. But, no, the DeMint amendment says you have to pay 102 
percent, because we are not going to help you in these dire times.
  I also say, these are permanent tax cuts in the DeMint amendment. The 
1-year deficit effects of this amendment are staggering. They are ugly, 
because basically this is a huge, big tax cut amendment is what it is.
  Last night, Senator Coburn spoke eloquently about growing deficits in 
the future, how fast they are growing. It begins to maybe put our 
currency in danger. Other countries might be not as interested in 
holding dollars, might not be interested in buying Treasuries.

[[Page S1493]]

Countries such as China come to mind, other countries come to mind.
  Obviously the DeMint amendment would make the concerns of Senator 
Coburn balloon. I mean, if Senator Coburn is concerned about the 
deficits today, Senator Coburn, I am sure, would be dramatically 
concerned about the effects of this amendment, which would balloon the 
deficits to an even greater amount.
  So I think the underlying bill is important, it is crucial. The 
estimates are, between either passing the underlying amendments or not 
passing them, a difference of about 3 to 4 million jobs, 3 to 4 million 
jobs in this country. We could choose not to pass this underlying bill. 
That would mean no economic stimulus recovery package. That would also 
mean about 3 to 4 million further jobs lost. If we pass this 
legislation, it would begin to create and bring some jobs back into 
this economy.
  Let's face it, banks are not lending for lots of reasons today. But 
one reason is because they are having a hard time finding creditworthy 
borrowers. It is hard to get creditworthy borrowers, when the borrower 
is having a hard time finding demand, because people are not buying the 
borrower's products.
  There are many parts to the overall solution. But one of them is 
helping create some demand, and this underlying bill does create 
demand. If, on the other hand, we do not pass the bill and pass these 
big tax cuts, it further balloons the deficit to a staggering amount. 
It is not going to have nearly the stimulative effect that the 
proponents might say. It will not.
  Our goal here, in representing our constituents in our State, is to 
take this kind of bad situation we find ourselves in--we kind of 
inherited this. This is where we are, these are the cards that were 
played, that is the hand we have right now. So let's do the best we can 
with what we have got. My judgment is, and I think it is the judgment 
of most Members of this body, this economic stimulus package may not be 
perfect, but it is pretty good. It will help create some jobs. It is 
certainly better than the alternative, which is nothing. Let's get on 
with it and keep improving upon it as we proceed.
  I strongly urge my colleagues not to adopt the DeMint amendment, 
which is a full repeal of the program and replaces it with a massive 
increase in debt.
  I yield the floor and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. MARTINEZ. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mrs. Gillibrand). Without objection, it is so 
ordered.


                 Amendment No. 159 to Amendment No. 98

(Purpose: To reduce home foreclosures, compensate servicers who modify 
mortgages, and remove the legal constraints that inhibit modification, 
                        and for other purposes)

  Mr. MARTINEZ. Madam President, I ask unanimous consent to call up 
amendment No. 159.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Florida [Mr. Martinez] proposes an 
     amendment numbered 159 to amendment No. 98.

  Mr. MARTINEZ. Madam President, I ask unanimous consent that reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in the Record of Tuesday, February 3, 2009, 
under ``Text of Amendments.'')
  Mr. MARTINEZ. Madam President, Members on both sides of the aisle 
agree that any stimulus we pass must be timely, targeted, and 
temporary. We need to put our economy back on track. The key to putting 
the economy back on track is that the spending we do through this 
stimulus be targeted, temporary, and timely.
  Each of these principles is important and they each are loaded with 
meaning. It needs to be timely because it needs to be directed as soon 
as possible. As the President as early as this morning said, it is 
essential we get it out there.
  It also has to be targeted because it cannot just go to all the 
wonderful things upon which the Congress might spend money. It has to 
be targeted to that which the economy needs in order to create jobs at 
this moment in time.
  It must be also temporary because we well know at some point this 
economy is going to recover, and as it recovers, it would not be a good 
idea for Government spending to be out of control and be the beast that 
feeds inflation. We do not want to come out of this economic crisis 
only to be creating the next one, which would be an inflationary 
problem for our economy.
  Americans want and deserve solutions that will create jobs and 
support the American worker. I have joined a number of my colleagues in 
offering an alternative with the right incentives to foster job 
creation.
  While creating jobs is essential if we want to achieve economic 
recovery, it will not fix the problem with that alone. Our Nation is 
still in the midst of the worst housing slump in decades, and many 
American families face the frightening reality of foreclosure.
  To date, Congress and the White House and the private sector have put 
forth a number of programs to help struggling homeowners, but we have 
yet to see significant results from any of these various programs that 
have been out there. This is because at the core of the problem are 
privately securitized mortgages, which were originated without a 
guarantee from the government-sponsored enterprises. These are the 
privately securitized mortgages that are not Fannie Mae, Freddie Mac or 
GSE sponsored. These mortgages account for only 15 percent of all 
outstanding mortgages, but they represent more than one-half of all the 
foreclosures that are taking place today.
  If left alone, the crisis will only continue to worsen. According to 
one expert, we can expect to see 1.7 million more foreclosures in the 
year of 2009 alone. It is a downward spiral that seems to find no 
bottom.
  Today I am proposing a plan that would provide troubled homeowners 
with options and incentivize participation from the private sector from 
these private securitizers who are out there in the private sector. 
Included in the plan is a loan modification program which will 
encourage mortgage servicers to help stem the tide of foreclosures.
  Currently, there are two primary factors hindering mortgage servicers 
from modifying loans: a lack of proper compensation, and second and 
equally important is the threat of litigation.
  The plan has a two-pronged approach that aims to address these 
concerns by the properly compensating mortgage servicers and removing 
the legal restraints that prevent modifications.
  Under the plan, the Federal Government would temporarily provide a 
monthly incentive fee to servicers who modify privately securitized 
mortgages. It also includes a safe harbor provision that removes the 
legal constraints currently inhibiting modifications. This plan also 
recognizes the integrity of contracts.
  There is always the potential that a relatively small number of 
junior investors could be harmed by the modifications permitted by the 
program. With this in mind, the proposed legislation eliminates the 
need for these junior investors to file suit by creating a small claims 
fund that the Treasury may use to resolve potential disputes. This will 
go a long way in protecting investors acting in good faith for the 
greater good--an incentive that is greatly needed if we want investors 
to be on board in helping to resolve this current crisis.
  The plan has been supported by a number of economists, including 
Columbia Business School Dean Glenn Hubbard and Vice Dean Christopher 
Mayer. According to a Columbia report, the plan could reduce up to 1 
million foreclosures at a cost of about $11 billion--roughly 10 percent 
of the $100 billion required by other plans.
  I have been supportive of similar concepts, including the plan put 
forth by FDIC Chairman Sheila Bair, which is based on the model used to 
modify the loans the FDIC took over from IndyMac. I believe this plan 
is even more taxpayer friendly because future potential losses are 
shouldered by private investors, not the Government.

[[Page S1494]]

  As we continue talking about the stimulus, I urge my colleagues to 
consider the need to address the root cause of this crisis, which is 
the housing market. Americans are struggling, and unless we provide 
them with realistic alternatives to foreclosure, we will fail to fix 
the larger problem at hand.
  A lot of colleagues of mine have expressed support for this plan. I 
encourage Members on both sides of the aisle to please look at this 
plan carefully. Because as a result of what we are doing on stimulus, 
we need to also deal with the housing problem. The housing problem is 
what brought us into this problem. We will not get out of this economic 
mess until we once again resolve the housing problem.
  We need to tackle it in two ways, in my view. We need to tackle it in 
keeping families in their homes, avoiding foreclosure where possible. A 
huge number of today's inventory of unsold homes are homes that have 
been or are coming out of foreclosure. Those homes in and of themselves 
obviously tend to be sold at much lower prices. So it continues to 
drive the market down. It depresses values. It depresses the market.
  The second problem, obviously, is still the old law of economics of 
supply and demand. We have a huge inventory of unsold homes. This 
inventory of unsold homes also impacts price. So I support not only my 
proposal but the proposal my colleague from Georgia, the Senator from 
Georgia, Johnny Isakson, has proposed, which is to incentivize the 
purchase of homes by providing a $15,000 tax credit, over a year or 2 
years, to anyone in America who purchases a home.
  The bottom line is, if we can get the market back again and people 
buying homes again and we draw down that inventory of unsold homes, if 
we slow down or can bring foreclosures to a halt, those two elements, 
working together, will be a greater way in which we can now begin to 
see the housing market stabilize in prices, which will also stabilize 
the foreclosures of the future.
  You see, families who are in trouble today were not the same families 
who were in trouble 2 years ago when this crisis began. Families who 
are in trouble today are people who increasingly find themselves upside 
down on their mortgage because of the continuing decline in home 
values.
  I hope my colleagues will carefully analyze these proposals--not only 
mine, amendment No. 159, but also Senator Isakson's proposal. I think 
these two proposals, hand in hand, will help us to make a difference in 
the current housing crisis. Many other things we can talk about in the 
stimulus, but fixing housing is at the core of what we must do.
  Madam President, I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. McCAIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Madam President, I ask unanimous consent that 
consideration of the present amendment be set aside, and I send to the 
desk an amendment and ask for it to be considered at the appropriate 
sequence of amendments.
  The PRESIDING OFFICER. Is there objection?
  Mr. INOUYE. I object.
  Mr. McCAIN. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. McCAIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


            Amendments Nos. 278 and 279 to Amendment No. 98

  Mr. McCAIN. Madam President, I ask unanimous consent for the 
consideration of that amendment in keeping with the order of 
consideration as decided by the majority leader and the minority 
leader.
  The PRESIDING OFFICER. Is there an objection to setting aside the 
pending amendment and calling up the amendment of the Senator from 
Arizona?
  Without objection, it is so ordered.
  Mr. McCAIN. Madam President, I send another amendment to the desk and 
ask unanimous consent for its consideration.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The clerk will report.
  The bill clerk read as follows:

       The Senator from Arizona [Mr. McCain] proposes amendments 
     numbered 278 and 279.

  The amendments are as follows:


                           amendment no. 278

   (Purpose: To reimplement Gramm-Rudman-Hollings to require deficit 
reduction and spending cuts upon 2 consecutive quarters of positive GDP 
                                growth)

       On page 431, after line 8, insert the following:

     SEC. __. REDUCING SPENDING UPON ECONOMIC GROWTH TO RELIEVE 
                   FUTURE GENERATIONS' DEBT OBLIGATIONS.

       (a) Enforcement.--Section 275 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended by inserting 
     at the end thereof the following:
       ``(d) Reducing Spending Upon Economic Growth to Relieve 
     Future Generations Debt Obligations.--
       ``(1) Sequester.--Section 251 shall be implemented in 
     accordance with this subsection in any fiscal year following 
     a fiscal year in which there are 2 consecutive quarters of 
     economic growth greater than 2% of inflation adjusted GDP.
       ``(2) Amounts provided in the american recovery and 
     reinvestment act of 2009.--Appropriated amounts provided in 
     the American Recovery and Reinvestment Act of 2009 for a 
     fiscal year to which paragraph (1) applies that have not been 
     otherwise obligated are rescinded.
       ``(3) Reductions.--The reduction of sequestered amounts 
     required by paragraph (1) shall be 2% from the baseline for 
     the first year, minus any discretionary spending provided in 
     the American recovery and Reinvestment act of 2009, and each 
     of the 4 fiscal years following the first year in order to 
     balance the Federal budget.
       ``(e) Deficit Reduction Through a Sequester.--
       ``(1) Sequester.--Section 253 shall be implemented in 
     accordance with this subsection.
       ``(2) Maximum deficit amounts.--
       ``(A) In general.--When the President submits the budget 
     for the first fiscal year following a fiscal year in which 
     there are 2 consecutive quarters of economic growth greater 
     than 2% of inflation adjusted GDP, the President shall set 
     and submit maximum deficit amounts for the budget year and 
     each of the following 4 fiscal years. The President shall set 
     each of the maximum deficit amounts in a manner to ensure a 
     gradual and proportional decline that balances the federal 
     budget in not later than 5 fiscal years.
       ``(B) MDA.--The maximum deficit amounts determined pursuant 
     to subparagraph (A) shall be deemed the maximum deficit 
     amounts for purposes of section 601 of the Congressional 
     Budget Act of 1974, as in effect prior to the enactment of 
     Public Law 105-33.
       ``(C) Deficit.--For purposes of this paragraph, the term 
     `deficit' shall have the meaning given such term in Public 
     Law 99-177.''.
       (b) Procedures Reestablished.--Section 275(b) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 is 
     amended to read as follows:
       ``(b) Procedures Reestablished.--Subject to subsection (d), 
     sections 251 and 252 of this Act and any procedure with 
     respect to such sections in this Act shall be effective 
     beginning on the date of enactment of this subsection.''.
       (c) Baseline.--The Congressional Budget Office shall not 
     include any amounts, including discretionary, mandatory, and 
     revenues, provided in this Act in the baseline for fiscal 
     year 2010 and fiscal years thereafter.


                           amendment no. 279

(Purpose: To prohibit the applicability of Buy American requirements in 
        the Act to the utilization of funds provided by the Act)

       On page 429, strike line 6 and all that follows through 
     page 430, line 12, and insert the following:
       Sec. 1604. (a) Inapplicability of Buy American 
     Requirements.--Notwithstanding any other provision of this 
     Act, the utilization of funds appropriated or otherwise made 
     available by this Act shall not be subject to any Buy 
     American requirement in a provision of this Act.
       (b) Buy American Requirement Defined.--In this section, the 
     term ``Buy American requirement'' means a requirement in a 
     provision of this Act that an item may be procured only if 
     the item is grown, processed, reused, or produced in the 
     United States.

  Mr. McCAIN. Madam President, I rise to offer an amendment that would 
strike the protectionist ``Buy American'' provision from the pending 
economic recovery package. While the supporters of this provision state 
that they intend it to save American jobs, it would have exactly the 
opposite effect, causing great harm to the American worker and global 
economy.
  In 1930, as the United States and the world was entering what would 
be

[[Page S1495]]

known to history as the Great Depression, this body considered issues 
similar to those we are discussing on the Senate floor today. Two men--
Mr. Smoot and Mr. Hawley--led the effort to enact protectionist 
legislation in the face of economic crisis. Their bill, the Smoot-
Hawley Tariff Act, raised duties on thousands of imported goods in a 
futile attempt to keep jobs at home. In the face of this legislation, 
1,028 economists issued a statement to President Herbert Hoover. This 
statement, subsequently printed in the New York Times, is as relevant 
today as it was nearly 80 years ago. ``America is now facing the 
problem of unemployment,'' these economists wrote. ``The proponents of 
higher tariffs would claim that an increase in rates will give work to 
the idle. This is not true. We cannot increase employment by 
restricting trade.'' Mr. Smoot, Mr. Hawley, and their colleagues paid 
no heed to this wise admonishment, and the Congress went ahead with 
protectionist legislation. In doing so, they sparked an international 
trade war as countries around the world retaliated, raising their own 
duties and restricting trade, and they helped turn a severe recession 
into the greatest depression in modern history.
  We know the lessons of history, and we cannot fall prey to the failed 
policies of the past. We should not sit idly by while some seek to 
pursue a path of economic isolation, a course that could lead to 
disaster. It didn't work in the 1930s, and it certainly won't work 
today. That is why I so strongly oppose the protectionist ``Buy 
American'' provision in the pending bill and believe we must strike it.
  The Senate version of the stimulus bill goes beyond the stark 
protectionism of its House counterpart in a way that risks serious 
damage to America's economic well-being. The bill currently on the 
Senate floor prohibits the use of funds in this bill for projects 
unless all of the iron, steel, and manufactured goods used in the 
project are produced in the United States. These antitrade measures may 
sound welcome to Americans who are hurting in the midst of our economic 
troubles and faced with the specter .of layoffs. Yet shortsighted 
protectionist measures like ``Buy American'' risk greatly exacerbating 
our current economic woes. Already, one economist at the Peterson 
Institute for International Economics has calculated that the ``Buy 
American'' provisions in this bill will actually cost the United States 
more jobs than it will generate. Some of our largest trading partners, 
including Canada and the European Union, have warned that such a move 
could invite protectionist retaliation, further harming our ability to 
generate jobs and economic growth. And it seems clear that this 
provision violates our obligations under more than one international 
agreement.
  The purpose of this stimulus legislation is to create jobs and 
generate economic growth. I am very concerned about the potential 
impact these ``Buy American'' policies will have on trade relations 
with our partners, an impact that will directly affect the number of 
jobs we are able to create at home. For example, in a few days, 
President Obama will embark on his first trip abroad to Canada. I 
applaud his decision to visit our neighbors to the north, as they are 
one of our closest allies and strongest trading partners. Our two 
nations share an increasingly integrated trade relationship, resulting 
in nearly $1 million of trade and commerce crossing our border every 
minute, a level of trade that sustains approximately 7 million jobs 
here in the United States.
  Should we adopt protectionist legislation, however, President Obama 
is likely to visit our ally with a dubious gift indeed: legislation 
that attempts to choke off Canada's access to the U.S. market. Prime 
Minister Stephen Harper said yesterday that the provisions ``are 
measures that are of concern to all trading partners of the United 
States.'' In a recent letter, Canada's ambassador to the U.S. Michael 
Wilson wrote, ``If Buy American becomes part of the stimulus 
legislation, the United States will lose the moral authority to 
pressure others not to introduce protectionist policies. A rush of 
protectionist actions could create a downward spiral like the world 
experienced in the 1930's.'' He writes further that this provision 
would ``decrease North American competitiveness, thereby killing jobs 
rather than creating them.'' It is beyond my comprehension why we would 
seek to hamper such an important relationship by passing legislation 
with provisions that have been proven counterproductive time and time 
again.
  The reaction of our Canadian friends is just the beginning of what we 
can expect to occur should this provision become law. American trade 
with the European Union currently stands at over $200 billion per year. 
John Bruton, the European Commission's ambassador to Washington, has 
raised serious objections to the ``Buy American'' provisions in a 
letter to Congress and the administration, saying that the provision 
``risks entering into a spiral of protectionist measures around the 
globe that can only hurt our economies further.'' A European Commission 
spokesman noted, ``We are particularly concerned about the signal that 
these measures could send to the world at a time when all countries are 
facing difficulties. Where America leads, many others tend to follow.''

  Should we enact such a provision, it will only be a matter of time 
before we face an array of similar protectionism from other countries--
from ``Buy European'' to ``Buy Japanese'' and more. In fact, in the 
1980s we saw Japanese provisions that attempted to take the kinds of 
steps we are contemplating now, and barred American goods in Japanese 
government procurement. The U.S. Congress responded just as we can 
expect others to do now--by threatening retaliation and considering 
legislation that would restrict Japanese imports.
  We took these steps in order to persuade our Japanese friends to 
abandon these protectionist moves, and in the end we succeeded. The 
United States has spent decades pushing toward a globalized world of 
open trade and investment, governed by rules applicable to all. The 
``Buy American'' provision contained in this legislation would 
undermine this longstanding tenet of American trade policy and would 
violate our international obligations and commitments. Just last 
November in Washington, the U.S. signed a joint declaration with 
members of the G-20 pledging that ``within the next 12 months, we will 
refrain from raising new barriers to investment or to trade in goods 
and services.'' Yet here we are, barely 2 months later, contemplating 
whether or not to go back on a commitment to some of our closest allies 
and trading partners, potentially damaging our credibility to uphold 
future agreements. Canadian Prime Minister Harper pointed out the irony 
here when he noted that ``we all agreed that we had to have a global 
response to recession, which would include stimulus packages in all 
major countries and the avoidance of protectionism, and certainly not 
protectionism in a stimulus package.''
  In addition, it appears that the ``Buy American'' provision would 
violate our obligations under the WTO Agreement on Government 
Procurement and, in fact, reports indicate that the European Union is 
already considering a legal WTO complaint--and the procurement chapter 
of the North American Free Trade Agreement. Such action is not only 
potentially disastrous for our economic interests, it is also a 
terrible way to conduct foreign policy. Pascal Lamy, head of the World 
Trade Organization, said recently, ``I hope the senators will be wise 
enough . . . to make sure the U.S. complies with its international 
obligations.'' Will we?
  In addition to the growing chorus of international opposition, there 
is also. opposition from the very American companies that would 
generate badly needed jobs at home. In a recent Washington Post 
article, Bill Lane, government affairs director for Caterpillar, is 
quoted as saying that ``by embracing Buy American, you are undermining 
our ability to export U.S.-produced products overseas.'' Karan Bhatia, 
GE's senior counsel for international law, said that adoption of the 
``Buy American'' provision would ``be creating an ample basis for 
countries to close their markets to U.S. products.'' Why then should 
this body approve a bill that would potentially devastate the ability 
of American companies to tap into foreign markets and, in turn, 
continue to employ thousands of hardworking Americans? The short answer 
is that

[[Page S1496]]

we should not. President Obama himself spoke out against the Buy 
American provision. ``I think that would be a mistake right now,'' he 
said yesterday. ``That is a potential source of trade wars that we 
can't afford at a time when trade is sinking all across the globe.''
  I hope all senators will support this amendment, which would strike 
the existing ``Buy American'' provision and replace it with a 
limitation on ``Buy American'' clauses in this bill. To adopt 
anticompetitive, protectionist policies is to risk economic disaster, 
and it is the last thing we should consider at a time of economic 
difficulty.
  I urge my colleagues to support this amendment.
  Madam President, I ask unanimous consent that the Record be held open 
for my second statement concerning the other amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Madam President, there are other Senators who are waiting 
to speak and propose amendments, so I will come back at the appropriate 
time to speak at some length on both amendments.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BOND. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                 Amendment No. 161 to Amendment No. 98

  Mr. BOND. Madam President, today I wish to talk about a number of 
concerns I have about the underlying bill as well as some amendments I 
have filed and propose to call up. I have offered the distinguished 
chairman of the Appropriations Committee one amendment I wish to call 
up, and I will check with him before actually calling it up.
  I think it is important to put this in context. Our Nation is in the 
midst of a serious economic crisis. Workers in my home State of 
Missouri and across the Nation are facing job losses, small businesses 
are failing, and families are struggling to pay their bills and put 
food on the table. It is clear we have to act quickly and boldly to 
protect and create jobs and put people back to work immediately. 
However, it is not nearly as important to act quickly as it is to do it 
right. I don't believe this bill is right. Let me tell my colleagues 
why.
  For any economic recovery package to work, there are three critical 
components. First, we must invest in ready-to-go priority 
infrastructure projects. America's decades-long lack of improvement and 
investment in infrastructure--in roads, bridges, river navigation, 
housing, and all types of public improvements--is taking a huge toll on 
our economy. By investing now in shovel-ready projects, we will make 
significant long-term improvements to our aching infrastructure. Good 
roads and highways connect people to communities, attract and sustain 
business, and are necessary to spur economic development in our 
communities. Also, investing in shovel-ready projects will create jobs 
in our communities now. New jobs and putting people back to work is the 
best way to help struggling families now and start turning our economy 
around.
  The second necessary component of any successful recovery package is 
real tax relief for working families and small businesses. Working 
families need real and significant tax relief--more than just a few 
extra dollars in their paycheck. They need to keep more money in their 
pockets and send less to Uncle Sam. Tax relief for working families 
will help folks weather this economic crisis.
  Small businesses are the backbone of our economy, as I hope all of us 
here recognize. Right now, small businesses across the Nation are 
struggling to meet payroll, struggling to pay rent, struggling to keep 
their books in balance. Tax relief for small businesses would give them 
the money they need to keep the workers they have now. Tax relief for 
small businesses would allow them to invest in new equipment. Most 
importantly, tax relief for small businesses would give them the money 
to create new jobs and hire new employees.
  The third and most important component of any economic recovery plan 
is attacking the root cause of the problem. Without help, our economy 
cannot recover from the breakdown in our financial and credit markets.
  Bad debt is weighing down the banking system. Bad debt is creating 
fear and uncertainty about the solvency of our financial system. We 
cannot ignore this problem or wait until later to tackle it head-on.
  Let me be clear. Without addressing the root cause of our economic 
crisis, no economic recovery package, no stimulus bill can succeed. 
Just ask the Japanese, who ``lost'' a decade of economic growth, 
providing money for more spending but without dealing with the bad 
assets that were on the financial books in the country. We cannot just 
throw money at the problem. We already tried that last year, and it 
hasn't worked. It hasn't turned the economy around. There are a number 
of alternatives to fix the root of our economic crisis. It is 
imperative that we select and act on one now.
  One option that makes a lot of sense to me is creating a new Federal 
entity that will take on the toxic assets that are weighing down the 
banks. Acquiring these toxic assets would also address the housing 
crisis by allowing the Government to modify home mortgages that will 
likely default, be able to reduce the payments and allow those people 
in the homes with the bad mortgages to keep them.
  During the savings and loan crisis in the 1980s and 1990s, the 
Government created the Resolution Trust Corporation to dispose of bad 
debt. We know this method can work. It was paid for. I was on the 
Banking Committee. We worked through it. But the RTC was the key 
component in helping our economy recover after almost 800 savings and 
loans failed. The good news is that a good deal of the money--not all 
of it--was brought back as the Federal Government disposed of those 
assets acquired.
  Whether it is through an RTC or another alternative, such as a bad 
bank or guarantee program, or some other combination, addressing the 
root cause of the economic crisis is the key component to economic 
recovery.
  Together, those three components--infrastructure investment, tax 
relief, and attacking the root cause of the crisis--are critical to any 
timely, targeted, and temporary economic recovery package. 
Unfortunately, I must say that the Democratic spending bill before us 
today fails on all three counts.
  I have to say I was very disappointed that after many years where we 
worked together on appropriations matters and tax matters, these 
measures did not go through hearings, did not go through bipartisan 
creation. We had a brief hearing, a brief markup session, and 
essentially the Democratic bill was reported out--without any 
Republican fingerprints on it.
  The bill that has come out stimulates the national debt, stimulates 
the growth of Government, but will do very little to stimulate the 
economy or job creation. First, the Democrats' spending bill 
shortchanges infrastructure. Next, the Democrats' spending bill fails 
to give working families and small businesses real tax relief. Third, 
the Democrats' spending bill fails to address the root cause of the 
economic crisis. The bill fails on all three counts.
  Also, no one can ignore the massive price tag of this bill. The 
Democrats' trillion-dollar spending bill is a huge debt to saddle on 
our children and grandchildren. The cost is too high--especially when 
many economists agree it will do little to create jobs and stimulate 
the economy today, when we really need it.
  In other words, the Democrats' trillion-dollar spending bill won't 
work for what we need it to do. The wasteful spending in this bill is 
running rampant. It seems this is a massive downpayment on the 
Democrats' policy priorities masquerading as a stimulus bill.
  I was glad that we were able to strike the $246 million tax break for 
Hollywood movie producers from the bill yesterday. But I am 
disappointed that even after the outpouring of calls from the American 
people--we certainly heard a lot in our office--45 Democrats still 
voted for that special interest tax break. I think it is insulting to 
struggling families in Missouri and across the Nation that the 
Democrats would try to sneak in an almost $250 million tax break for 
Hollywood movie producers. Calling such a tax break for

[[Page S1497]]

Hollywood movies an energy stimulus is outrageous.
  There are many more examples of this in the trillion-dollar spending 
bill that will have zero stimulative effect on our economy. How about 
the $75 million for smoking cessation or the $34 million to redecorate 
the Department of Commerce? This bill is loaded with many spending 
items that have nothing to do with stimulus or creating jobs. Maybe 
some of these items have merit on their own, but they won't create jobs 
or grow our economy, and they don't belong in an emergency stimulus 
bill.
  The figures I have seen from CBO say less than 10 percent of this 
will be spent in the current year. Most of the spending is going to 
occur in 2011, 2012, and beyond. Only about 6 percent of it is on 
vitally needed infrastructure. We need a bill that meets the goals of 
creating jobs and solving the credit problem and helping American 
families now, not years down the road, if ever.
  It is no surprise, Madam President, that the more Americans learn 
about this bill, the more they oppose it. You can see the results from 
the national polls. A recent Gallup poll shows that support is 
declining. A Rasmussen poll that came out today shows only 37 percent 
of Americans support this massive spending bill. In Missouri, our calls 
are running 9 to 1 against it. I think probably that 1 will even be 
reduced and the opposing figure will be greater as people learn more 
about it. My offices in Washington and in cities across my State have 
received overwhelming phone calls saying stop this trillion-dollar 
spending bill.
  I think it is critical that we pass legislation that will help our 
economy recover, help create jobs, and help people get back to work 
now. But I cannot support this spending bill that fails to stimulate 
the economy or create jobs. I cannot support the bill that will saddle 
our grandchildren with even more debt. I cannot support this spending 
bill that would create a massive growth in Government programs, some of 
which may continue for years.
  A critical ingredient to economic recovery is confidence that there 
be discipline in Government. There must be some confidence that we will 
not go hog-wild on a spending binge that saddles our kids with debt and 
sets off an inflationary cycle.
  We must not repeat the mistakes of the Great Depression by throwing 
up trade barriers. We are living in a global economy, and we are in a 
global economic crisis. This demands more free trade, not less. I am 
heartened that just yesterday President Obama acknowledged the dangers 
of protectionism. I hope my colleagues don't follow the path of Smoot-
Hawley and cause further damage to our economy and jobs. Cutting off 
trade not only threatens our export jobs, but many more jobs in my 
State depend upon exports and depend upon the one or two industries 
that might be affected. Farmers in my State have been absolutely wiped 
out in the past when their exports to Southeast Asia, for example, a 
decade ago were cut off. This retaliation that the European Union and 
others have threatened could cut off the markets for our farmers.
  Finally, the enormity of this spending bill sends the wrong signal 
about creating jobs.
  I hope this body will agree to a complete substitute to get a bill 
that will work and work now. I think there are some improvements that 
can be made in it. I have several of these I intend to offer at the 
appropriate time with several of my distinguished colleagues, including 
the ranking member of the Environment and Public Works Committee. He 
and I, along with Senators Boxer, Baucus, Cochran, Crapo, Bayh, 
Brownback, and Voinovich, will be offering an amendment for better 
roads, bridges, and highways. That amendment would take $5.5 billion 
provided in the new surface transportation investment program and put 
it into the highway and bridge formula, making the total for highways 
and bridges $32.5 billion instead of $27 billion. Every State wins, and 
it is offset. According to the American Association of State Highway 
and Transportation Officials, there are currently 5,148 ready-to-go 
projects, with a total price tag of $64.3 billion.
  In addition, I will introduce, with Senators Baucus, Voinovich, and 
Specter, an amendment that eliminates the $8.7 billion rescission of 
contract authority found in SAFETEA-LU for September 30, 2009. What we 
had to do when we passed SAFETEA was put in a ``gimme'' at the end. 
Unfortunately, that ``gimme'' would cut off money that has already been 
authorized and ready to go to the States to spend on the Nation's 
highways and bridges. If this rescission is not revoked, we would see 
the cancellation of hundreds of major projects and the loss of jobs in 
every State. I think that for a stimulus it is appropriate to undo that 
artificial limit on spending on highways. For Missouri, the Department 
of Transportation estimates that this rescission would cost the State 
$205 million in lost projects and 9,600 jobs. This is not the year to 
be losing those jobs. Our amendment would strike that destructive 
rescission.
  On a totally different subject, I will join Senator Coburn in 
offering an amendment that will address a national health epidemic and 
empower families to make healthy food choices. The amendment is simple. 
It would require the U.S. Department of Agriculture to establish 
guidelines to ensure that Federal dollars are used to purchase food 
that is nutritious and consistent with the food pyramid. These 
guidelines would be developed by the USDA, and they would give all of 
our important health and community advocates the opportunity to give 
the Government their input about how to make the Food Stamp Program a 
healthier program. According to the Centers for Disease Control and 
Prevention, poor nutrition leading to obesity can result in 1 out of 8 
deaths in America today, which is caused by illnesses linked to being 
overweight or obese.
  Another program that I intend to offer, in addition to investing in 
our transportation infrastructure, is investment in early childhood 
facilities. The shortage of these facilities is a chronic problem 
facing prekindergarten programs. I will offer an amendment that takes 
$400 million out of the HUD Neighborhood Stabilization Program to fund 
capital investments for new construction, rehabilitation, and 
retrofitting of early childhood development centers. There is almost 
$150 million in stalled capital projects in five States, which would 
serve 10,000 children. Projections on this survey suggest an immediate 
need that exceeds a billion dollars over the next 2 years and would 
serve 30,000 children and generate at least 4,000 jobs.
  Finally, this is the amendment I am going to call up. It deals with 
low-income housing. Some of the folks who have been hit hardest by the 
economic crisis are needy families. They have been hit doubly hard by 
the reduction in available and affordable housing.
  Today I intend to offer a bipartisan amendment with Senators Murray, 
Dodd, Reed, and Kohl to address this problem by providing $2 billion in 
direct equity grants to States through the low-income housing tax 
credit program.
  Much of these funds would be directed toward tax credit deals that 
have already been approved by State credit agencies and have financing 
in place to proceed into construction, except for a recent equity gap 
created by the credit crisis. In other words, these funds are ready to 
go. They are truly shovel ready, and they deal with a great problem.
  The problem is, this crisis in the financial markets has made it 
impossible for the normal low-income housing credit deals to go 
forward. This money would fill in that gap. In my State of Missouri, 
there are about 703 affordable housing units approved by the Missouri 
Housing Development Commission that have been stalled. They are ready 
to go. For 2009, the States anticipate another 2,000 units would be 
stalled.
  If the equity gap funding is provided, it not only will save these 
units, but also create some 3,000 new jobs.
  It is estimated the low-income housing tax credit will nationally 
build 120,000 homes annually, while supporting 180,000 jobs. These are 
good to go, and when the President talks about shovel-ready projects, 
what better thing to do than to make sure we have affordable housing 
for those who most need it.
  I believe this amendment provides that affordable housing for 
families displaced by home foreclosures.

[[Page S1498]]

  Madam President, I ask unanimous consent that the pending amendment 
be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. Madam President, I call up amendment No. 161.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Missouri [Mr. Bond], for himself, Mr. 
     Dodd, Mr. Kohl, Mrs. Murray, and Mr. Reed, proposes an 
     amendment numbered 161 to amendment No. 98.

  Mr. BOND. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

     (Purpose: To provide $2,000,000,000 from the HOME program for 
       investment in the low income housing tax credit projects)


             GAP FUNDING FOR LOW INCOME TAX CREDIT PROJECT

       On page 253, line 1, strike ``$2,250,000,000'' and insert 
     in lieu thereof ``$250,000,000'', and insert the following 
     account after line 13 on page 257:
       ``For an additional amount for capital investments in low 
     income housing tax credit projects, $2,000,000,000, to remain 
     available until September 30, 2011: Provided, That the funds 
     shall be allocated to States under the HOME program under 
     this Heading shall be made available to State housing finance 
     agencies in an amount totaling $2,000,000,000, subject to any 
     changes made to a State allocation for the benefit of a State 
     by the Secretary of Housing and Urban Development for areas 
     that have suffered from disproportionate job loss and 
     foreclosure: Provided further, That the Secretary, in 
     consultation with the States, shall determine the amount of 
     funds each State shall have available under HOME: Provided 
     further, That the State housing finance agencies (including 
     for purposes throughout this heading any entity that is 
     responsible for distributing low income housing tax credits) 
     or as appropriate as an entity as a gap financier, shall 
     distribute these funds competitively under this heading to 
     housing developers for projects eligible for funding (such 
     terms including those who may have received funding) under 
     the low income housing tax credit program as provided under 
     section 42 of the I.R.C. of 1986, with a review of both the 
     decisionmaking and process for the award by the Secretary of 
     Housing and Urban Development: Provided further, That funds 
     under this heading must be awarded by State housing finance 
     agencies within 120 days of enactment of the Act and 
     obligated by the developer of the low income housing tax 
     credit project within one year of the date of enactment of 
     this Act, shall expend 75 percent of the funds within two 
     years of the date on which the funds become available, and 
     shall expend 100 percent of the funds within 3 years of such 
     date: Provided further, That failure by a developer to expend 
     funds within the parameters required within the previous 
     proviso shall result in a redistribution of these funds by a 
     State housing finance agency or by the Secretary if there is 
     a more deserving project in another jurisdiction: Provided 
     further, That projects awarded tax credits within 3 years 
     prior to the date of enactment of this Act shall be eligible 
     for funding under this heading: Provided further, That, as 
     part of the review, the Secretary shall ensure equitable 
     distribution of funds and an appropriate balance in 
     addressing the needs of urban and rural communities with a 
     special priority on areas that have suffered from excessive 
     job loss and foreclosures: Provided further, That State 
     housing finance agencies shall give priority to projects that 
     require an additional share of Federal funds in order to 
     complete an overall funding package, and to projects that are 
     expected to be completed within 3 years of enactment: 
     Provided further, That any assistance provided to an eligible 
     low income housing tax credit project under this heading 
     shall be made in the same manner and be subject to the same 
     limitations (including rent, income, and use restrictions) as 
     an allocation of the housing credit amount allocated by the 
     State housing finance agency under section 42 of the I.R.C. 
     of 1986, except that such assistance shall not be limited by, 
     or otherwise affect (except as provided in subsection 
     (h)(3)(J) of such section), the State housing finance agency 
     applicable to such agency: Provided further, That the State 
     housing finance agency shall perform asset management 
     functions to ensure compliance with section 42 of the I.R.C. 
     of 1986, and the long term viability of buildings funded by 
     assistance under this heading: Provided further, That the 
     term basis (as such term is defined in such section 42) of a 
     qualified low-income housing tax credit building receiving 
     assistance under this heading shall not be reduced by the 
     amount of any grant described under this heading: Provided 
     further, That the Secretary shall collect all information 
     related to the award of Federal funds from state housing 
     finance agencies and establish an internet site that shall 
     identify all projects selected for an award, including the 
     amount of the award as well as the process and all 
     information that was used to make the award decision.''.

  Mr. BOND. I thank the Chair, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. INHOFE. Madam President, first, I wish to make a comment on the 
remarks of the Senator from Missouri.
  One of the most disturbing things, other than the cost of this 
stimulus bill, is the fact there is nothing in there to stimulate. 
There are two things that can be done that would be of great benefit to 
the United States of America.
  One is, as he talked about, infrastructure. I was somewhat shocked 
that in the bill, on the other side, there was only $30 billion, in the 
Senate bill $27 billion that would go toward highways, bridges, and 
that type of construction. I am very much in support of his amendment 
No. 161 that will raise that amount by $5.5 billion. I have to say, it 
is not enough. That would still be less than 5 percent of the total 
amount that would go to those items that would provide immediate jobs.
  In my State of Oklahoma, we can identify over $1.1 billion, just in 
Oklahoma, of projects that are spade ready, with environmental impact 
statements, everything has been done. We are ready to go on them. That 
is what will produce jobs tomorrow and the next day and the next day.
  The other area is in the military. While those two amendments have to 
do with the infrastructure of which I am in strong support, the Boxer-
Inhofe amendment has yet to be filed. It will be filed. We are talking 
there about some $50 billion that would go toward construction and 
infrastructure.


                 Amendment No. 262 to Amendment No. 98

  I want to mention, though, there is one other amendment I do want to 
bring up for consideration. That is amendment No. 262. This is a 
recognition of investing in our Nation's defense. It provides thousands 
of sustainable American jobs and provides for our Nation's security at 
the same time.
  Major defense procurement programs are all manufactured in the United 
States, with our aerospace industry alone employing more than 655,000 
workers spread across the United States. At the end of last month, 
conservative economist Martin Feldstein wrote in the Washington Post 
about the $800 billion mistake. He was referring, of course, to the 
stimulus bill.
  In that article, he pointed out the value of infrastructure spending 
on domestic military bases is the most significant we could do to try 
to stimulate the economy. In fact, it is clear that infrastructure 
investment alone with defense spending and tax cuts has a greater 
stimulative impact on the economy than anything else the government can 
do.
  If our infrastructure needs repair, we equally need the tools to 
reconstruct our military readiness. That is what I am trying to do with 
this amendment. This is amendment No. 262.
  I agree with everything that was said by the Senator from Missouri, 
that we need to do a lot of this with infrastructure. But, equally, my 
amendment increases defense procurement spending to manufacture or 
acquire vehicles, equipment, ammunition, and materials required to 
reconstitute military units.
  We are accomplishing two things: We are providing the jobs; we are 
also rebuilding our military. The one thing we hear on the floor over 
and over, with the activity that is now subsiding in Iraq but, of 
course, escalating in Afghanistan, is that we are overworking everyone. 
The term we use in the military is the OPTEMPO is too high. We all 
recognize that fact.
  We know we went through the decade of the nineties reducing spending 
on both end strength and modernization. What we need to do, if we are 
going to be having some kind of stimulative effect, if you can do it 
and rebuild our military, drop down the OPTEMPO for our people serving 
and at the same time do something about some of our FCS systems, for 
example, the Future Combat System, so we will become superior to our 
prospective enemies on the field in terms of equipment we give our 
kids.
  Right now, we all recognize that with the exception of the F-22 and 
the Joint Strike Fighter, the Russians are making the SU series that is 
superior to our best strike vehicles, the F-15 and F-16. This is a 
procurement problem. We already have the lines going on C-17s and other 
vehicles, and it is going to be necessary to augment that.

[[Page S1499]]

  This is fully offset. It does have $5.3 billion that would increase 
procurement.
  I ask unanimous consent to set aside the pending amendment for the 
purpose of bringing up Inhofe amendment No. 262.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The bill clerk read as follows:

       The Senator from Oklahoma [Mr. Inhofe] proposes an 
     amendment numbered 262 to amendment No. 98.

  The amendment is as follows:

     (Purpose: To appropriate, with an offset, $5,232,000,000 for 
  procurement for the Department of Defense to reconstitute military 
 units to an acceptable readiness rating and to restock prepositioned 
                    assets and war reserve material)

       On page 60, between lines 4 and 5, insert the following:

                     GENERAL PROVISIONS--THIS TITLE


additional amounts for procurement for reconstitution of military units 
    and restocking of prepositioned assets and war reserve material

       Sec. 301.  (a) Additional Amount for Procurement.--
       (1) In general.--For an additional amount for 
     ``Procurement'' for the Department of Defense, 
     $5,232,000,000, to remain available until expended, to 
     manufacture or acquire vehicles, equipment, ammunition, and 
     materials required to reconstitute military units to an 
     acceptable readiness rating and to restock prepositioned 
     assets and war reserve material.
       (2) Availability.--The items for which the amount available 
     under paragraph (1) shall be available shall include fixed 
     and rotary wing aircraft, tracked and non-tracked combat 
     vehicles, missiles, weapons, ammunition, communications 
     equipment, maintenance equipment, naval coastal warfare 
     boats, salvage equipment, riverine equipment, expeditionary 
     material handling equipment, and other expeditionary items.
       (3) Allocation among procurement accounts.--The amount 
     available under paragraph (1) shall be allocated among the 
     accounts of the Department of Defense for procurement in such 
     manner as the President considers appropriate. The President 
     shall submit to the congressional defense committees a report 
     setting for the manner of the allocation of such amount among 
     such accounts and a description of the items procured 
     utilizing such amount.
       (4) Congressional defense committees defined.--In this 
     subsection, the term ``congressional defense committees'' has 
     the meaning given that term in section 101(a)(16) of title 
     10, United States Code.
       (b) Offset.--
       (1) Periodic censuses and programs.--The amount 
     appropriated by title II under the heading ``Bureau of the 
     Census'' under the heading ``periodic censuses and programs'' 
     is hereby reduced by $1,000,000,000.
       (2) Digital-to-analog computer box program.--The amount 
     appropriated by title II under the heading ``National 
     Telecommunications and Information Administration'' under the 
     heading ``digital-to-analog converter box program'' is hereby 
     reduced by $650,000,000.
       (3) Procurement, acquisition, and construction for noaa.--
     The amount appropriated by title II under the heading 
     ``National Oceanic and Atmospheric Administration'' under the 
     heading ``procurement, acquisition, and construction'' is 
     hereby reduced by $70,000,000, with the amount of the 
     reduction allocated to amounts available for supercomputing 
     activities relating to climate change research.
       (4) Departmental management for department of commerce.--
     The amount appropriated by title II under the heading 
     ``DEPARTMENT OF COMMERCE'' under the heading ``Departmental 
     Management'' is hereby reduced by $34,000,000.
       (5) Federal buildings fund for gsa.--The amount 
     appropriated by title V under the heading ``GENERAL SERVICES 
     ADMINISTRATION'' under the heading ``Real Property 
     Activities'' under the heading ``federal buildings fund'' is 
     hereby reduced by $2,000,000,000, with the amount of the 
     reduction allocated to amounts available for measures 
     necessary to convert GSA facilities to High-Performance Green 
     Buildings.
       (6) Energy-efficient federal motor vehicle fleet 
     procurement for gsa.--The amount appropriated by title V 
     under the heading ``GENERAL SERVICES ADMINISTRATION'' under 
     the heading ``Energy-Efficient Federal Motor Vehicle Fleet 
     Procurement'' is hereby reduced by $600,000,000.
       (7) Resource management for u.s. fish and wildlife 
     service.--The amount appropriated by title VII under the 
     heading ``United States Fish and Wildlife Service'' under the 
     heading ``Resource Management'' is hereby reduced by 
     $65,000,000, with the amount of the reduction allocated as 
     follows:
       (A) $20,000,000 for trail improvements.
       (B) $25,000,000 for habitat restoration.
       (C) $20,000,000 for fish passage barrier removal.
       (8) Operating expenses for corporation for national and 
     community service.--The amount appropriated by title VIII 
     under the heading ``CORPORATION FOR NATIONAL AND COMMUNITY 
     SERVICE'' under the heading ``Operating Expenses'' is hereby 
     reduced by $13,000,000, with the amount of reduction 
     allocated to amounts available for research activities 
     authorized under subtitle H of title I of the 1990 Act.
       (9) Supplemental capital grants to the national railroad 
     passenger corporation.--The amount appropriated by title XII 
     under the heading ``Federal Railroad Administration'' under 
     the heading ``supplemental capital grants to the national 
     railroad passenger corporation'' is hereby reduced by 
     $850,000,000.

  Mr. INHOFE. Madam President, I am hoping to be able to consider this 
amendment in the near future. Let me mention one other point of equal 
significance, and it is somewhat controversial.
  I just got back a couple days ago from Guantanamo Bay. I have been 
down there several times. As a matter of fact, I was one of the first 
Members--I think the first Member of Congress, of either House, to be 
there after 9/11. I have watched it as the years have gone by, the 
criticism of things happening at Guantanamo Bay that have never 
happened at Guantanamo Bay. People are talking about torturing and all 
these things. This is not the truth.
  What really bothers me is, all you have to do, if you want to know 
the truth about it, is pull up on your computer the Red Cross Web site. 
They are down there with regularity talking about what is happening.
  There are no human rights abuses. In fact, 3 days ago when I was 
there, some of the detainees were kind of laughing about the fact they 
actually had better medical treatment than they ever had before. As far 
as the food is concerned, it is the best. There are six camps in 
conjunction with the severity of the problem with a particular 
detainee, what level of terrorist activities he was involved in. The 
first three are the ones ready to go back, and the last ones are the 
more severe.
  In camp 5 and camp 6, we are talking about really bad guys up there. 
They still have recreational activities, health care, dental care, 
food. So things there are good.
  I hope any preconceived notions by any Member of this Senate could be 
satisfied by going and seeing for yourself or pulling up the Web site. 
We even had al-Jazeera in there to evaluate how people are treated at 
Guantanamo Bay. It is an asset we have had since 1903. It is something 
we cannot do without.
  I have submitted an amendment, which I will not call up at this time, 
amendment No. 198. People such as Senator Martinez, who is from Cuba, 
recognize the fact that we have to keep that facility open.
  Right now, even though it has a capacity of 11,000, we only have 
about 425 detainees there. Of that, there are 170 who cannot be 
returned to their home country, cannot be repatriated because they will 
not let them back in. Of the 170, 110 are the real serious, most severe 
of the terrorists. What do we do with those? If something should 
happen--and, of course, the President came out with two edicts. One was 
to suspend legal proceedings at this time, which the judge down there 
has rejected, so they are continuing. The other is to close Guantanamo 
Bay within 12 months.
  The reason the second one is not workable is because you have to 
figure out what to do with all these detainees. I don't know of one 
Senator on the floor who would like them sent to his or her State. I 
know they have come up with some 17 institutions, one of which is in my 
State of Oklahoma, where they could relocate these detainees. That 
becomes a terrorist target. It is something that is not acceptable.
  All the amendment does, which I am hoping we get cleared before too 
long, is to prohibit the use of funds in this stimulus bill to transfer 
detainees from Guantanamo Bay to any facility in the United States or 
to construct any facility for such detainees in the United States.
  When I say that, it will be necessary to do it. The courtroom down in 
Guantanamo Bay cost $12 million to build. It took a year to get it 
built. Because of the sensitive nature of the information, they cannot 
be tried in a normal court facility. This would preclude funds from 
being allocated toward the relocation of those detainees from 
Guantanamo Bay to any of the Continental United States areas.
  With that, I serve notice I would like to get others to look at this 
amendment very carefully. This may be the

[[Page S1500]]

only opportunity they have to ensure their State is not flooded with 
detainees, with terrorists, and create the problems we all know would 
come from that transfer.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Madam President, I understand there are roughly 10 
amendments pending. There is understandable concern about calling up 
additional amendments at this time. If I am mistaken, I am more than 
happy to call up my amendment. Failing that, for the time being, I 
would like to talk a little bit about it.
  I believe it is important we pass a true stimulus package quickly. 
Across the Nation, we know millions of families and small businesses 
are suffering from the economic crisis in which we find ourselves. Many 
of these small businesses feel like families, and they are faced, of 
course, with tough choices.
  Yesterday the New York Times featured a story about a small direct 
mail firm in Bellaire, TX, just outside Houston. Fewer orders combined 
with rising health care costs will force this firm to cut staff or cut 
benefits unless the economy turns around soon. So we must act quickly, 
but we must act wisely.
  I don't believe the pending bill on the floor today meets that latter 
part of my criteria, a wise bill. The most recent Gallup poll I have 
seen said only 37 percent of the people in the polling sample believe 
the current bill would actually help stimulate the economy in a 
positive way. In the meantime, we would see in excess of $1 trillion of 
additional new deficit spending passed on to our children and 
grandchildren.
  We have to not only act quickly, but we have to act wisely. We have 
to deliver a stimulus plan that will immediately benefit America's 
families and small businesses. We have to avoid, as well, repeating 
mistakes of the past that failed to stimulate the economy--and I will 
talk about that more in just a moment--and we have to resist the 
temptation, which is all too common in Washington, DC, of trying to 
fund everybody's wish list. We know that wish list goes on and on 
without end, and we need to set the right priorities, the same thing 
families have to do every day.
  I believe one of the best ways we can stimulate our economy is to 
provide true tax relief to everybody who pays taxes. Rather than 
reprocessing those tax dollars by having Washington redistribute them 
to the winners and losers in the political process, why not let the 
people who earn the money keep more of it. We know that is a lot more 
efficient.
  As we have seen, the new chairwoman of President Obama's Council of 
Economic Advisers, Christina Romer, along with her husband, did a 
study--she is a real, live economist. We hear economist for this, 
economist for that. Many are nameless and faceless. I thought how 
interesting it would be, instead of citing unnamed economists, if you 
just plugged in the word ``lawyer'' or let's say ``veterinarians.'' 
Veterinarians believe this, lawyers believe that. We wouldn't accept 
that at face value. We would want to know what it was and whether it 
was credible and what they are talking about. Because we know there are 
economists who disagree with each other, and it is plain silly to 
suggest that among economists there is any consensus on these 
unprecedented times we find ourselves in.

  But there are two economists--Christina Romer and her husband, she 
being the most recent chairwoman of President Obama's Council of 
Economic Advisers--who found in a study they published in 2007 that a 
tax cut of 1 percent of GDP generates real output by about 3 percent 
over the following 3 years, a 1-to-3 ratio. Now, that strikes me as a 
lot better than some of what I have seen in terms of the stimulative 
effect in spending, which is roughly for every $1 spent, you may get a 
1.5-percent increase in growth.


                 Amendment No. 277 to Amendment No. 98

  Mr. President, I just received a note from staff that indicates it is 
all right to go ahead and call up my amendment.
  Let me pause, Mr. President, and call up my amendment No. 277 and ask 
for its immediate consideration.
  The PRESIDING OFFICER (Mr. Burris). Is there objection to setting 
aside the pending amendment?
  Without objection, it is so ordered. The clerk will report.
  The legislative clerk read as follows:

       A Senator from Texas [Mr. Cornyn] proposes an amendment 
     numbered 277 to amendment No. 98.

  Mr. CORNYN. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with at this time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

      (Purpose: To reduce income taxes for all working taxpayers)

       Beginning on page 435, strike line 4 and all that follows 
     through page 441, line 15, and insert the following:

     SEC. 1001. REDUCTION IN 10-PERCENT RATE BRACKET FOR 2009 AND 
                   2010.

       (a) In General.--Paragraph (1) of section 1(i) is amended 
     by adding at the end the following new subparagraph:
       ``(D) Reduced rate for 2009 and 2010.--In the case of any 
     taxable year beginning in 2009 or 2010--
       ``(i) In general.--Subparagraph (A)(i) shall be applied by 
     substituting `5 percent' for `10 percent'.
       ``(ii) Rules for applying certain other provisions.--

       ``(I) Subsection (g)(7)(B)(ii)(II) shall be applied by 
     substituting `5 percent' for `10 percent'.
       ``(II) Section 3402(p)(2) shall be applied by substituting 
     `5 percent' for `10 percent'.''.

       (b) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2008.
       (2) Withholding provisions.--Subclause (II) of section 
     1(i)(1)(D)(ii) of the Internal Revenue Code of 1986, as added 
     by subsection (a), shall apply to amounts paid after the 60th 
     day after the date of the enactment of this Act.

  Mr. CORNYN. Mr. President, simply stated, the amendment I offer today 
is based on the experience of what works. We have been presented all 
sorts of economic theories, some of which I have even bought into 
because I thought the smartest people on the planet knew more than I 
did, and perhaps I had to have faith in some of these smart people. But 
we know based on experience, not just based on faith, that this 
amendment will work to stimulate the economy.
  This amendment cuts the income tax rate in the lowest tax bracket 
from 10 percent to 5 percent, so it will immediately help some of the 
people who earn the least amount of money in our society, and it will 
in fact help all working Americans immediately. Currently, married 
couples pay a 10-percent tax on income up to $16,050, which is roughly 
$8,000 for a single tax return. They pay a 10-percent tax on that now, 
and my amendment would cut it to 5 percent. That would put about $500 
per year back into the family budget, or roughly the same amount as the 
provisions in the current bill known as the ``Making Work Pay'' 
refundable tax credit. And I will talk about that in a minute. But this 
amendment would provide meaningful tax relief to more than 105 million 
Americans--to everyone who must file a tax return by April 15.
  This amendment would provide an immediate economic stimulus and jolt 
to our economy and would show the American people and the global 
financial community that we are serious about delivering an economic 
stimulus that will actually work. Isn't that the first question we 
ought to ask: Will it work? This one will work, because experience 
proves it. This amendment will cut the size of this $1 trillion bill by 
about $25 billion because it replaces the so-called ``Making Work Pay'' 
refundable tax credit.
  Now, the refundable tax credit, so everybody understands, is not like 
the usual credit against income. This is cash money paid by the Federal 
Government to a person whether they pay income taxes or not. In fact, 
what it amounts to is taking money from people who do pay taxes and 
giving it to people who don't necessarily pay taxes. It represents a 
huge transfer of wealth. But even worse, in this bill it represents a 
repetition of the failed stimulus bill that we voted on roughly 1 year 
ago.
  I am sorry to say now I was one of those votes in favor of that 
stimulus bill. That is in the category of what I described earlier, 
where I believed the smartest people on the planet were telling us we 
had to spend this $150 billion-plus. And we had bipartisan support for 
the bill. We borrowed $150 billion or so from our children and 
grandchildren. In other words, we added it to

[[Page S1501]]

the Federal deficit. You know what kind of impact it had? It had zero, 
zip, nada, no impact on the economy, other than to rack up another $150 
billion in debt for our children.
  So this refundable tax credit, if passed in its current form, 
represents a repetition of what we know will not work and which will in 
fact make our economic situation worse. It will represent a $46 billion 
transfer of wealth to folks who don't pay income taxes in the first 
place. We should provide tax relief in a straightforward and 
transparent way to all taxpayers who owe income taxes. In other words, 
this amendment is about providing tax relief for taxpayers which, 
according to Ms. Romer, is the most efficient way to get our economy 
moving again, and one that will not pick winners and losers here in 
Washington, DC, after Congress takes its cut, but allows it to be kept 
by the people who earned it in the first place.
  I ask my colleagues to support this amendment when we have an 
opportunity to vote on it later on. This is, once again, amendment No. 
277, and I urge my colleagues to support it.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Hawaii.
  Mr. INOUYE. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BUNNING. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                 Amendment No. 242 to Amendment No. 98

  Mr. BUNNING. Mr. President, I call up my amendment No. 242.
  The PRESIDING OFFICER. Is there any objection to setting aside the 
pending amendment? Without objection, it is so ordered. The clerk will 
report.
  The legislative clerk read as follows:

       The Senator from Kentucky [Mr. Bunning] proposes an 
     amendment numbered 242 to amendment No. 98.

  Mr. BUNNING. I ask unanimous consent the reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To amend the Internal Revenue Code of 1986 to suspend for 
2009 the 1993 income tax increase on Social Security benefits, and for 
                            other purposes)

       On page 570, between lines 8 and 9, insert the following:

     SEC. __. TEMPORARY REPEAL OF 1993 INCOME TAX INCREASE ON 
                   SOCIAL SECURITY BENEFITS.

       (a) In General.--Paragraph (2) of section 86(a) (relating 
     to social security and tier 1 railroad retirement benefits) 
     is amended by adding at the end the following new flush 
     sentence:
     ``This paragraph shall not apply to any taxable year 
     beginning in 2009.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.
       (c) Maintenance of Transfers to Hospital Insurance Trust 
     Fund.--There are hereby appropriated to the Federal Hospital 
     Insurance Trust Fund established under section 1817 of the 
     Social Security Act (42 U.S.C. 1395i) amounts equal to the 
     reduction in revenues to the Treasury by reason of the 
     amendment made by subsection (a). Amounts appropriated by the 
     preceding sentence shall be transferred from the general fund 
     at such times and in such manner as to replicate to the 
     extent possible the transfers which would have occurred to 
     such Trust Fund had such amendment not been enacted.
       (d) Offset.--Notwithstanding any other provision of 
     division A, the amounts appropriated or made available in 
     division A (other than any such amount under the heading 
     ``Department of Veterans Affairs'' in title X of division A) 
     shall be reduced by a percentage necessary to offset the 
     aggregate amount appropriated under subsection (c).

  Mr. BUNNING. Mr. President, I have three amendments. Since there are 
so many amendments, I am going to only offer one at this time. It is an 
amendment I have offered on the floor numerous times on major bills. It 
has something to do with a serious problem that 12 million American 
seniors face every year. My amendment puts more dollars in seniors' 
wallets, which will hopefully stimulate the economy by giving them more 
expendable income.
  My amendment would suspend for just 1 year, the year 2009, the 
increased tax on Social Security benefits that Congress passed in 1993. 
I have been a strong advocate for eliminating this tax entirely for 
many years. My amendment would give seniors a 1-year break from this 
unfair and punitive tax.
  Let me start with a little background. Historically, Social Security 
benefits were not taxed by the Federal Government at all. However, in 
1983, the Nation was facing an immediate shortfall in the Social 
Security Program, with the trust funds possibly running out of money in 
the next couple years. Acting on the recommendations of the Greenspan 
commission, Congress passed a law in 1983 that began taxing Social 
Security benefits for the first time. The new law required that 50 
percent of a senior's Social Security benefit or Railroad Retirement 
benefit be taxed if his or her income was above $25,000 or $32,000 for 
married couples. This tax, over the past 26 years, has been dedicated 
to shoring up the Social Security system or the Railroad Retirement 
system.
  In 1993, when I was a member of the Ways and Means Committee in the 
House, Congress was faced with a similar problem. This time it was the 
Medicare trust fund that was going broke. Once again, Congress called 
on American seniors to help fix this program by instituting another 
additional tax on Social Security benefits. In 1993, Congress passed a 
law that required 85 percent of a senior's Social Security benefit be 
taxed if their income was $34,000 for a single person or $44,000 for a 
couple.
  As a Member of the House in 1993, I thought this tax increase was 
grossly unfair to our senior citizens. On one hand we tell seniors to 
plan for retirement and on the other hand we tax them for doing that. 
CRS estimates that there are 12 million seniors paying this tax on 85 
percent of their Social Security benefits.
  Also, since the income levels are not indexed to inflation, many more 
seniors become burdened each year as we go forward and inflation rises.
  My amendment is very simple. It gives seniors a break for 1 year from 
paying this tax. While I would love to see this tax permanently 
repealed, suspending it for 1 year is a start and a stimulus to get 
money into the pockets of our senior citizens so they can help 
stimulate the economy. It would help do it immediately, by allowing 
millions of seniors to keep more of their Social Security benefits. 
With wild fluctuations in gas prices and increases in health care and 
food costs, this tax relief could make a difference to millions of 
seniors across this country.
  The amendment holds the Medicare trust fund harmless so the solvency 
of Medicare is not jeopardized. The amendment is paid for by reducing 
discretionary spending in the bill, except spending for veterans.
  In the past, many of my Senate colleagues have supported sense-of-
the-Senate amendments to remove this unfair tax. Today, Senators will 
have an opportunity to vote on actually giving seniors relief and 
removing this unfair tax for just 1 year, 2009. It is the fair thing to 
do. I hope my colleagues can support this amendment and support over 12 
million seniors who are forced to pay this unfair tax.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois is recognized.
  Mr. DURBIN. Mr. President, I thank the Senator from Kentucky for 
offering his amendment. There are 14, I believe, maybe 15, pending 
amendments to this bill. I think it is healthy. It means we are 
actively debating this issue and getting suggestions from Democrats and 
Republicans about ways to change it.
  But let's remember why we are here. This is H.R. 1, the first bill of 
the session. It is the bill, in terms of priority, that has the highest 
priority for the President of the United States and for the Nation. It 
is the American Recovery and Reinvestment Act of 2009.
  It has been only 2 weeks now since we swore in a new President, the 
44th President of the United States. He comes to this office, I 
believe, with extraordinary talents and potential. But he also comes 
facing some of the most serious challenges any President has faced in 
75 years. You have to go back to Franklin Roosevelt, in 1933, and the 
Great Depression to find another time in American history that was any 
more challenging than what we face today. I think most Americans know 
what we are talking about.
  We found, for the gross domestic product; that is, the production of

[[Page S1502]]

goods and services in America, our growth in that area has started to 
decline for the first time in 25 years. We have found that unemployment 
rates are higher than they have been in 15 or 20 years--in some places 
even worse. Ask the average person or family member: Does this affect 
you? And they will say, of course, it does. My savings for my 
retirement are not what they used to be. I have lost a lot. I had 
planned on a life of comfort and security and now I am not sure.
  How about your home? For most people it is the most important asset 
in their life. Even if you are paying your mortgage payment, your home 
value has been going down in most communities across America. People 
understand, too, that many of their neighbors are losing their homes to 
foreclosure. Some of these are hard-working families who have played by 
the rules and all of a sudden the world is upside-down. The principal 
they owe on their mortgage is more than the value of their home.
  Ask people about jobs, about all the jobs we have lost across 
America--half a million jobs in December, even more in the month of 
January. As we lose more and more jobs, of course, people face 
hardships. Part of our effort is to try to find a way to help them, 
provide a safety net, to give them a helping hand--as we should.
  Let me tell you what President Obama's proposal means to America. 
First, we are going to try to help those people who are suffering. For 
those on unemployment right now, many of these people have been 
stretched to the absolute limit. Imagine losing your job and trying to 
keep your family together and make the utility bill payments and not 
lose the house--in the hopes that this is going to turn around and you 
will find another job. We provide an additional help to them. It is not 
a lot. I would like to give more, but it means more money in 
unemployment relief for these families.
  The second thing we find is that as soon as you lose your job, guess 
what happens next. You lose your health insurance. There is a program 
called COBRA where you can turn around and buy health insurance, but 
take a look at the price. The price is dramatically larger than you 
paid as an employee, if you had coverage at your workplace. So we try 
to extend health insurance for these families. Shouldn't we, for the 
millions of Americans who are out of work, give them a little more to 
live on and a little helping hand when it comes to the paying of their 
health insurance? That is not just humane; if you are looking at the 
pure economics of it, trust me, those unemployed families with an extra 
few dollars a week are going to spend this money back into this 
economy, keeping their families together.
  Then we take a look at what we need to do to get this economy moving 
forward. President Obama said the first thing we need to do is to give 
working families, middle-income families, a helping hand. Tax policy 
over the last 8 years has been geared primarily, most of the breaks, to 
the wealthiest people in America. But the folks who have been falling 
behind are those whose wages didn't keep up. The cost of living kept 
up, but their wages didn't keep up. President Obama says, as part of 
our recovery plan, let's give a helping hand, $500 to an individual, 
$1,000 to a family, at least so that these working families can pay 
their bills and maybe try to get ahead a little bit. That, to me, is a 
sensible economic recovery.
  Wouldn't we start at the base of America, the strength of America, 
the families of America, and make sure they get the first helping hand, 
after we have taken care of those who lost their jobs, through 
unemployment? That is part of it.
  He also has asked us, in the Obama plan: Help businesses, small 
businesses in particular, because they are the bedrock of the American 
economy. They create most of the jobs. They are the most vulnerable. We 
have seen it happen. We get the announcements of the big companies that 
are laying off thousands of workers: 20,000 at Caterpillar, thousands 
at Starbucks and INTEL and the list goes on and on. But it is the small 
job in the mall or downtown that lays off a worker or goes out of 
business--then we start losing jobs that way. The President has 
proposed in his tax package, let's allow these businesses to write off 
their losses and apply them to previous years' tax liability. Give them 
a helping hand. If they want to buy things that might expand their 
businesses, let's encourage them, give them more of a tax writeoff. So 
we build this into the program here as well. I think these are all 
solid investments in people who are struggling with unemployment and 
middle-income families finding it hard to pay their bills and small 
businesses that are vulnerable to a weak economy.
  Then the President goes a step further and the President says: Let's 
now create jobs, let's invest in America in a way that is going to 
build America's economy for decades to come. He has identified several 
areas of importance that I think will meet the test of time and I hope 
will meet the approval of my colleagues.
  The first thing he says is energy. We know, as long as we are 
captives of foreign oil producers who can run the price of gasoline up 
to $4.50 next week and back down again to $2.50 a month later, it is 
tough to build an economy.
  So President Obama has told us, as part of this, build into this 
energy-related investments, the kinds of things that make sense, 
research in areas that will give us energy capability.
  We can't build an American economy without energy. Let's build it 
with homegrown energy, energy that uses our creativity and our 
resources and builds on them.
  He also said: Let's take a look at our schools, let's take a look at 
our Government buildings, and if the energy is going out through cracks 
in the windows and the doors, let's do something about it--more energy 
efficiency.
  That is a good investment. That is going to pay itself back over a 
period of time.
  Secondly, there is this whole element of health care. We know that 
one of the crucial elements in our daily lives is the protection of 
health insurance, and we know the cost of that insurance and the cost 
of medical care continue to rise.
  What President Obama has made part of this is something that is the 
most important single downpayment to health care reform. He believes we 
should start moving as a nation to put our medical records on computers 
so that we have technology that has my medical records, the records of 
my family, so that when you go to the hospital, the doctors who are 
there and the nurses who are there have access to solid available 
information. They are not going through pages hoping they don't miss 
one. It is going to mean that there will be more affordable health 
care, and it will be safer health care. That makes sense. That is a 
good investment.
  The third element is education. What the President has said as part 
of his proposal here is that we need to start building--by building, 
putting people to work--we need to start building the laboratories, the 
libraries, and the classrooms of the 21st century.
  Let's be honest about this. America is as ingenious, innovative, and 
creative as any nation on earth. But the reason we are is because our 
schools prepare our children to meet that challenge and to lead. That 
is part of the investment of this bill.
  Overall, what the President is asking us to do is to do our very best 
today to invest about $900 billion--a huge sum of money, I do not doubt 
that--so at the end of the day we will have saved or created 3 to 4 
million jobs.
  My friends, some of them on the other side of the aisle, say that is 
way too much money, $900 billion. This $900 billion represents about 
6.5 percent of the gross domestic product of America. So you say: Is 
that enough? Is that enough of a catalyst? Most of the economists say: 
Err on the side of providing enough water to put out the fire. Don't 
put so little on it that you will have to revisit that conflagration 
tomorrow. And if you follow the lead of some who want to cut back the 
size of this program substantially, every time they cut back the size 
of it, they will cut back the number of jobs we will be creating in 
America at a time when we desperately need more jobs.
  We expect to lose in economic activity in America $1 trillion a year 
because of this recession. What we are putting back over 2 years, this 
$900 billion, means we are about at half of what we are going to lose. 
We are going to put some $450 billion of economic spending into an 
economy that is losing $1 trillion in activity. So we are

[[Page S1503]]

not even keeping up with what the recession is doing to us. So those 
who want to cut this back dramatically, I can tell you, sadly, if they 
have their way, we will be back here again.
  You remember last year, President Bush said to us: I think the 
economy is weak, and I know how to solve the problem. Tax cuts will do 
it. And he asked us, the Democratic Congress, to give the Republican 
President $150 billion in tax cuts. And we did. Senator Baucus, the 
chairman of the Finance Committee, worked to deliver a bill, a 
bipartisan bill, focusing on tax cuts.
  If you listen to my friends on the other side of the aisle, they 
believe this is the answer to every ill. If the economy is flourishing, 
more tax cuts; if the economy is struggling, more tax cuts. Well, tax 
cuts have their place, and they are a part of this, but they are not 
the complete answer. We learned that when we put $150 billion into the 
economy in tax cuts last April, I believe it was, and it did not have 
the kind of positive impact we expected on our economy.
  The point I want to get to is this: We have to act, and we have to 
act now. Sure, we should have this debate on the amendments. Some will 
prevail, some will not. But at the end of the day, the American people 
will not accept as a final verdict that the Senate did nothing. They 
will find it absolutely unacceptable that one of the worst economic 
crises in America was met with political resistance. They want us to 
work together. And we should.
  I am open--I believe most Democrats are--to good ideas and good 
suggestions, and a lot of our colleagues are, in good faith, working 
toward that end. But there is one basic thing we should remember: When 
we get down to the bottom line, most of the critics of this program, 
this $900 billion program, when you add up the total amount of their 
criticism, it is less than 1 percent--less than 1 percent.
  Well, let's try to cure that 1 percent. Let's do our best to make 
sure we do. But let's not walk away from this challenge. Let's not walk 
away from this crisis because we find in some paragraph in here 
something to which we object.
  If there were ever a time when the American people expect us to rise 
to the occasion, to stand with President Obama and try to turn this 
economy around, this is the time. I would say to my colleagues, let's 
get it done this week. We need to tell America first--and the world--
that we are not going to stand back and be victimized by this economy. 
We are going to use every talent, every tool we can to get this 
American economy moving again for the workers and families and 
businesses that count on us so much.
  In the Senate, it is easy to get something lost in the debate and end 
up doing nothing. That is the one thing that is prevalent in the Senate 
too many times. But this is different. This is a historic challenge.
  I hope Senators from both sides of the aisle will work in good faith 
to find a way to put together a product that will ultimately serve this 
country and serve it well. Two-thirds of the American people now say 
they support this plan. They do not believe it is the last thing we are 
going to do, and they sure do not believe the economy is going to be 
cured in weeks or months; it may take us longer. But we need to start 
working together and give this our best effort. We need to follow on 
from this doing something about the housing market, mortgage 
foreclosures, people who are underwater with their own home mortgages, 
folks who will not consider buying a home because of the uncertainty of 
the economy. That is absolutely a priority. It may not be included in 
this bill. Perhaps it will be. But that is a priority we should turn to 
next.
  Then we need to look at these financial institutions.
  Make no mistake about it, when this Bernard Madoff is found guilty of 
a Ponzi scheme, people are wondering whether he will go to jail. I am 
not going to say whether he should or should not. He needs to be held 
accountable for what he did. A lot of innocent people lost a lot of 
money because of what he did. He needs to be held accountable.
  What about the financial institutions that brought us to this moment 
in American economic history? I think we need accountability there too. 
We need to make sure these executives do not run off with millions of 
dollars in bonuses, capitalizing on the taxpayers' money, ignoring the 
fact that they failed in their business missions. We need to have a 
good, strong law in that regard too.
  We need to have proper oversight and regulation of financial 
institutions so America never goes down this road again. That is our 
responsibility on our watch.
  I sincerely hope both sides of the aisle will make it their business 
to get it done this week so the American people understand that we get 
it, we understand the severity of the crisis we face.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
  Mr. FEINGOLD. Mr. President, I would like to respond to some comments 
that were made about the----
  Mr. BAUCUS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wisconsin has the floor.
  Mr. FEINGOLD. Mr. President, if there was an arrangement that I am 
unaware of, I would defer.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, we try to be evenhanded and fair and 
balanced here. We have had a gentleman's agreement that we alternate 
sides on speakers. Since the Senator from Illinois last spoke, I think 
it is only fair and appropriate that we rotate.
  Mr. FEINGOLD. Mr. President, I was unaware of that, and I defer to my 
friend from Arizona.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. McCAIN. I will not take too long because I know there are other 
Senators waiting to speak.
  I send an amendment to the desk and ask for its immediate 
consideration.
  Mr. BAUCUS. Mr. President, reserving the right to object, I think the 
pending amendments would have to be set aside.
  The PRESIDING OFFICER. Is there objection to setting aside the 
pending amendments?
  Mr. BAUCUS. Mr. President, reserving the right to object.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. We already have 16 amendments lined up in the queue. It 
is going to be a very late night tonight because of that great number 
of amendments.
  I was wondering, I would be more than willing to work out an 
arrangement where the Senator's amendment can be the next one available 
after our votes tonight, the first Republican amendment tomorrow. I 
have to draw the line somewhere here; otherwise, we would keep going. I 
renew my offer to make it the first amendment tomorrow.
  Mr. McCAIN. I would be pleased to accommodate the manager, who has 
been very accommodating to this side of the aisle, and he just 
demonstrated that. So I would be glad, if it is agreeable to the 
manager to allow me to propose the amendment now. Then I would be glad 
to ask for a vote on it at the convenience of the managers of the bill 
so that it is most convenient for them.
  Mr. BAUCUS. Mr. President, I would prefer that you offer the 
amendment after we dispose of the 16 tonight.
  Then we can agree by unanimous consent that it would be the first one 
up.
  Mr. McCAIN. If I could ask unanimous consent that I would be the 
first amendment considered tomorrow.
  Mr. BAUCUS. That would be fine.
  Mr. McCAIN. Mr. President, I will withhold proposing the amendment. I 
ask unanimous consent that my amendment be allowed to be filed and 
considered at the beginning of legislative work tomorrow.
  The PRESIDING OFFICER. Is there objection?
  Mr. BAUCUS. So far, I have to object, and I have to figure out why. I 
might say to my good friend, in order to get order here, they are 
telling me we are coming in at 9:30 tomorrow morning. I know the 
Senator, a former military man, is used to early hours.
  Mr. McCAIN. Whatever the floor staff wishes, as well as the manager. 
By the way, I say that with great respect to the staff on the floor who 
are making this machine, this unwieldy machine, run in the most 
efficient fashion.

[[Page S1504]]

  Mr. BAUCUS. Thank you very much.
  Mr. McCAIN. Mr. President, I will withhold until tomorrow morning, 
according to the unanimous consent agreement, and file the amendment 
and ask for its consideration at 9:30 a.m.
  Mr. BAUCUS. Or whenever we come into session tomorrow morning. We 
expect to be in about 9:30. There may be some leader time.
  Mr. McCAIN. Sure.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. Mr. President, I would like to keep the floor, if I can, 
for a couple of minutes.
  Basically, tomorrow morning we will be considering this amendment. I 
would like to say a few words because this is a proposal that I think 
should be considered, along with the legislation that is pending. It is 
a compilation of what we believe is the most effective way to address 
the stimulus and job creation. It has tax provisions, such as 
elimination of the 3.1-percent payroll tax for all employees for 1 
year. It lowers the 10-percent tax bracket to 5 percent; lowers the 15-
percent tax bracket to 10 percent; lowers the corporate tax bracket 
from 35 to 25 percent and has accelerated depreciation for capital 
investments for small business; the extension of unemployment insurance 
benefits; extension of food stamps, unemployment insurance benefits, 
tax-free training and employment services, as well as keeping families 
in their homes through a loan modification program. It has tax 
incentives for home purchases and GSE-FHA conforming loan limits; 
national infrastructure and defense, which is very badly needed; 
transportation infrastructure; and also contains the trigger that is 
also the subject of a separate amendment I have proposed, with a total 
of about $420 billion.
  Now, I know my friend from Wisconsin is waiting patiently, but I 
would like to point out where I think we are at this moment; that is, 
we basically have legislation which is too big, which is not 
stimulative, and which does not create jobs. The American people are 
beginning to figure it out. In fact, polling numbers in the last couple 
of days have shown a significant shift in American public opinion 
because they are beginning to examine this proposal.
  I argue that it is time we sit down, Republicans and Democrats, and 
begin good-faith negotiations to create a real job creation and 
stimulus package. I think it would be unfortunate if this body passed, 
on a party-line basis or largely party-line basis, this package in 
similar fashion as it did in the other body.
  I think we have a proposal here that deserves consideration, but I 
also think it is time that we had serious negotiations to try to reach 
some kind of consensus on a package and legislation that truly 
stimulates and truly creates jobs.
  My colleague from Arizona will be pointing out, as many others have, 
that there are many programs here, moneys in the hundreds of millions 
and billions, that simply do not meet any criteria for job creation: 
$75 million for smoking cessation; $150 million for honeybee insurance. 
The list goes on and on. We also have an obligation to future 
generations to understand that $1.2 trillion, followed by another TARP, 
followed by an omnibus appropriations bill, requires us to put this 
country, once the economy recovers, back on the path to a balanced 
budget and reduce spending across the board once our economy has 
recovered.
  I thank the Senator from Montana, the distinguished manager of the 
bill, for his consideration on my amendment. I thank my colleague from 
Wisconsin, as always.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. I ask unanimous consent that following the remarks by the 
Senator from Wisconsin, the Senator from Arizona, Mr. Kyl, be 
recognized.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Wisconsin.


                           amendment no. 140

  Mr. FEINGOLD. Mr. President, I would like to respond to some comments 
that were made about the amendment I am offering with Senator McCain 
and others. Just to remind my colleagues, our amendment creates a point 
of order against unauthorized earmarks in appropriations bills. Again, 
it applies to unauthorized earmarks. If a provision is not both an 
earmark, as defined by the Senate Rule 44, and unauthorized, this point 
of order does not apply.
  For the purposes of this amendment, we consider a program to have 
been authorized even if that authorization has only passed the Senate 
during the same Congress as the proposed spending item.
  Moreover, as a safeguard we have taken care to also exempt programs 
that may have had their authorization lapse, but which are clearly 
needed and are included in the President's budget request.
  The Senator from Hawaii noted, for example, that we haven't 
considered an Intelligence authorization bill for some time, or a 
Foreign Operations and State Department authorization bill. He argued 
that the programs covered by those lapsed authorizations, or programs 
that have never been authorized, would be subject to this point of 
order.
  They would not be subject to the point of order established by this 
amendment.
  First, to my knowledge, few if any of the programs under those 
measures would be considered ``congressionally directed spending,'' and 
thus they could be funded without this point of order applying. Second, 
programs covered by those authorizing measures are typically included 
in the President's budget request whether or not the authorization has 
lapsed and, as such, are fully exempt from this point of order.
  Let me reiterate, in order to be subject to our point of order, the 
program must be an earmark; that is, ``congressionally directed 
spending'' as defined in Senate rules, and it must not be authorized or 
included in the President's budget request.
  The Senator from Hawaii used the specter of an authorization bill 
being filibustered to stop the ability of Congress to use its power of 
the purse as an argument against this amendment. Once again, if a 
program is not considered to be ``congressionally directed spending'' 
it will never be subject to this point of order, and Congress is free 
to fund it or not as it sees fit.
  The Senator from Hawaii also raised the concern that this amendment 
creates a point of order against unauthorized earmarks added to 
conference reports. Darn right it does. We shouldn't be adding earmarks 
to conference reports. Under the amendment, if a point of order is 
sustained against a provision in a conference report, that provision 
would be stricken, but the legislative process would continue with no 
more potential roadblocks than exist currently. The conference report 
would revert to a nonamendable Senate amendment, which would be the 
conference agreement without the objectionable material, and the 
measure could then be sent back to the House. It won't tie the two 
Houses up in knots, as the Senator from Hawaii suggested. The House 
will accept the Senate amendment or it won't. If the House makes a 
further change, the Senate can consider it. That is the regular order 
of business around here. The best way to avoid this issue is not to 
slip earmarks into conference reports.
  The argument was also made that if our amendment was adopted, then 
authorizers would have the power to earmark, but no one else. This 
amendment doesn't give the power to earmark to anyone. All it does is 
return the Senate to what should be the proper way to consider special 
interest spending. If you want some special project for your State or 
district, the authorizing committee of jurisdiction should review it, 
and legislation authorizing it should pass both Houses and be signed 
into law. That is the regular scrutiny we should require of special 
interest spending. Then the Appropriations Committee can decide whether 
and at what level to fund the authorized program. That is the way the 
system is supposed to work. Unfortunately, we now have an alternative, 
short-cut process, whereby Members stick spending provisions into 
appropriations bills without any scrutiny whatsoever. That is a recipe 
for waste, fraud and abuse.
  I have great respect for the Senator from Hawaii, and I appreciate 
his willingness to debate my proposal on the merits. I wish more of my 
colleagues were willing to have this kind of public discussion about 
earmarks. But I disagree with his arguments. This is a sensible 
amendment. It will put some teeth into the earmark rules we adopted in 
the last Congress. As we consider

[[Page S1505]]

a bill that proposes to increase our debt to the tune of $800 billion, 
we should be doing all we can to assure our constituents that their 
money is not being wasted on pork-barrel spending. One way we can do 
that is to pass the Feingold-McCain-McCaskill amendment, and I urge my 
colleagues to support it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, I ask unanimous consent that an editorial in 
the February 4 edition of the Arizona Republic be printed in the Record 
at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. KYL. I will refer to that editorial, because it sets the stage 
for what we need to do to fix this bill. The Gallup poll yesterday said 
that 56 percent of Americans believe that either this bill should not 
be passed or that it should require major changes before it is passed. 
That is not only what most American people believe but also what most 
of the people on the Republican side of the aisle believe and I know 
some Members on the other side as well.
  This editorial is titled ``Senators should just start over in fixing 
fiscal mess.''
  They say:

       Far too much of the stimulus bill is simply unserious as 
     ``economic stimulus.'' The Senate would do us all a great 
     favor if it started again from scratch.

  In a different part they write:

       When the Congressional Budget Office analyzed the stimulus 
     bill in its original configuration, it found that just 25 
     percent of its content might have any effect on the economy 
     this year.
       A similar analysis by the Wall Street Journal concluded 
     that just 12 cents of every dollar spent would have a chance 
     to create immediate stimulus.

  They conclude:

       Make the measure look like a stimulus package rather than a 
     pork package.

  That is what most of us believe we should do. You build the bill from 
the bottom up. What actually stimulates the economy, what actually 
creates jobs, you put that in the program. There may be a place for 
extending unemployment benefits, though that probably should be in a 
separate bill, because it is clearly not stimulative even though it 
helps people who are hurting. I doubt that there would be any objection 
to doing it. But we ought to focus the stimulus on exactly that; 
Otherwise the American people are going to be cynical when they look at 
a bill that is $1.3 trillion in size, and the experts are saying a very 
small percentage of that actually does anything to create jobs or 
stimulate the economy.
  Let's go back to last December. In the Washington Post, Lawrence 
Summers, head of the President's National Economic Council, said:

       Investments will be chosen strategically based on what 
     yields the highest rate of return for the economy.

  The Congressional Budget Office, the CBO, projects that in fiscal 
year 2009, the deficit is going to total $1.2 trillion, and that 
doesn't include any of this stimulus bill which is about $1.3 trillion. 
Add those two together, we are talking about $2.5 trillion. So we need 
to take Lawrence Summers' advice and only spend money that will yield 
the highest rate of return for the economy. If we do that in building 
this bill from the bottom, we can actually do something that is great 
for the American people and still not be wasting taxpayer money. It 
might take 2 or 3 more days, but this is the most important economic 
bill this Congress will have considered in decades. It is the biggest 
bill in the history of the United States. We spent yesterday, Tuesday, 
on it, today, tomorrow, probably Friday, perhaps Saturday. We spent 5 
weeks on an energy bill a couple years ago. Surely on a bill of this 
magnitude and with the emergency facing the country, if it takes us 3 
or 4 more days to do it right, we ought to do it right. That means 
constructed from the bottom up with things we know will stimulate the 
economy and create jobs, not just fulfill campaign promises, not just 
make good on 8 years of things we wanted to spend money on but have not 
been able to find any other bill to stick it in until we got to this 
bill. Let's try to do this in a bipartisan way that will achieve the 
objective.
  The President himself, on Super Bowl Sunday, in a nationally 
televised interview on NBC, said:

       There will be no earmarks in the bill.

  He said he is going to be trimming out things that are not relevant 
to putting people back to work right now. My guess is he is fairly 
embarrassed with a lot of the earmarks that are in the bill. Most of my 
Democratic colleagues are meeting now. I hope they are talking about 
what can be eliminated from this bill, what kind of earmarks or 
wasteful spending can be eliminated from the bill. It has become an 
embarrassment. We would be very happy to have them join in some of our 
amendments which will eliminate that spending.
  Senator Conrad, chairman of the Budget Committee, knows what he is 
talking about in these matters. He told Fox News:

       There are other areas of the package that are really very 
     questionable in terms of whether they would stimulate the 
     economy. Some of the programs that are given money only have 
     10 percent spend out in the next two years.

  He is correct on that. On the same day Senator Dorgan also commented 
to Fox News that ``major chunks of the package do not spend out for 
years which is problematic.''
  We all agree. We ought to start over and start by eliminating these 
programs. If we do that, then we can meet an objective which is far 
higher than either 12 percent or 25 percent in terms of the money we 
spend that will actually provide new jobs.
  The Congressional Budget Office, nonpartisan, says only 12 percent of 
the discretionary spending in the bill will be spent by the end of this 
year and that less than half of the total of the discretionary money 
will be spent by the end of the following year. So more than half of 
the bill starts spending in the year 2011. I hope the recession is over 
by 2011. If it is not, obviously, we can look at that time to see 
whether we need more stimulus. But having stimulus for 2 years, that is 
a pretty long time to be stimulating. Let's adopt the McCain idea that 
after 2 years we take a pause and see what else we might need to do. We 
could probably save a lot of money. We would make wiser decisions, and 
we would be stimulating in the short term which is what we want to do.
  The President's Chief of Staff said last year: You never want to 
waste a crisis. He was referring to the use of a crisis such as this to 
accomplish certain good. He was talking about reform ideas and so on. 
But we have to be careful that others aren't using this as an excuse to 
put spending in a bill that has been pent up for 8 years, that some of 
our colleagues wish to have done but haven't found a vehicle to carry 
it and, thus, stick it in this bill. That is what the American people 
are so upset about.
  If we will solve this problem, the American people will be a lot more 
generous in their support for the other things we want to do. I have 
talked about some examples. I don't want to go through a laundry list. 
A lot of this is oriented to Washington, DC: $9 billion for a Federal 
buildings fund; more money to help the auto companies, $600 million to 
buy more cars for Government employees; $248 million for USDA 
facilities modernization; $34 million to spruce up the Commerce 
Department headquarters; $125 million for the DC sewer system. All of 
these may well be important things to do. You can't argue that they are 
directly stimulative, though some people will have to do the work 
associated with them. But we have no idea whether these things are 
ready to go, whether they can be done in the first 2 years, or whether 
these are things that actually will be spent, as will the majority of 
the money, in the 2 years after 2010.
  In any event, we have a process, as Senator Cochran, the ranking 
member on the Appropriations Committee, has said, that enables us to 
vet all of this spending and prioritize it so we put the most helpful 
spending first, and those things that are not as justified then fall 
out of the spending for this year and maybe come back next year. But it 
is our way of determining what we really want to do as a country that, 
obviously, cannot just have everything we want, and we cannot pay for 
simply everything. So, as Senator Cochran said, we have the 
responsibility to be deliberate and consider these items

[[Page S1506]]

carefully in the context of the President's formal budget request. It 
is a matter of making tough decisions, and I would hope we could do 
that.
  Now, let's assume--because I am sure our Democratic colleagues will 
agree to eliminate some of these wasteful programs--we still have the 
problem that if the money is not reduced, then the money is still in 
the bill to be spent by somebody somewhere. So it is not just a matter 
of taking earmarks out, but it is a matter of eliminating the funding 
categories those earmarks are in, or as soon as we authorize the money, 
it will come right back in and we will have the same projects.
  In this regard, I am very troubled by programs that would fund 
directly States and local governments because we have seen the lists 
they have sent to us--their wish list of things they would like to get. 
If we simply strike the exact delineation of where they want some of 
this money to go but leave the pot of money there, I ask you, where is 
it going to be spent? It will not take 5 minutes for them to get that 
list back out, put it on the table, and start going to town.
  Just some general categories here:
  There is $16 billion to repair and build schools. That has always 
been a local school function. It is not a Federal function.
  There is $5.5 billion for a brandnew discretionary program on 
transportation.
  There is $2.25 billion for a neighborhood stabilization program. That 
is the same kind of program that would have made funding available for 
groups such as ACORN that we took out of the housing bill in June of 
last year. I do not think people want this kind of money going to ACORN 
or groups like that.
  There is $500 million to upgrade fire stations. I know all our local 
fire departments would love to have money to upgrade their fire 
stations. Is that a Federal responsibility?
  There is $9 billion to the National Telecommunications and 
Information Administration for grants to provide access to broadband.
  There are huge chunks that would go to local projects specifically 
delineated by the Conference of Mayors. On January 17, they issued 
their fourth update of a report that details much of the spending they 
would like to accomplish. It is a stunning list of porkbarrel projects 
involving swimming pools, water slides, corporate jet hangars, 
skateboard parks, dog parks, equestrian trails, golf courses, parking 
garages, museums, bike paths, and so on. Some of those things might be 
perfectly appropriate; all of them should be local responsibilities. If 
people in the community want something like that badly enough, they 
will find a way to get the money to support it.
  Just to illustrate the degree to which this prospect of free money 
has motivated people to what I regard as silliness--again, some of 
these projects may be perfectly appropriate; if they are, local 
governments will find a way to fund them--there is $8.4 million--a lot 
of money--for a polar bear exhibit in Providence, RI. There is $6.1 
million for corporate jet hangars in Fayetteville, AK. There is--a 
small amount of money--$100,000 to create one cop job in Sulfur Creek, 
CA. I do not know what kind of community Sulfur Creek is, but surely 
California could come up with $100,000 to get a police officer on the 
force for that community, I would think. There is a lot of money here 
for California. There is money to rehabilitate a skateboard park in 
Alameda, CA; $500,000 for Sunset View Dog Park in Chula Vista, CA. 
There is money for an equestrian park in San Juan, Puerto Rico, and so 
on.
  The bottom line is, these things ought to be subjected to the usual 
appropriations process. I guarantee you, the appropriators are pretty 
careful when they go through these items. Yes, some of this stuff slips 
in, but they try to prioritize these projects, and it is not just a 
giveaway to local communities.
  I think it is worthwhile noting what some of the money is 
specifically spent for in categories. Golf courses seem to be a big 
item. Golf courses. There are several million dollars for golf course 
renovations and construction in Shreveport, LA; Brockton, MA; 
Roseville, MN; Florissant, MO; St. Louis, MO; Lincoln, NE. There is an 
environmentally friendly golf course in Dayton, OH. That one might win 
the approval of the appropriators. There is the renovation of a golf 
course maintenance building in Kauai County, HI.
  Not to leave out my own State--there are a lot of museums that are 
apparently in need of some renovation or construction here--there is 
one in Scottsdale, $35 million for a museum of the West. I guarantee 
you that will be a great museum, but I would hope we could help the 
folks in Arizona generate the money for this museum. There are museums 
in Miami, FL; Meridian, MS; a Minor League Baseball museum in Durham, 
NC; a museum of contemporary science--there are several museums of 
contemporary science; that must be a new trend--in Trenton, NJ. There 
is a music museum in Puerto Rico; a music hall of fame in Florissant, 
MO.
  I may be mispronouncing the names of some of these communities, in 
which case I apologize.
  There is a local history museum at Imperial Centre in Rocky Mount, 
NC. I bet that would be fun to go to. In Trenton, NJ, there is another 
contemporary science museum--again, in Trenton, NJ. There is the Las 
Vegas Historic Post Office Museum in Las Vegas, NV, and the Las Vegas 
Performing Arts Center in Las Vegas. There is the Art Walk at the 
Rochester Museum and Science Center in Rochester, NY; Lima, OH; Puerto 
Rico--well, there are three more in Puerto Rico--four more; one in 
Green Bay, WI. You get the drift.
  Parking garages are a pretty big item, and I will not list them all 
here, but there are a lot of them in California, Colorado, Connecticut. 
There is a maintenance garage recycling and sanitation truck wash--let 
me say that again--a maintenance garage recycling and sanitation truck 
wash in Bridgeport, CT--I am sure that is necessary, actually--$27 
million. I gather all other communities in the country find a way to 
pay for theirs, but Bridgeport needs some help on that. Structural 
repairs to Yankee Doodle Garage in Norwalk, CT. And that list goes on 
and on. In fact, the list goes on and on. I will refrain from reading 
about another 30 of these.
  Bicycles are a big item. Bike paths in Long Beach, CA; Miami, FL; 
Lewiston, ME; St. Louis, MO; Austin and Arlington, TX; Salt Lake City.
  Water slides are a pretty good item. There is one in Carmel, IN. 
There is one in Shreveport, LA.
  Pools--as I said, that is a big item. There is lots of swimming pool 
rebuilding and refurbishing and so on: California: San Leandro, CA; 
Sulfur Creek, CA--a lot of California swimming pools. There are a 
couple here in Connecticut, Colorado. There is one to replace pools at 
city high schools in Meriden, CT; one to upgrade swimming pools and 
school restrooms in New Haven, CT. Florida has several pools. They are 
going to build a fishing pier in Savannah, GA. This one I do not 
understand, Mr. President: millions of dollars for propane heating 
replacement with solar water heating systems for county swimming pools 
in Maui, HI. I did not think they needed heated pools in Maui, but more 
power to them if they can go with solar. Again, the list goes on and on 
and on. This is the wish list.
  These are the kinds of things that when you make money free, people 
will line up to take part in. Even if we were to eliminate the pots of 
money here that these particular specific items would come from--let's 
assume all of the earmarks are gone but the pot of money is there--
there are still other pots of money in the bill worth billions of 
dollars that represent wasteful Washington spending, money that will 
not go to create jobs.
  I urge my colleagues here, as we talk about bipartisanship, as every 
one of us is struck by the absolute seriousness of the crisis that 
faces our country, we want to do something that works. And to ask 
somebody to support this is to say, in 6 months or a year or a year and 
a half, did it work? For those who support something that does not 
work, not only is that not in the best interests of the United States, 
but I think there will be a very high price to pay for wasting perhaps 
a trillion dollars. It is money we do not have, and we cannot afford to 
waste it.
  So what I would urge my colleagues to do: We have several amendments 
today and tomorrow that will be offered to try to end the wasteful 
Washington spending and relegate those

[[Page S1507]]

kinds of bills to the Appropriations Committee, where they can make the 
tough choices, and then focus on the things which can actually create 
jobs and stimulate the economy. Our colleagues on our side of the aisle 
will have several important suggestions in that regard. We probably 
need to start with housing, which is where the problem started. 
Experts, as I read this morning, agree that until you solve that, you 
are probably not going to solve the rest of the problem.
  So if we can approach the bill from a commonsense standpoint, which 
is what the American people want us to do, we can create a very good 
piece of legislation. But as it stands right now, there are going to 
have to be fundamental changes in this bill, starting basically from 
scratch, in order for it to do the work we want it to do and to be 
supported by the American people. We can afford the extra time, if it 
is 2 or 3 days, to get it done right.
  I urge my colleagues, let's put the partisanship aside, the victory 
dances and all of that, and roll up our sleeves and try to see if we 
can follow the admonitions of the President when he laid out the 
original concept of this bill--timely, targeted, and temporary--and try 
to focus on those things which will do the job rather than simply to 
fulfill our spending wishes or those of many of our well-meaning 
constituents.

                               Exhibit 1

               [From the Arizona Republic, Feb. 4, 2009]

         Senators Should Just Start Over in Fixing Fiscal Mess

       In opposing President Barack Obama's economic-stimulus 
     package--now ballooned to more than $900 billion--
     congressional Republicans risk letting Democrats earn all the 
     credit as stewards of a national economic revival.
       Unfortunately, their strategy looks to be a safe bet.
       Far too much of the stimulus bill is simply unserious as 
     ``economic stimulus.''
       The Senate would do us all a great favor if it started 
     again from scratch.
       Congress now enjoys a public mandate to spend like the 
     drunken sailor of its dreams . . . on one condition. That it 
     allocate spending not to its beloved ``pork,'' but to 
     spending projects that offer some promise, however slight, of 
     sparking the economy.
       And just what constitutes an economy-igniting spending 
     project?
       We know what doesn't. Smoking-cessation programs may be 
     helpful, but they are not ``stimulus.''
       Spending $870 million to combat bird flu may be a 
     worthwhile investment in public health. But its prospects for 
     kick-starting the 2009 U.S. economy are pretty much nil.
       When the Congressional Budget Office analyzed the stimulus 
     bill in its original configuration, it found that just 25 
     percent of its content might have any effect on the economy 
     this year.
       A similar analysis by the Wall Street Journal concluded 
     that just 12 cents of every dollar spent would have a chance 
     to create immediate stimulus.
       And there are outright dangerous provisions to the bill.
       The ``Buy American'' clause in the legislation, ensuring 
     that only American-made steel and manufactured goods are 
     purchased with stimulus money, is an open invitation to an 
     economy-wrecking trade war. Europeans are rightfully 
     infuriated by it.
       So are serious Democratic-leaning economists like Lawrence 
     Summers.
       Make the measure look like a stimulus package rather than a 
     pork package.
       Then, Democrats might manage to peel off some of the GOP 
     support that the president deems so valuable.

  The PRESIDING OFFICER (Mr. Merkley). The Senator from South Carolina.
  Mr. DeMINT. Thank you, Mr. President.
  I would like to speak for a few moments on a couple of amendments. 
But before I do, I ask unanimous consent that following my talk that 
Senator Saxby Chambliss be allowed to speak.
  The PRESIDING OFFICER. Is there objection?
  The Senator from Montana.
  Mr. BAUCUS. Mr. President, reserving the right to object, we have 
been going back and forth, so if someone from this side of the aisle 
does appear by the time the Senator finishes his remarks, we could 
either have a gentlemen's agreement or I could ask unanimous consent 
that the next speaker be a Democrat. Everyone is an honorable Senator 
here, so if a Democrat is here, after you finish, I say to the 
Senator--
  Mr. DeMINT. I revise my request, Mr. President, to fit that request.
  Mr. BAUCUS. I thank the Senator.
  The PRESIDING OFFICER. Is there objection to the request as revised?
  Mr. BAUCUS. I have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DeMINT. Thank you, Mr. President.


                           Amendment No. 168

  Mr. President, I would like to speak for a few minutes about 
Amendment No. 168. It is the DeMint amendment we are calling the 
American Option to the spending plan that has been proposed by the 
majority. This is a complete substitute for the spending plan. We call 
it the American Option because it helps to develop a free market 
American economy by leaving money in the hands of people and businesses 
rather than taking it and then having the Government direct where the 
money goes. So it basically puts our faith in the American people, in 
our free market economic system, instead of political decisions here in 
Washington.
  Americans are very concerned about the direction of our country. In 
fact, I have never seen people more anxious about where we are. They 
are worried about the economy but even more worried about the reckless 
spending and Government intrusion into our culture and into our free 
markets.
  Our economy is in trouble. That is obvious. The national unemployment 
rate is now over 7 percent and climbing. Stock markets have plunged, 
jeopardizing the retirement security of millions of seniors. Nearly a 
million homes were repossessed last year, and in the last week, 
thousands of Americans have lost their jobs at some of our Nation's 
strongest companies, including Home Depot, Microsoft, Caterpillar, and 
Boeing. In the midst of these difficult and uncertain times, Americans 
understandably voted for change. Frustrated with runaway spending, Wall 
Street bailouts, and soaring energy prices, they voted for President 
Obama who, as a candidate, promised to lower taxes, cut spending, 
increase domestic energy, and create millions of new jobs.

  I like President Obama very much. We were elected to the Senate 
together, and we have worked together on several common goals. I truly 
believe he wants to do what is best for our country, but our economy 
needs more than slogans and empty promises.
  As I have said before, I believe the stimulus bill that is being 
championed by President Obama and the Democratic majority is the worst 
piece of economic legislation Congress has considered in 100 years. Not 
since the passage in 1909 of the 16th amendment which cleared the way 
for Federal income tax has the United States seriously entertained a 
policy so comprehensively hostile to economic freedom, nor so 
arrogantly indifferent to economic reality. The bill, if it were a 
country, would have the 15th largest economy in the world--right in 
between Australia and Mexico and greater than the gross domestic 
product of Saudi Arabia and Iran put together. The American people will 
be forced to borrow 100 percent of the unprecedented $1.2 trillion 
pricetag when you include interest. The stimulus bill will cost well 
over $1 billion for every page it is printed on and $400,000 for every 
job it hopes to create or save.
  Proponents argue that we are facing a once-in-a-lifetime economic 
crisis and only an immediate and overwhelming stimulus bill can ignite 
the economy, create jobs, and spur growth. That may very well be true, 
but the spending bill before us today is just that: a spending bill, 
not an economic stimulus bill. The Democratic bill takes money--it 
actually borrows money--and decides where it should go. It does 
virtually nothing to stimulate the economy while it wastes billions of 
taxpayer dollars. It is a hodgepodge of long-supported pet projects 
that should be considered in the normal budget process but not an 
economic stimulus bill. Using the troubled economy as their motive, 
Democrats have opened the floodgates for all sorts of outrageous 
wasteful spending.
  Here are just a few of the examples from the Senate substitute: $400 
million for researching sexually transmitted diseases. They are telling 
us now that they took that out, but then we find they left the money in 
there, which could be used for the same purposes once we pass the bill. 
There is $200 million for bike and pedestrian trails and off-road 
vehicle routes; $200 million to force the military to buy electric 
cars; $34 million to renovate the Department of Commerce headquarters; 
$75 million for a program to

[[Page S1508]]

end smoking, which, if successful, will bankrupt the children's health 
program Democrats just passed last week.
  Of the more than $800 billion in the bill that is being sold as 
infrastructure investment, only $30 billion will actually go to build 
highways, about $40 billion for upgrades in our telecommunications and 
electricity infrastructure, and about $20 billion in business tax cuts. 
These are the only three components of the bill that might arguably 
stimulate the economy and create jobs and, even then, only temporarily. 
Altogether, only 11 percent of this so-called ``American Recovery and 
Reinvestment Act of 2009'' will have anything to do with either 
recovery or reinvestment. And rest assured, the elevated spending 
levels in this bill will never recede.
  The tax side of the bill is not much better. We can think of it this 
way: If nearly every Democrat in Congress supports a tax cut, it is 
probably not a tax cut. Indeed, the text of the Democratic plan reveals 
that $212 billion of smoke-and-mirror gimmicks--temporary cuts and 
rebates exactly like those that failed to stimulate the economy last 
year. Half of the tax changes in this bill are for people who don't 
even pay taxes, and all of them are temporary, which will undermine 
their impact. This bill is not an economic stimulus bill at all, but 
really a political stimulus--a stimulus to grow Government in 
Washington.
  Any doubters of the bare-knuckled partisanship at the heart of the 
Democrats' trillion-dollar catastrophe will do well to ask a simple 
question: Who benefits from this legislation? Who, indeed? Alternative 
energy companies, public employee unions, teachers unions, university 
faculty and administrators, welfare recipients, ACORN-style community 
organizers, politicians who spend the money, Federal bureaucrats who 
allocate it, and the limousine liberal lawyers and lobbyists who will 
influence every dime behind the scenes. In other words, this bill is a 
massive transfer of wealth not from the rich to the poor, but from 
middle-class families and small businesses to favored Democratic 
constituencies who are not the poor and middle class we promised to 
help.
  This bill is not a stimulus; it is a mugging. It is a fraud. 
Conservatives who fear proponents of this bill want to inch our economy 
closer to a European style of socialism are kidding themselves. The 
proponents of this bill want to strap a big rocket on the back of our 
economy and launch it all the way to Brussels. This massive spending 
bill is fatally flawed. It will not rescue our economy; it will 
strangle it.
  That is why this bill must be stopped dead in its tracks. It cannot 
be fixed by tweaking it here or tweaking it there. It must be scrapped 
entirely so the leadership in Congress will be forced to consider real 
alternatives.
  Fortunately, there is another way, a better way, a way that will 
actually stimulate the economy, spur investment, and create jobs, a way 
that will permanently and immediately save billions of dollars in the 
private sector and in the hands of Americans who buy goods, provide 
services, start businesses, and hire employees. We call it the American 
Option because it relies on the American people to generate jobs and 
growth, not the Federal Government.
  The plan I am offering is not new or clever. It is only 11 pages 
long. It comes with no bells or whistles, no smoke and mirrors, but it 
will work, and it is based on proven American principles of freedom, 
equality, and opportunity.
  The plan--developed by scholars J.D. Foster and William Beach at the 
Heritage Foundation--is the best anyone has proposed since the 
recession first took hold. The idea is simple. First, make the 
temporary tax cuts of 2001 and 2003 that are currently set to expire in 
2011 permanent. Make our current rates permanent. This would create the 
certainty for citizens and businesses they need to plan their spending 
and to grow their businesses. The short-term, temporary tax relief of 
the sort envisioned by the Democratic plan does not stimulate economic 
growth; it is temporary and it creates economic uncertainty. It is the 
difference between a $1,000 gift one month, which you might put away or 
use to pay off some credit card, and a $1,000-a-month raise which might 
get you thinking about buying a house, a new car, or taking a summer 
vacation or starting a new business. To encourage people to take risks 
and create new jobs, we must make tax relief for families and small 
businesses permanent. Recessions are caused by uncertainty that keeps 
investors on the sidelines. Permanent low taxes allow for plans and 
decisions to be made with an eye toward the future.
  With the 2011 tax bomb diffused, part 2 of our plan will cut income 
tax rates across the board. The top marginal rate--the one paid by most 
of the small businesses that create new jobs--will fall from 35 percent 
to 25 percent. It simplifies the code to include only two other 
brackets: 15 and 10. These marginal rate reductions would be permanent 
and give the private sector maximum predictability as it decides how to 
best spend its recovered income. This is a matter of fairness. No 
American family should be forced to pay the Federal Government more 
than 25 percent of the fruits of their labor.
  Just as we cut taxes for families and small businesses, we need to 
cut them for corporations as well, from 35 to 25 percent, and we 
shouldn't be afraid to say so. Our corporate tax rate is one of the 
highest in the world, driving investment and jobs overseas. Lowering 
this key rate will unlock trillions of dollars to be invested in 
America instead of abroad. Rather than giving large companies loopholes 
and targeted tax benefits which only encourage them to spend money on 
lobbyists who secure such goodies, Congress should get out of the 
business of picking winners and losers in the market and simply cut 
everyone's taxes and let's let the best companies win. This plan will 
make businesses compete for consumers, not Congressmen and Senators.

  To further simplify and improve the code, our plan would also 
permanently repeal the alternative minimum tax, permanently maintain 
the capital gains and dividend taxes at 15 percent, permanently kill 
the death tax for estates under $5 million, and cut the tax rate to 15 
percent; permanently extend the $1,000-per-child tax credit, 
permanently repeal the marriage penalty, and permanently limit itemized 
deductions to home mortgage interest and charitable contributions.
  The Heritage Foundation's Center for Data Analysis' widely respected 
economic forecasting model projects this plan would result in nearly 
500,000 more jobs this year, almost 3 million new jobs by 2011, 7.5 
million new jobs by 2013, and a total of nearly 18 million jobs over 
the next decade. That is an average of nearly 2 million jobs every 
year. Instead of taking $1 trillion out of the economy so politicians 
can spread it around to special interests, the American Option will 
keep a trillion more dollars in the hands of American families and 
businesses. Instead of growing Government where waste and corruption 
run rampant, we grow the private sector where innovation flourishes. 
Instead of giving the power and control of our economy to politicians 
and bureaucrats, we give Americans and small businesses the freedom to 
spend and invest their own money. The positive effects of letting more 
money stay in the private economy immediately and permanently will 
quickly become apparent.
  Beyond the job creation, I know we are all also interested in seeing 
our housing and real estate markets, as well as the automobile sector, 
emerge from the doldrums. Within 5 years, the American Option would 
produce $175 billion in residential investment and $362 billion in 
nonresidential investment. That is more than a half trillion dollars 
left to private citizens with the motivation to care for their 
families, invest in a new business, or expand their current productive 
activities.
  The auto industry will also experience a dramatic increase in sales 
activity. Between 2009 and 2011, total sales of new cars and light 
trucks would rise $24.5 billion more than they would otherwise. Again, 
allowing private citizens and businesses to use their own capital 
instead of sending it off to Washington benefits all sectors of the 
economy.
  The evidence in support of this legislation is not theoretical but 
historical, unlike the Keynesian arguments behind the Democratic 
spending and debt plan. In 1964 John F. Kennedy's tax reductions led to 
9 million private sector jobs in 5 years. Ronald Reagan's 1981 tax cuts 
led to 7 million in the same

[[Page S1509]]

timeframe. Five years on, the 2001 and 2003 tax cuts led to the 
creation of 4 million and 6 million jobs, respectively. Every time the 
United States has cut marginal tax rates, millions of jobs have been 
created--jobs that lifted the unemployment into the workplace, the 
working poor into the middle class, and the middle class into long-term 
economic security.
  Similar stories can be told of Great Britain's rescue under Margaret 
Thatcher in the 1980s. More recently, Israel's economic reforms under 
their Finance Minister changed their whole economic platform.
  President Obama's own chief economist has shown that tax cuts do 
truly stimulate economic activity to the tune of $3 of increased output 
for every dollar of tax relief.
  On the other hand, the world's greatest experiments in spending our 
way out of a recession have three textbook examples. The first is 
Franklin Roosevelt's response to the Great Depression. The New Deal 
began in 1933 with unemployment around 25 percent and effectively ended 
with the establishments of F.D.R.'s ``war economy'' in 1940 with 
unemployment still hovering around 20 percent. The second example is 
from the 1970s when huge deficits in the United States neither spurred 
economic growth nor curtailed inflation. The third example is Japan, 
their so-called Lost Decade, in which the Japanese Government tried in 
vain for 10 years to spend its way out of a national real estate and 
investment collapse.
  Every discredited idea from these three monuments to economic 
mismanagement can be found in the fine print of the Democrats' $1 
trillion socialist experiment we are considering this week: massive 
spending, skyrocketing deficits, inevitable tax increases, and the 
disastrous unintended consequences of hurried and arbitrary meddling in 
our economy.
  Finally, there is another issue I want to address. I have recently 
heard some of my colleagues say that this recession is the fault of the 
free market, that President Obama has inherited the problems of a 
conservative ideology.
  Mr. President, the charge is flatly, demonstrably false. In fact, it 
is incredible that anyone would say it.
  Let me be clear: conservatism has nothing to apologize for.
  It was not conservatism that foisted Fannie Mae and Freddie Mac onto 
the national credit market.
  It was not conservatism that that shook-down the Nation's banking 
system with the Community Reinvestment Act.
  It was not conservatism that asked for, lied about, and then wasted 
$350 billion for the Troubled Asset Relief Program.
  Nor did conservatism sign on to the second tranche of the TARP funds 
now in the hands of our esteemed new Treasury Secretary.
  It was not conservatism that used taxpayer funds to bail out the 
perpetrators of the Wall Street meltdown.
  It wasn't conservatism that led our financial industry to make these 
reckless loans, and it certainly wasn't conservatism that made that 
industry ask for the taxpayers to foot the bill for their idiocy.
  It wasn't conservatism that bailed out an auto industry bankrupted by 
its inability to manage costs and strangled by the tentacles of 
unionism.
  Every problem now plaguing our economy can be directly traced to some 
Government policy that was passed over the vehement objections and 
warnings of principled conservatives.
  The same scenario is playing out with this spending bill, but the 
result is not preordained.
  The Democrat plan will fail, it will hurt our economy, it will kill 
jobs, it will lengthen and deepen the recession, and it will delay any 
hope of recovery.
  But it is not enough to merely stop this, the wrong bill--we must 
pass the right one.
  It is not simply a viable alternative--it is the American option to 
rescue our economy from an inexorable slide toward European social-
democracy.
  With a troubled economy, mounting national debt, and an entitlement 
crisis ready to explode, conservatives must offer bold and proven 
solutions to secure America's future.
  We cannot simply derail the ``liberal express''; we must show our 
fellow countrymen a better path.
  There is nothing wrong with our economy that a free people cannot 
solve. All we need is the freedom to take back from Washington control 
of our economic destiny.
  The policy approach I have outlined can work, and if implemented, 
will work. How do I know?
  Because liberating people to pursue their own happiness and fortune 
is the only thing that ever does.
  I thank the Chair, and yield the floor.
  The PRESIDING OFFICER. The Senator from Georgia is recognized.
  Mr. CHAMBLISS. Mr. President, I rise to discuss the economic stimulus 
package. First of all, my friend from South Carolina has raised so many 
valid points in his discussion. I know he has an amendment that is 
primarily focused on reduction of taxes to stimulate this economy, 
create jobs, and put more money into people's pockets. I concur with 
him 100 percent that this is the direction in which we need to go. I 
look forward to further debate on his amendment and seeing his 
amendment reach the floor.
  This stimulus package we are now debating gets more expensive and, 
frankly, less stimulating with every passing day. The Democrat's plan 
is not a job creating bill. Plain and simple, in its current form it is 
a spending bill.
  We have been going through a number of amendments over the last 
several days and I am pleased to see that some of those amendments have 
had success. I think the bill looks somewhat better, but we still have 
a long way to go. This bill should not be about pet projects. Instead 
of wasting $600 million, for example, of hard-earned taxpayer money for 
new cars for the Federal Government or $650 million for a failed 
digital TV transition program or even $120 million for the Census 
Bureau to hire personnel who specialize in ``partnerships,'' we should 
be spending Americans' money on creating jobs for Americans. These jobs 
should allow Americans to go out and buy new cars themselves and 
thereby stimulate and energize a very struggling automobile industry. 
This bill should put money in the pockets of individuals who can buy 
new TVs instead of having to worry about the digital transmission issue 
covered in this particular proposal.
  I have been in discussions with Senators McCain, Martinez, and 
others. We are in the process of finalizing an amendment that will be a 
substitute for the base bill that does exactly that--focus on creating 
jobs and stimulating the economy.
  Any package that is intended to focus on strengthening our economy 
should focus on three things and three things only:
  First of all, job creation. Despite an injection of hundreds of 
billions of dollars into our banking system, the credit markets remain 
frozen.
  A lack of both confidence in the market and credible borrowers are 
precluding our credit markets from thawing and freeing much needed 
capital. Along with the current dual track of the TARP program, we can 
loosen this tight grip on capital is through job creation.
  We must incentivize the creation of new jobs through favorable tax 
treatment of businesses and individuals. My friend from South Carolina 
mentioned an issue we are going to have in our amendment that is very 
critical, I think, to the long-term corporate structure in America. A 
solution that really will provide for the creation of jobs is the 
reduction of the corporate tax rate from 35 percent to 25 percent. We 
have the second highest corporate tax rate in the world. What are we 
doing about charging corporations that amount of money? What we are 
doing is exporting jobs out of America.
  I talked to one of the leading economists in the country this morning 
who happens to be a resident of my State and is somebody whom I look to 
for guidance from time to time. I asked him, ``If you could point to 
anything that would create jobs in America, what would the first thing 
be?'' He immediately said, ``Cutting the corporate tax rate.'' He said 
it is ridiculous what we do and that what we are going to hear from 
folks on the other side is that what we are doing by cutting the 
corporate tax rate is looking after the big corporations. The fact is, 
according to this renowned economist, the big corporations don't pay 
that 35 percent

[[Page S1510]]

anyway. It is the guys on Main Street, the insurance agencies in my 
home State, the veterinary hospitals down the street, and all the other 
small businesses that are, in fact, paying that 35 percent. It is our 
small manufacturers that depend on export markets to be competitive 
that are having to pay that 35 percent. If we reduce the corporate tax 
on those entities, then we are going to have the potential and the 
reality of creating jobs in this country. We also need to put more 
money in the pockets of individuals. One way we can do that, which we 
are going to have in our amendment, is by the reduction of payroll 
taxes. That will put a bigger paycheck into the pockets of every hard-
working American every single week; make no mistake about it.
  We have to look at spending measures that will have an immediate 
stimulative effect on our economy. Military and highway construction 
can provide jobs in the immediate future and put stability and 
confidence back in the marketplace and start people spending their 
paychecks again. There is no better way to put money into the 
manufacturing sector tomorrow than by putting money into defense 
contracting if it's done in the right and responsible way. We need to 
increase defense spending and make sure America remains safe and 
secure. Yet there is nothing in the base bill that the Democrats have 
offered that will increase pure defense spending.
  In addition to job creation, second, we have to focus on housing. The 
housing crisis is what got us into this real financial mess that we are 
in today. I don't care what we do with respect to trying to spend or 
tax our way out of this; unless we fix the housing sector in this 
country, we are never going to recover from the economic crisis we are 
seeing today.
  How do we do that? Again, you will see measures that have already 
been discussed in the form of amendments over the next couple of days--
amendments such as that from my colleague and friend, Senator Isakson, 
to provide a $15,000 tax credit to anyone who buys a house between 
January 1 and December 31. Measures that are outside-the-box thinking 
such as the one by the Senator from Nevada that proposes to provide 
long-term, low-interest loans for individuals seeking to either 
purchase a home or to refinance a home, where if they are not able to 
do this, they will be subject to foreclosure. So it is these types of 
housing measures and provisions that will allow us to stimulate the 
housing sector and try to get that portion of our economy back on 
track.
  Third, in addition to the job creation and housing, we have to focus 
on compassion for folks who have lost jobs during these tough times, 
through no fault of their own. In my State, we have had 2 weeks of 
major announcements of job losses. It is simply due to the fact that 
these corporations are having to develop cost-cutting measures that 
will improve their bottom line because their sales are down 
significantly. Their workers are quality workers and they would like to 
keep them on, but they simply cannot afford it. They have to find cost-
cutting measures.
  So when you find folks such as that who are in need of assistance, we 
have an obligation, I think, to provide some relief to them. It is 
important that we prevent the bottom from getting deeper. We need to 
work to assist those who have fallen as a result of this spiraling 
economy and not from irresponsible fiscal decisions.
  We must act to expand protections to serve as a compassionate step 
toward regrowth of our economy, a restrengthening in our markets, and a 
return to fiscal security.
  All these provisions are going to be included, along with others, in 
the substitute amendment that will be forthcoming either tonight or 
tomorrow. We must be clear--job creation doesn't mean ``Buy American.'' 
In tough economic times, it is all too easy to turn inward, to want to 
build protectionist walls around America. Nobody believes in buying 
American more than I do, but it is not the time to pretend our economy 
knows only the bounds of our borders.
  I say this as someone who represents a State with a strong 
manufacturing sector. We live in an interconnected, global economy, 
where most manufactured products have at least one component not made 
in America. ``Buy American'' is the quickest way to export American 
jobs.
  The biggest problem I see with the current proposal that is under 
debate, which came out of the Finance Committee from the Democratic 
side, is that we are now having to approach that bill in a top-down 
way. In other words, we are having to take the bill as it is and have 
amendments forthcoming that seek to strip out provisions in there that 
are not stimulating. These are the pet projects for individuals in this 
body, projects that will do nothing but take money out of taxpayers' 
pockets.
  What we should do is develop a system directed toward this crisis 
that is a bottom-up review and a bottom-up attack on this financial 
crisis. We can do that basically by scrapping the current bill and 
starting over again. It is not that complicated to do.
  I hope, at the end of the day, that this is the approach we will 
ultimately take. It is not just this trillion dollar spending package 
we are looking at in the Senate; we have to be responsible as we move 
forward because there are other bills that are coming right behind this 
one. There is a TARP III, which we understand will be laid on the table 
within the next few days. We have heard numbers as high as another half 
trillion dollars that may be asked for in TARP III, and that may not be 
the end of the road there.
  There is also an Omnibus bill that I understand has already been put 
together that spends $1 trillion of taxpayers' money. One of my 
constituents said to me the other day, ``We used to talk in terms of a 
million. Then we got to where we talk in terms of a billion. Now you 
folks are talking in terms of a trillion. What comes after a 
trillion?''
  That is a pretty tough question to answer, but we are fast getting 
there. We as policymakers in the Senate have to be responsible with the 
taxpayers' money. Sure, we want to do everything we can from a policy 
standpoint to stimulate America out of this economic crisis. But 
spending our way out of this situation is not the answer. That is why I 
hope we can review where we are with this current proposal, and instead 
of having a top-down review of it, look at it in more positive terms 
and have a bottom-up review. Let's start over again with the basics. We 
should start with the housing sector and figure out how to fix it. If 
there are other ideas out there than what has already been talked 
about, let's put them on the table and figure it out.
  Secondly, let's look at how we are going to create jobs. We simply 
know by spending money that we are not going to create or maintain 
jobs. There are a lot of smart people in this body. Let's figure out 
the best solution.
  Lastly, let's be compassionate. We need to make sure Americans are 
taken care of when they have lost their jobs through no fault of their 
own.
  Mr. President, I yield the floor. I see the Senator from Rhode Island 
is here. I assume going back and forth he would be next.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. Mr. President, I rise today to discuss a feature of 
the economic recovery legislation that will both create jobs in the 
short term and help us confront the long-term economic challenges that 
are facing us.
  Clearly, creating jobs is a paramount goal of this legislation. In 
this time of deepening recession, one in ten Rhode Islanders is looking 
for a job. At 10 percent, our unemployment rate is second in New 
England and the second highest across this entire Nation. As I have 
traveled around my State, I have heard from countless Rhode Islanders 
struggling to hold on to their retirement savings, their homes, and 
their livelihoods.
  Against this dark background, jobs mean security. Steady employment 
helps families pay the bills and plan for the future. Jobs mean 
confidence in an unsettled time. In this weakening economy, job 
creation should be our highest economic priority.
  But at the end of the day, the best jobs this legislation can create 
are jobs that produce lasting infrastructure, assets that will help our 
economy function smoothly for years to come, such as highways, bridges, 
weatherized homes and schools, and water treatment plants. These are 
win-wins for the American people.

[[Page S1511]]

  Fortunately, this bill goes beyond a definition of infrastructure as 
just the things the Romans could build. The last few decades have seen 
enormous innovation in this country--new communications platforms, the 
Internet and mobile phones, new sources of energy. This technological 
revolution is transforming the way we live and work, as the rail system 
did and the highway system did in decades and centuries past. And as 
the Federal Government helped build the railways and highways, the 
bricks and mortar infrastructure of the 20th century, today this 
recovery bill will support the digital infrastructure of the 21st 
century. It is a dual benefit: jobs today and a platform for growth 
tomorrow.
  To me, one of the most vital parts of our Nation's infrastructure in 
this 21st century will be the development of a national health 
information network to improve the quality and efficiency of health 
care, to save money, and to save lives. But today this network is 
growing at the speed of mud. Health care is frighteningly behind the 
rest of American industry in its development and implementation of 
information technology. Why? Because of economics, the strange, 
bizarre, twisted economics of our health care system that fails to 
reward doctors and hospitals when they invest in health information 
infrastructure.
  If we can solve the health information network problem, private 
industry will develop technology to allow doctors to prescribe drugs 
electronically and help remind you to take them. Technology will help 
doctors update your vital information in real time and cross-reference 
your health issues with the best illness prevention and treatment 
strategies. And technology promises decision support programs 
implementing best medical practices which will help health care 
providers avoid costly, life-threatening, and completely unnecessary 
medical errors that now bedevil our health care system.
  Look at what private technology and innovation have already done with 
the Internet--Google, e-Bay, Amazon, YouTube, Facebook. Whose life has 
not been changed?
  Imagine what can happen in health care. Wonderful opportunities 
beckon, both in the near term, because funding this infrastructure will 
create jobs in the information technology sector, and in the long term 
to help us bring down the spiraling health care costs that threaten to 
engulf our economy.
  But the broken economics of the health care system mean that those 
opportunities will not arise without help. Unless the Federal 
Government gets involved to set standards for this technology on which 
everyone can agree, the resolution of a digital x-ray image, for 
instance, or requirements protecting a patient's privacy or leveling 
economic obstacles, we will never get to a national system.
  The Romans could not build an electronic health information 
infrastructure, but we can and we must, and this legislation will.
  There are rumors that an amendment will shortly be adopted that 
would, among other things, strip out this investment in health 
information technology. Of all the dumb mistakes we could make in this 
bill, that would be the very dumbest of all. It would harm the 
immediate element of job creation that is important to this 
infrastructure. It would slow down the development of a national health 
information infrastructure, and it would compromise our ability to deal 
with the health care crisis that is looming behind the economic crisis 
we are dealing with now.
  As I see it, we have three waves stacked up. We have an economic 
crisis that is upon us that we need to address. Immediately behind that 
is a bigger and worse health care crisis, bigger and worse than the 
crisis we are facing now. And behind that is an environmental, global 
warming, and climate change crisis that is bigger still.
  Now is the time to prepare for that next health care crisis, the one 
we will have to address as soon as we begin to get our arms around the 
economic crisis.
  I have been a champion of health information technology since I was 
attorney general of Rhode Island years ago, and the snail's pace of 
adoption has both perplexed and disappointed me. I frequently ask 
doctors from all across the country why they insist on using paper, and 
I always get the same three answers. One: I can't afford in my practice 
to put all this machinery in. Two: I tried using health information 
technology, but it was too complicated. Or three: I don't want to 
invest in this and then get it wrong. I don't want to invest until I 
know what the standards are. I don't want to take what I call the 
Betamax risk of investing in the wrong technology.
  There is an additional problem, at least for electronic prescribing. 
The Federal Government insists on doctors maintaining a paper system 
for controlled prescriptions. If you tried to move to an electronic 
system, you have to maintain two. It does not make any sense.
  The doctors' concerns about health information technology are 
answered in this recovery package.
  First, the bill addresses the cost issue in a number of ways. If you 
are a doctor who cannot afford to purchase a health information system 
so that your patients can have an electronic health record of their own 
that is private and securely theirs, this bill has grant money to help 
you. If you are a doctor doing well enough not to need a grant but 
could certainly use a loan to make this happen, the bill has loan money 
for you. Or maybe you are a doctor who can afford the upfront 
investment but have not been able to make the business case for the 
ongoing use of the technology and the change it will require in the 
day-to-day administration of your practice. This bill reverses the 
backwards incentives that discouraged the use of health information 
technology and that discouraged quality improvement efforts.
  For the first time, Medicare and Medicaid are going to pay for 
meaningful use of health information technology in doctors' offices. 
Starting with this recovery bill, keeping people healthy will keep the 
business of medicine healthy.
  Second is the challenge of technology. Health information technology 
is about much more than digitizing data, more than going from illegible 
handwriting to clear electronic type. Health IT is about coordinating 
care between multiple providers. Anybody who has a serious illness is 
aware of the confusion that surrounds having to deal with multiple 
doctors. Health IT is about helping patients and their loved ones 
manage those complex, chronic conditions. Health IT is about using best 
practice protocols so the wide variation--the wide and unexplained 
variation--in American medicine can be narrowed down to the best 
practices we know of and Americans can be assured they are getting the 
best quality of care. Health IT is about better care for patients who 
are ill, and it is also about preventive care for patients so they do 
not become ill.
  The recovery bill recognizes that the goal is not health IT in every 
pot, but higher quality, more efficient care for every single American 
who interacts with our health care system. The economic recovery bill 
also recognizes that for some doctors, this is a lofty goal and that 
they will need more than money to get there.
  Everyone knows that new technologies are hard to learn, hard to adapt 
to, and hard to incorporate into an existing system. You can be a 
brilliant doctor, a master at the healing arts, and still have trouble 
coping with the demands of a new information technology. It often seems 
easier to keep doing things as they have always been done. So this bill 
does not just hand out grants to buy big fancy new boxes of equipment 
to sit in office closets. This bill includes implementation assistance 
so the doctors have a little help opening that box, installing that 
technology, and putting it to work on behalf of their patients.
  That assistance will be offered through regional extension centers, 
not unlike our agricultural extension service that has been helping 
farmers all over this great Nation for decades. Every Senator in this 
body from a rural State knows how helpful and effective the 
agricultural extension model is. And for those of us from urban areas, 
think of it as a ``geek squad'' for American doctors.
  Third, the standards issue. Our esteemed colleague Dr. Coburn has 
often noted that the greatest challenge he sees in building up our 
national health information infrastructure is the lack of national 
standards. Doctors are

[[Page S1512]]

often afraid to adopt new technology before they are sure their health 
information system will be able to talk to other doctors' health 
information systems. Fortunately, significant progress has been made in 
creating a broad set of standards for health information technology 
products, thanks in large part to the leadership of outgoing HHS 
Secretary Mike Leavitt. The recovery bill acknowledges that progress 
and builds upon it, establishing a new health information technology 
standards committee and establishing a process for the adoption of 
future standards, implementation specifications, and certification 
criteria so you know what you are buying meets the standards.
  All that said, we all know that health information technology is 
ultimately about patients. Patients must trust and participate in the 
health information technology revolution if it is going to reach its 
full potential. Therefore, the recovery bill includes a number of vital 
privacy protections to ensure the security and the confidentiality of 
electronic patient records. These protections include changes in 
notification policy if there is an unauthorized acquisition or 
disclosure of health information. It includes the establishment of 
privacy officers in HHS regional offices, new restrictions on the sale 
of health information, improved enforcement of violations to privacy 
law, and other strong provisions.
  I am well aware that privacy is a controversial and highly charged 
area of debate. I think it is important we all view the privacy 
provisions in this bill as the beginning and not the end of our 
national discussion about health care privacy.
  These provisions will require oversight and, perhaps over time, 
adjustment. I look forward to this ongoing challenge and remain 
committed to being engaged in it. But for now, this is a good, strong 
privacy package. It has, I think, solid agreement in this building.
  Last, but certainly not least, I wish to acknowledge the 
extraordinary work of the man who has been committed to health care in 
the Senate longer than anyone else--the incomparable Senator from 
Massachusetts, Edward Kennedy. He has been a tremendous supporter of 
advancing health information technology for years, and was the primary 
architect of this language in the Senate. As always, we are in his debt 
for the expertise and the leadership, the passion and the compassion he 
provides, and we look forward to his speedy return to the floor.

  I will conclude, Mr. President, by saying I know there is an enormous 
amount of politics now surrounding this economic recovery plan. But in 
order to try to make the politics look good, let us not hit what is 
probably the smartest and the best investment in this whole plan, one 
that not only works to provide jobs in a key American industry today 
but that lays the foundation for addressing what is probably the next 
biggest, most dangerous problem that is facing Americans behind this 
immediate economic crisis. Let us not be fools here in the service of 
political expedience. Let us stick with these health information 
technology elements of the bill, support them energetically, and I hope 
every colleague will see the wisdom of them and support their inclusion 
in this bill.
  I thank the Presiding Officer very much for his courtesy, and I yield 
the floor.
  The PRESIDING OFFICER. The Senator from Mississippi is recognized.


                           Amendment No. 140

  Mr. COCHRAN. Mr. President, I am bringing to the attention of the 
Senate my opposition to an amendment that has been offered on this 
bill. Earlier today, the Senator from Wisconsin, Mr. Feingold, offered 
amendment No. 140 to create a so-called ``earmark point of order'' that 
would lie against appropriations provisions before the Senate. This 
amendment, if it should be adopted, serves no desirable purpose. In my 
opinion, on the contrary, it would only serve to weaken the Congress as 
an institution, and in relationship in particular to the 
administration, and would yield more authority to the unelected 
bureaucracy of the Federal Government to make decisions that all of our 
constituents in all of our States sent us here to make. It is, in 
effect, a restriction of the power of Congress and the direct 
representatives of the people and the States.
  Individual appropriations bills should be brought to the floor 
subject to amendment by any Senator, whether a member of the 
Appropriations Committee or not, without any restrictions. This makes 
the Senate different from the House of Representatives, as all Senators 
know. The House has a Rules Committee. When legislation is brought to 
the floor of the House of Representatives, the originating committee 
has to go before the Rules Committee and basically get permission to 
call up the bill and present it to the body. The Rules Committee 
decides whether amendments will be in order and, if so, which 
amendments, and how much time for debate on the amendments. Here, we 
don't have a rules committee; it is not necessary. Each Senator is, in 
effect, the member of the rules committee. The Senate decides under its 
rules as a body, with each individual Senator having equal power and 
equal say as to what amendments can be offered. Any Senator should have 
the right to offer an amendment to any bill, and it doesn't have to be 
germane, unless cloture has been invoked.
  So what this amendment seeks to do, intentionally or not, is to limit 
the power of this body to be involved in the process of deciding how 
taxpayer funds are going to be spent by the Federal Government and for 
what purposes. So this is an unnecessary abrogation of a 
constitutionally vested responsibility in the Senate. It subrogates the 
Senate to the power of the executive, and this amendment should be 
defeated.
  The bill that contains the legislation offered by the Senator would 
not do anything about $100 billion in new programs that are being 
funded in this stimulus bill to which the amendment is being offered. 
There are 128 pages of legislation in the bill before the Senate 
dealing with health information technology, and $23 billion of funding 
is associated with that language--$23 billion. It is a new program that 
has not been authorized by the relevant committee. Is that subject to a 
point of order, I ask the Senate? I don't think so. But under the 
language of this amendment by the Senator from Wisconsin, I suppose it 
would be subject to a point of order, but nobody is demanding a point 
of order against the bill containing that provision.
  Since I have been in the Senate, I have served on authorizing 
committees and the Appropriations Committee. The authorization process 
is an important function of our Senate. The Appropriations Committee 
works closely with authorizing committees. If any Senator opposes 
authorizing language that is contained in an appropriations bill, the 
Senator can offer an amendment to strike it. The Senate can strike the 
language if it determines that is the appropriate thing to do.
  Now, all the committees produce earmarks, not just the Appropriations 
Committee. When I served on the Agriculture Committee, the farm bill 
customarily contained specific authorizations for expenditures of 
funds--entitlement to Federal dollars by certain classes of producers 
of agriculture products. If any Senator had an objection to any portion 
of that authorizing bill, he or she could offer an amendment to strike 
it or amend it. Individual Senators are free and have the power to 
modify any bill before the Senate, and appropriations bills are no 
different. But to give a Senator a point of order to raise over some 
provision with which they disagree is not an appropriate change in the 
rules of the Senate and should not be tolerated in this legislation. It 
should be stricken. My experience has shown that because a program is 
authorized doesn't necessarily mean it is a good idea or that it will 
be funded. And that is another point.
  Supporters of the amendment have made it clear their goal is to get 
rid of all earmarks--however earmarks may be defined by them--
regardless of what committee may produce them, regardless of whether 
they have been specifically authorized. This amendment is a step toward 
that goal, in my opinion. So I suggest that the Senate should look 
carefully and consider seriously the impact that this amendment may 
have, and when it is called up, if it is, I hope the Senate will vote 
it down.
  The PRESIDING OFFICER (Mr. Whitehouse). The Senator from Iowa is 
recognized.

[[Page S1513]]

  Mr. GRASSLEY. Mr. President, one specific area of this cobbled-
together bill is spending. The bill provides significant increases in 
Medicaid spending. There is $87 billion in Medicaid funds in this bill. 
There is a fundamental change to Medicaid that is in the House bill 
waiting to be put into the Senate bill when it comes to conference.
  There are numerous amendments to try to fix some of the problems with 
the Medicaid provisions of this bill, and I wish to discuss some of 
those at this point. I start with this $87 billion of FMAP money they 
have referred to. This is a huge payment to States. Now, some will say 
that $87 billion in Medicaid payments in this spending party bill is 
meant to help States pay for people already enrolled, but the facts 
tell a different story.
  In January, the Urban Institute produced a report for the Kaiser 
Commission on Medicaid and uninsured titled ``Rising Unemployment, 
Medicaid and the Uninsured.'' The Urban Institute's research asserts 
that for every 1 percent increase in nationwide unemployment, Medicaid 
and Children's Health Insurance Programs will see an increase of 1 
million additional beneficiaries nationwide.
  I want to make clear that for the unemployed who qualify, we ought to 
provide enough money in Medicaid to take care of it, but we are raising 
questions about money beyond that. So we have this formula that is kind 
of a benchmark--this Urban Institute research. Using that formula and 
the unemployment baseline that is in the bill, I had the Congressional 
Budget Office prepare a cost estimate for an amendment giving States 
additional funding based on the Urban Institute's published research. 
This amendment would provide for an additional per capita Federal 
payment to States for every new enrollee--every new enrollee--that the 
Urban Institute research assumes will go on Medicaid or SCHIP during 
the 27 months contemplated in this bill.
  Everyone watching probably knows that the Urban Institute is not 
exactly a conservative think tank, so their research should be credible 
to my friends on the other side of the aisle. Now, remember, the cost 
of the additional Medicaid funds for States in this bill is a whopping 
$87 billion. The cost of my amendment to take care of the unemployed 
going on SCHIP or on Medicaid--$10.8 billion. That is $10.8 billion for 
what the Urban Institute suggests are enrollment-driven increases in 
Medicaid spending due to the recession.
  So the question is: Why does this bill provide almost eight times 
what the States actually need for new enrollments resulting from this 
economic downturn? The Senate is considering $87 billion in funding 
because States are facing deficits of as much as $312 billion in the 
aggregate over the next 2 years. So let us not kid ourselves. What this 
is all about is a bill giving States money to help them fill their 
deficits. This outlandish sum of money is not needed for Medicaid. It 
might be needed for something else--and we ought to discuss it in terms 
of the something else--but not for Medicaid.
  So you may want to ask: What commitment is Congress getting from the 
States in exchange for $87 billion, of which only $10.8 billion might 
be used for the need for which is supposedly in this legislation? 
Congress is giving States $87 billion and hoping that States don't take 
actions contrary to Medicaid actually providing the care that people 
need. I use the word ``hope'' because the underlying bill doesn't do 
enough to make sure the States do what is best for Medicaid. Does the 
bill prevent States from cutting their Medicaid Programs? It does not. 
The bill only prevents States from cutting Medicaid income eligibility. 
But if Congress is giving States $87 billion and telling them not to 
cut Medicaid eligibility, I think it is very important we in Congress 
also tell the States that they can't cut benefits. But this bill 
doesn't do that. If Congress is giving States $87 billion and telling 
them not to cut Medicaid eligibility, shouldn't Congress also tell 
States they can't cut payments to providers? So you have eligibility, 
you have providers, you have benefits--and we are only dealing with 
eligibility in this bill--and, yet, giving out $87 billion of which 
almost $11 billion is needed for the purpose of unemployed going on 
Medicaid.

  States cannot change income eligibility, but under this bill as 
written they can cut provider payments to doctors, pharmacists, 
dentists, and benefits to providers.
  Will there be Medicaid beneficiaries who are elderly or disabled, 
able to receive home- and community-based services? If we want to keep 
seniors and the disabled in their homes rather than in institutions, 
paying direct care workers to provide home- and community-based 
services is very critical to that goal.
  Will there be enough pharmacists taking Medicaid? Will there be 
enough rural hospitals and public hospitals taking Medicaid?
  I had one member of the Senate Finance Committee on my side of the 
aisle tell me in that State, their State legislature owes $400 million 
to hospitals. Shouldn't we be taking care of problems like that?
  Will there be enough community health centers taking Medicaid? Will 
Medicaid beneficiaries who are elderly or disabled get into nursing 
homes if they need to do that?
  Will States cut mental health services because Congress didn't 
prevent them from doing so in this bill, even at the same time giving 
them $87 billion, which is about $76 billion more than the demands of 
Medicaid because of unemployment?
  Will there be pediatricians or children's hospitals there for 
children on Medicaid?
  If the Senate does nothing to protect access to these vital 
providers, nobody will be able to assure the people who count on 
Medicaid that the care they need will be there for them. I have filed 
an amendment that prevents States from generally cutting eligibility 
and benefits and provider payment rates while they are receiving the 
$87 billion in additional aid. In other words, I go beyond just a 
requirement in the underlying bill that eligibility can't be changed. 
We go to benefits and we go to protecting providers.
  If we want to protect Medicaid, then we ought to really protect 
Medicaid. I hope we will do that by adopting this amendment.
  As written, the bill gives States $87 billion, also in the hopes that 
States do not take action that is contrary to economic growth. Here 
again, I use the word ``hope'' because the bill doesn't do enough to 
make sure States do what is best for the economy either. We should ask 
for more guarantees that States will spend the money appropriately and 
not make decisions that work against economic recovery. If Congress 
gives States $87 billion and tells them not to cut Medicaid, should 
Congress also tell States not to raise taxes because, if States react 
to their deficit by increasing taxes--even in view of getting this $87 
billion--they will defeat the goal of economic recovery that we in 
Congress are trying to make happen through this legislation. For sure 
you do not increase taxes at a time of economic distress because it is 
going to make that distress worse. It makes no sense for us to leave 
the door wide open then for States to raise taxes while getting a $87 
billion windfall from the Federal Government.
  I have an amendment that prevents States from raising income, 
personal property, or sales taxes as a condition of the receipt of $87 
billion in Federal assistance. If Congress gives States $87 billion and 
tells them not to cut Medicaid, should Congress also tell States not to 
raise tuition at State universities? There is a report out just today 
that I heard about on the news about how unaffordable college is 
becoming, particularly to middle-income Americans. People are not going 
to go to college even though a college degree is very essential for 
success in our society, and we are here giving $87 billion to States 
without any direction to the States whether or not they increase 
tuition once again, as they tend to do every year.
  If States can price young people out of an education, that does 
nothing for preparing our workforce for the 21st century. So I also 
have an amendment that prevents States from raising tuition rates at 
State colleges and universities as a condition of the receipt of the 
$87 billion of Federal assistance.
  For $87 billion--we are talking about $87 billion, just to give to 
the States--shouldn't Congress expect States to modernize their 
Medicaid Program? We have heard my friend and colleague, Dr. Coburn, 
having an amendment requiring States to improve chronic care

[[Page S1514]]

in Medicaid and develop medical homes as a condition of the receipt of 
$87 billion in Federal assistance--because these things are some of the 
best advancements you can make in the practice of medicine that are 
going to improve the quality of life, but more important they save 
taxpayer dollars or even private dollars. For $87 billion, what does 
this bill do to ensure that all those Federal taxpayers' dollars are 
being spent appropriately? Almost nothing.
  During the markup we were able to get funding for the Department of 
Health and Human Services Office of Inspector General increased by 
$3.25 million. For those of you doing the math back home, $3,250,000 is 
just under four one hundredths of 1 percent of the $87 billion Medicaid 
spending on the bill. Senator Cornyn and I have an amendment that 
requires States to do something to improve their waste, fraud, and 
abuse rates in exchange for the $87 billion in Federal taxpayers' 
money. That is what that money for the inspector general is all about. 
It provides a list of eight options to combat waste, fraud, and abuse, 
and the Secretary can provide more options at his or her discretion as 
well.
  States are given time to plan and implement options. States can 
choose to make their payments transparent. States can choose to 
implement recovery audit contractors--as is used very successfully in 
Medicare. States can choose the Medicare/Medicaid data matching 
program. States can implement third party liability programs that find 
other insurers who should pay before Medicaid pays out of the public 
fisc. States can implement electronic verification systems to limit 
fraud and abuse. States can implement the recently passed Paris system 
to protect the integrity of the program. States can comply with the 
recently implemented disproportionate share hospital audit requirement. 
States can choose to increase their budget for Medicare fraud control 
units. These are all very reasonable steps that States could and should 
take, if Congress is going to send them $87 billion in additional 
Medicaid dollars, when only $10.8 billion of that is necessary to take 
care of the people who will go on Medicaid because they are unemployed.
  They do not have to do all these options I just gave. They only have 
to do four of these many options; just show the American people that 
States can take four simple steps to reduce fraud, waste, and abuse. 
Shouldn't Congress at least ask that much of the State, for $87 
billion? If Congress is going to give States $87 billion in Medicaid 
funds, shouldn't the formula be fair?
  While I admire the hard work devoted to the exceedingly complex 
formula in this bill, it simply is not fair to certain States. States 
with low unemployment rates, States that have not seen the recession 
hit in full yet--those States will see less of the $87 billion than 
other States.
  Senator Bingaman started down this road to correct this in our 
Finance Committee markup. You have an amendment that picks up the baton 
and drives it the rest of the way home. Each State gets a flat 9.5-
percent increase in their FMAP payment and States can choose which 9 
consecutive quarters in an 11-quarter period best fits the economic 
needs of their specific State. This is a better, this is a fairer way 
to spend $87 billion.
  If Congress passes all of this Medicaid spending, what guarantee do 
we have that the fiscal challenges facing Medicaid in the future will 
be solved? Sooner rather than later, we all must recognize our 
entitlements are unsustainable as currently constructed.
  President Obama has acknowledged this himself on numerous occasions 
recently. One of my concerns about the additional Medicaid funding that 
is in this bill is that it places too much emphasis on Medicaid in the 
here and now, the short term, and ignores future fiscal challenges down 
the road, the next two or three decades.

  Just last year the Center for Medicare Services Office of Actuary 
reported that Medicaid costs will double over the next decade. That is 
simply unsustainable, and I think every Senator knows that. It is 
critical that both the Federal Government and States recognize the 
fiscal challenges we face and the need to take action right now. 
Senators Cornyn and Hatch and I have an amendment that requires States 
to submit a report to the Secretary detailing how they plan to address 
Medicaid sustainability. It is critical that we look at the future of 
Medicaid if Congress is to give States $87 billion in additional 
Medicaid funding when it is only going to take about $10.8 billion to 
take care of the uninsured because of the economic recession we are in.
  The House bill has a provision that fundamentally changes Medicaid. 
Medicaid is a program that is generally, as we know, for low-income 
pregnant women, children, and low-income seniors. Under the House bill, 
the Federal taxpayer would step in to pay the full cost to provide 
Medicaid coverage to people who lose their jobs and are not eligible 
for continuing coverage from their employer. Normally, Medicaid is 
supposed to be a shared State/Federal responsibility, with the States 
and the Federal Government sharing the costs on a national average--57 
percent to 43 percent. In my particular State, the Federal Government 
pays 62 percent--but not in this new Medicaid Program the House would 
create because under the House bill--get this--the Federal Government, 
for the first time ever, would pick up 100 percent of the costs. The 
House bill transforms Medicaid into a coverage for anyone who loses 
their job if they do not have access to COBRA coverage from their 
former employer, and the House bill would offer this taxpayer-paid 
Medicaid coverage regardless of how wealthy they might be.
  Now Medicaid is for low-income people, but it is being expanded in 
the House to, no matter how wealthy you might be, but being unemployed, 
you could qualify for Medicaid. Tell me if that is not a waste of 
taxpayers' money. It is taxing low-income people to help wealthy 
people, just the opposite of what we normally do in this country.
  With all the fiscal challenges this country faces, and with 
entitlement spending already out of control, this ought to be seen by 
every Member of the Senate as an outrage. Obviously, it was not an 
outrage to the 244 people who voted for it in the other body. I hope 
folks on the other side of the aisle will come to the floor and defend 
a policy that, if you are unemployed--I suppose if you are an 
unemployed CEO who previously made $5 million, you can walk into the 
State office and get Medicaid. I don't understand it.
  My bigger concern is what happens in 2 years when the money goes 
away. On December 31, 2010, what happens to all the people who have 
been covered by this massive expansion of Medicaid entitlement? What 
happens to all of the people who have been added to the rolls in States 
that expand coverage with the $87 billion influx in this bill, when 
only $10.8 billion is needed, according to CBO, based on the Urban 
Institute program, for those who are going to be unemployed? Mr. 
President, $76 billion more is going to be spent someplace.
  Someone on the other side needs to convince me that this policy we 
are putting in place is truly temporary. I do not buy that it is 
temporary. Every one of us knows the States will be coming back in the 
middle of next year to beg for an extension so they don't have to cut 
Medicaid rolls. There are too many former Governors in this Chamber for 
anyone to argue that it is not going to happen.
  I know a lot of people have worked very hard putting this bill 
together. I respect that they have worked hard. I wish they would have 
worked smarter. Giving States $87 billion even though that is about 
eight times what they need to stay ahead of enrollment-driven Medicaid 
increases is not well thought out. Giving States $87 billion while 
still allowing them to cut their Medicaid Program is not well thought 
out. Giving States $87 billion while still allowing them to raise taxes 
or tuition is not well thought out. Giving States $87 billion without 
requiring them to do a better job of addressing fraud, waste, and abuse 
is not well thought out. Giving States $87 billion without making them 
address the fiscal sustainability of their Medicaid Program is not well 
thought out. A massive expansion of the entitlements under the guise of 
the word ``temporary'' is not well thought out.
  This bill is cobbled together--a spending party. It is not well 
thought out. It is out of control. The Senate should support numerous 
amendments, as I have discussed this afternoon, to

[[Page S1515]]

address the shortcomings that occur when partisan bills are moved too 
quickly.
  I filed what is referred to as a Grassley-Schumer amendment to amend 
the American Opportunity Tax Credit work. In my opinion, the amendment 
makes the American Opportunity Tax Credit better. Senator Schumer 
agrees with the me, or obviously he would not be cosponsoring this with 
me, because he is joining me.
  I thank Senator Schumer for his support and look forward to working 
with him on simplifying the education tax credit Congress has put into 
the Tax Code. I have long been an advocate for helping Americans afford 
college through the Tax Code. So when I was chairman of the Finance 
Committee, I successfully included a number of education measures in 
that tax bill of 2001. These measures were enacted into law as part of 
a bipartisan agreement--I want to emphasize, bipartisan agreement. Now 
Americans can take an above-the-line deduction for the cost of higher 
education expenses because of that bill. In addition, people with 
student loans have greater flexibility when deducting student loan 
interest. I have also promoted section 529 qualified tuition programs 
by repealing the sunset provisions Congress imposed back in 2001.
  The other education tax provisions we included in the 2001 bipartisan 
tax legislation should also be made permanent. Several provisions would 
fall into that category, but that debate will be left to another day. 
We are not pursuing that on this bill.
  Today, Senator Schumer and I are here to build on the American 
Opportunity Tax Credit included in the legislation we are debating 
today. This is how we do it. The amendment Senator Schumer and I are 
offering would increase the tax credit while maintaining a refundable 
portion of the tax credit, which will help low-income individuals with 
college expenses. The amendment would also spread out the way the tax 
credit is calculated. Under this amendment, more Americans will receive 
a more robust and uniform tax credit regardless of income. In addition, 
taxpayers currently claiming the HOPE scholarship credit will get a 
bigger tax benefit. Again, low-income individuals will continue to 
benefit from the credit's refundability feature, which I will note has 
never been done in the area of education tax until now.
  If my Senate colleagues argue that the Grassley-Schumer amendment 
adds to the cost of the stimulus package--which, in full disclosure, 
the amendment adds $3 billion to the existing $10 billion price tag on 
the American Opportunity Tax Credit--I will tell them to cut wasteful 
spending that is included in the bill.
  The Grassley-Schumer amendment is stimulative. The same cannot be 
said for the spending provisions in the bill, including millions upon 
millions of dollars for parking garages or millions upon millions of 
dollars for swimming pools, water slides. This spending does not pass 
the stimulative test.
  The Joint Committee on Taxation has even said that under the 
Grassley-Schumer amendment, we will ``lower the cost of higher 
education, which will induce more individuals to enroll in higher 
education programs.''
  So I hope everybody agrees that this is a very good thing, 
particularly considering the fact that there was this report on the 
news today where there is, particularly because of the recession we are 
in, not enough middle-income people going to college because of the 
problems we have. So we need to make more help available for people 
going to college, especially for displaced workers who would like to go 
back to school for training in another career. That is more essential 
during an economic downturn like we now have. An education means jobs, 
and that is what a large part of this stimulus package is all about.
  I urge my colleagues to support the Grassley-Schumer amendment.
  Lastly, and then I will yield the floor, I have a statement I wish to 
read entitled ``CBO Analysis'' that shows stimulus bill jobs to cost as 
much as $300,000 each. A preliminary analysis by the Congressional 
Budget Office shows that the jobs created by the economic stimulus 
legislation being debated in the Senate will cost taxpayers between 
$100,000 and $300,000 apiece. These numbers should be contrasted to 
those under the January baseline of the Congressional Budget Office in 
which there is no stimulus. That shows the gross domestic product per 
worker is about $100,000. The new analysis indicates the cost of each 
stimulus job to be as much as three times more than jobs created 
without the stimulus bill.
  There has been a lot of talk about bang for the buck, but there is no 
talk about actually making sure it happens so that Americans get the 
help they need. Before Congress spends another $1 trillion, we ought to 
make sure we are getting our money's worth. Congressional leaders 
should postpone a final vote on a stimulus bill until the Senate has 
had the opportunity to carefully review a full analysis of the 
Congressional Budget Office.
  Mr. President, I ask unanimous consent to have the February 4, 2009, 
CBO report printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                 Washington, DC, February 4, 2009.
     Hon. Charles E. Grassley,
     Ranking Member, Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Senator: At your request, the Congressional Budget 
     Office (CBO) has conducted an analysis of the macroeconomic 
     impact of the Inouye-Baucus amendment in the nature of a 
     substitute to H.R. 1. CBO estimates that this Senate 
     legislation would raise output and lower unemployment for 
     several years, with effects broadly similar to those of H.R. 
     1 as introduced. In the longer run, the legislation would 
     result in a slight decrease in gross domestic product (GDP) 
     compared with CBO's baseline economic forecast.


                    Effects on Output and Employment

       The macroeconomic impacts of any economic stimulus program 
     are very uncertain. Economic theories differ in their 
     predictions about the effectiveness of stimulus. Furthermore, 
     large fiscal stimulus is rarely attempted, so it is difficult 
     to distinguish among alternative estimates of how large the 
     macroeconomic effects would be. For those reasons, some 
     economists remain skeptical that there would be any 
     significant effects, while others expect very large ones.
       CBO has developed a range of estimates of the effects of 
     the Senate legislation on GDP and employment that encompasses 
     a majority of economists' views. According to these 
     estimates, implementing the Senate legislation would increase 
     GDP relative to the agency's baseline forecast by between 1.2 
     percent and 3.6 percent by the fourth quarter of 2010. It 
     would also increase employment at that point in time by 1.3 
     million to 3.9 million jobs, as shown in Table 1. In that 
     quarter, the unemployment rate would be 0.7 percentage points 
     to 2.1 percentage points lower than the baseline forecast of 
     8.7 percent. The effects of the legislation would diminish 
     rapidly after 2010. By the end of 2011, the Senate 
     legislation would increase GDP by 0.4 percent to 1.2 percent, 
     would raise employment by 0.6 million to 1.9 million jobs, 
     and would lower the unemployment rate by 0.3 percentage 
     points to 1.0 percentage point.
       Those estimated effects differ modestly from CBO's 
     estimates for H.R. 1 as introduced. In particular, the 
     effects on output and employment are slightly higher in 2009 
     and 2010, but slightly lower in 2011. The differences stem 
     from three main sources. First, the Senate legislation's 
     provisions regarding the alternative minimum tax (AMT), which 
     do not appear in the House bill, would add stimulus to the 
     economy, especially in 2010. Second, the Senate legislation 
     would allow faster spending from the State Fiscal 
     Stabilization Fund, increasing such spending by about $20 
     billion over the 2009-2010 period compared with that under 
     the House bill (and decreasing spending correspondingly in 
     the following years). And last, the estimated decrease in 
     withholding (and thus the reduction in revenues) associated 
     with the Making Work Pay Credit would be greater in 2009 
     under the Senate legislation than under H.R. 1.


      effects of various types of legislative provisions on output

       Although the Senate legislation has numerous detailed 
     provisions, the macroeconomic effects can be illustrated by 
     considering the provisions in seven categories. Table 2 shows 
     the range of estimated effects on the economy--the multiplier 
     effects--of a one-time increase of a dollar of additional 
     spending or a dollar reduction in taxes. For all of the 
     categories that would be affected by the Senate legislation, 
     the resulting budgetary changes are estimated to raise output 
     in the short run, albeit by different amounts.
       The numbers in Table 2 indicate the cumulative impact on 
     GDP over several quarters. For example, a one-time increase 
     in federal purchases of goods and services of $1.00 in the 
     second quarter of this year would raise GDP by $1.00 to $2.50 
     in total over several quarters, with most of that effect in 
     the first two quarters and little effect beyond a year.
       As shown in the first two categories in the table, direct 
     purchases of goods and services by governments, including 
     investment in infrastructure, tend to have relatively large 
     effects on GDP. Because infrastructure spending takes time to 
     occur, increased funding

[[Page S1516]]

     for that purpose would not boost outlays or GDP much this 
     year, but it would probably provide significant stimulus from 
     2010 through 2012.
       Grants to state and local governments (such as increased 
     assistance for education) might not increase state spending 
     for the programs designated in the grants but, instead, might 
     free up funds that the states would otherwise spend on those 
     programs. States could use those extra funds in a variety of 
     ways: direct purchases of goods and services (or smaller cuts 
     in such purchases), tax cuts (or smaller tax increases), 
     transfer payments, or reduced borrowing. The impact of grants 
     therefore would depend on how states used them.
       Transfers to persons (for example, unemployment insurance 
     and nutrition assistance) would also have a significant 
     impact on GDP. Transfers have a relatively strong effect on 
     consumption because they tend to go to people, such as the 
     poor or unemployed, who are likely to spend much of any 
     additional income. For that reason and because transfers can 
     be increased quickly, they are estimated to have a 
     significant impact on GDP by early 2010. Transfers also 
     include refundable tax credits, which have an impact similar 
     to that of a temporary tax cut.
       A dollar's worth of a temporary tax cut would have a 
     smaller effect on GDP than a dollar's worth of direct 
     purchases or transfers, because a significant share of the 
     tax cut would probably be saved. The amount saved, and 
     therefore the size of the effect on GDP, would depend on who 
     received the tax cut and how temporary it would be. Most 
     households probably save most of a temporary tax cut, to keep 
     their purchases relatively smooth over time. However, the 
     predominantly lower-income households that spend all of their 
     income and would like to borrow funds to spend more if they 
     could (that is, households that are ``liquidity 
     constrained'') probably spend a large share of temporary 
     boosts to income. In addition, the longer a tax cut is 
     expected to last, the greater the impact on total after-tax 
     income, and the larger the likely effect on consumption.
       CBO's analysis divides the temporary tax cuts in the Senate 
     legislation into those that would go primarily to higher-
     income households and last for only one year (mostly the 
     provisions affecting the AMT) and those that would go 
     primarily to lower- and middle-income households and last for 
     two years (predominantly the Making Work Pay Credit), with 
     the former having a considerably lower range of multipliers 
     than the latter. Taken together, the temporary nonbusiness 
     tax cuts in the Senate legislation would reduce revenues much 
     more in 2010 than in 2009 because much of the reduction in 
     taxes would be realized by households when they filed their 
     returns in 2010.
       The provision for greater tax-loss carrybacks would result 
     in a large up-front cost to the government, but the effect of 
     that provision on business spending would probably be small 
     because it primarily would affect firms' after-tax income 
     rather than their marginal incentives for new investment. 
     Therefore, the effect of the provision on revenues would be 
     significantly greater than its effect on the economy.


             the relationship between output and employment

       CBO derived its estimates of the effect of the Senate 
     legislation on employment from the estimated effect on GDP. 
     Historical evidence suggests that GDP growth that is 1 
     percentage point faster over a year (relative to a baseline 
     forecast) will cause the unemployment rate to decline by a 
     little more than half a percentage point (relative to a 
     corresponding baseline forecast). The fall in the 
     unemployment rate leads more people to enter the labor force 
     and seek jobs and fewer to drop out. Therefore, employment 
     rises both from a decline in the number of unemployed 
     workers and a decline in the number of people out of the 
     labor force. In addition, some workers otherwise working 
     part time move to full-time status.
       The change in employment relative to the change in GDP in 
     CBO's estimates is small compared with that in most industry-
     based studies of stimulus. By the end of 2010, CBO estimates, 
     about $140,000 of additional GDP would lead to one additional 
     person employed. That relationship is similar to those 
     indicated by other macroeconomic studies of stimulus 
     proposals. However, a number of other sorts of studies imply 
     more employment per dollar of additional GDP. Because the 
     macroeconomic studies use the historical relationship between 
     changes in economic growth and changes in jobs, they 
     incorporate a number of broad economic effects. For example, 
     output per employee tends to fall in a recession because 
     employers try not to fire their best workers even as they cut 
     production in response to decreased demand. Therefore, as 
     fiscal stimulus increases demand, firms can ramp up 
     production without increasing employment proportionally. 
     Historical evidence thus suggests that fiscal stimulus boosts 
     both productivity and hours of work as well as employment. 
     Studies that ignore those effects are likely to overstate the 
     impact of fiscal stimulus on employment.


                       Long-Run Effects on Output

       Most of the budgetary effects of the Senate legislation 
     occur over the next few years. Even if the fiscal stimulus 
     persisted, however, the short-run effects on output that 
     operate by increasing demand for goods and services would 
     eventually fade away. In the long run, the economy produces 
     close to its potential output on average, and that potential 
     level is determined by the stock of productive capital, the 
     supply of labor, and productivity. Short-run stimulative 
     policies can affect long-run output by influencing those 
     three factors, although such effects would generally be 
     smaller than the short-run impact of those policies on 
     demand.
       In contrast to its positive near-term macroeconomic 
     effects, the Senate legislation would reduce output slightly 
     in the long run, CBO estimates, as would other similar 
     proposals. The principal channel for this effect is that the 
     legislation would result in an increase in government debt. 
     To the extent that people hold their wealth as government 
     bonds rather than in a form that can be used to finance 
     private investment, the increased debt would tend to reduce 
     the stock of productive capital. In economic parlance, the 
     debt would ``crowd out'' private investment. (Crowding out is 
     unlikely to occur in the short run under current conditions, 
     because most firms are lowering investment in response to 
     reduced demand, which stimulus can offset in part.) CBO's 
     basic assumption is that, in the long run, each dollar of 
     additional debt crowds out about a third of a dollar's worth 
     of private domestic capital (with the remainder of the 
     rise in debt offset by increases in private saving and 
     inflows of foreign capital). Because of uncertainty about 
     the degree of crowding out, however, CBO has incorporated 
     both more and less crowding out into its range of 
     estimates of the long-run effects of the Senate 
     legislation.
       The crowding-out effect would be offset somewhat by other 
     factors. Some of the Senate legislation's provisions, such as 
     funding for improvements to roads and highways, might add to 
     the economy's potential output in much the same way that 
     private capital investment does. Other provisions, such as 
     funding for grants to increase access to college education, 
     could raise long-term productivity by enhancing people's 
     skills. And some provisions would create incentives for 
     increased private investment. According to CBO's estimates, 
     provisions that could add to long-term output account for 
     roughly one-quarter of the legislation's budgetary cost.
       The effect of individual provisions could vary greatly. For 
     example, increased spending for basic research and education 
     might affect output only after a number of years, but once 
     those investments began to boost GDP, they might pay off over 
     more years than would the average investment in physical 
     capital (in economic terms, they have a low rate of 
     depreciation). Therefore, in any one year, their contribution 
     to output might be less than that of the average private 
     investment, even if their overall contribution to 
     productivity over their lifetime was just as high. Moreover, 
     while some carefully chosen government investments might be 
     as productive as private investment, other government 
     projects would probably fall well short of that benchmark, 
     particularly in an environment in which rapid spending is a 
     significant goal. The response of state and local governments 
     that received federal stimulus grants would also affect their 
     long-run impact; those governments might apply some of that 
     money to investments they would have carried out anyway, thus 
     freeing funds for noninvestment purposes and lowering the 
     long-run economic return to those grants. In order to 
     encompass a wide range of potential effects, CBO used two 
     assumptions in developing its estimates: first, that all of 
     the relevant investments together would, on average, add as 
     much to output as would a comparable amount of private 
     investment, and, second, that they would, on average, not add 
     to output at all.
       In principle, the legislation's long-run impact on output 
     also would depend on whether it permanently changed 
     incentives to work or save. However, according to CBO's 
     estimates, the legislation would not have any significant 
     permanent effects on those incentives.
       Including the effects of both crowding out of private 
     investment (which would reduce output in the long run) and 
     possibly productive government investment (which could 
     increase output), CBO estimates that by 2019 the Senate 
     legislation would reduce GDP by 0.1 percent to 0.3 percent on 
     net. H.R. 1, as passed by the House, would have similar long-
     run effects. CBO has not estimated the macroeconomic 
     effects of the stimulus proposals year by year beyond 
     2011.


                  other effects of stimulus proposals

       It is important to note that effects on GDP, the aggregate 
     domestic output of the economy, do not necessarily translate 
     into effects on people's well-being. First, the part of GDP 
     that contributes directly to people's welfare is consumption. 
     However, changes in GDP do not necessarily imply 
     corresponding changes in consumption. For example, if GDP 
     rises because foreigners finance greater investment, much of 
     the additional income generated by the investment will flow 
     overseas as payments to foreigners and will not be available 
     to support higher consumption.
       More fundamentally, many things that make people better off 
     do not appear in GDP at all. For example, healthier children 
     or shorter commute times can improve people's welfare without 
     necessarily increasing the nation's measured output in the 
     long run (though spending in those areas would still provide 
     short-run stimulus). Even legislation explicitly intended to 
     affect output may also seek to accomplish other goals and can 
     be evaluated accordingly.

[[Page S1517]]

       I hope this information is helpful to you. If you have any 
     further questions, I would be glad to answer them. The staff 
     contacts for the analysis are Ben Page and Robert Arnold.
           Sincerely,
                                             Douglas W. Elmendorf,
     Director.
                                  ____


TABLE 1.--ESTIMATED MACROECONOMIC IMPACTS OF THE INOUYE-BAUCUS AMENDMENT
 IN THE NATURE OF A SUBSTITUTE TO H.R. 1, FOURTH QUARTERS OF 2009, 2010,
                                AND 2011
------------------------------------------------------------------------
                                            2009       2010       2011
------------------------------------------------------------------------
GDP (Percentage from baseline):
    Low estimate of effect of plan.....        1.4        1.2        0.4
    High estimate of effect of plan....        4.1        3.6        1.2
GDP Gap a (Percent):
    Baseline...........................       -7.4       -6.3       -4.1
    Low estimate of effect of plan.....       -6.1       -5.2       -3.7
    High estimate of effect of plan....       -3.7       -3.0       -2.9
Unemployment Rate (Percent):
    Baseline...........................        9.0        8.7        7.5
    Low estimate of effect of plan.....        8.5        8.1        7.2
    High estimate of effect of plan....        7.7        6.7        6.5
Employment b (Millions of jobs):
    Baseline...........................      141.6      143.3      146.2
    Low estimate of effect of plan.....      142.5      144.6      146.8
    High estimate of effect of plan....      144.0      147.2     148.1
------------------------------------------------------------------------
Source: Congressional Budget Office.
a The GDP gap is the percentage difference between gross domestic
  product and CBO's estimate of potential GDP. Potential GDP is the
  estimated level of output that corresponds to a high level of
  resource--labor and capital--use. A negative gap indicates a high
  unemployment rate and low utilization rates for plant and equipment.
b Figures for employment are based on surveys of households.


    TABLE 2.--POLICY MULTIPLIERS: THE CUMULATIVE IMPACT ON GDP OVER SEVERAL QUARTERS OF VARIOUS POLICY OPTION
----------------------------------------------------------------------------------------------------------------
                                      -                                           High-               Low
----------------------------------------------------------------------------------------------------------------
Purchases of Goods and Services by the Federal Government-................               2.5-                1.0
Transfers to State and Local Governments for Infrastructure-..............               2.5-                1.0
Transfers to State and Local Governments Not for Infrastructure-..........               1.9-                0.7
Transfers to Persons-.....................................................               2.2-                0.8
Two-Year Tax Cuts for Lower- and Middle-Income People-....................               1.7-                0.5
One-Year Tax Cuts for Higher-Income People-...............................               0.5-                0.1
Tax-Loss Carryback-.......................................................               0.4-                0--
----------------------------------------------------------------------------------------------------------------
Note: For each option, the figures shown are a range of "multipliers," that is, the cumulative change in gross
  domestic product over several quarters, measured in dollars, per dollar of additional spending or reduction in
  taxes.
Source: Congressional Budget Office.

  Mr. LIEBERMAN. Mr. President, I rise to address comments made by my 
colleagues regarding several measures for the Department of Homeland 
Security in the American Recovery and Reinvestment Act: the $248 
million provided for the construction of a consolidated headquarters, 
and the $500 million provided to fund construction and renovation of 
fire stations. These are both projects that will save lives, save 
money, and most importantly for this bill, create jobs.
  The Senator from South Carolina has included funding for the DHS 
headquarters project among a list of what he refers to as ``cats and 
dogs'' which he is intent on stripping from the bill. But the DHS 
consolidation project is far more important to our Nation than those 
comments might suggest.
  DHS is responsible for leading a unified, national effort to secure 
the United States, yet the Department does not have all the necessary 
tools to do so, including an adequate headquarters. DHS is currently 
spread throughout more than 70 buildings located on 40 sites across the 
national capital region making communication, coordination, and 
cooperation among DHS components a significant challenge. Moreover, the 
existing space housing the Office of the Secretary, Intelligence, and 
other key functions is grossly inadequate, contributes to recruitment 
and morale problems, and is simply not befitting a cabinet agency 
critical to Americans' security.
  Some of my colleagues have argued that funding this important 
homeland security project is not appropriate in the stimulus bill. I 
respectfully disagree.
  The DHS headquarters project will create jobs. The final 
environmental impact statement for the headquarters plan found that the 
overall project would create direct employment opportunities for over 
32,000 people in the national capital region. Put another way, the 
economy would gain payroll earnings of approximately $1.2 billion 
during construction and renovation of the St. Elizabeths West Campus 
plus approximately $3.8 billion in additional expenditures during the 
construction phases.
  Funding this project through the stimulus will also expedite the 
creation of these jobs. DHS estimates that the funding included in this 
bill will allow the headquarters project to be completed 12 months 
earlier than previously planned. This means funding will be spent into 
the local economy earlier creating real jobs and stimulating economic 
growth in DC, Maryland, and Virginia when it is most needed.
  This bill will also save money. Accelerating the project will reduce 
the cost of the overall headquarters project by $18 million. Moreover, 
the Federal Government will be able to negotiate better prices with 
contractors because they can sign larger contracts up front which will 
result in additional cost savings.
  In short, this project creates a win-win situation by creating jobs 
today and saving money for the taxpayer in the long run. And, most 
importantly, by fostering a more efficient and effective Department of 
Homeland Security, it will make our country safer.
  I would also like to take a moment to address the mischaracterization 
by some of my colleagues and members of the media that this money will 
only be spent on furniture. The $248 million allocated to DHS will fund 
construction, IT infrastructure, security, and a host of other 
activities associated with constructing a building. Furniture is one 
allowable use of the funding, however less than 7 percent of the total 
funding proposed for the headquarters in this bill would be allocated 
towards furniture.
  And I would also like to address the comments of my colleague from 
Oklahoma regarding the value and the appropriateness of providing funds 
for the construction of fire stations. I would argue that as an issue 
of security, safety, and of job creation, there is nothing more 
valuable or appropriate.
  The Nation's fire houses are in dire need of attention. In cities and 
towns across America, they are too few in number, aging, and crumbling, 
and as a result, they are inadequate to provide the necessary 
protection to families and communities. The U.S. Fire Administration--a 
part of the Department of Homeland Security--has provided a grim 
picture in its second needs assessment of the U.S. Fire Services. 
Consider the following: 60 to 75 percent of fire departments have too 
few stations to provide an optimal response; 36 percent of fire 
stations in the United States are over 40 years old; 54 percent of fire 
stations lack backup power; and 72 percent of fire stations are not 
equipped for exhaust emission control.
  These figures show that our country's fire stations are just not able 
to ensure that firefighters can serve the needs of their communities 
with the adequate safety and effectiveness.

[[Page S1518]]

These infrastructure problems are spread across the country, in 
communities large and small. Permit me to address the need for building 
more fire stations, from the ground up, to ensure that there are enough 
to protect the public.
  Without an adequate number of fire stations, the response time of 
firefighters may increase significantly in incidents where every moment 
counts. A fire doubles in size every 60 seconds. A heart attack victim 
suffers irreversible brain damage after four minutes. So imagine the 
impact on a neighborhood where the fire houses are spread too far 
apart--imagine the increase in risk of death, injury, and property 
damage. This is a risk we cannot afford to take.
  This funding, which would be distributed by the Department of 
Homeland Security to the communities with the greatest need, could be 
applied immediately to projects in need of attention right now. The 
U.S. Conference of Mayors has identified over 100 fire station 
construction or renovation projects that are ``Ready to Go,'' so 
thousands of jobs would be created immediately with this $500 million. 
This is funding that we cannot afford to trim from this bill--both for 
the jobs it creates, and the safety and security it will provide for 
our communities.
  I encourage my colleagues to look at the facts. These projects, which 
are essential to the security of our Nation and our communities, will 
also create jobs and stimulate the economy. It is not wasteful spending 
and belongs in the stimulus bill we are considering today.
  Mr. INOUYE. Mr. President, earlier today Senator McConnell singled 
out for criticism funding in this bill for upgrades of outdated 
information technology at the State Department and U.S. Agency for 
International Development.
  He said: ``$524 million for a program at the State Department that 
promises to create 388 jobs . . . that comes to $1.35 million per 
job.'' He went on to say: ``$100 million for 300 jobs at the U.S. 
Agency for International Development, $333,333 per job.''
  With all due respect to my friend, the minority leader and former 
chairman of the State and Foreign Operations Subcommittee who was a 
strong supporter of these programs in the past, that is a simplistic 
statement which does not tell the whole story.
  First, it undercounts the number of jobs these funds will generate, 
as I will explain. And second, it implies that the only value of a 
stimulus project is the jobs created, as if the resulting product is of 
no value. If we adopt that standard, I hate to think what the minority 
leader would say about other Federal projects, whether the cost of 
building the Washington Monument or a project in his State.
  Computer systems are inherently not personnel intensive, but they do 
have a significant impact on the supply chain economy.
  The State Department's and USAID's estimate of the number of jobs 
related to information technology upgrades is approximately 688 jobs. I 
doubt the unemployed citizens of Kentucky, any more than the citizens 
of Hawaii, would scoff at that number.
  But this does not take into account the jobs created across the 
country when a Federal agency has a major investment in computer 
technology and systems. Much of the hardware would be manufactured by 
workers here in the U.S. Other components are made overseas and shipped 
to our ports, like Long Beach, CA.
  U.S. workers unload the container ships and load the computer parts 
onto trucks or rail cars. Those trucks or trains travel across the 
country, and their drivers purchase fuel and food. The components are 
then unloaded and delivered to their final destination.
  The 688 jobs cited by the Senate Appropriations Committee were merely 
those jobs directly identified with installing these computer systems 
and providing services to these Federal agencies. It does not take into 
account the impact of manufacturing, purchasing, and transporting new 
equipment.
  But this funding will do more than create jobs.
  The information technology upgrades proposed in this bill would 
improve the worldwide technology capabilities of two Federal agencies 
which are out of warranty and not up to current user demands. These 
technology systems form the core of communications between Washington 
and posts overseas.
  Some of these funds would be used to upgrade secure phones as the 
current secret level phones are no longer supported by the available 
technology.
  The Department has identified serious weaknesses in cybersecurity 
which these funds will address. Recent legislation mandating the 
Comprehensive National Cybersecurity Initiative requires all Federal 
agencies to become compliant with new standards to prevent cybercrime.
  Federal agencies working overseas are particularly vulnerable to 
attack from foreign agents attempting to hack into the State 
Department's computer system. Sometimes this is to gain intelligence, 
but recently entire government computer systems have been taken down by 
malicious actors.
  We cannot take this risk, which is why the Congress supported 
legislation last year to improve cybersecurity measures. Funds in this 
bill would address that need. Without these funds the State Department 
would not likely be able to make these critical investments for some 
years.
  Funds will also be used to construct a back-up site for the worldwide 
information technology system, to prevent a single-point failure in 
communications. This need was identified after the 9/11 attacks by many 
independent reviews, but there have not been sufficient funds in the 
budget. This investment would ensure that the State Department's 
technology system, which supports 265 embassies and consulates in 154 
countries, would not shut down if there is a major incident on the east 
coast of the U.S., like a power failure.
  No. 1, the bill includes funding for many Federal agencies and 
departments to upgrade facilities or technology, and the State 
Department funding is in line with these same types of projects.
  No. 2, this funding included for the State Department and USAID is 
for existing construction projects and upgrades that have been under-
funded or deferred for years.
  No. 3, these will support only domestic facilities which will improve 
the efficiency of the State Department's operations and create jobs in 
the U.S.
  No. 4, in several instances, like the diplomatic security training 
facility and cybersecurity upgrades, the funds will strengthen security 
for U.S. diplomats posted overseas.
  No. 5, all of the funds will be spent domestically at facilities in 
the U.S.
  The PRESIDING OFFICER (Mr. Udall of Colorado.) The Senator from 
Washington is recognized.
  Mrs. MURRAY. Mr. President, I ask unanimous consent that at 5:45 
today, the Senate proceed to vote in relation to the amendments 
specified in this agreement in the order listed; that no amendment be 
in order to any of the amendments prior to the vote; that there be 2 
minutes of debate equally divided and controlled in the usual form 
prior to each vote; and that after the first vote, the succeeding votes 
be limited to 10 minutes each: Vitter amendment No. 179; Isakson 
amendment No. 106, as modified; Cardin amendment No. 237; DeMint 
amendment No. 168; Thune amendment No. 238; Martinez amendment No. 159, 
that the amendment be modified with the changes at the desk; McCain 
amendment No. 278, that the amendment be modified with the changes at 
the desk; Bond amendment No. 161; Inhofe amendment No. 262; Cornyn 
amendment No. 277; Bunning amendment No. 242; Dorgan amendment No. 300; 
and McCain amendment No. 279.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments (Nos. 159 and 278), as modified, are as follows:


                           Amendment No. 159

       At the end of division B, add the following:

                    TITLE VI--FORECLOSURE MITIGATION

     SEC. 6001. SHORT TITLE.

       This title may be cited as the ``Keep Families in Their 
     Homes Act of 2009''.

     SEC. 6002. DEFINITIONS.

       For purposes of this title--
       (1) the term ``securitized mortgages'' means residential 
     mortgages that have been pooled by a securitization vehicle;
       (2) the term ``securitization vehicle'' means a trust, 
     corporation, partnership, limited liability entity, special 
     purpose entity, or other structure that--
       (A) is the issuer, or is created by the issuer, of mortgage 
     pass-through certificates, participation certificates, 
     mortgage-

[[Page S1519]]

     backed securities, or other similar securities backed by a 
     pool of assets that includes residential mortgage loans;
       (B) holds all of the mortgage loans which are the basis for 
     any vehicle described in subparagraph (A); and
       (C) has not issued securities that are guaranteed by the 
     Federal National Mortgage Association, the Federal Home Loan 
     Mortgage Corporation, or the Government National Mortgage 
     Association;
       (3) the term ``servicer'' means a servicer of securitized 
     mortgages;
       (4) the term ``eligible servicer'' means a servicer of 
     pooled and securitized residential mortgages, all of which 
     are eligible mortgages;
       (5) the term ``eligible mortgage'' means a residential 
     mortgage, the principal amount of which did not exceed the 
     conforming loan size limit that was in existence at the time 
     of origination for a comparable dwelling, as established by 
     the Federal National Mortgage Association;
       (6) the term ``Secretary'' means the Secretary of the 
     Treasury;
       (7) the term ``effective term of the Act'' means the period 
     beginning on the effective date of this title and ending on 
     December 31, 2011;
       (8) the term ``incentive fee'' means the monthly payment to 
     eligible servicers, as determined under section 6003;
       (9) the term ``Office'' means the Office of Aggrieved 
     Investor Claims established under section 6004(a); and
       (10) the term ``prepayment fee'' means the payment to 
     eligible servicers, as determined under section 6003(b).

     SEC. 6003. PAYMENTS TO ELIGIBLE SERVICERS AUTHORIZED.

       (a) Authority.--The Secretary is authorized during the 
     effective term of the Act, to make payments to eligible 
     servicers in an amount not to exceed an aggregate of 
     $10,000,000,000, subject to the terms and conditions 
     established under this title.
       (b) Fees Paid to Eligible Servicers.--
       (1) In general.--During the effective term of the Act, 
     eligible servicers may collect monthly fee payments, 
     consistent with the limitation in paragraph (2).
       (2) Conditions.--For every mortgage that was--
       (A) not prepaid during a month, an eligible servicer may 
     collect an incentive fee equal to 10 percent of mortgage 
     payments received during that month, not to exceed $60 per 
     loan; and
       (B) prepaid during a month, an eligible servicer may 
     collect a one-time prepayment fee equal to 12 times the 
     amount of the incentive fee for the preceding month.
       (c) Safe Harbor.--Notwithstanding any other provision of 
     law, and notwithstanding any investment contract between a 
     servicer and a securitization vehicle, a servicer--
       (1) owes any duty to maximize the net present value of the 
     pooled mortgages in the securitization vehicle to all 
     investors and parties having a direct or indirect interest in 
     such vehicle, and not to any individual party or group of 
     parties; and
       (2) shall be deemed to act in the best interests of all 
     such investors and parties if the servicer agrees to or 
     implements a modification, workout, or other loss mitigation 
     plan for a residential mortgage or a class of residential 
     mortgages that constitutes a part or all of the pooled 
     mortgages in such securitization vehicle, if--
       (A) default on the payment of such mortgage has occurred or 
     is reasonably foreseeable;
       (B) the property securing such mortgage is occupied by the 
     mortgagor of such mortgage; and
       (C) the servicer reasonably and in good faith believes that 
     the anticipated recovery on the principal outstanding 
     obligation of the mortgage under the modification or workout 
     plan exceeds, on a net present value basis, the anticipated 
     recovery on the principal outstanding obligation of the 
     mortgage through foreclosure;
       (3) shall not be obligated to repurchase loans from, or 
     otherwise make payments to, the securitization vehicle on 
     account of a modification, workout, or other loss mitigation 
     plan that satisfies the conditions of paragraph (2); and
       (4) if it acts in a manner consistent with the duties set 
     forth in paragraphs (1) and (2), shall not be liable for 
     entering into a modification or workout plan to any person--
       (A) based on ownership by that person of a residential 
     mortgage loan or any interest in a pool of residential 
     mortgage loans, or in securities that distribute payments out 
     of the principal, interest, and other payments in loans in 
     the pool;
       (B) who is obligated to make payments determined in 
     reference to any loan or any interest referred to in 
     subparagraph (A); or
       (C) that insures any loan or any interest referred to in 
     subparagraph (A) under any provision of law or regulation of 
     the United States or any State or political subdivision 
     thereof.
       (d) Legal Costs.--If an unsuccessful suit is brought by a 
     person described in subsection (d)(4), that person shall bear 
     the actual legal costs of the servicer, including reasonable 
     attorney fees and expert witness fees, incurred in good 
     faith.
       (e) Reporting Requirements.--
       (1) In general.--Each servicer shall report regularly, not 
     less frequently than monthly, to the Secretary on the extent 
     and scope of the loss mitigation activities of the mortgage 
     owner.
       (2) Content.--Each report required by this subsection shall 
     include--
       (A) the number of residential mortgage loans receiving loss 
     mitigation that have become performing loans;
       (B) the number of residential mortgage loans receiving loss 
     mitigation that have proceeded to foreclosure;
       (C) the total number of foreclosures initiated during the 
     reporting period;
       (D) data on loss mitigation activities, disaggregated to 
     reflect whether the loss mitigation was in the form of--
       (i) a waiver of any late payment charge, penalty interest, 
     or any other fees or charges, or any combination thereof;
       (ii) the establishment of a repayment plan under which the 
     homeowner resumes regularly scheduled payments and pays 
     additional amounts at scheduled intervals to cure the 
     delinquency;
       (iii) forbearance under the loan that provides for a 
     temporary reduction in or cessation of monthly payments, 
     followed by a reamortization of the amounts due under the 
     loan, including arrearage, and a new schedule of repayment 
     amounts;
       (iv) waiver, modification, or variation of any material 
     term of the loan, including short-term, long-term, or life-
     of-loan modifications that change the interest rate, forgive 
     the payment of principal or interest, or extend the final 
     maturity date of the loan;
       (v) short refinancing of the loan consisting of acceptance 
     of payment from or on behalf of the homeowner of an amount 
     less than the amount alleged to be due and owing under the 
     loan, including principal, interest, and fees, in full 
     satisfaction of the obligation under such loan and as part of 
     a refinance transaction in which the property is intended to 
     remain the principal residence of the homeowner;
       (vi) acquisition of the property by the owner or servicer 
     by deed in lieu of foreclosure;
       (vii) short sale of the principal residence that is subject 
     to the lien securing the loan;
       (viii) assumption of the obligation of the homeowner under 
     the loan by a third party;
       (ix) cancellation or postponement of a foreclosure sale to 
     allow the homeowner additional time to sell the property; or
       (x) any other loss mitigation activity not covered; and
       (E) such other information as the Secretary determines to 
     be relevant.
       (3) Public availability of reports.--After removing 
     information that would compromise the privacy interests of 
     mortgagors, the Secretary shall make public the reports 
     required by this subsection.

     SEC. 6004. COMPENSATION FOR AGGRIEVED INVESTORS.

       (a) In General.--
       (1) Compensation.--Each injured person shall be entitled to 
     receive from the United States--
       (A) compensation for injury suffered by the injured person 
     as a result of loan modifications made pursuant to this 
     title; and
       (B) damages described in subsection (d)(3), as determined 
     by the Secretary of the Treasury.
       (2) Office of aggrieved investor claims.--
       (A) In general.--There is established within the Department 
     of the Treasury an Office of Aggrieved Investor Claims.
       (B) Purpose.--The Office shall receive, process, and pay 
     claims in accordance with this section.
       (C) Funding.--The Office--
       (i) shall be funded from funds made available to the 
     Secretary under this section;
       (ii) may reimburse other Federal agencies for claims 
     processing support and assistance;
       (iii) may appoint and fix the compensation of such 
     temporary personnel as may be necessary, without regard to 
     the provisions of title 5, United States Code, governing 
     appointments in competitive service; and
       (iv) upon the request of the Secretary, the head of any 
     Federal department or agency may detail, on a reimbursable 
     basis, any of the personnel of that department or agency to 
     the Department of Treasury to assist it in carrying out its 
     duties under this section.
       (3) Option to appoint independent claims manager.--The 
     Secretary may appoint an Independent Claims Manager--
       (A) to head the Office; and
       (B) to assume the duties of the Secretary under this 
     section.
       (b) Submission of Claims.--Not later than 2 years after the 
     date on which regulations are first promulgated under 
     subsection (f), an injured person may submit to the Secretary 
     a written claim for one or more injuries suffered by the 
     injured person in accordance with such requirements as the 
     Secretary determines to be appropriate.
       (c) Investigation of Claims.--
       (1) In general.--The Secretary shall, on behalf of the 
     United States, investigate, consider, ascertain, adjust, 
     determine, grant, deny, or settle any claim for money damages 
     asserted under subsection (b).
       (2) Extent of damages.--Any payment under this section--
       (A) shall be limited to actual compensatory damages 
     measured by injuries suffered; and
       (B) shall not include--
       (i) interest before settlement or payment of a claim; or
       (ii) punitive damages.
       (d) Payment of Claims.--
       (1) Determination and payment of amount.--

[[Page S1520]]

       (A) In general.--Not later than 180 days after the date on 
     which a claim is submitted under this section, the Secretary 
     shall determine and fix the amount, if any, to be paid for 
     the claim.
       (B) Parameters of determination.--In determining and 
     settling a claim under this section, the Secretary shall 
     determine only--
       (i) whether the claimant is an injured person;
       (ii) whether the injury that is the subject of the claim 
     resulted from a loan modification made pursuant to this 
     title;
       (iii) the amount, if any, to be allowed and paid under this 
     section; and
       (iv) the person or persons entitled to receive the amount.
       (2) Partial payment.--
       (A) In general.--At the request of a claimant, the 
     Secretary may make one or more advance or partial payments 
     before the final settlement of a claim, including final 
     settlement on any portion or aspect of a claim that is 
     determined to be severable.
       (B) Judicial decision.--If a claimant receives a partial 
     payment on a claim under this section, but further payment on 
     the claim is subsequently denied by the Secretary, the 
     claimant may--
       (i) seek judicial review under subsection (i); and
       (ii) keep any partial payment that the claimant received, 
     unless the Secretary determines that the claimant--

       (I) was not eligible to receive the compensation; or
       (II) fraudulently procured the compensation.

       (3) Allowable damages for financial loss.--A claim that is 
     paid for injury under this section may include damages 
     resulting from a loan modification pursuant to this title for 
     the following types of otherwise uncompensated financial 
     loss:
       (A) Lost personal income.
       (B) Any other loss that the Secretary determines to be 
     appropriate for inclusion as financial loss.
       (e) Acceptance of Award.--The acceptance by a claimant of 
     any payment under this section, except an advance or partial 
     payment made under subsection (d)(2), shall--
       (1) be final and conclusive on the claimant with respect to 
     all claims arising out of or relating to the same subject 
     matter;
       (2) constitute a complete release of all claims against the 
     United States (including any agency or employee of the United 
     States) under chapter 171 of title 28, United States Code 
     (commonly known as the ``Federal Tort Claims Act''), or any 
     other Federal or State law, arising out of or relating to the 
     same subject matter;
       (3) constitute a complete release of all claims against the 
     eligible servicer of the securitization in which the injured 
     person was an investor under any Federal or State law, 
     arising out of or relating to the same subject matter; and
       (4) shall include a certification by the claimant, made 
     under penalty of perjury and subject to the provisions of 
     section 1001 of title 18, United States Code, that such claim 
     is true and correct.
       (f) Regulations.--Notwithstanding any other provision of 
     law, not later than 45 days after the date of enactment of 
     this Act, the Secretary shall promulgate and publish in the 
     Federal Register interim final regulations for the processing 
     and payment of claims under this section.
       (g) Consultation.--In administering this section, the 
     Secretary shall consult with other Federal agencies, as 
     determined to be necessary by the Secretary, to ensure the 
     efficient administration of the claims process.
       (h) Election of Remedy.--
       (1) In general.--An injured person may elect to seek 
     compensation from the United States for one or more injuries 
     resulting from a loan modification made pursuant to this 
     title by--
       (A) submitting a claim under this section;
       (B) filing a claim or bringing a civil action under chapter 
     171 of title 28, United States Code; or
       (C) bringing an authorized civil action under any other 
     provision of law.
       (2) Effect of election.--An election by an injured person 
     to seek compensation in any manner described in paragraph (1) 
     shall be final and conclusive on the claimant with respect to 
     all injuries resulting from a loan modification made pursuant 
     to this title that are suffered by the claimant.
       (3) Arbitration.--
       (A) In general.--Not later than 45 days after the date of 
     the enactment of this Act, the Secretary shall establish by 
     regulation procedures under which a dispute regarding a claim 
     submitted under this section may be settled by arbitration.
       (B) Arbitration as remedy.--On establishment of arbitration 
     procedures under subparagraph (A), an injured person that 
     submits a disputed claim under this section may elect to 
     settle the claim through arbitration.
       (C) Binding effect.--An election by an injured person to 
     settle a claim through arbitration under this paragraph 
     shall--
       (i) be binding; and
       (ii) preclude any exercise by the injured person of the 
     right to judicial review of a claim described in subsection 
     (i).
       (i) Judicial Review.--
       (1) In general.--Any claimant aggrieved by a final decision 
     of the Secretary under this section may, not later than 60 
     days after the date on which the decision is issued, bring a 
     civil action in the United States District Court for the 
     District of Columbia, to modify or set aside the decision, in 
     whole or in part.
       (2) Record.--The court shall hear a civil action under 
     paragraph (1) on the record made before the Secretary.
       (3) Standard.--The decision of the Secretary incorporating 
     the findings of the Secretary shall be upheld if the decision 
     is supported by substantial evidence on the record considered 
     as a whole.
       (j) Attorney's and Agent's Fees.--
       (1) In general.--No attorney or agent, acting alone or in 
     combination with any other attorney or agent, shall charge, 
     demand, receive, or collect, for services rendered in 
     connection with a claim submitted under this section, fees in 
     excess of 10 percent of the amount of any payment on the 
     claim.
       (2) Violation.--An attorney or agent who violates paragraph 
     (1) shall be fined not more than $10,000.
       (k) Applicability of Debt Collection Requirements.--Section 
     3716 of title 31, United States Code, shall not apply to any 
     payment under this section.
       (l) Report.--Not later than 1 year after the date of 
     promulgation of regulations under subsection (f), and 
     annually thereafter, the Secretary shall submit to Congress a 
     report that describes the claims submitted under this section 
     during the year preceding the date of submission of the 
     report, including, for each claim--
       (1) the amount claimed;
       (2) a brief description of the nature of the claim; and
       (3) the status or disposition of the claim, including the 
     amount of any payment under this section.
       (m) GAO Audit.--The Comptroller General of the United 
     States shall conduct an annual audit on the payment of all 
     claims made under this section and shall report to the 
     Congress on the results of this audit beginning not later 
     than the expiration of the 1-year period beginning on the 
     date of the enactment of this Act.
       (n) Authorization of Appropriations.--There are authorized 
     to be appropriated for the payment of claims in accordance 
     with this section up to $1,700,000,000, to remain available 
     until expended.

     SEC. 6005. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary, 
     such sums as may be necessary to carry out this title.

     SEC. 6006. SUNSET OF AUTHORITY.

       The authority of the Secretary to provide assistance under 
     this title shall terminate on December 31, 2011.


                           Amendment No. 278

       On page 431, after line 8, insert the following:

     SEC. __. REDUCING SPENDING UPON ECONOMIC GROWTH TO RELIEVE 
                   FUTURE GENERATIONS' DEBT OBLIGATIONS.

       (a) Enforcement.--Section 275 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended by inserting 
     at the end thereof the following:
       ``(d) Reducing Spending Upon Economic Growth to Relieve 
     Future Generations Debt Obligations.--
       ``(1) Sequester.--Section 251 shall be implemented in 
     accordance with this subsection in any fiscal year following 
     a fiscal year in which there are 2 consecutive quarters of 
     economic growth greater than 2% of inflation adjusted GDP.
       ``(2) Amounts provided in the american recovery and 
     reinvestment act of 2009.--Appropriated amounts provided in 
     the American Recovery and Reinvestment Act of 2009 for a 
     fiscal year to which paragraph (1) applies that have not been 
     otherwise obligated are rescinded.
       ``(3) Reductions.--The reduction of sequestered amounts 
     required by paragraph (1) shall be 2% from the baseline for 
     the first year, minus any discretionary spending provided in 
     the American recovery and Reinvestment act of 2009, and each 
     of the 4 fiscal years following the first year in order to 
     balance the Federal budget.
       ``(e) Deficit Reduction Through a Sequester.--
       ``(1) Sequester.--Section 253 shall be implemented in 
     accordance with this subsection.
       ``(2) Maximum deficit amounts.--
       ``(A) In general.--When the President submits the budget 
     for the first fiscal year following a fiscal year in which 
     there are 2 consecutive quarters of economic growth greater 
     than 2% of inflation adjusted GDP, the President shall set 
     and submit maximum deficit amounts for the budget year and 
     each of the following 4 fiscal years. The President shall set 
     each of the maximum deficit amounts in a manner to ensure a 
     gradual and proportional decline that balances the federal 
     budget in not later than 5 fiscal years.
       ``(B) MDA.--The maximum deficit amounts determined pursuant 
     to subparagraph (A) shall be deemed the maximum deficit 
     amounts for purposes of section 601 of the Congressional 
     Budget Act of 1974, as in effect prior to the enactment of 
     Public Law 105-33.
       ``(C) Deficit.--For purposes of this paragraph, the term 
     `deficit' shall have the meaning given such term in Public 
     Law 99-177..''.
       (b) Procedures Reestablished.--Section 275(b) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 is 
     amended to read as follows:
       ``(b) Procedures Reestablished.--Subject to subsection (d), 
     sections 251 and 253 of this Act and any procedure with 
     respect to such

[[Page S1521]]

     sections in this Act shall be effective beginning on the date 
     of enactment of this subsection.''.
       (c) Baseline.--The Congressional Budget Office shall not 
     include any amounts, including discretionary, mandatory, and 
     revenues, provided in this Act in the baseline for fiscal 
     year 2010 and fiscal years thereafter.

  The PRESIDING OFFICER. The Senator from Missouri is recognized.
  Mrs. McCASKILL. I would like to talk about a few of the amendments I 
will be offering to this very important piece of legislation. Let me 
say this again: This is a very important piece of legislation. I think 
everyone needs to take a moment, take a deep breath, and consider what 
the alternatives are. Either we come together in the Senate over the 
next few days and pass this bill or we do nothing--or we do nothing. I 
will tell you, where I live in Missouri, ``nothing'' is not an option. 
If people think we can do nothing and this problem will begin to take 
care of itself, they do not understand the economic situation we are 
facing. So I have no problem with a full debate. I have no problem with 
us looking at every line and figuring out whether there is money we can 
take out that is wasteful or not stimulative. But at the end of the 
day, this notion that we are going to put this on the shelf--are you 
kidding me? Put it on a shelf.
  We have a crisis in this country. We are in a dramatic recession. The 
Government must act to stimulate job creation. If we do not, then we 
are going to have some explaining to do. Being brave and bold enough to 
do something is always harder than finding something wrong with 
something. And we will always be able to find something wrong in 
everything we do around here. So buck up. Be strong. Move forward for 
the American people because that is what they said to us last November. 
That is what they want. They wanted it to be a new day.
  I am glad we are talking with each other. I am glad we are debating 
amendments. I am glad we are working in a bipartisan fashion to try to 
pull some of the things out of this bill that have distracted the 
conversation about the Economic Recovery Act. They have distracted us. 
They put us on defense. Excuse me, we are on offense. We are trying to 
help our economy. Sitting back and shooting that thing is not going to 
get us there.
  There are some things I think we can do to make it better, and 
several of the amendments I have offered have to do with our ability to 
make this process transparent and to make sure we are accountable for 
the money.
  First, I have submitted an amendment to strengthen the whistleblower 
protection. We have to make sure our whistleblowers are well taken care 
of. Some of the best information we get in cleaning up Government comes 
from inside the companies that work for the Federal Government. We gave 
these protections to defense contractors in last year's Defense 
Authorization Act. We need to give it to every Federal contractor so 
that we can get the best information possible about what is going on 
internally in these companies as they spend public money.
  Another amendment improves the transparency requirements for the 
public database Web site.
  We need this public database to work, because it is a new tool to 
allow us to track all the money to make sure the money is going where 
it was intended to go, to make sure we don't have fraud, waste, and 
abuse in these contracts and programs, as we fund the various 
infrastructure needs of the country, whether it is building a school, a 
bridge, or an electric grid.
  Another amendment I have will boost the resources for the inspectors 
general. Those are our cops in terms of accountability. We cannot do 
this kind of government spending without giving the same kind of 
increase to the inspector general community for them to do their jobs.
  Also additional funding for acquisition personnel is included. 
Acquisition personnel are going to be called to this cause in a 
dramatic fashion. As we spend this money, we have to make sure we have 
enough folks that we can monitor the contracts, make sure the contracts 
are drafted in a way that protects taxpayer money. So we need to 
increase both acquisition personnel and inspector general resources.
  There is also another technical amendment I will be offering that has 
to do with a vagary in Missouri law and another State's laws as it 
relates to the ability of my State and another State to use water and 
sewer funding.
  Let me say this before yielding the floor. I compliment the President 
today on the dramatic steps he took on curbing executive pay in the 
various companies that have received Federal money. The proposal he 
laid out today is aggressive. It is broad in scope. It is just what the 
doctor ordered. I am so pleased that not only the President but Senator 
Wyden and Senator Snowe offered another amendment in the area of taxing 
some of the excessive bonuses that have occurred. We are watching Wall 
Street. We are paying attention. Please behave as you should, if you 
have taken this kind of public money. Please understand it is not 
business as usual. It is not luxury retreats and fancy parties and big-
time bonuses. It is a new day. Please start behaving as if you get it. 
Because if we cannot convince the American people that we are looking 
after them, we will never get the recovery we must have so that 
everyone has the opportunity to succeed. That is all it is about, that 
opportunity that is unique to America--that everyone can have a chance 
to succeed.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. VITTER. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 179

  Mr. VITTER. Before we start voting in a little less than an hour, I 
encourage all colleagues to look seriously at and to support the Vitter 
amendment which will be voted on tonight. The Vitter amendment is an 
attempt to start the important work of cutting out some of the clearly 
nonstimulative parts of this bill. Fundamentally, it does two things. 
First, it cuts out $35 billion of spending, which is not stimulative, 
which is not focused on quick job creation and economic stimulus. It 
takes that out of the bill. Secondly, it takes out the Davis-Bacon 
language, which is not part of any reasonable stimulus program and 
which will, in fact, cost the Government more money by significantly 
increasing labor costs on many projects. That has been estimated to 
cost about $17 billion. The American people get it. This is a big 
debate, an important matter they have been watching carefully. Every 
day that goes by, they understand ever more clearly that this is a big 
spending bill with the whole spectrum of traditional big government 
Washington spending items, a laundry list, and that is not the same 
animal at all as real focused job creation, economic stimulus.
  There is now a plurality of all Americans who think this is a bad 
bill, not stimulative, and it should be either dramatically changed--
not at the margin but at the core--or defeated. Quite frankly, that 
plurality is growing every hour of every day. They are staggered, the 
Louisianians I have talked to, by two things. First, the enormous size 
and cost of the bill. This is a direct cost. There is no argument that 
we can recoup this as possibly we can recoup some of the TARP money. 
This is a direct cost. It adds on to the debt and the deficit penny by 
penny. A trillion dollars is a lot of money. As one of my colleagues 
said: A trillion dollars or nearly that surely is a terrible thing to 
waste. This current stimulus bill of almost a trillion dollars is the 
largest spending bill ever enacted by Congress. It makes the entire New 
Deal, even adjusted for inflation, look small. If it would be divvied 
up equally, the $825 billion, it would be like every family in America 
borrowing $10,520. That is not an analogy drawn from the air. In fact, 
we are collectively borrowing every cent of this money. Every dollar is 
another dollar of deficit and debt. We are borrowing that, $10,520 for 
every American family. If all of our families were asked to equally 
shoulder that burden, this would be the equivalent of what each average 
family roughly spends on food, clothing, and health care in a year.
  The bill, if it were a country with a GDP, would be the fifteenth 
largest GDP in the world, right between Australia and Mexico, greater 
than the gross domestic products of Saudi Arabia and Iran put together. 
It does cost well over $1 billion for every page it is

[[Page S1522]]

printed on, $400,000 for every job it hopes or even claims to save or 
create.
  This is about job creation. A lot of us have questions, if any of 
these goals are going to be met. But let's assume the stated goals are 
met of saving and creating jobs, $400,000 per job. Of course, I don't 
think it will ever meet those goals. Altogether, by the analysis of 
many expert analysis, only 11 percent of this bill has anything to do 
with recovery or reinvestment. Fact one is the enormous size and cost 
of this bill which is staggering and frightening to so many Americans. 
Part two is that Americans get it. It is common sense, and they can 
tell the difference between a laundry list of spending items, 
traditional Washington, big government items. Virtually every major 
item we find in the Federal Government's budget every year, they can 
tell the difference between that, which this bill is, which the House 
bill is, and true focused job creation, economic stimulus. They know 
the difference. They know this is a laundry list of spending.
  The Vitter amendment would begin to try to change that. It would not 
be enough, but it would begin to make a dent in that by cutting $35 
billion of spending that is line item spending, nothing particularly 
focused on job creation, economic development. That spending is in a 
number of different categories. I invite Members to look at all details 
of the amendment. It starts with the truly inane. For instance, $20 
million for the removal of fish barriers. Let me clarify, small and 
medium-size fish barriers, in case one was wondering. What the heck is 
that, to begin with? I would venture to say 95 percent of the Senate 
has no idea, but we are going to throw $20 million at that issue. How 
many jobs will that save or create?
  That is similar to some of the items in the bill as originally 
introduced: An enormous amount of money for honeybee insurance; $400 
million for the prevention of sexually transmitted diseases; $70 
million still in the bill for supercomputing related to global climate 
change models. I am starting with what is the truly ridiculous and 
inane. From there we go to a lot of other items we can debate, which we 
may have to do, we may have to consider, but it is not stimulus. It is 
traditional Washington spending. How about $1 billion for the 2010 
census. We just threw $210 million at the new census a few months ago. 
We are going to throw a billion dollars more. I don't know if that is 
needed. I don't know if that is a good idea. But I know with absolute 
certainty, as does everyone in this body, that that is normal spending. 
That is a normal appropriations matter, not job creation, economic 
recovery, economic stimulus.
  There are so many examples like that. FBI construction. I am a big 
supporter of the FBI. They may have capital needs. It is not economic 
stimulus. NIST construction. Most Americans don't know what NIST is, 
the National Institute of Standards and Technology. Maybe they have 
capital needs. It is not significant job creation and economic 
stimulus. The Commerce headquarters, we are going to spend $34 million 
there under this bill. DHS, Department of Homeland Security, 
consolidation, reorganization, streamlining, saving. That is going to 
save money; right? Not exactly, $248 million to streamline and 
consolidate. USDA modernization, let's modernize that Department for 
$300 million.
  Some of these may be good ideas. Some of this spending may be worthy. 
I don't know, as I stand here today. But I absolutely know--and I 
daresay everybody in this body knows--it is not job creation. It is not 
economic stimulus. It is pent-up Washington demand for government 
spending. Most of what I am talking about right here in our Nation's 
capital, in the heart of the megabureaucracies. State Department 
training facility, that is another $75 million; State Department 
capital investment fund, $524 million. That is almost a billion 
dollars. How many jobs in the heartland of America will that create? 
How much impact in terms of real people in the real world in mainstream 
America will that have in stimulating the economy? My answer is zero. 
That is the obvious answer on the minds of Americans. The District of 
Columbia sewer system, $125 million. Are communities around the country 
getting the same treatment? No. The Economic Development Assistance 
Program, and another biggie, Amtrak, almost a billion dollars. Again, 
we deal with Amtrak in the normal appropriations process every year. We 
have an important debate about whether to continue to subsidize Amtrak. 
We need to have that debate. We need to get it right. I don't know what 
the precisely right answer is, but I know it is a normal spending item. 
It is not job creation. It is not economic stimulus. It is just turning 
this bill into a whole other year of appropriations inserted somehow 
magically between 2009 and 2010.
  NASA climate change studies, a cool half a billion dollars. It is 
nice to use round figures like half a billion-- neighborhood 
stabilization, historic preservation, fish and wildlife resource 
construction, comparative research, the pandemic flu, the smart grid.

  People might say: You are not worried about a pandemic flu and the 
threat that causes to our Nation? I am. That is a serious subject. We 
need to address it. We have debated it and begun to address it in the 
normal appropriations process. Maybe we need to do more; I do not know. 
But I do know one thing. That is average spending and typical spending 
that is nothing to do with job creation and economic stimulus. Yet this 
bill is littered line after line after line with all of those items. 
Many are ridiculous. Some are obscene. Others are debatable as spending 
items, but they are clearly not job creation and economic stimulus.
  So I hope this vote tonight on the Vitter amendment will be the 
beginning of fundamentally changing this bill so it is no longer simply 
a laundry list of traditional Washington, big government spending 
items.
  Again, the American people get it. No. 1, they know a trillion 
dollars is a terrible thing to waste. And, No. 2, they know this bill, 
as it stands now, just like the House bill, is simply a laundry list of 
spending items, traditional Washington, big government spending, pent-
up demand for spending here in the Nation's Capital. It has been pent 
up and building for several years. It is not focused, disciplined, 
economic stimulus, or job creation.
  There is a big difference between the two, and the American people, 
with their common sense, can spot that difference a mile away; and they 
have because they have been making their voices heard. Scientific 
polls, several polls--not one here, not one there--several across the 
board say that a plurality of the American people now say this is a bad 
idea. This bill should be changed at its core, not at the margins but 
at its core, or it should be stopped, and we should start over. That is 
what we need to do.
  The speaker immediately before me, the distinguished junior Senator 
from Missouri, said that not acting, doing nothing, is not an option. 
She said that with great passion and great focus. I agree. I am a 
little puzzled about how animated she was about that because I do not 
know anyone, at least in this body, who thinks or says that inaction is 
an option. The choice being laid out that it is this bill even after 
the amendments or nothing is a superficial, false choice. Nobody thinks 
it is this bill even after amendments or nothing.
  We have to act. But this is not the universe of possibilities. We 
need to change this bill at its core or, if we cannot, we need to say 
no. We will stay on the subject. We will focus on the economy. We will 
start over. We will act with real focus and speed. But it is not worth 
saying yes to a bad bill, particularly at the cost of nearly a trillion 
dollars.
  So I urge all of my colleagues, Republicans and Democrats, to begin 
that bipartisan path forward toward making this a fundamentally 
different and worthy bill, and beginning that by adopting the Vitter 
amendment tonight.
  With that, Mr. President, I yield back my time.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Tester). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. VITTER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Under the previous order, there will now be 2 minutes of debate 
equally divided prior to a vote in relation to amendment No. 179 
offered by the Senator from Louisiana, Mr. Vitter.

[[Page S1523]]

  The Senator from Louisiana is recognized.
  Mr. VITTER. Mr. President, I would urge all of my colleagues to 
support this amendment. This would be an important start--not a finish 
but a start--to trimming down this bill and trimming down pure spending 
items out of the bill which are not job creation and economic stimulus. 
The whole savings would be about $35 billion of spending in the bill. 
That is obviously outlined and delineated in the amendment. In 
addition, it would omit the Davis-Bacon language which would cost the 
Government in terms of increased costs of projects another $17 billion.
  The American people know the difference between a long laundry list 
of traditional Washington big government spending items and true, 
focused job creation and economic development. They know this bill 
right now is the former, not the latter. Let's begin to change that.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. VITTER. Mr. President, if there are no other speakers, I ask for 
the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There appears to 
be a sufficient second.
  The question is on agreeing to amendment No. 179.
  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. 
Kennedy) is necessarily absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from New Hampshire (Mr. Gregg).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 32, nays 65, as follows:

                      [Rollcall Vote No. 37 Leg.]

                                YEAS--32

     Alexander
     Barrasso
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Hatch
     Inhofe
     Isakson
     Johanns
     Kyl
     Martinez
     McCain
     McConnell
     Risch
     Roberts
     Sessions
     Thune
     Vitter
     Wicker

                                NAYS--65

     Akaka
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Boxer
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Hagan
     Harkin
     Hutchison
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Shelby
     Snowe
     Specter
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Gregg
     Kennedy
       
       
  The amendment (No. 179) was rejected.


                           Amendment No. 106

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided prior to a vote in relation to 
amendment No.--the Senator from Montana is recognized.
  Mr. BAUCUS. We are now going to vote on the Isakson-Lieberman 
amendment, No. 106, the housing tax credit. I am prepared to accept the 
amendment.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DODD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. Mr. President, I want to add my voice to that of our 
colleague from Georgia, Senator Isakson, in support of his amendment. 
This is an idea that is not inexpensive to do, but I think it may be 
the kind of confidence-building measure that is necessary to free our 
credit markets and begin to get the housing issue moving again. It is 
not the only answer. I think it is a critical component and element in 
achieving the results we all desire.
  I think our colleague from Georgia came up with an idea worth our 
support. Therefore, I am going to be a cosponsor as chairman of the 
Banking Committee, and I urge my colleagues to support it.
  The PRESIDING OFFICER. The Senator from Georgia is recognized.
  Mr. ISAKSON. Mr. President, I thank the chairman of the Banking 
Committee and other Members on both sides of the aisle who worked on 
this amendment. I am happy to accept his support.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 106) was agreed to.


                           Amendment No. 237

  Mr. BAUCUS. Mr. President, next is the Cardin amendment, No. 237. I 
understand the chairman and ranking member of the Small Business 
Committee agree to this. I don't see the chairman. I see Senator Cardin 
on the Senate floor. I urge him to speak to the amendment. Otherwise, I 
am prepared to accept the amendment.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. CARDIN. Mr. President, I thank the chairman. This amendment will 
make it easier for small businesses to be able to get surety bonds in 
order to participate in these contracts with Government. It has the 
support of the chairman and ranking member of the Small Business 
Committee. I am prepared to accept a voice vote.
  The PRESIDING OFFICER. Is there further debate? If not, the question 
is on agreeing to the amendment.
  The amendment (No. 237) was agreed to.
  Mr. BAUCUS. Mr. President, I move to reconsider the vote.
  Mr. LEAHY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER (Ms. Cantwell). The Senator from Montana.


                           Amendment No. 168

  Mr. BAUCUS. Madam President, I understand the next amendment is 
DeMint amendment No. 168, the tax cut substitute.
  This amendment is very simple. It strikes the entire bill. Then it 
replaces the entire bill with a $2.5 trillion increase in the national 
debt, according to the Joint Committee on Tax. With debt service and 
added tax provisions, it increases the national debt over 10 years by 
$3 trillion because it is a massive tax cut.
  Again, it replaces the underlying bill, which means no aid to States, 
no energy provisions, no infrastructure provisions, nothing that is in 
the bill, replaced by a tax cut which takes effect in 2011. Joint Tax 
scores this, adding interest on the debt, about a $3 trillion increase 
in the national debt over 3 years.
  I strongly urge this amendment not be adopted.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. DeMINT. Madam President, how long do I have?
  The PRESIDING OFFICER. One minute.
  Mr. DeMINT. Madam President, what this bill does is probably one of 
the most important things we need to do in this economic debate, and it 
is stop the planned tax increases that are going to happen in 2011 for 
every American.
  The large score that is being thrown around here assumes we are going 
to let those taxes go up, but we are not. This is a misrepresentation 
of the cost of this bill. This bill stops the current tax increases 
that are planned in 2011, keeps the current tax rate the same. The only 
change it makes is it lowers the top marginal rate from 35 to 25 
percent for businesses, for investors, and for individual Americans.
  We call it the American option because it leaves money in the hands 
of the American people and businesses, rather than bringing it to 
Washington and distributing it our way.
  I encourage everyone to stop the planned tax increases with the 
American option.
  Mr. GRASSLEY. Madam President, I will vote for DeMint Amendment No. 
168 because it provides long-term tax relief. However, I do not agree 
that

[[Page S1524]]

State and local tax deductions and other itemized deductions should be 
eliminated. If the amendment passes, I would work in conference to 
restore the State and local tax deductions, as well as other itemized 
deductions.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Madam President, I raise a point of order that the 
pending amendment violates section 201 of Senate Concurrent Resolution 
21, the concurrent resolution on the budget for fiscal year 2008.
  Mr. DeMINT. Madam President, I move to waive the applicable portion 
of the budget.
  Mr. BAUCUS. I ask for the yeas and nays on that motion.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to the motion.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. 
Kennedy) is necessarily absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from New Hampshire (Mr. Gregg).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 36, nays 61, as follows:

                      [Rollcall Vote No. 38 Leg.]

                                YEAS--36

     Alexander
     Barrasso
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Hatch
     Hutchison
     Inhofe
     Isakson
     Johanns
     Kyl
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Risch
     Roberts
     Sessions
     Shelby
     Thune
     Vitter
     Wicker

                                NAYS--61

     Akaka
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Boxer
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Hagan
     Harkin
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Snowe
     Specter
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Gregg
     Kennedy
  The PRESIDING OFFICER. On this vote the yeas are 36, the nays are 61. 
Three-fifths of the Senators duly chosen and sworn not having voted in 
the affirmative, the motion is rejected.
  The point of order is sustained and the amendment falls.


                           Amendment No. 238

  The PRESIDING OFFICER. There will now be 2 minutes of debate evenly 
divided on the Thune amendment. The Senate will be in order.
  Mr. THUNE. Madam President, what my amendment very simply says is 
that any of the funding in this bill that was not authorized as of 
February 1 of this year could not be funded under the bill. The point 
very simply is that, in order for a stimulus to be effective, it has to 
be timely, it has to be targeted, it has to be temporary. Funding in 
this or programs in this that are created that are new programs are 
going to be none of the above. It is going to take a long time, as we 
all know, to get regulations in place and create the bureaucracies. All 
these programs that are new programs included in this legislation are 
going to take a very long time to implement and, therefore, I do not 
believe ought to be considered stimulus and they ought not be funded as 
a part of this stimulus bill.
  My amendment simply says any program that was not authorized as of 
February 1 of this year will not be funded under the stimulus bill. It 
is a way of trimming the cost of this bill back and doing something 
that actually I think eliminates a lot of the extraneous spending that 
is included in the bill. I urge my colleagues to support it.
  The PRESIDING OFFICER. The time of the Senator has expired. The 
Senator from Hawaii is recognized.
  Mr. INOUYE. Madam President, I rise in opposition to this amendment. 
This amendment says any item, unless the project was authorized prior 
to February 1 of this year, would be thrown out. No authorization bills 
have passed this Senate so far this year, so many worthwhile items 
might not meet the terms. In addition, there are new programs which 
were authorized but not before February 1, such as the $9.5 billion for 
energy loan guarantees, $3.2 billion for western area power, $5.5 
billion for competitive grants. These are dead.
  I urge all of you, keep in mind that this is not an easy amendment. 
This is a tricky one. I vote no.
  The PRESIDING OFFICER. All time has expired. The question is on 
agreeing to the amendment.
  Mr. THUNE. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There appears to 
be a sufficient second. The clerk will call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. 
Kennedy) is necessarily absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from New Hampshire (Mr. Gregg).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 35, nays 62, as follows:

                      [Rollcall Vote No. 39 Leg.]

                                YEAS--35

     Alexander
     Barrasso
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Hatch
     Hutchison
     Inhofe
     Isakson
     Johanns
     Kyl
     McCain
     McConnell
     Murkowski
     Risch
     Roberts
     Sessions
     Shelby
     Thune
     Vitter
     Voinovich
     Wicker

                                NAYS--62

     Akaka
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Boxer
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Hagan
     Harkin
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     Martinez
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Snowe
     Specter
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Gregg
     Kennedy
       
  The amendment (No. 238) was rejected.


                           Amendment No. 159

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided prior to the vote on amendment No. 
159 offered by the Senator from Florida, Mr. Martinez.
  Mr. MARTINEZ. Madam President, the housing crisis got us into this 
problem we are in today which necessitates the need for a stimulus 
bill. Until we deal with housing problems, we are not going to be out 
of this problem.
  My proposal creates a situation where, for 3 years, it compensates 
private servicers of mortgages so they can be incentivized to work out 
mortgages for families who are in trouble, so that they might be able 
to stay in their homes and not be foreclosed.
  This is a way to utilize the private sector, with some incentives 
from government money, to make sure we do not foreclose on more 
families. Two things will be accomplished. It also provides a safe 
harbor for the servicers, so that they are beyond legal liability for 
anything they might do in those workouts.
  At the end of the day, what we will do is stabilize home prices by 
freezing foreclosures. Not only will we be helping families, but we 
will also be trying to put a floor on the housing economy, on housing 
prices, which continue to decline. This will stabilize housing prices, 
it will avoid future foreclosures, and it will begin to turn us around 
and create the kind of housing economy we need in order for the 
American economy to come back.
  The PRESIDING OFFICER. The Senator from Connecticut is recognized.

[[Page S1525]]

  Mr. DODD. Madam President, first, I want to commend my colleague from 
Florida. This is a well-intended proposal. Here is the one problem with 
it that I tell my colleague: It breaks contracts. There is a 
constitutional issue here, where servicers could sue.
  What we are doing with this amendment, if I understand it correctly, 
is that the compensation due to a servicer would now fall on the 
taxpayer. So we would have to set up a bureaucracy to pay the servicer 
where the legal liability was determined. That poses some real 
problems.
  The other part of the amendment I totally agree with. In fact, we try 
to cover it. In fact, we established a safe harbor, my colleague will 
recall, in the bill we did together, and also trying to figure out a 
way to deal with this.
  But I am nervous. There is $1.7 billion dollars in the amendment. No 
one can say with any certainty whether that would be an adequate amount 
to cover the government costs were these determined to be liabilities 
of the government. So I am uneasy about establishing a new bureaucracy 
here, and also the constitutional question of breaking these contracts 
which raises some very serious issues.
  But what I recommend to my colleague is, we have got an amendment 
coming up in a little while, maybe tomorrow, where we can work together 
to try to accommodate this to deal with exactly what he is talking 
about. But I have a very difficult time accepting this for the reasons 
I have described.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  Mr. KYL. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  At this moment there is not a sufficient second.


                      Amendment No. 159 withdrawn

  Mr. MARTINEZ. Madam President, I ask unanimous consent to withdraw 
the amendment.
  The PRESIDING OFFICER. Without objection, the amendment is withdrawn.


                           Amendment No. 278

  Under the previous order, there will now be 2 minutes of debate 
equally divided on the McCain amendment No. 278.
  The Senator from Arizona is recognized.
  Mr. McCAIN. Madam President, every dollar of the $1.2 trillion we are 
contemplating spending with this legislation would add to the national 
debt. The national debt has already climbed to more than $10.2 
trillion. This amount does not include any of the funding provided in 
the legislation we are considering. After achieving economic growth for 
two quarters, then, according to this legislation, the President shall 
submit in his first budget, after the restoration of economic growth, 
fixed deficit targets that would achieve a balanced budget not later 
than 5 years from that date.
  The discretionary spending caps are restored in the first fiscal year 
after the restoration of economic growth for 5 fiscal years at a level 
equal to the budget baseline, excluding any and all portions of the 
Economic Recovery and Reinvestment Act.
  Basically, this legislation calls for, as soon as there are two 
quarters of GDP growth after inflation, that we embark on an effort to 
balance the budget. We are mortgaging our children's future.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Madam President, I strongly share the desire of the 
Senator from Arizona to put the budget back on track, and put it on a 
path to balance. But I do not think this proposal has received the 
consideration it deserves. It has not had a hearing before the Budget 
Committee, yet includes a proposal to create deficit targets that were 
badly gamed during the Gramm-Rudman era, and turned out to actually 
cover for additional deficits. So I think that would be a profound 
mistake. We need a process that works. It deserves the consideration of 
the President and the Budget Committee.
  I strongly urge my colleagues to oppose this amendment at this time.
  I raise a point of order that this amendment violates section 306 of 
the Congressional Budget Act.
  Mr. McCAIN. Madam President, I move to waive the applicable portions 
of the Budget Act, and I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion. The yeas and nays have 
been ordered. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. 
Kennedy) is necessarily absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from New Hampshire (Mr. Gregg).
  The PRESIDING OFFICER (Mr. Begich). Are there any other Senators in 
the Chamber desiring to vote?
  The yeas and nays resulted--yeas 44, nays 53, as follows:

                      [Rollcall Vote No. 40 Leg.]

                                YEAS--44

     Alexander
     Barrasso
     Bayh
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Collins
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Hatch
     Hutchison
     Inhofe
     Isakson
     Johanns
     Kyl
     Lieberman
     Lugar
     Martinez
     McCain
     McCaskill
     McConnell
     Murkowski
     Nelson (NE)
     Risch
     Roberts
     Sessions
     Shelby
     Snowe
     Specter
     Thune
     Vitter
     Voinovich
     Wicker

                                NAYS--53

     Akaka
     Baucus
     Begich
     Bennet
     Bingaman
     Boxer
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Hagan
     Harkin
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lincoln
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (FL)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Gregg
     Kennedy
  The PRESIDING OFFICER. On this vote, the yeas are 44, the nays are 
53. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is not agreed to.
  The point of order is sustained, and the amendment fails.
  The Senator from Montana.


                           Amendment No. 161

  Mr. BAUCUS. Mr. President, it is my understanding the next amendment 
is Bond amendment No. 161. I have checked with our side. Our side is 
willing to accept this amendment. I understand it is also acceptable by 
the other side, but I will let Senator Bond speak to that.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I have to do a couple things, and I just 
want to tell you, thanks so much for agreeing to support this 
bipartisan amendment cosponsored by my partner on the Transportation 
and Housing and Urban Development Subcommittee, Senator Murray, and 
Senator Dodd, Senator Reed of Rhode Island, and Senator Kohl.
  Mr. President, I ask unanimous consent that Senators Voinovich and 
Brownback be added as cosponsors to the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. Some people are a little confused. In 30 seconds--50 
seconds maybe--let me tell you, this is $2 billion in direct equity 
that goes to State housing finance programs to produce affordable 
housing. The funds come from the home moneys in the bill. The funds go 
to shovel-ready projects that have already been approved by State 
credit agencies. Why can't they go forward? Because of the credit 
crisis and the crunch, the tax credits are no longer worth what they 
used to be worth. This amendment allows to fill in the hole. It makes 
the projects viable. There will be tens of thousands of new units and 
tens of thousands of new jobs.
  I appreciate very much my colleagues on the other side.
  I yield to my colleague from Washington.
  Mr. BAUCUS. Mr. President, we are ready to vote.
  The PRESIDING OFFICER. The question is on agreeing to the Bond 
amendment.

[[Page S1526]]

  The amendment (No. 161) was agreed to.


                           Amendment No. 262

  The PRESIDING OFFICER. Under the previous order, there will be now 2 
minutes of debate equally divided prior to a vote on amendment No. 262, 
offered by the Senator from Oklahoma.
  The Senator from Oklahoma.
  Mr. INHOFE. Mr. President, I ask unanimous consent that Senators 
Martinez, Chambliss, Roberts, Brownback, and Bunning be added as 
cosponsors to the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. INHOFE. Mr. President, there has been a lot of discussion and 
complaints about there not being enough funds in terms of 
infrastructure--roads and buildings and all that. Actually, it is under 
4 percent in this bill. We have talked about that. What we have not 
talked about is the need for military procurement.
  In a Washington Post article, Martin Feldstein talked about the fact 
that infrastructure spending on domestic military bases and procurement 
is one of the things we could do that would be very helpful, citing 
there are 655,000 employees in the aerospace industry alone.
  Now, what I am trying to do with this amendment is to increase 
procurement by $5.3 billion. It is offset. So you have a decision: Do 
you want to spend $20 million for fish passage barrier removal, $34 
million to renovate the Department of Commerce, or have a strong 
national defense? Do you want to spend $13 million to research 
volunteer activities or have a strong national defense?
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. INHOFE. I urge adoption of my amendment.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, this amendment adds $5.2 billion for 
defense. It pays for it by cutting a long list of programs out of the 
bill: energy-efficient motor vehicle fleet--that is one I see right 
here--grants for the National Passenger Rail Corporation, among others.
  On behalf of Senator Inouye, I make a point of order that the pending 
amendment violates section 302(f) of the Budget Act.
  Mr. INHOFE. Mr. President, I move to waive the applicable portion of 
the Budget Act and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to the motion.
  The clerk will call the roll
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. 
Kennedy) is necessarily absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from New Hampshire (Mr. Gregg).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 38, nays 59, as follows:

                      [Rollcall Vote No. 41 Leg.]

                                YEAS--38

     Barrasso
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Collins
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Hatch
     Hutchison
     Inhofe
     Isakson
     Johanns
     Kyl
     Lieberman
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Risch
     Roberts
     Sessions
     Shelby
     Snowe
     Thune
     Vitter
     Voinovich
     Wicker

                                NAYS--59

     Akaka
     Alexander
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Boxer
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Conrad
     Corker
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Hagan
     Harkin
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lincoln
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Specter
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Gregg
     Kennedy
  The PRESIDING OFFICER. On this vote, the yeas are 38, the nays are 
59. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected. The point of order is 
sustained, and the amendment falls.
  Mr. REID. Mr. President, we have four more votes tonight, and then we 
will have no more votes tonight after those four.
  What I wanted to talk about a little bit is tomorrow. We started on 
this bill Monday evening. Everyone who has stood to give a speech on 
this--Democrat or Republican--has talked about the financial crisis our 
country is in. There are different ways of addressing it, and we 
understand that. I wanted to do everything I could to make sure there 
is an open process, and there has been. There have been no restrictions 
on amendments. There have been no complaints from us as to subject 
matter of amendments. However, the stark reality is we need to complete 
this bill. We have stated and the Speaker has stated that we need to 
finish this bill before the Presidents Day recess. To do that, to jump 
through all the hurdles, is very difficult.
  In my last conversation with the Republican leader, he indicated that 
he would like to go to conference. I am not holding him to that. 
Something could go wrong the next couple of days or today or tomorrow, 
but that is our intention. If we don't go to conference, then we will 
do what we have done in the past: send something back over here. I 
would rather we did a conference. I think it would set a good tone. But 
conferences are sometimes slow and a little bit tedious. We have to get 
two different committees and maybe as many as three different 
committees represented in that conference. We have to get everybody 
together and have a series of meetings.
  To solve the financial crisis we have in our country is going to take 
a lot of cooperation. We know this bill is imperfect. Democrats and 
Republicans acknowledge it is an imperfect piece of legislation.
  Without belaboring the point, we are going to have votes again 
tomorrow. Now, my colleagues will note that the vast majority of the 
votes we have had have been Republican amendments. That is fine. We are 
happy with that. We want to make sure that people with concerns about 
this bill offer those amendments, but we are now arriving at a point 
where we are offering amendments upon amendments.
  I understand there are two big amendments I know the Republicans have 
tomorrow. One of them is the Ensign-McConnell amendment dealing with 
housing. I understand my friend--the man I have been with now going on 
27 years; we came to Washington together--John McCain has an important 
amendment. There are probably other amendments everybody thinks are 
important. I would at least note those two.
  I hope we can look to finishing this legislation tomorrow. That 
doesn't mean at 5 o'clock. It may be later in the evening--and that is 
an understatement--but I think we should work to see if we can complete 
this legislation.
  I know we are getting toward the end of amendments being offered 
because I have been told by my staff that now we are getting into 
amendments dealing with religious liberty and other things that don't 
have a lot to do, in my opinion, with this legislation, but we are 
setting no restriction or parameters on what amendments can be offered.
  We all do acknowledge we have a crisis facing the American people. If 
someone isn't absolutely happy about this legislation, let's vote and 
move it on to the next program. If we do something in conference that 
is revolting to the minority, they can stop the conference report. So 
let's move on. Let's finish this. For us to finish this bill tomorrow 
or Friday is going to still take a lot of our work so that the 
President has a piece of legislation on his desk and so we can leave 
and do our Presidents Day recess.
  Now, we don't have to take our recess, but we have responsibilities 
that are more than in Washington, DC. We have a constituency at home to 
whom we also have responsibilities. I doubt there is one of us who 
doesn't have a lot to do during the Presidents Day recess at home. We 
aren't often able to go home during the week, so there are things I 
know that I schedule during the breaks that I can't do any other time. 
Weekends don't do the trick.

[[Page S1527]]

  So in light of the crisis facing the American people, there is no 
reason the American people shouldn't expect us to complete action on 
this bill tomorrow. If people need more time, I am a patient man. Now, 
we understand--we will take a 60-vote margin. We are happy to have this 
legislation require 60 votes. I hope we don't have to go through filing 
cloture and a cloture vote on Saturday or Sunday and 30 hours and all 
that stuff.
  I just think the picture the people have here of the Senate is one 
where we have really tried these first few weeks, including the time 
during this legislation, to have the Senate work as it used to. I hope 
everyone feels--as we start getting the extraneous amendments dealing 
with matters I don't think conform with what the intention of this bill 
is, which is economic recovery--that we should be worried about people 
not having the opportunity to offer amendments. I think we have offered 
a number of amendments on housing. You name the subject, we have done 
multiple amendments. I am a patient person, as I have indicated, 
willing to work with everyone, but my goal is to get this legislation 
over to the House as soon as we can.
  The PRESIDING OFFICER. The Republican leader is recognized.
  Mr. McCONNELL. Mr. President, let me just say I think the amendment 
process has been well handled. We had a lot of amendments to offer 
today, and they are in the process of being voted on. We have a lot 
more amendments to offer tomorrow, and then I think we can discuss 
sometime during the day tomorrow exactly what the endgame might be on 
this legislation.
  I am pleased and my Members are pleased, I would say to the majority 
leader, with the way it has been handled to this point, and sometime 
tomorrow we will discuss how we might move toward a conclusion.
  I yield the floor.


                           Amendment No. 277

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided prior to a vote in relation to 
amendment No. 277 offered by the Senator from Texas, Mr. Cornyn.
  The Senator from Texas is recognized.
  Mr. CORNYN. Mr. President, my amendment reduces the 10-percent 
marginal income tax bracket to 5 percent--10 percent to 5 percent--in 
2009 and 2010. Currently, the 10-percent tax bracket that was created 
in 2001 by the Economic Growth and Tax Relief Reconciliation Act 
applies to the first roughly $8,000 that a single taxpayer earns and 
$16,000 for a joint tax return. My amendment provides broad-based 
relief to more than 105 million taxpayers, including every hard-working 
American with an income tax liability.
  My amendment does not add to the bill's total. Instead, my amendment 
is paid for by striking the refundable making work pay credit which 
picks winners and losers by providing relief to only a select group of 
taxpayers. It also, I might say, repeats a mistake we made last year, 
or earlier--I guess last year, last January--when we spent $150 billion 
of our children's and grandchildren's money to try to stimulate the 
economy, and everybody agrees it did not work.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. CORNYN. I ask my colleagues to support the amendment.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, the amendment is very simple. Let me 
explain the consequence of the amendment.
  Those who pay income taxes will get a tax reduction. Those who work 
but do not pay income taxes--they pay payroll taxes--will not get any 
benefit from this amendment. That is the portion that is cut out. That 
is about 50 million Americans. So this amendment would give a tax cut 
to those who pay income taxes--a modest amount--and to pay for it, it 
disenfranchises those 49 million, 50 million Americans who will get a 
tax break under this bill because they work; that is, they pay payroll 
tax. Those who work but who are not wealthy will spend the money more 
than people who are wealthier and get a tax cut. So I suggest very 
strongly that we do not support this amendment.
  I raise a point of order that the pending amendment violates section 
201 of S. Con. Res. 21.
  Mr. CORNYN. Mr. President, I move to waive the applicable portion of 
the Budget Act and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. 
Kennedy) is necessarily absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from New Hampshire (Mr. Gregg).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 37, nays 60, as follows:

                      [Rollcall Vote No. 42 Leg.]

                                YEAS--37

     Alexander
     Barrasso
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Hatch
     Hutchison
     Inhofe
     Isakson
     Johanns
     Kyl
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Risch
     Roberts
     Sessions
     Shelby
     Specter
     Thune
     Vitter
     Wicker

                                NAYS--60

     Akaka
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Boxer
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Hagan
     Harkin
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Snowe
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--2

     Gregg
     Kennedy
  The PRESIDING OFFICER. On this vote, the yeas are 37, the nays are 
60. Three-fifths of the Senators duly chosen and sworn not having voted 
in the affirmative, the motion is rejected. The point of order is 
sustained, and the amendment falls.


                           Amendment No. 242

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes for debate equally divided prior to a vote on amendment No. 242 
offered by the Senator from Kentucky, Mr. Bunning.
  The Senator from Kentucky is recognized.
  Mr. BUNNING. Mr. President, my amendment is simple. It suspends for 
the year 2009 the tax increase on Social Security benefits that 
Congress passed in 1993. This increase taxes seniors above certain 
income levels on 85 percent of their Social Security taxable income. We 
should not be in the business of taxing Social Security benefits. It is 
unfair, and it is punitive.
  CRS estimates that at least 12 million seniors pay this tax. This 
amendment holds the Medicare trust funds harmless. Joint Tax says the 
amendment scores at $14.4 billion, so I reduce discretionary spending 
in the bill, except spending for veterans, by the necessary amount.
  Now is the time to fix this problem at least for 1 year. I urge 
support of the amendment.
  The PRESIDING OFFICER (Mr. Warner). The Senator from Montana.
  Mr. BAUCUS. Mr. President, this amendment effectively undoes part of 
the budget agreement that was agreed to in 1993. We effectively 
balanced the budget and ended up with a $10 billion, $11 trillion 
surplus. The fact is, the amendment reduces taxes only on the top 24 
percent, the highest income-earning seniors. Twenty-four percent of the 
most wealthy seniors--that is highest income--will get a break in 
taxes. Other seniors will not. The other 76 percent will get no break.
  The Senator from Kentucky pays for it by reducing parts of the bill 
which create jobs. This is highways, this is roads, this is energy, and 
so forth. Frankly, I don't think that is a wise course of action to 
take.

[[Page S1528]]

  Accordingly, I raise a point of order that the pending amendment 
violates section 201 of Senate Concurrent Resolution 21.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. BUNNING. Mr. President, I move to waive the applicable portion of 
the Budget Act.
  I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to the motion.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. 
Kennedy) is necessarily absent.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from New Hampshire (Mr. Gregg) and the Senator from Ohio (Mr. 
Voinovich).
  The PRESIDING OFFICER. Are there ary other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 39, nays 57, as follows:

                      [Rollcall Vote No. 43 Leg.]

                                YEAS--39

     Alexander
     Barrasso
     Bayh
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Hatch
     Hutchison
     Inhofe
     Isakson
     Johanns
     Kyl
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Nelson (NE)
     Risch
     Roberts
     Sessions
     Shelby
     Specter
     Thune
     Vitter
     Wicker

                                NAYS--57

     Akaka
     Baucus
     Begich
     Bennet
     Bingaman
     Boxer
     Brown
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Hagan
     Harkin
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (FL)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Snowe
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--3

     Gregg
     Kennedy
     Voinovich
  The PRESIDING OFFICER. On this vote the yeas are 39, the nays are 57. 
Three-fifths of the Senators duly chosen and sworn not having voted in 
the affirmative, the motion is rejected. The point of order is 
sustained, and the amendment falls.
  The Senator from Montana is recognized.


                 Amendment No. 300 to Amendment No. 98

  Mr. BAUCUS. The next amendment is the Dorgan amendment, No. 300, 
which we are prepared to take.
  Mr. DORGAN. Mr. President, I ask we consider amendment No. 300.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from North Dakota [Mr. Dorgan] for himself, Mr. 
     Baucus and Mr. Brown, proposes an amendment numbered 300 to 
     amendment No. 98.

  Mr. DORGAN. I ask unanimous consent the reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To clarify that the Buy American provisions shall be applied 
      in a manner consistent with United States obligations under 
                       international agreements)

         On page 430, strike lines 7 through 12 and insert the 
     following:
         (d) This section shall be applied in a manner consistent 
     with United States obligations under international 
     agreements.

  Mr. DORGAN. I offer this amendment on behalf of myself, Mr. Baucus, 
Mr. Inouye, and Mr. Brown. It simply says the ``Buy American'' section 
shall be ``applied in a manner consistent with United States 
obligations under international agreements.''
  I yield the remainder of my time to Senator Brown.
  Mr. BROWN. I thank the Senator from North Dakota and thank Senators 
Baucus and Inouye for their support.
  Americans are willing to reach into their pockets and spend billions 
of dollars for infrastructure to build bridges and highways and water 
and sewer and put people back to work. All that Americans want is that 
we provide jobs in this country--jobs, construction jobs--and that what 
they use for this construction, the materials, are made in America. 
This is WTO compliant. It follows U.S. and international global trade 
rules. It is a commonsense amendment.
  Some people say ``protectionism,'' but how can you have an $800 
billion trade deficit and call us protectionist? How can you have a 
$200-billion-a-day net outflow and say we are closing our borders? It 
makes sense to vote for the Dorgan amendment.
  Mr. McCAIN. Mr. President, I ask for 1 minute to speak in opposition 
to the amendment.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. McCAIN. Mr. President, what this amendment does is basically 
stand in direct contradiction to the amendment itself. It is impossible 
to say the section would be applied in a manner consistent with the 
U.S. obligations under international agreements and then say that 
anything that is manufactured in the United States, whether iron, 
steel, or manufactured goods will have to be subject to ``Buy 
American.''
  The reaction to this amendment has been strong and widespread, 
including the President of the United States, who said, ``I think this 
would be a mistake right now.'' The President said, ``It is a potential 
source of trade wars that we cannot afford at a time when trade is 
sinking all over the globe.''
  I yield the remainder of my time.
  Mr. GRASSLEY. Mr. President, I am pleased to express my support for 
the Dorgan amendment that would clarify that the Buy American 
provisions of this bill shall be applied in a manner that is consistent 
with our international trade obligations.
  The original Buy American language in the bill doesn't specifically 
provide an exemption for countries that provide reciprocal access for 
the United States in the area of government procurement. But we are 
obligated under international agreements to provide such a carveout. 
This amendment will fix this problem.
  The United States has obligations to its trading partners. If we 
don't live up to our commitments to other countries under trade 
agreements, we can't expect them to live up to their commitments to us. 
The last thing that we should do in this time of economic uncertainty 
is fail to comply with our international obligations.
  I would like to thank Senator Dorgan and Senator Baucus for working 
together to craft this amendment.
  Mr. LEAHY. Mr. President, I ask unanimous consent to be listed as a 
cosponsor on the Dorgan amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The question is on agreeing to the amendment.
  The amendment (No. 300) was agreed to.


                           Amendment No. 279

  The PRESIDING OFFICER. There is now 2 minutes equally divided prior 
to a vote in relation to the amendment offered by the Senator from 
Arizona.
  Mr. McCAIN. Mr. President, nearly 80 years ago, two men--Mr. Smoot 
and Mr. Hawley--led an effort to enact protectionist legislation in 
hopes of curing the woes of the American worker. Despite the strong 
objection of over a thousand leading economists of the time, the Smoot-
Hawley legislation was enacted. This bill helped spark an international 
trade war that turned a severe recession into the greatest economic 
depression in modern history.
  The Buy American provision in the current bill has echoes of the 
disastrous Smoot-Hawley tariff act. It prohibits the use of funds in 
this bill for projects unless all of the iron, steel, and manufactured 
goods used in the project are produced in the United States. These 
anti-trade measures may sound welcome to Americans who are hurting in 
the midst of our economic troubles and faced with the specter of 
layoffs. Yet shortsighted protectionist measures like Buy American risk 
greatly exacerbating our current economic woes. Already, one economist 
at the Peterson Institute for International Economics has calculated 
that the Buy American provisions in this bill will actually cost the 
United States more jobs than it will generate.
  Some of our largest trading partners, including Canada and the 
European Union--who account for hundreds of billions of dollars in 
annual trade--have warned that such a move could invite protectionist 
retaliation, further harming our ability to generate jobs and economic 
growth. And it seems

[[Page S1529]]

clear that this provision violates our obligations under more than one 
international agreement, including the WTO Agreement on Government 
Procurement and the procurement chapter of the North American Free 
Trade Agreement.
  Just last November in Washington, the U.S. signed a joint declaration 
with members of the G-20 pledging that ``within the next 12 months, we 
will refrain from raising new barriers to investment or to trade in 
goods and services.'' Yet barely 2 months later, we are contemplating 
whether or not to go back on a commitment to some of our closest allies 
and trading partners, potentially damaging our credibility to uphold 
future agreements.
  Even President Obama himself spoke out against the Buy American 
provision. ``I think that would be a mistake right now,'' he said 
yesterday. ``That is a potential source of trade wars that we can't 
afford at a time when trade is sinking all across the globe.''
  We know the lessons of history, and we cannot fall prey to the failed 
policies of the past. We should not sit idly by while some seek to 
pursue a path of economic isolation, a course that could lead to 
disaster. It didn't work in the 1930s, and it certainly won't work 
today. I hope all senators will support this amendment, which would 
strike the existing Buy American provision and replace it with a 
limitation on Buy American clauses in this bill.
  As I said, the President of the United States said it would be a 
mistake right now. It sends a message to the world that the United 
States is going back to protectionism.
  I ask unanimous consent the comments of literally every leader in the 
world, including the Canadian leader, the European leader, and over 100 
major industries in the United States of America in opposition to this 
amendment and an op-ed article by Douglas Irwin be printed in the 
Record at this time.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                       Letters From World Leaders


                                 CANADA

       Ambassador Michael Wilson: ``We are concerned about 
     contagion, that is, other countries also following 
     protectionist policies. If Buy America becomes part of the 
     stimulus legislation, the United States will lose the moral 
     authority to pressure others not to introduce protectionist 
     policies. A rush of protectionist actions could create a 
     downward spiral like the world experienced in the 1930s.''


                             EUROPEAN UNION

       Ambassador John Bruton: ``The United States and the 
     European Union should take the lead in keeping the 
     commitments not to introduce protectionist measures taken by 
     the G20 in November 2008. Failing this risks entering into a 
     spiral of protectionist measures around the globe that can 
     only hurt our economies further.''


                             U.S. INDUSTRY

       Over 100 signatories: ``Enacting expansive new Buy American 
     restrictions would invite our international partners to 
     exclude American goods and services from hundreds of billions 
     of dollars of opportunities in their stimulus packages and 
     perhaps to adopt Buy-Local rules or raise other barriers to 
     American goods more broadly across their economies. The 
     resulting damage to our export markets and the millions of 
     high-paying American jobs they support would be enormous.''

                       Quotes From World Leaders


                                  U.K.

       Prime Minister Gordon Brown: ``The biggest danger the world 
     faces is a retreat into protectionism''.


                                  U.S.

       President Barack Obama: It would be a mistake when 
     worldwide trade is declining for the United States ``to start 
     sending a message that somehow we're just looking after 
     ourselves and not concerned with world trade.''

                  Quotes From Reports and News Sources


             Peterson Institute for International Economics

       Report on `Buy American': EU spokesman Peter Power stated 
     that ``if a bill is passed which prohibits the sale or 
     purchase of European goods on American territory, [the 
     European Union] will not stand idly by and ignore.'' Buy 
     American provisions would particularly damage US reputation 
     abroad since they would come just a few months after the 
     United States pledged to reject protectionism at the G-20 
     summit on November 15, 2008.
       In a country of 140 million workers, with millions of new 
     jobs to be created by the stimulus package, the number of 
     employees affected by the Buy American provision is a 
     rounding error.
       General Electric (GE) Senior Counsel Karan Bhatia: ``You 
     would be creating an ample basis for countries to close their 
     markets to U.S. products.''
       Bill Lane--Caterpillar, Inc. Director of Governmental 
     Affairs: . . . ``The so-called Buy America amendment is 
     really an anti-export provision,'' . . . ``At Caterpillar we 
     are doing everything we can to export American-made products 
     to the numerous infrastructure projects being proposed around 
     the world, particularly those in China. Embracing new Buy 
     American restrictions would totally undermine those efforts 
     to increase U.S. exports.''
       Fred Smith--Chairman of FedEx: . . . ``If the Congress 
     passes this buy-American provision, I can assure you--and we 
     operate in 220-some-odd countries around the world and are a 
     huge part of the import-export infrastructure of the United 
     States--we will get retaliation, and it will be American jobs 
     at risk.''
                                  ____


   List of Companies and Organizations in Opposition to Buy American

               (Signatories of attached industry letter)

       ABB; The ACE Group of Insurance and Reinsurance Companies; 
     AT&T; Alticor, Inc.; AgustaWestland North America Inc.; Avaya 
     Inc.; BAE Systems, Inc.; BASF Corporation; Boston Scientific 
     Corp.; Case New Holland Inc.; Caterpillar Inc.; Cisco 
     Systems, Inc.; Citibank N.A.; Cummins Inc.; Dassault Falcon 
     Jet; The Dow Chemical Company; Eastman Kodak Company; 
     Forsberg International Logistics, LLC; Fujitsu.
       General Electric Company; IBM Corporation; Intel 
     Corporation; International Bancshares Corporation; 
     International Bank of Commerce; ITT Corporation; John Deere; 
     Lockheed Martin Corporation; Manitowoc Company Inc.; The 
     McGraw-Hill Companies, Inc.; McKesson Corporation; Michelin 
     North America, Inc.; Microsoft Corporation; NEC Corporation 
     of America; Oracle Corporation; Panasonic Corporation of 
     North America; PCS VacDry USA LLC; Philips Electronics North 
     America; The Procter & Gamble Company; SAP America.
       Siemens Corporation; TEREX; Texas Instruments Incorporated; 
     Transact Technologies; Trimble Navigation Limited; Unilever 
     United States; United Technologies Corporation; US Trading & 
     Investment Company; Volvo Group North America; XOCECO USA; 
     Xerox Corporation; The Advanced Medical Technology 
     Association; Aerospace Industries Association; American 
     Business Conference; American Chemistry Council; American 
     Council of Engineering Companies; Associated Builders & 
     Contractors; Associated Equipment Distributors.
       Association of International Automobile Manufacturers, 
     Inc.; Business Roundtable; The Associated General Contractors 
     of America; The Association of Equipment Manufacturers; 
     Brazil-U.S. Business Council; Business Software Alliance; 
     California Chamber of Commerce; Canadian American Business 
     Council; Consuming Industries Trade Action Coalition; The 
     Coalition for Government Procurement; Coalition of Service 
     Industries; Computer & Communications Industry Association; 
     Computing Technology Industry Association; Consumer 
     Electronics Association; Emergency Committee for American 
     Trade.
       European-American Business Council; Grocery Manufacturers 
     Association; Hong Kong-U.S. Business Council; Information 
     Technology Industry Council; International Wood Product 
     Association; National Association of Foreign-Trade Zones; 
     National Association of Manufacturers; National Defense 
     Industrial Association; National Electronic Distributors 
     Association; National Foreign Trade Council; Ohio Alliance 
     for International Trade; Organization for International 
     Investment; Retail Industry Leaders Association; Securities 
     Industry and Financial Markets Association; Semiconductor 
     Industry Association; Software & Information Industry 
     Association.
       Technology Association of America (formerly AeA and ITAA); 
     Technology CEO Council; Telecommunications Industry 
     Association; United States Council for International 
     Business; US-ASEAN Business Council; U.S.-Bahrain Business 
     Council; U.S. Chamber of Commerce; U.S.-India Business 
     Council; U.S.-Korea Business Council; U.S.-Pakistan Business 
     Council; U.S.-UAE Business Council; Washington Council on 
     International Trade.
                                  ____


                [From the New York Times, Jan. 31, 2009]

                  If We Buy American, No One Else Will

                         (By Douglas A. Irwin)

       Hanover, NH.--World trade is collapsing. The United States 
     trade deficit dropped sharply in November as imports from the 
     rest of the world plummeted in response to the financial 
     crisis and global recession. United States imports from 
     China, Japan and elsewhere declined at double digit rates. 
     The last thing the world economy needs is for governments to 
     give a further downward shove to trade. Unfortunately, we may 
     be doing just that.
       Steel industry lobbyists seem to have persuaded the House 
     to insert a ``Buy American'' provision in the stimulus bill 
     it passed last week. This provision requires that preference 
     be given to domestic steel producers in building contracts 
     and other spending. The House bill also requires that the 
     uniforms and other textiles used by the Transportation 
     Security Administration be produced in the United States, and 
     the Senate may broaden such provisions to include many other 
     products.

[[Page S1530]]

       That might sound reasonable, but history has shown that Buy 
     American provisions can raise the cost and diminish the 
     effect of a spending package. In rebuilding the San 
     Francisco-Oakland Bay Bridge in the 1990s, the California 
     transit authority complied with state rules mandating the use 
     of domestic steel unless it was at least 25 percent more 
     expensive than imported steel. A domestic bid came in at 23 
     percent above the foreign bid, and so the more expensive 
     American steel had to be used. Because of the large amount of 
     steel used in the project, California taxpayers had to pay a 
     whopping $400 million more for the bridge. While this is a 
     windfall for a lucky steel company, steel production is 
     capital intensive, and the rule makes less money available 
     for other construction projects that can employ many more 
     workers.
       American manufacturers have ample capacity to fill the new 
     orders that will come as a result of the fiscal stimulus. In 
     addition, other countries are watching closely to see if the 
     crisis becomes a general excuse for the United States to 
     block imports and favor domestic firms. General Electric and 
     Caterpillar have opposed the Buy American provision because 
     they fear it will hurt their ability to win contracts abroad.
       They're right to be concerned. Once we get through the 
     current economic mess, China, India and other countries are 
     likely to continue their large investments in building 
     projects. If such countries also adopt our preferences for 
     domestic producers, then America will be at a competitive 
     disadvantage in bidding for those contracts.
       Remember the golden rule, or the consequences could be 
     severe. When the United States imposed the Smoot-Hawley 
     Tariff in 1930, it helped set off a worldwide movement toward 
     higher tariffs. When everyone tried to restrict imports, the 
     combined effect was a deeper global economic slump. It took 
     decades to undo the accumulated trade restrictions of that 
     period. Let's not make the same mistake again.

  Mr. McCAIN. Mr. President, this amendment may lose. We are making a 
very dangerous move tonight.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. DORGAN. Mr. President, both Mr. Smoot and Mr. Hawley are dead, 
but this amendment is a part of a very significant debate that is on 
the floor of the Senate and across the country. Mr. President, 20,000 
people a day are losing their jobs--20,000 people a day. We are going 
to shove a lot of money out the door of this Congress in support of 
economic recovery. The question is, Are we going to try to put people 
back to work? Will we put people back to work on America's factory 
floors making iron and steel and manufactured products?
  We already have a ``Buy American'' provision under current law. That 
is not violative of our trade agreements. We just added an amendment 
that says this section, the ``Buy American'' section, ``shall be 
applied in a manner consistent with United States obligations under 
international agreements.''
  I don't think anyone can credibly argue that somehow this undermines 
our international agreements. But we do have a $700-billion-a-year 
trade deficit, and my hope would be that as we push this money out the 
door, we do it in support of American jobs.
  The PRESIDING OFFICER. The time of the Senator has expired.
  The question is on agreeing to the amendment.
  Mr. McCAIN. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There appears to 
be a sufficient second. The clerk will call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. 
Kennedy) is necessarily absent.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from New Hampshire (Mr. Gregg) and the Senator from Ohio (Mr. 
Voinovich).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 31, nays 65, as follows:

                      [Rollcall Vote No. 44 Leg.]

                                YEAS--31

     Alexander
     Barrasso
     Bennett
     Bond
     Bunning
     Chambliss
     Coburn
     Cochran
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Hatch
     Inhofe
     Isakson
     Johanns
     Kyl
     Lieberman
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Risch
     Roberts
     Sessions
     Shelby
     Thune
     Wicker

                                NAYS--65

     Akaka
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Boxer
     Brown
     Brownback
     Burr
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Collins
     Conrad
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Gillibrand
     Graham
     Grassley
     Hagan
     Harkin
     Hutchison
     Inouye
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lincoln
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schumer
     Shaheen
     Snowe
     Specter
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Vitter
     Warner
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--3

     Gregg
     Kennedy
     Voinovich
  The amendment (No. 279) was rejected.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, on behalf of Senator Landrieu, I ask 
unanimous consent that the pending amendments be temporarily set aside, 
and Senator Landrieu's amendment No. 102 be called up and agreed to, 
and that the motion to reconsider be temporarily laid on the table.
  The PRESIDING OFFICER. Is there objection?
  Mr. BAUCUS. Mr. President, I have checked with Senator Cochran.
  Mr. ENSIGN. Mr. President, reserving the right to object, while we 
are waiting, may I lay down my amendment?
  Mr. BAUCUS. Mr. President, on the Landrieu amendment, I withdraw my 
request.
  The PRESIDING OFFICER. The Senator from Nevada.


                 Amendment No. 353 to Amendment No. 98

                (Purpose: In the nature of a substitute)

  Mr. ENSIGN. I ask unanimous consent that the pending amendments be 
set aside. I send an amendment to the desk and ask for its immediate 
consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Ensign], for himself, Mr. 
     McConnell, and Mr. Alexander, proposes an amendment numbered 
     353 to Amendment No. 98.

  Mr. ENSIGN. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. BAUCUS. Mr. President, it is my understanding that with the 
amendment just offered by the Senator from Nevada, tomorrow morning the 
first amendment to be considered will be the amendment offered by 
Senator McCain from Arizona. The second amendment will be the amendment 
offered by the Senator from Nevada, Mr. Ensign. I ask unanimous consent 
that be the order.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Connecticut is recognized.


                 Amendment No. 354 to Amendment No. 98

  Mr. DODD. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. Is there objection to setting aside the 
pending amendment?
  Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Connecticut [Mr. Dodd] proposes an 
     amendment numbered 354 to Amendment No. 98.

  The amendment is as follows:

(Purpose: To impose executive compensation limitations with respect to 
       entities assisted under the Troubled Asset Relief Program)

       At the end of division B, add the following:

               TITLE VI--EXECUTIVE COMPENSATION OVERSIGHT

     SEC. 6001. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Senior executive officer.--The term ``senior executive 
     officer'' means an individual who is 1 of the top 5 most 
     highly paid executives of a public company, whose 
     compensation is required to be disclosed pursuant to the 
     Securities Exchange Act of 1934, and any regulations issued 
     thereunder, and non-public company counterparts.
       (2) Golden parachute payment.--The term ``golden parachute 
     payment'' means any payment to a senior executive officer for 
     departure from a company for any reason, except for payments 
     for services performed or benefits accrued.
       (3) TARP.--The term ``TARP'' means the Troubled Asset 
     Relief Program established

[[Page S1531]]

     under the Emergency Economic Stabilization Act of 2008 
     (Public Law 110-343, 12 U.S.C. 5201 et seq.).
       (4) TARP recipient.--The term ``TARP recipient'' means any 
     entity that has received or will receive financial assistance 
     under the financial assistance provided under the TARP.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (6) Commission.--The term ``Commission'' means the 
     Securities and Exchange Commission.

     SEC. 6002. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

       (a) In General.--During the period in which any obligation 
     arising from financial assistance provided under the TARP 
     remains outstanding, each TARP recipient shall be subject 
     to--
       (1) the standards established by the Secretary under this 
     title; and
       (2) the provisions of section 162(m)(5) of the Internal 
     Revenue Code of 1986, as applicable.
       (b) Standards Required.--The Secretary shall require each 
     TARP recipient to meet appropriate standards for executive 
     compensation and corporate governance.
       (c) Specific Requirements.--The standards established under 
     subsection (b) shall include--
       (1) limits on compensation that exclude incentives for 
     senior executive officers of the TARP recipient to take 
     unnecessary and excessive risks that threaten the value of 
     such recipient during the period that any obligation arising 
     from TARP assistance is outstanding;
       (2) a provision for the recovery by such TARP recipient of 
     any bonus, retention award, or incentive compensation paid to 
     a senior executive officer and any of the next 20 most 
     highly-compensated employees of the TARP recipient based on 
     statements of earnings, revenues, gains, or other criteria 
     that are later found to be materially inaccurate;
       (3) a prohibition on such TARP recipient making any golden 
     parachute payment to a senior executive officer or any of the 
     next 5 most highly-compensated employees of the TARP 
     recipient during the period that any obligation arising from 
     TARP assistance is outstanding;
       (4) a prohibition on such TARP recipient paying or accruing 
     any bonus, retention award, or incentive compensation during 
     the period that the obligation is outstanding to at least the 
     25 most highly-compensated employees, or such higher number 
     as the Secretary may determine is in the public interest with 
     respect to any TARP recipient;
       (5) a prohibition on any compensation plan that would 
     encourage manipulation of the reported earnings of such TARP 
     recipient to enhance the compensation of any of its 
     employees; and
       (6) a requirement for the establishment of a Board 
     Compensation Committee that meets the requirements of section 
     6003.
       (d) Certification of Compliance.--The chief executive 
     officer and chief financial officer (or the equivalents 
     thereof) of each TARP recipient shall provide a written 
     certification of compliance by the TARP recipient with the 
     requirements of this title--
       (1) in the case of a TARP recipient, the securities of 
     which are publicly traded, to the Securities and Exchange 
     Commission, together with annual filings required under the 
     securities laws; and
       (2) in the case of a TARP recipient that is not a publicly 
     traded company, to the Secretary.

     SEC. 6003. BOARD COMPENSATION COMMITTEE.

       (a) Establishment of Board Required.--Each TARP recipient 
     shall establish a Board Compensation Committee, comprised 
     entirely of independent directors, for the purpose of 
     reviewing employee compensation plans.
       (b) Meetings.--The Board Compensation Committee of each 
     TARP recipient shall meet at least semiannually to discuss 
     and evaluate employee compensation plans in light of an 
     assessment of any risk posed to the TARP recipient from such 
     plans.

     SEC. 6004. LIMITATION ON LUXURY EXPENDITURES.

       (a) Policy Required.--The board of directors of any TARP 
     recipient shall have in place a company-wide policy regarding 
     excessive or luxury expenditures, as identified by the 
     Secretary, which may include excessive expenditures on--
       (1) entertainment or events;
       (2) office and facility renovations;
       (3) aviation or other transportation services; or
       (4) other activities or events that are not reasonable 
     expenditures for conferences, staff development, reasonable 
     performance incentives, or other similar measures conducted 
     in the normal course of the business operations of the TARP 
     recipient.

     SEC. 6005. SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.

       (a) Annual Shareholder Approval of Executive 
     Compensation.--Any proxy or consent or authorization for an 
     annual or other meeting of the shareholders of any TARP 
     recipient during the period in which any obligation arising 
     from financial assistance provided under the TARP remains 
     outstanding shall permit a separate shareholder vote to 
     approve the compensation of executives, as disclosed pursuant 
     to the compensation disclosure rules of the Commission (which 
     disclosure shall include the compensation discussion and 
     analysis, the compensation tables, and any related material).
       (b) Nonbinding Vote.--A shareholder vote described in 
     subsection (a) shall not be binding on the board of directors 
     of a TARP recipient, and may not be construed as overruling a 
     decision by such board, nor to create or imply any additional 
     fiduciary duty by such board, nor shall such vote be 
     construed to restrict or limit the ability of shareholders to 
     make proposals for inclusion in proxy materials related to 
     executive compensation.
       (c) Deadline for Rulemaking.--Not later than 1 year after 
     the date of enactment of this Act, the Commission shall issue 
     any final rules and regulations required by this section.

     SEC. 6006. REVIEW OF PRIOR PAYMENTS TO EXECUTIVES.

       (a) In General.--The Secretary shall review bonuses, 
     retention awards, and other compensation paid to employees of 
     each entity receiving TARP assistance before the date of 
     enactment of this Act to determine whether any such payments 
     were excessive, inconsistent with the purposes of this Act or 
     the TARP, or otherwise contrary to the public interest.
       (b) Negotiations for Reimbursement.--If the Secretary makes 
     a determination described in subsection (a), the Secretary 
     shall seek to negotiate with the TARP recipient and the 
     subject employee for appropriate reimbursements to the 
     Federal Government with respect to compensation or bonuses.

  Mr. DODD. Mr. President, I will be very brief. I know others want to 
be heard. I appreciate the consideration of the manager of this part of 
the bill, Senator Baucus.
  This amendment would apply to recipients of TARP assistance, stronger 
restrictions on executive compensation. I will make some comments this 
evening and invite my colleagues to look at the language of the 
amendment.
  It is the one that I hope all Members will be able to support. It 
does not directly apply to the stimulus package, but it is an 
opportunity for us to speak on the executive compensation issues which 
are critically important.
  The amendment bans bonuses for most highly paid executives of TARP-
recipient firms: Prohibits TARP recipients from paying a bonus, 
retention award, or other similar incentive compensation to the 25 most 
highly-paid employees ``or such higher number as the Secretary of the 
Treasury may determine is in the public interest with respect to any 
TARP recipient.''
  It requires a retroactive review: The Secretary of the Treasury must 
review bonus awards paid to executives of TARP recipients to determine 
whether any payments were excessive, inconsistent with the purposes of 
the act or the TARP or otherwise contrary to public interest and, if 
so, seek to negotiate with the recipient and the subject employee for 
appropriate reimbursement to the Government.
  It requires each TARP recipient to include on annual proxy statement 
a ``say on pay'' proposal or advisory shareholder vote on the company's 
executive cash compensation program.
  It allows for the Government to clawback any bonus or incentive 
compensation paid to an executive based on reported earnings or other 
criteria later found to be materially inaccurate.
  It prohibits compensation plans that would encourage manipulation of 
reported earnings.
  The Board Compensation Committee of each TARP recipient must be 
composed entirely of independent directors; and requires the committee 
to evaluate compensation plans and their potential risk to the 
financial health of the company.
  It prohibits golden parachutes to top senior executives.
  It prohibits a compensation plan that has incentives for employees to 
take unnecessary and excessive risks that threaten the value of the 
company.
  This will encourage the companies to use the TARP funds for the 
purposes they were intended and assure the American taxpayers that 
their funds are being used properly. 
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. BARRASSO. I ask unanimous consent that the pending amendment be 
set aside and I be allowed to call up amendment No. 326.
  The PRESIDING OFFICER. Is there objection?
  Mrs. BOXER. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. BAUCUS. I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.

[[Page S1532]]

  The bill clerk proceeded to call the roll.
  Mr. BAUCUS. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The Senator from Wyoming.
  Mr. BARRASSO. Mr. President, the bill we are looking at today 
represents a massive Federal investment. It will provide Federal funds 
for a host of activities at State and local levels. This would be a new 
experience for many of our States.
  The requirements set forth for Federal involvement have caused some 
State and local officials to take pause. But in the West, we have 
already learned the lessons of Federal involvement. In my State of 
Wyoming, we deal with the Federal Government in the day-to-day 
operations of our land, of our businesses and of our communities. More 
than 45 percent of the land in Wyoming is federally owned. The Federal 
Government has introduced major predators into our landscape. The 
Federal Government controls most of our dams, lakes, and reservoirs. 
The Federal Government manages the irrigation and grazing for 
agriculture production. We depend on Federal managers to access Federal 
lands for hunting and fishing. Living with this heavy Federal 
involvement in Wyoming, we struggle every day to cut red tape and to 
get work done. I urge the Members of the Senate to seriously consider 
the experience of the people of Wyoming.
  We in Congress need to face the realities of our Federal system. 
Bureaucratic delays impact everyday life in Wyoming. Unless we 
seriously consider legislative alternatives, delays will affect many of 
the projects proposed for funding through this piece of legislation we 
are considering. The vast majority of the projects proposed for this 
funding are subject to environmental laws. These laws provide for 
measured, thoughtful decisionmaking. They allow public involvement in 
our Government, but they are not built for speed. Virtually every 
school to be built, every road, and every bridge in this legislation 
would require documentation under the National Environmental Policy 
Act, called NEPA. From my Wyoming experience, NEPA reviews can take 
years--not weeks, not months but years. Even after NEPA documentation 
is finalized, activist groups can file appeals and litigation and hold 
up projects for many years to come.
  To address this pressing need, I am proposing an amendment today 
numbered 326, along with several colleagues, to provide for a 
streamlined process of approval. The amendment would require that NEPA 
be completed in 9 months. We require that administrative appeals be 
combined for expedient consideration. Once the administrative remedies 
are exhausted, judicial review is available in the Federal Court of 
Appeals right here in Washington, DC. This provides a single, clear 
system to review decisions and provide a fair ruling.
  A host of experts have called for Congress to face the reality of 
NEPA during this stimulus package debate. The nonpartisan Congressional 
Budget Office, in their January 28 letter to the Senate, gave 
recommendations for ``actions that could accelerate spending.'' NEPA is 
the very first point they offered. CBO wrote that Congress should 
consider ``waiving requirements for environmental and judicial 
reviews.'' CBO is not alone. Governor Schwarzenegger of California, a 
very moderate Governor, listed waiving NEPA as a priority for his State 
to succeed with stimulus funding. He wrote that Congress should ``waive 
or greatly streamline NEPA requirements,'' in order to speed delivery 
of the projects. The U.S. Chamber of Commerce, the largest group of 
businesses in the Nation, called for NEPA reform. These are exactly the 
people we expect to lift us out of the recession. The U.S. Chamber of 
Commerce feels that this amendment is necessary for the stimulus 
package to succeed. The knowledgeable, moderate, hard working people of 
America are calling on Congress to make this improvement to the 
stimulus legislation. In fact, some of them are calling for us to go 
further than this amendment would go.
  This amendment is not a waiver of NEPA responsibility. Rather, it 
requires that NEPA documentation be timely and effective. If 
bureaucratic delays stand in the way of project completion, it provides 
for the project to go forward. This amendment is a practical middle 
ground. I urge Members of the Senate to support it.
  This amendment will make the aims of this legislation possible. The 
Federal Government should not stand in the way of people trying to help 
out and to help us out of the recession. Community projects should be 
reviewed quickly and allowed to go forward after a reasonable time. 
This amendment would prevent bureaucratic delays. Approval of the 
amendment will allow our transportation, our public land management, 
and construction goals to be met on time. If the aim of H.R. 1 is to 
provide quick, efficient funding for projects that will stimulate our 
economy, we must approve this amendment. If projects are truly shovel 
ready, if our partners in the agencies, States and local governments 
have done their homework, they won't depend on this amendment. But by 
approving this amendment, we will guarantee that no Federal bureaucrat 
sitting in Washington can waste time and money on endless paperwork. 
Frankly, I believe this kind of requirement should be available to all 
of us who struggle with bureaucratic delays in the Federal Government.
  I will explain a few of the difficulties we face in Wyoming with 
Federal delays and bureaucratic red tape. I am sure my fellow 
cosponsors of the amendment have similar stories. I hope my colleagues 
will heed our cautionary tales.
  In the Medicine Bow National Forest, we have watched millions of 
acres of forest die year after year. Bark beetles have infested our 
pine trees. They spread quickly and leave behind stands of dense, dry 
timber waiting to burn. We see entire mountain ranges of standing dead 
timber. This is a health problem, a safety problem for our communities 
in and around the forest. The Forest Service recognizes the importance 
of moving quickly to reduce wildfire risk and remove the hazardous 
fuels. Yet it takes nearly 2 years to plan and review a single project, 
2 years before we can even begin work on the projects. Most of that 
time is consumed by analysis and review in order to reach NEPA 
compliance. This is a clear example where red tape and bureaucratic 
requirements are failing the people of Wyoming. These same policies 
will fail the people of America if we do not include a process of 
expedited NEPA regulations in this legislation.
  The Eastern Shoshone and Northern Arapaho tribes also face delays due 
to red tape that the Federal Government imposes on transactions 
involving Indian lands. Almost every proposal to lease or develop the 
surface minerals, timber, water, and other resources located on Indian 
land is subject to approval by a Federal official. However, that 
official's decision cannot be made until the NEPA review and 
documentation requirements have been fulfilled. The lengthy paperwork 
must be completed regardless of what the Indian tribe or the landowner 
wants and regardless of the tribe or the landowner's participation in 
negotiating the transaction. Those review and documentation 
requirements take time, even when the process goes smoothly. If there 
is a court challenge to the NEPA review, the process can be dragged on 
for many months or even years. The challenge of complying with NEPA has 
its own impacts on the human environment in the case of Indian lands. 
It makes Indian lands less attractive to prospective investors and 
developers, and it can lead to substantial delays and considerable 
uncertainty.

  I am not saying that NEPA has no benefits and that it is all bad. But 
as we consider this stimulus bill, we in Congress must be honest with 
ourselves. We must face the fact that NEPA compliance may create 
significant delays in the spending contemplated by this bill. That 
should not happen. We should make it clear that NEPA will not be 
available as a mechanism to block or substantially delay a project 
authorized by this legislation.
  With that in mind, I hope Members of the Senate will support this 
amendment. We know in Wyoming that delay and red tape are part of every 
Federal project. If Washington is serious about implementing massive 
Federal investment in local communities, we must

[[Page S1533]]

ask ourselves the same questions being asked by our constituents: How 
do we make the process effective? How do we harness the most resources 
in the least amount of time? How can we best serve the people?
  If you consider the on-the-ground realities of Federal projects, you 
see the necessity of this amendment. We need to put an end to 
bureaucratic delays. We must allow our communities to move forward with 
projects in a reasonable timeframe. We should allow the public to 
dispute Federal decisions, but we should limit unending lawsuits and 
delays. These are improvements that will vastly improve the 
effectiveness of Federal funding and allow truly shovel-ready projects 
to proceed without delay.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Montana.
  Mr. BAUCUS. Mr. President, at this point, I appreciate that the 
Senator from Wyoming has an amendment. I wondered if perhaps he could 
hold off and offer his amendment tomorrow and work out with Senator 
Boxer the appropriate accommodations for both Senators. That would be 
my hope. In the meantime, Senator Harkin has an amendment he would like 
to offer.
  Mr. BARRASSO. Mr. President, I will work on that with Senator Boxer.
  Mr. BAUCUS. I thank the Senator for his accommodation.
  Mrs. BOXER. Mr. President, I thank Senator Barrasso. I didn't know 
about the Senator. As he knows, he is waiving the National Environment 
Act as it pertains to these projects. I will be glad to work with him 
to figure out a way to do a side-by-side, however he wants to deal with 
it, a second degree.
  The ACTING PRESIDENT pro tempore. The Senator from Iowa is 
recognized.
  Mr. HARKIN. Mr. President, I ask unanimous consent that the pending 
amendment be set aside, and I call up amendment No. 338 and ask for its 
consideration.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Mr. BARRASSO. I object.
  The PRESIDING OFFICER. Objection is heard.
  The Senator from Iowa.
  Mr. HARKIN. Mr. President, I wish to talk about the amendment I will 
be calling up at some point. There is no doubt that the automobile 
industry is the heart and soul of America's manufacturing sector. It is 
absolutely critical to a healthy and diversified, vibrant U.S. economy. 
Right now this essential industry is on life support, hemorrhaging 
jobs, slashing production, closing dealerships, and, in the case of GM 
and Chrysler, dependent on Federal loans to avoid bankruptcy. Chrysler 
announced a 50-percent decline in January sales compared to a year ago. 
GM had a 49-percent decline in sales. Ford had a 39-percent decline. 
Toyota, with major plants in America, suffered a 32-percent decline in 
U.S. sales. These numbers are shocking, and people who think this is 
only an automakers' problem just don't get it.
  The auto industry is not just a few assembly plants in Detroit. The 
Big Three and foreign automakers have plants in Alabama, Delaware, 
Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, 
Michigan, Minnesota, Mississippi, Missouri, Nevada, New York, Ohio, 
Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and 
Wisconsin.
  There are car dealerships and auto parts manufacturers in thousands 
of communities all across America. Directly or indirectly, the auto 
industry supports one 1 of every 10 jobs in this country.
  So let's be very clear, we are not going to have a strong economic 
recovery in the United States without a strong recovery in the 
automobile industry. That is why it is important this economic stimulus 
bill provide a major boost to automakers. The real question is, What is 
the best way to give a boost to the automakers? Is it giving them money 
at the top and letting them deal with it as they will? Well, that is 
like old trickle-down economics; all we have to do is give it to the 
top and somehow it will all trickle down.
  Some of us have a better idea, and I think a better approach. It is 
to put it in at the bottom and let it percolate up. Here is what I mean 
by that.
  The auto workers want nothing more than to be back on the job 
producing full time, producing high-quality cars, providing for their 
families, paying their taxes.
  Now, I am offering this amendment which will give low- and modest-
income consumers a $10,000 subsidy for the purchase of a new car that 
is assembled in America--a car or pickup truck assembled in America.
  Now, here are the conditions that apply to this. First of all, the 
car you are bringing in has to be at least 10 years old. You have to 
have title for the car in your own possession prior to the date of the 
enactment of this bill. The new car you are purchasing has to get at 
least 5 miles per gallon more than the car you are bringing in. The new 
car must have a fuel economy rating of 25 miles per gallon or better 
or, in the case of a pickup, 20 miles per gallon or better. And the old 
car you are bringing in must be relinquished to the Government and be 
destroyed. This offer, this $10,000 subsidy, would be available only to 
individuals with incomes of $50,000 a year or less or couples with an 
income of $75,000 or less.
  So let me run through that again. Here is the way it would work. If 
you have an income of less than $50,000--or for a couple less than 
$75,000--if you have a car that is at least 10 years old, and you have 
had title to that car since before the enactment of this bill--actually 
before January of this year--you could take your W-2 form to show your 
income, take the title of the old car to show you have owned it, show 
how old the car is, and you can go to any auto dealer anywhere you want 
and buy a new car and the subsidy will be $10,000. You will get 
$10,000. All you have to do is relinquish your old car, and that car 
has to be destroyed.
  Well, what would this amendment accomplish? First of all, it will 
bring a lot of customers back into the auto showrooms, and they will 
not just be looking, they will be buying. This will be a shot of 
adrenaline right into the bloodstream of the domestic auto industry. 
Secondly, it will accelerate the shift from older gas-guzzling vehicles 
to new high mileage cars. Third, and very important in these tough 
economic times, it will make it affordable for ordinary working 
Americans to buy a new car.
  Think about it. Think about people who make less than $50,000 or a 
couple who makes less than $75,000 a year. Chances are, they are the 
ones who have the old clunkers. They need it to go back and forth to 
work. If you live in a rural area, it is absolutely essential. These 
are the people who have these old cars, and they put repairs in them--a 
couple hundred here, a couple hundred there--because they can afford to 
do that, but they cannot afford to buy a new car. But it is a much 
different story if the Federal Government is going to give you $10,000 
to buy that new car.
  For example, let's take this example: A basic 2009 Chevrolet Cobalt 
gets 34 miles per gallon on the highway. It has a manufacturer's 
suggested retail price starting at $16,330. After the Federal subsidy--
assuming you are under the income limits, and you have this 10-year-old 
car--you will be able to buy that car for $6,330.
  Now, what is also important is that you will be able to get financing 
under this program. Because the lender, with a $10,000 reduction in 
price, will be offering a car loan for far less than the car's worth 
after it leaves the lot.
  We had a session today, and we heard Mr. Larry Summers. We all know 
who he is down at the White House. He said there are a lot of willing 
lenders out there, but they do not have worthy borrowers.
  Well, now, if you are a person--a low-income, moderate-income 
person--and you are making $50,000 a year, and you need a new car--you 
have an old clunker, and you keep paying for repairs on it, but you 
wish to buy a new car--let's say it costs you $20,000 to buy a new 
car--you can go to your local bank and try to get a loan for $15,000 or 
$18,000 for a $20,000 car, and you will not get it. You will not get 
it. But if you go to that bank to try to get a loan for a $20,000 car 
and $10,000 of it is a subsidy from the Government, and you are only 
borrowing $10,000 for that car, you will get the financing.
  So that is another important thing this amendment will do. It will 
start opening channels of credit. Money will start to begin to flow 
through banks

[[Page S1534]]

and other lending organizations--savings and loans, credit unions, 
institutions such as that--for people to buy a car.
  This amendment will make it affordable for a modest-income American 
to buy a new car. Make no mistake about it, it would stimulate a surge 
in auto sales--not just the automakers, but a broad swath of the 
economy impacted by the auto industry. Think about all of the other 
things that go into these cars in almost every community in America.
  The Federal Government has given General Motors and Chrysler a few 
months to come up with a plan to ensure their long-term viability as 
businesses while producing a greener mix of vehicles. But we have 
failed to address two big questions.
  In the midst of a severe recession, how do you boost demand for cars 
assembled in America? How do we get rid of that surplus we have out 
there? Go to any auto lot in your State. There are new cars all over 
the place, and there is no one buying them. So we failed to address 
that. How do we boost demand? Secondly, how do we give consumers 
compelling incentives to purchase fuel-efficient cars, especially at a 
time when gas prices have fallen dramatically? I was in my home State 
of Iowa this week, and gas is $1.77 a gallon. I have not seen it that 
low for a long time.
  So this amendment provides a realistic answer to both questions. It 
would boost demand incredibly. We estimate that for the $16 billion 
this amendment would provide, it would cover more than 1.5 million 
purchases of new fuel-efficient, domestically assembled cars. It would 
accelerate the transition of our U.S. vehicle fleet toward more fuel-
efficient cars, and this would be a gain for our whole country, 
reducing the demand for gasoline, reducing the dependence on foreign 
oil, lowering the operating costs of these new cars.
  It will do little good to extend loans to GM and Chrysler if consumer 
demand for new cars remains dead. Now, we had the Mikulski amendment 
earlier today--today or yesterday--and that will help a little bit. But 
it is a tax deduction for modest-income Americans. It probably will not 
mean that much, maybe $1,000, $1,500. It is better than nothing. But if 
you want to sell those cars, give them $10,000, give $10,000 to modest-
income Americans. Say: Go buy a car with these conditions.
  We are very good around here at passing billions of dollars. What are 
we up to, $900 billion now on this bill? There is a lot of good stuff 
in this stimulus bill, and I support it. We are good at giving a lot of 
money to Wall Street and banks and GM and Chrysler at the top. We seem 
to be very good at giving a lot of money at the top. How about giving 
some money down at the bottom?
  You want to talk about rebuilding confidence in America? Think what 
would happen to all these modest-income Americans who could now go out 
and get a new car. Think of all the old clunkers we would take off the 
road and destroy. That would rebuild confidence. As I mentioned, we 
would get our lending channels going. There would be a lot of loans 
made out there for these cars. With lending institutions, my gosh, 
loaning $6,000 on a $16,000 car, that is not everyone breaking a sweat.
  So it is going to do little good for us to demand that automakers 
shift production to fuel-efficient cars if consumers are unwilling to 
buy them or they cannot buy them because of the recession.
  This amendment is designed to address these challenges, to stimulate 
demand for new fuel-efficient cars, accelerate the shift toward a more 
fuel-efficient fleet, and help working-class Americans. As I said, you 
only qualify as an individual if you make $50,000 a year or less, or 
for a couple making $75,000 or less. Let's help working-class 
Americans. Now, people might say: Gee, that is a lot of money, $16 
billion. But aren't we trying to stimulate the economy?
  Again, in closing, I say, you are not going to get economic recovery 
until we address the automobile sector. That is the big driver in this 
country, no pun intended, of course. But that is what we have to 
address. We are not doing it. We keep punting the ball down the field: 
loans to GM, loans to Chrysler; they come up with a plan. But with all 
those new automobiles sitting out there, no one is buying them. Well, 
let's give them a subsidy. Let's give a subsidy to working-class 
Americans for a change, and give them a little hand up--not a handout, 
but a hand up. I will tell you, it will reverberate all through our 
economy if we are to do something like this.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DODD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. DODD. Mr. President, I understand there has been an objection. I 
am not going to offer an amendment at this point until after this is 
resolved.
  I wish to take a couple of minutes, if I may, on an amendment I will 
call up either this evening or tomorrow once this has been resolved, 
this process matter has been resolved. I intend to offer an amendment 
that would statutorily require a dedication of $50 billion from the 
second tranche of the so-called TARP funding to be dedicated to 
foreclosure mitigation.
  As chairman of the Senate Banking Committee--and I am pleased to 
recognize that the distinguished Presiding Officer is a new member of 
that committee--for the last 2 years--in fact, 2 years ago this very 
week, we had our very first hearing, and I became chairman of the 
committee on the foreclosure problems in this country and the problems 
with the residential mortgage market generally. We had witnesses at 
that time who warned that we might face as many as 2 million 
foreclosures in the country. I recall when the witness testified to 
that effect, there were those who scoffed at that prediction, that 
nothing such as that could possibly happen in the United States. Now it 
seems like a modest prediction in light of what has occurred over the 
last 2 years regarding our economy, in this country, all of which began 
with the residential mortgage market in this Nation.
  More so than anything else, it was the predatory lending that drew 
people into mortgages they were ill-prepared to meet, did not require 
documentation; they were actually called liar loans, in a sense. Of 
course, the brokers and the servicers and lenders were all passing on 
the responsibility with little or no accountability, were being 
compensated for their efforts, and no longer had any underwriting 
standards or requirements that would have required that the borrowers 
meet certain requirements in order to protect that mortgage and that 
homeowner.
  I won't dwell on that this evening except to say that now we have 8 
million homes underwater in effect, where the mortgages exceed the 
value of the homes. It is predicted that several millions more could 
lose their homes. Mr. President, 10,000 people a day in this country 
are losing their homes, along with the 20,000 losing their jobs, and 
there is an increase in the likelihood of further deterioration in the 
housing market.
  I had hoped earlier on, with the first tranche of $350 billion, that 
more would be done in foreclosure mitigation. Regretfully, despite 
promises to the contrary, that never occurred. I am hopeful--in fact, 
beyond hopeful--because this amendment would require that $50 billion 
of that remaining $350 billion be dedicated to this purpose. I am 
confident that the new administration is committed to that. They 
certainly indicated as much in their comments. While not specifically 
identifying a number, they certainly indicated they intend to dedicate 
serious resources toward foreclosure mitigation. This amendment would 
secure, beyond any doubt--that those resources I have identified would 
be allocated for foreclosure mitigation. There are some other points in 
the amendment, but that is the major thrust.
  Most economists, regardless of ideology or political perspective, 
have agreed that until we deal with the foreclosure crisis, the 
economic situation will continue to deteriorate until we get to the 
bottom of that. There are a variety of different proposals that have 
been suggested on how we might

[[Page S1535]]

achieve that. This amendment I am offering does not insist upon any 
particular formulation. There are a number of ideas out there. I think 
Sheila Bair, who is the chairperson of the Federal Deposit Insurance 
Corporation, has one of the more creative ideas, an idea that has been 
warmly embraced by the Obama administration. That is not to say they 
agree with every dotted ``I'' and crossed ``t,'' but they certainly 
indicated they think it is more than just a reasonable idea but may 
very well contribute to putting a tourniquet on this hemorrhaging that 
is occurring in the residential mortgage market. That is one idea. 
There are others as well. Several of my colleagues on both sides of 
this political divide have offered ideas that I think would contribute 
to the reduction of foreclosures in the country, many of which are very 
solid ideas. Some may need further work than others, but I think all of 
us are now aiming in the right direction.
  It has been a journey of some length. It was only in the spring of 
last year that we faced some six filibusters in this Chamber when we 
tried to fashion a housing program that would reduce some of the 
problems we saw a year ago. Obviously, the mood has changed 
dramatically. We now have virtually everyone talking about how to deal 
with the foreclosure problem. I only regret that same consensus had not 
developed earlier. Had it done so, in my view, we would not be where we 
are today. This is not a natural disaster that has occurred; this was 
an avoidable problem. That is the great tragedy of it. This was an 
avoidable economic problem that has at its roots the mortgage crisis. 
Unfortunately, it went unattended for so long despite repeated warnings 
by many of us.
  But here we are at the outset of 2009 with the worst economic crisis 
since the Great Depression and a problem that has now spread throughout 
the globe. So it is incumbent upon us to take various steps to try to 
address this issue. I think the money that was allocated back last fall 
minimized the problem in a sense that it would have been far worse than 
it is today without those resources. Unfortunately, the management of 
those resources has not been as well executed as it could have been. My 
hope is that this next tranche will be far better managed with far 
greater accountability, far greater transparency, and far greater 
controls on such things as executive compensation.
  Obviously, the stimulus package is also important. I wish to commend 
President Obama because he has said this well; that is, these steps we 
are taking are not in and of themselves going to resolve the economic 
crisis. What I think they do is minimize further deterioration of our 
economy. The President said the other day that he wishes these actions 
would turn the corner for us. What he hopes it will achieve is to stop 
the deterioration or the flow of this economy moving in the wrong 
direction.
  So I think it is important as we talk about the stimulus package that 
we talk about these TARP funds. These are all steps that are needed to 
get us moving in the right direction, to create jobs in the country and 
stop the tremendous increase in unemployment--as I mentioned, 20,000 
jobs a day--and begin to repair our credit market and the financial 
system in this country.
  Far more will need to be done. Anyone who stands on this floor or 
elsewhere and predicts that because of the steps we are taking we are 
going to miraculously or immediately cure our economic ills is 
misspeaking. It will not. But it will get us pointed in the right 
direction. That is what is important about these steps we are about to 
take. It will move us in a direction of improving our economy.
  I see my colleague from Missouri.
  Mrs. McCASKILL. Mr. President, will the Senator yield for a question?
  Mr. DODD. I am pleased to yield.
  Mrs. McCASKILL. Mr. President, through the Presiding Officer, I wish 
to ask my colleague from Connecticut whether, when we were trying to 
deal with the foreclosure crisis last year, there were many people in 
the Chamber who said: Well, let's just shelve that for awhile. Let's 
forget about that problem right now. We don't need to do anything right 
now.
  My recollection is that is what a lot of the response was from some 
of our friends.
  Mr. DODD. Mr. President, I would say to my colleague from Missouri 
that she has an excellent memory. I had 82 hearings in the Banking 
Committee, over a third of them on this subject matter alone. We came 
to the floor of the Senate at the behest of the majority leader, 
Senator Reid, who was a champion of these issues. We had these hearings 
prior to the Passover, Easter break in committee, over a third of them 
on this subject matter alone. We faced six filibusters--almost a record 
number--on a single piece of legislation. It was after that break that 
things began to open up and move.
  My colleague from Missouri has this exactly right. There were those 
who were vehemently opposed. There were all sorts of amendments, all 
sorts of efforts made to obstruct any effort for us to come up with 
ideas to allow us to mitigate the rising foreclosures in the country. 
Had we dealt with it then, a year ago, I think it is safe to say to my 
colleagues that we would not be in the situation we are in today.
  Mrs. McCASKILL. Mr. President, I would ask my colleague, it is almost 
like what a famous baseball player once said: ``It is deja vu all over 
again.'' Because what I am hearing, if I am correct--and I would 
certainly ask him this question--I am hearing the same thing now on the 
economic recovery bill, that we need to shelve it.
  I heard one of our colleagues, who I believe is the ranking member on 
Senator Dodd's committee, actually today on TV and the last couple of 
days saying: We need to shelve this thing.
  I would ask the Senator from Connecticut, through the Presiding 
Officer, I have this feeling that if we shelve it, we will be back here 
next year and, as with the housing crisis, the economic crisis in this 
country will do nothing but get demonstrably worse and more painful for 
the American people.
  Mr. DODD. Mr. President, responding to my colleague and friend from 
Missouri, she is absolutely correct. I think there is a tendency to 
look at these issues as if they were somehow stovepiped, separate from 
each other, this dealing with the TARP legislation and dealing with the 
financial crisis and now dealing with the stimulus package is 
unrelated. It has been pointed out that there is a likelihood we will 
lose as much as $2 trillion out of our economy over the next 2 years. 
Making up that gap is going to require some effort.
  This bill will ultimately, I hope, result in an appropriation of 
something between $800 billion and $900 billion--no small amount but 
far short of what will be lost in our economy over the next 2 years. If 
we defeat this or shelve this, as has been suggested, we exacerbate the 
economic problems of this Nation to a significant degree, which would 
require this body coming back at a later date with something that none 
of us even wants to contemplate at this point.
  So this is not an unrelated matter. You shelve this, you walk away 
from this responsibility, and you burden the American taxpayer to the 
likes none of us could even begin to calculate.
  So I thank my colleague from Missouri for pointing that fact out. 
This is related. If our economy does not begin to improve or at least 
not get worse, as the President has accurately pointed out, the 
problems only become more pronounced, more difficult to resolve in the 
coming weeks and months. So our economic future depends upon each of 
these pieces in place that will allow us to begin to turn that corner, 
see credit begin to move, borrowing occur, lenders lending, and 
activity economically in this country begin to move in the direction we 
need for recovery. So I thank her immensely for her comments. She 
identified exactly what needs to be done and explained it to our 
citizens.

  This is not an idle effort just to secure some spending. It is 
absolutely essential if we are going to produce the kinds of jobs that 
are necessary, contribute to economic growth, and make a difference for 
our country. That is the reason I thought on this bill--it is a 
stimulus bill--of requiring to be set aside $50 billion of the TARP 
money in the next tranche to be dedicated to the rising number of 
foreclosures of residential properties in our Nation. If you are losing 
20,000 jobs a day, you don't need to be a degreed economist to know 
that with every one of those people who loses a job, the greater the 
likelihood they will lose their home.

[[Page S1536]]

  We need to do everything we can to try to stop that erosion in the 
job market and simultaneously do what we can to make it possible for 
people to stay in their homes. There is a direct correlation between 
the stimulus effort and TARP regarding mitigation of foreclosures. That 
is why I will ask my colleagues to be supportive of that effort 
tomorrow.
  I yield the floor and suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BAUCUS. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. BAUCUS. Mr. President, I ask unanimous consent that the pending 
amendment be set aside and the following Senators be permitted to call 
up amendments at the desk as follows: DeMint, No. 189; Boxer, an 
amendment regarding environmental laws; Barrasso, an amendment 
regarding environmental laws; Harkin, amendment No. 338; Dodd, 
amendment No. 145; McCaskill, amendments Nos. 125 and 236, with a 
modification; that the Landrieu amendment No. 102 be called up, and 
once that is reported this evening, it be considered and agreed to, and 
the motion to reconsider be laid upon the table.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Without objection, it is so ordered.


                 Amendment No. 326 to Amendment No. 98

  Mr. BARRASSO. Mr. President, I ask unanimous consent that the pending 
amendments be set aside and I be allowed to call up amendment No. 326.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Wyoming [Mr. Barrasso], for himself, Mr. 
     Crapo, Mr. Roberts, Mr. Vitter, Mr. Enzi, Mr. Risch, and Mr. 
     Bennett, proposes an amendment numbered 326 to amendment No. 
     98.

  Mr. BARRASSO. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The amendment is as follows:

  (Purpose: To expedite reviews required to be carried out under the 
               National Environmental Policy Act of 1969)

       On page 431, between lines 8 and 9, insert the following:
       Sec. 16__. (a)(1) Notwithstanding any other provision of 
     law, all reviews carried out pursuant to the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
     with respect to any actions taken under this Act or for which 
     funds are made available under this Act shall be completed by 
     the date that is 270 days after the date of enactment of this 
     Act.
       (2) If a review described in paragraph (1) has not been 
     completed for an action subject to the National Environmental 
     Policy Act of 1969 (42 U.S.C. 4321 et seq.) by the date 
     specified in paragraph (1)--
       (A) the action shall be considered to have no significant 
     impact to the human environment for the purpose of that Act; 
     and
       (B) that classification shall be considered to be a final 
     agency action.
       (b) The lead agency for a review of an action carried out 
     pursuant to this section shall be the Federal agency to which 
     funds are made available for the action.
       (c)(1) There shall be a single administrative appeal for 
     all reviews carried out pursuant to this section.
       (2) Upon resolution of the administrative appeal, judicial 
     review of the final agency decision after exhaustion of 
     administrative remedies shall lie with the United States 
     Court of Appeals for the District of Columbia Circuit.
       (3) An appeal to the court described in paragraph (2) shall 
     be based only on the administrative record.
       (4) After an agency has made a final decision with respect 
     to a review carried out under this section, that decision 
     shall be effective during the course of any subsequent appeal 
     to a court described in paragraph (2).
       (5) All civil actions arising under this section shall be 
     considered to arise under the laws of the United States.


                 Amendment No. 189 to Amendment No. 98

  Mr. BARRASSO. Mr. President, I ask unanimous consent that the pending 
amendment be set aside and I be allowed to call up amendment No. 189 on 
behalf of Senator DeMint.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Wyoming [Mr. Barrasso], for Mr. DeMint, 
     proposes an amendment numbered 189 to amendment No. 98.

  Mr. BARRASSO. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The amendment is as follows:

  (Purpose: To allow the free exercise of religion at institutions of 
 higher education that receive funding under section 803 of division A)

       On page 192, after line 21 insert the following:
       Sec. 807.  elimination of funding prohibition. 
     Notwithstanding section 803(d)(2)(C), section 803(d)(2)(C) 
     shall have no effect.

  Mr. BARRASSO. Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Montana.


Amendments Nos. 145, 338, 125, and 236, as Modified to Amendment No. 98

  Mr. BAUCUS. Mr. President, on behalf of Senators Dodd and Harkin, I 
call up amendments, one for each Senator, and on behalf of Senator 
McCaskill, I call up two amendments as under the previous order.
  The ACTING PRESIDENT pro tempore. Pursuant to the previous order, the 
amendments will be considered pending.
  The amendments are as follows:


                           AMENDMENT NO. 145

     (Purpose: To improve the efforts of the Federal Government in 
   mitigating home foreclosures and to require the Secretary of the 
    Treasury to develop and implement a foreclosure prevention loan 
                           modification plan)

       On page 263, between lines 10 and 11, insert the following:


           general provisions--hope for homeowners amendments

       Sec. 1201.  Section 257 of the National Housing Act (12 
     U.S.C. 1715z-23), as amended by the Emergency Economic 
     Stabilization Act of 2008 (Public Law 110-343), is amended--
       (1) in subsection (e)(1)(B), by inserting after ``being 
     reset,'' the following: ``or has, due to a decrease in 
     income,'';
       (2) in subsection (k)(2), by striking ``and the mortgagor'' 
     and all that follows through the end and inserting ``shall, 
     upon any sale or disposition of the property to which the 
     mortgage relates, be entitled to 25 percent of appreciation, 
     up to the appraised value of the home at the time when the 
     mortgage being refinanced under this section was originally 
     made. The Secretary may share any amounts received under this 
     paragraph with the holder of the eligible mortgage refinanced 
     under this section.'';
       (3) in subsection (i)--
       (A) by inserting ``, after weighing maximization of 
     participation with consideration for the solvency of the 
     program,'' after ``Secretary shall'';
       (B) in paragraph (1), by striking ``equal to 3 percent'' 
     and inserting ``not more than 2 percent''; and
       (C) in paragraph (2), by striking ``equal to 1.5 percent'' 
     and inserting ``not more than 1 percent''; and
       (4) by adding at the end the following:
       ``(x) Auctions.--The Board shall, if feasible, establish a 
     structure and organize procedures for an auction to refinance 
     eligible mortgages on a wholesale or bulk basis.
       ``(y) Compensation of Servicers.--To provide incentive for 
     participation in the program under this section, each 
     servicer of an eligible mortgage insured under this section 
     shall be paid $1,000 for performing services associated with 
     refinancing such mortgage, or such other amount as the Board 
     determines is warranted. Funding for such compensation shall 
     be provided by funds realized through the HOPE bond under 
     subsection (w).''.

       At the end of division B, add the following:

                    TITLE VI--FORECLOSURE PREVENTION

     SEC. 6001. MANDATORY LOAN MODIFICATIONS.

       Section 109(a) of the Emergency Economic Stabilization Act 
     of 2008 (12 U.S.C. 5219) is amended--
       (1) by striking the last sentence;
       (2) by striking ``To the extent'' and inserting the 
     following:
       ``(1) In general.--To the extent''; and
       (3) by adding at the end the following:
       ``(2) Loan modifications required.--
       ``(A) In general.--In addition to actions required under 
     paragraph (1), the Secretary shall, not later than 15 days 
     after the date of enactment of this paragraph, develop and 
     implement a plan to facilitate loan modifications to prevent 
     avoidable mortgage loan foreclosures.
       ``(B) Funding.--Of amounts made available under section 115 
     and not otherwise obligated, not less than $50,000,000,000, 
     shall be made available to the Secretary for purposes of 
     carrying out the mortgage loan modification plan required to 
     be developed and implemented under this paragraph.
       ``(C) Criteria.--The loan modification plan required by 
     this paragraph may incorporate the use of--

[[Page S1537]]

       ``(i) loan guarantees and credit enhancements;
       ``(ii) the reduction of loan principal amounts and interest 
     rates;
       ``(iii) extension of mortgage loan terms; and
       ``(iv) any other similar mechanisms or combinations 
     thereof, as determined appropriate by the Secretary.
       ``(D) Designation authority.--
       ``(i) FDIC.--The Secretary may designate the Corporation, 
     on a reimbursable basis, to carry out the loan modification 
     plan developed under this paragraph.
       ``(ii) Contracting authority.--If designated under clause 
     (i), the Corporation may use its contracting authority under 
     section 9 of the Federal Deposit Insurance Act.
       ``(E) Consultation required.--In developing the loan 
     modification plan under this paragraph, the Secretary shall 
     consult with the Chairperson of the Board of Directors of the 
     Corporation, the Board, and the Secretary of Housing and 
     Urban Development.
       ``(F) Reports to congress.--The Secretary shall provide to 
     the Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Financial Services of the House 
     of Representatives--
       ``(i) upon development of the plan required by this 
     paragraph, a report describing such plan; and
       ``(ii) a monthly report on the number and types of loan 
     modifications occurring during the reporting period, and the 
     performance of the loan modification plan overall.''.


                           amendment no. 338

   (Purpose: To require the Secretary of the Treasury to carry out a 
program to enable certain individuals to trade certain old automobiles 
                      for certain new automobiles)

       On page 431, between lines 8 and 9, insert the following:

     SEC. 1607. AUTOMOBILE TRADE-IN PROGRAM.

       (a) Definitions.--In this section:
       (1) Automobile, fuel, manufacturer, model year.--The terms 
     ``automobile'', ``fuel'', ``manufacturer'', and ``model 
     year'' have the meaning given such terms in section 32901 of 
     title 49, United States Code.
       (2) Eligible individual.--The term ``eligible individual'' 
     means an individual--
       (A) who does not have more than 3 automobiles registered 
     under his or her name;
       (B) who filed a return of Federal income tax for a taxable 
     year beginning in 2007 or in 2008, and, if married for the 
     taxable year concerned (as determined under section 7703 of 
     the Internal Revenue Code of 1986), filed a joint return;
       (C) who is not an individual with respect to whom a 
     deduction under section 151 of the Internal Revenue Code of 
     1986 is allowable to another taxpayer for a taxable year 
     beginning in the calendar year in which the individual's 
     taxable year begins;
       (D) whose adjusted gross income reported in the most recent 
     return described in subparagraph (B) was not more than 
     $50,000 ($75,000 in the case of a joint tax return or a 
     return filed by a head of household (as defined in section 
     2(b) of the Internal Revenue Code of 1986));
       (E) who has not acquired an automobile under the Program; 
     and
       (F) who did not file such return jointly with another 
     individual who has acquired an automobile under the Program.
       (3) Eligible new automobile.--The term ``eligible new 
     automobile'', with respect to a trade of an eligible old 
     automobile by an eligible individual under the Program, means 
     an automobile that--
       (A) has never been registered in any jurisdiction;
       (B) was assembled in the United States; and
       (C) has a fuel economy that--
       (i) is not less than 25 miles per gallon (20 miles per 
     gallon in the case of a pick up truck), as determined by the 
     Administrator of the Environmental Protection Agency using 
     the 5-cycle fuel economy measurement methodology of such 
     Agency; and
       (ii) has a fuel economy that is more than 4.9 miles per 
     gallon greater than the fuel economy of such eligible old 
     automobile, as determined by the Administrator using the 2-
     cycle fuel economy measurement methodology of such Agency for 
     both automobiles.
       (4) Eligible old automobile.--The term ``eligible old 
     automobile'', with respect to a trade for an eligible new 
     automobile by an eligible individual under the Program, means 
     an automobile that--
       (A) is operable;
       (B) was first registered in any jurisdiction by any person 
     not less than 10 years before the date on which such trade is 
     initiated;
       (C) is registered under such eligible individual's name on 
     the date on which such trade is initiated; and
       (D) was registered under such eligible individual's name 
     before January 16, 2009.
       (5) Pick up truck.--The term ``pick up truck'' means an 
     automobile with an open bed as determined by the Secretary in 
     consultation with the Secretary of Transportation.
       (6) Program.--The term ``Program'' means the Automobile 
     Trade-In Program established under subsection (b).
       (7) Secretary.--Except as otherwise provided, the term 
     ``Secretary'' means the Secretary of the Treasury, or the 
     Secretary's designee.
       (b) Program Established.--The Secretary shall establish the 
     Automobile Trade-In Program to provide eligible individuals 
     with subsidies to purchase eligible new automobiles in 
     exchange for eligible old automobiles.
       (c) Duration of Program.--The Program shall commence on the 
     date on which the Secretary prescribes regulations under 
     subsection (h) and shall terminate on the earlier of--
       (1) September 30, 2010; and
       (2) the date on which all of the funds appropriated or 
     otherwise made available under subsection (j) have been 
     expended.
       (d) Trades.--
       (1) In general.--Except as otherwise provided in this 
     subsection, if an eligible individual and a seller of an 
     eligible new automobile initiate a trade as described in 
     subsection (e) for such new automobile with an eligible old 
     automobile of the eligible individual before the termination 
     of the Program under subsection (c), the Secretary shall 
     provide to the seller of such new automobile $10,000.
       (2) Limitation on purchase price of eligible new 
     automobiles.--The Secretary may not make any payment under 
     this subsection for a trade for an eligible new automobile 
     under the Program if--
       (A) the purchase price of such new automobile exceeds the 
     manufacturer's suggested retail price for such new 
     automobile; or
       (B) the price of the non-safety related accessories, as 
     determined by the Secretary in consultation with the 
     Administrator of the National Highway Traffic Safety 
     Administration, of such new automobile exceeds--
       (i) the average price of the non-safety related accessories 
     for the prior model year of such new automobile; or
       (ii) in the case that there is no prior model year for such 
     new automobile, the average price of non-safety related 
     accessories for similar new automobiles (as determined by the 
     Secretary), with consideration of the types of non-safety 
     related accessories that are typically provided with such 
     automobiles.
       (3) Compensation for delayed payments.--In the case that a 
     payment under this subsection to a seller for a trade under 
     the Program is delayed, the Secretary shall provide to such 
     seller the amount otherwise determined under this subsection 
     plus interest at the overpayment rate established under 
     section 6621 of the Internal Revenue Code of 1986.
       (e) Initiation of Trade.--An eligible individual and the 
     seller of an eligible new automobile initiate a trade under 
     the Program for such eligible new automobile with an eligible 
     old automobile of such individual if--
       (1) the eligible individual, or the eligible individual's 
     designee, drives such old automobile to the location of such 
     seller;
       (2) the eligible individual provides to the seller--
       (A) such old automobile; and
       (B) an amount (if any) equal to the difference between--
       (i) the purchase price of such new automobile; and
       (ii) the amount the Secretary is required to provide to the 
     seller under subsection (d); and
       (3) the eligible individual and the seller notify the 
     Secretary of such trade at such time and in such manner as 
     the Secretary considers appropriate.
       (f) Limitation on Resale.--
       (1) In general.--Except as provided in paragraph (2), an 
     individual who purchases an automobile under the Program may 
     not sell or lease the automobile before the date that is 1 
     year after the date on which the individual purchased the 
     automobile under the Program.
       (2) Exception for hardship.--The limitation in paragraph 
     (1) shall not apply to an individual if compliance with such 
     limitation would constitute a hardship, as determined by the 
     Secretary.
       (g) Disposal of Eligible Old Automobiles.--
       (1) In general.--A seller who receives an eligible old 
     automobile in exchange for an eligible new automobile under 
     the Program shall deliver such old automobile to an 
     appropriate location for proper destruction and disposal as 
     determined by the Secretary in accordance with paragraph (2).
       (2) Disposal and salvage.--The Secretary may permit a 
     seller under paragraph (1) to salvage portions of an 
     automobile to be destroyed and disposed of under such 
     paragraph, except that the Secretary shall require the 
     destruction of the engine block and the frame of the 
     automobile.
       (3) Compensation.--The Secretary shall compensate a seller 
     described in paragraph (1) for costs incurred by such seller 
     under such paragraph in such amounts or at such rates as the 
     Secretary considers appropriate.
       (h) Regulations.--
       (1) In general.--Not later than 30 days after the date of 
     the enactment of this Act, the Secretary shall prescribe 
     rules to carry out the Program.
       (2) Expedited procedures for rulemaking.--The provisions of 
     chapter 5 of title 5, United States Code, shall not apply to 
     regulations prescribed under paragraph (1).
       (i) Monitoring.--The Secretary shall establish a mechanism 
     to monitor the expenditure of funds appropriated under 
     subsection (j).
       (j) Direct Spending Authority.--
       (1) In general.--There is authorized to be appropriated and 
     is appropriated to the Secretary $16,000,000,000, including 
     administrative expenses, to carry out the Program.

[[Page S1538]]

       (2) Availability.--The amount appropriated under paragraph 
     (1) shall be available for the purpose described in such 
     paragraph until September 30, 2010.
       (3) Emergency designation.--Amounts appropriated pursuant 
     to paragraph (1) are designated as an emergency requirement 
     and necessary to meet emergency needs pursuant to section 
     204(a) of S. Con. Res. 21 (110th Congress) and section 
     301(b)(2) of S. Con. Res. 70 (110th Congress), the concurrent 
     resolutions on the budget for fiscal years 2008 and 2009.


                           amendment no. 125

 (Purpose: To limit compensation to officers and directors of entities 
      receiving emergency economic assistance from the Government)

       On page 428, between lines 11 and 12, insert the following:

              Subtitle D--Limits on Executive Compensation

     SEC. 1551. SHORT TITLE.

       This subtitle may be cited as the ``Cap Executive Officer 
     Pay Act of 2009''.

     SEC. 1552. LIMIT ON EXECUTIVE COMPENSATION.

       (a) In General.--Notwithstanding any other provision of law 
     or agreement to the contrary, no person who is an officer, 
     director, executive, or other employee of a financial 
     institution or other entity that receives or has received 
     funds under the Troubled Asset Relief Program (or ``TARP''), 
     established under section 101 of the Emergency Economic 
     Stabilization Act of 2008, may receive annual compensation in 
     excess of the amount of compensation paid to the President of 
     the United States.
       (b) Duration.--The limitation in subsection (a) shall be a 
     condition of the receipt of assistance under the TARP, and of 
     any modification to such assistance that was received on or 
     before the date of enactment of this Act, and shall remain in 
     effect with respect to each financial institution or other 
     entity that receives such assistance or modification for the 
     duration of the assistance or obligation provided under the 
     TARP.

     SEC. 1553. RULEMAKING AUTHORITY.

       The Secretary shall expeditiously issue such rules as are 
     necessary to carry out this subtitle, including with respect 
     to reimbursement of compensation amounts, as appropriate.

     SEC. 1554. COMPENSATION.

       As used in this subtitle, the term ``compensation'' 
     includes wages, salary, deferred compensation, retirement 
     contributions, options, bonuses, property, and any other form 
     of compensation or bonus that the Secretary of the Treasury 
     determines is appropriate.


                     amendment no. 236, as modified

(Purpose: To establish funding levels for various offices of inspectors 
     general and to set a date until which such funds shall remain 
                               available)

       On page 3, line 22, strike ``2010'' and insert ``2011''.
       On page 3, line 23, insert before the period ``and an 
     additional $17,500,000 for such purposes, to remain available 
     until September 30, 2011''.
       On page 41, line 4, strike ``2010.'' and insert ``2011, and 
     an additional $4,000,000 for such purposes, to remain 
     available until September 30, 2011.''.
       On page 41, line 21, strike ``2010'' and insert ``2011''.
       On page 47, line 8, strike ``2010'' and insert ``2011''.
       On page 47, line 26, strike ``2010'' and insert ``2011''.
       On page 60, line 4, strike ``2010.'' and insert ``2011, and 
     an additional $3,000,000 for such purposes, to remain 
     available until September 30, 2011.''.
       On page 77, line 19, strike ``expended.'' and insert 
     ``September 30, 2012, and an additional $10,000,000 for such 
     purposes, to remain available until September 30, 2012.''.
       On page 95, line 12, insert before the period ``and an 
     additional $13,000,000 for such purposes, to remain available 
     until September 30, 2011''.
       On page 105, line 24, strike ``2010'' and insert ``2011''.
       On page 116, line 21, strike ``2010.'' and insert ``2011, 
     and an additional $7,400,000 for such purposes, to remain 
     available until September 30, 2011.''.
       On page 127, line 14, strike ``2010'' and insert ``2011''.
       On page 137, line 8, strike ``2011.'' and insert ``2012, 
     and an additional $15,000,000 for such purposes, to remain 
     available until September 30, 2011.''.
       On page 146, line 12, insert before the period ``and an 
     additional $10,000,000 for such purposes, to remain available 
     until September 30, 2012''.
       On page 149, between lines 5 and 6, insert the following:

                    Office of the Inspector General

       For an additional amount for the Office of the Inspector 
     General, $1,000,000, which shall remain available until 
     September 30, 2011.
       On page 214, line 19, strike ``2010'' and insert ``2011''.
       On page 225, line 6, strike ``2010'' and insert ``2011''.
       On page 226, line 23, strike ``2010'' and insert ``2011''.
       On page 243, line 6 insert ``, and an additional 
     $12,250,000 for such purposes, to remain available until 
     September 30, 2011'' before the colon.
       On page 263, line 7, insert ``, and an additional 
     $12,250,000 for such purposes, to remain available until 
     September 30, 2011'' before the colon.
       On page 733, line 2, strike ``expended'' and insert 
     ``September 30, 2012,''.

  Mr. BAUCUS. I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mrs. BOXER. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.


                 Amendment No. 363 To Amendment No. 98

  Mrs. BOXER. Mr. President, I am just waiting to take the Senate out 
tonight. But I did want to say there was a little bit of a surprise 
that happened tonight when one of my colleagues offered an amendment to 
essentially repeal environmental laws as they relate to this bill. All 
activities of this bill, if this Barrasso amendment were to pass, all 
the activities would no longer be covered by the National Environmental 
Policy Act.
  That is a very disturbing amendment and I was very surprised by it as 
chair of the Environment and Public Works Committee here. Thanks to the 
diligent staff--and I do appreciate them letting me know--I was able to 
craft another amendment that I hope will precede the amendment of 
Senator Barrasso and allow the Senate to express itself, saying that we 
do not intend to waive environmental laws that will protect the public 
health of our communities and, if there are projects that are such a 
harm to our community, they should be replaced by the many shovel-ready 
projects that our mayors are telling us are out there, that our 
Governors are telling us are out there.
  We will have that debate tomorrow but I wanted to mention why I was 
still here at 10 after 10, here protecting our communities across 
America.
  I have sent an amendment to the desk. I hope that amendment will be 
queued up as per the suggested list of Senator Baucus.
  The ACTING PRESIDENT pro tempore. The amendment is now pending among 
the amendments that have been sent up.
  The amendment is as follows:

 (Purpose: To ensure that any action taken under this act or any funds 
    made available under this act that are subject to the National 
     Environmental Policy Act (NEPA) protect the public health of 
                    communities across the country)

       At the appropriate place, insert the following:


                                Findings

       The Senate finds that:
       According to leading national and state organizations, 
     there are many more NEPA compliant, ready-to-go activities, 
     than are funded in this bill, and
       If there is an action or funds made available for an action 
     that triggers NEPA, and that activity could cause harm to 
     public health, and that harm has not been evaluated under 
     NEPA, the project would not meet the requirements of NEPA and 
     should not be funded.


                               Section 1

       Any action or funds made available for an action that 
     triggers NEPA, that have not complied with NEPA, and 
     therefore pose a potential danger to our communities across 
     the country, must either come into compliance with NEPA or be 
     replaced by other eligible activities.


                 Amendment No. 102 To Amendment No. 98

  The ACTING PRESIDENT pro tempore. The Chair notes for the record that 
amendment No. 102, sponsored by Senator Landrieu, is considered offered 
and adopted.
  The amendment (No. 102) was agreed to, as follows:

(Purpose: To ensure that assistance for the redevelopment of foreclosed 
and abandoned homes to States or units of local government impacted by 
catastrophic natural disasters may be used to support the redevelopment 
 of homes damaged or destroyed as a result of the 2005 hurricanes, the 
  severe flooding in the Midwest in 2008, and other natural disasters)

       On page 251, lines 13 and 14, strike ``housing:'' and 
     insert the following: ``housing: Provided further, That 
     funding used for section 2301(c)(3)(E) of the Act shall also 
     be available to redevelop demolished, blighted, or vacant 
     properties, including those damaged or destroyed in areas 
     subject to a disaster declaration by the President under 
     title IV of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5121 et seq.):''

                          ____________________