NOMINATION OF ELENA KAGAN; Congressional Record Vol. 156, No. 89
(Senate - June 15, 2010)

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[Pages S4928-S4933]
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                       NOMINATION OF ELENA KAGAN

  Mr. GRASSLEY. Mr. President, I wish to address my colleagues about 
the upcoming judiciary hearing and the nomination of Solicitor Kagan to 
the Supreme Court. I have always been of the opinion that the Senate 
needs to conduct a comprehensive and careful review of Supreme Court 
nominees. It is important that the nominee be given a fair, respectful, 
and also deliberative process. This is a lifetime appointment to the 
highest Court in the land, so it is our duty to ensure that the Supreme 
Court of the United States candidate understands the proper role of the 
Supreme Court in our system of government, and would be true to the 
Constitution and the laws as written. We need to be certain that the 
nominee will not come with an agenda to impose his or her personal 
political feelings and preferences on the bench.
  The Senate needs enough time to adequately review the nominee's 
record to make these determinations. But because Solicitor Kagan does 
not have the usual background of being a judge on the Federal or State 
bench, we have no concrete examples of her judicial philosophy in 
action. It is critical that we understand whether she has a proper 
judicial philosophy because Solicitor Kagan is being considered for the 
Supreme Court. So it is even more important for us to look at her 
entire record and to give particular weight to her statements and 
writings as well as the positions she has taken over the years.
  In order for the Senate to fulfill its constitutional responsibility 
of advise and consent, we must get all of her documents from the 
Clinton Library and have enough time to analyze them so we can 
determine whether she should be a Justice. I share the concerns of the 
Judiciary Committee ranking member, Senator Sessions, that Solicitor 
Kagan's documents will not be fully produced in time for the committee 
to conduct a thorough review of the nominee's record.
  I hope we will receive these materials in time before the Judiciary 
Committee holds the Kagan hearings. From the materials and documents 
that we received so far, and which the committee is still reviewing, 
Solicitor Kagan's record clearly shows she is a political lawyer. In 
fact, a recent Washington Post article said her papers in the Clinton 
Library ``show a flair for the political,'' and that she had ``finely 
tuned . . . political antennae.''
  Solicitor Kagan was involved in a number of hot-button issues during 
President Clinton's second term, including gun rights, welfare reform, 
partial-birth abortion, and Whitewater. The documents we received from 
the Clinton Library show that Ms. Kagan

[[Page S4929]]

promoted liberal positions and offered analyses and recommendations 
that often were more political than legal in nature.
  Solicitor Kagan's memos from the Marshall papers also indicate a 
liberal and seemingly outcome-based approach to her legal analysis. So 
I look forward to asking Solicitor Kagan about her record and her 
judicial philosophy. But a judge needs to be an independent arbiter, 
not an advocate or a rubberstamp for a political agenda. We already 
know that Solicitor Kagan has held far left political views from a 
young age. She has been a long-time political lawyer, and she is a 
personal friend of the President.
  As Solicitor General, she has been a prominent member of the Obama 
administration's team. As a nominee to the Supreme Court, Solicitor 
Kagan has the burden of showing that despite her record as a political 
lawyer, rather than as a sitting judge or practitioner, if she is 
confirmed she will apply the law impartially and not as a member of 
someone's team who is working to achieve their preferred political 
  Moreover, President Obama's standard for picking judicial nominees is 
one that places a premium on a judge's empathy for certain individuals 
or groups rather than on an even-handed reading of the law. As a 
Senator, President Obama lauded judicial nominees who would decide 
cases based on ``one's deepest values, one's core concerns, one's 
broader perspectives on how the world works, and the depth and breadth 
of one's empathy.''
  As a Presidential candidate, President Obama said he would appoint 
judges who have empathy for certain groups. As President he said his 
judges would have ``a keen understanding of how the law affects the 
daily lives of the American people.''
  The Obama ``empathy'' standard concerns me greatly because the 
inference is that an empathetic judge will pick winners and losers 
based on his or her personal preferences rather than the law blindly 
picking winners and losers.
  When President Obama nominated Solicitor Kagan to the Supreme Court, 
Vice President Biden's chief of staff, who was involved in vetting the 
Supreme Court of the United States candidates, assured liberals they 
had nothing to worry about from her selection. In fact, he said 
Solicitor Kagan was ``clearly a legal progressive.'' Thus, it is safe 
to assume that the President was true to his promise and picked someone 
who embodied his empathy standard.
  Because Solicitor Kagan does not have one of the best indicators of a 
Supreme Court nominee's judicial philosophy; that is, a judicial record 
on a State or Federal bench, then I believe she should be very 
forthcoming with the Judiciary Committee's inquiries into her judicial 
  In fact, Ms. Kagan herself advocated that a nominee should respond to 
specific inquires into the nominee's judicial philosophy and positions 
on constitutional issues.
  Solicitor Kagan wrote in her University of Chicago Law Review 
article, ``Confirmation Messes, Old and New:''

       The kind of inquiry that would contribute most to 
     understanding and evaluating a nomination is . . . discussion 
     first, of the nominee's broad judicial philosophy and, 
     second, of her views on particular constitutional issues. By 
     ``judicial philosophy'' . . . I mean such things as the 
     judge's understanding of the role of courts in our society, 
     of the nature of and values embodied in our Constitution, and 
     of the proper tools and techniques of interpretation, both 
     constitutional and statutory.

  She also wrote that a nominee could comment on ``hypothetical cases'' 
and on general issues such as ``affirmative action or abortion,'' or 
``privacy rights, free speech, race and gender discrimination, and so 
  Given the fact that Solicitor Kagan has been nominated to a lifetime 
position on the Nation's highest Court, the Senate must determine that 
if confirmed, she will interpret the Constitution with judicial 
restraint and without imposing her personal political policy 
preferences and biases.
  The Senate must determine by examining the totality of her record 
that if confirmed, she would not be a rubberstamp for the President's 
political agenda. We will have to see whether Ms. Kagan will live up to 
her own standard for Supreme Court nominees and whether she will be as 
forthcoming as she argued Supreme Court of the United States nominees 
should be in the Senate confirmation process.
  So I am going to be pursuing this for my people of Iowa because they 
are very concerned. I am getting a lot of phone calls both for and 
against her that have to be taken into consideration.
  I yield the floor.
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  Mr. DURBIN. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                            Interchange Fees

  Mr. DURBIN. Mr. President, a few weeks ago we considered a Wall 
Street reform bill which tried to address some of the underlying 
problems in our economy which led to the recession. It was an ambitious 
undertaking. The Senate Banking Committee, under Chairman Dodd, led us 
through a very difficult and lengthy debate over the bill.
  Part of the debate included an amendment which I offered relative to 
what is known as an interchange fee. An interchange fee is the amount 
of money charged to a business when a customer presents a credit card. 
So if I go to a restaurant in Chicago and pay for the bill with a 
credit card, the restaurant is going to have to pay a percentage of my 
bill to the credit card company or at least to the issuing bank of the 
credit card. And then I, of course, have to pay the bill when it comes 
in the mail.
  This so-called interchange fee--the charge by the credit card company 
to the business I am patronizing--is a fee that turns out to be very 
large and expensive. Nearly $50 billion in credit and debit card 
interchange fees is collected each year, primarily by the largest 
credit card companies and by the largest banks that issue those credit 
cards. This is virtually unregulated. There is no regulation as to the 
amount charged or collected from these businesses. Visa and MasterCard, 
which dominate the credit and debit card industries, establish the 
interchange rates that all merchants and, by extension, their customers 
pay to banks whenever a card is swiped. So if the restaurant I went to 
is charged 1 percent, 2 percent, or 3 percent because I presented a 
Visa card or a MasterCard, that is going to be reflected in the bill I 
pay. It certainly is going to come off of any profit margin the 
restaurant might realize as a result of my patronizing it.
  Already more than half of the retail transactions in America are 
conducted by debit and credit cards. Every time someone uses a credit 
or debit card to make a donation to a charity, Visa and MasterCard 
require an interchange fee to be paid. There have been exceptions where 
they have said they will suspend the fees, but by and large, if one 
makes a donation to the charity of their choice using their credit or 
debit card, part of the money they think they donated is going to end 
up in the hands of these credit card companies.
  According to a January 14 analysis by the Huffington Post, banks and 
card companies make an estimated $250 million a year from their 
interchange or swipe fees on charitable donations. In other words, it 
turns out that Visa and MasterCard are declaring themselves part of 
this charitable contribution and taking millions of dollars out of it. 
I would like to see more of that money go to the charitable purposes 
for which people donate their money.
  The Huffington Post noted that charities such as Habitat for Humanity 
pay about 2.15 percent of their donation in card fees. St. Jude's 
Children's Research Hospital, well known and well respected, pays about 
2.5 percent in card fees. Is it really necessary for Visa and 
MasterCard and the big banks to take a cut out of every charitable 
donation? We are not talking about the cost of the transaction. I will 
concede the fact that the regular proportional cost of a transaction of 
using the card is certainly fair for Visa and MasterCard to charge, but 
they raise that dramatically. There is no way that Visa and MasterCard 
could justify

[[Page S4930]]

2.5 percent if I use my debit card to try to make a donation to St. 
Jude's Children's Research Hospital. They are literally gaming the 
system and profit-taking from charities.
  In the wake of the devastating earthquake in Haiti in January, Visa, 
MasterCard, and their member banks voluntarily suspended the collection 
of interchange fees for some charitable donations for earthquake 
relief. It seems these companies can survive without charging these 
fees for charitable donations. They have done it. One bank, Capital 
One, has decided not to collect interchange on donations made to 
charity by their cards. I salute them. It is the right thing to do. Why 
aren't they all taking this position? Why don't they exempt charitable 
institutions from these issuing bank and credit card fees? I wish other 
banks were as reasonable when it came to interchange fees and 
charitable causes as Capital One.
  There is another group--universities. They pay a heavy cost in 
interchange fees. They lose a fortune in interchange when people use 
cards to pay for things such as tuition and housing.
  After my amendment passed the Senate, I received a letter from the 
American Council on Education and eight other major university 
associations thanking me. The letter said:

       As a result of your amendment, we believe that colleges and 
     universities will see reduced debit card costs which they 
     will be able to pass on to students and their families 
     through lower costs as well as increased resources for 
     institutional grant aid and student services.

  The reach of credit cards is unlimited in our economy. So are the 
greedy hands of the credit card companies and their issuing banks when 
it comes to these interchange fees. When I said in this amendment that 
we really want those fees to reflect the reasonable and proportional 
cost of processing the transaction, they screamed bloody murder because 
there is a lot of money being made--some $50 billion across the economy 
from these fees. Wouldn't it be great if we could enable colleges and 
universities to lower the cost students have to pay and put more 
resources into financial aid?
  The letter also said that under my amendment, ``colleges and 
universities will be able to offer discounts to students and their 
families for payments made with checks and debit cards.'' That is 
another thing they don't like to talk about. These two major credit 
card giants, Visa and MasterCard, really have a sweet deal. They 
basically coordinate their policies. It is as if Coke and Pepsi reached 
an agreement and said to your local store: Don't you dare offer that 
other product at a discount. That is virtually what has happened with 
Visa and MasterCard. They tell the stores: You can't give any better 
treatment; you can't say this is a Visa store or a MasterCard store. No 
way. You have to say we accept all credit cards from these issuing 
agencies. And basically, you can't limit it to debit cards, limit it to 
check cards, give a discount, limit the amount in terms of the dollar 
amount you can charge on these cards.
  I also want to say that governments are paying these credit card 
companies a lot as well. Think of all the ways in which people conduct 
transactions with Federal, State, and local governments. Every time 
somebody uses a card to pay for a driver's license or a parking sticker 
or a ride on public transit or to pay a ticket or to obtain a permit, 
there is an interchange fee. The city of Chicago paid $7.5 million in 
interchange fees last year. The Chicago Transit Authority paid $1.8 
million per year in interchange fees. The Illinois Tollway paid $11.6 
million in interchange fees last year. In most cases, the government 
agencies have no bargaining power when it comes to the amount of the 
interchange fee. Every dollar spent on these fees is a dollar that 
could have been spent on jobs and services and a dollar that could have 
been spared from the taxpayer.
  The American Association of Motor Vehicle Administrators represents 
DMVs across the country. They accept cards for payment of things such 
as driver's licenses, car registrations, and license plates. They wrote 
a letter. They said:

       State motor vehicle agencies and other state agencies are 
     experiencing unprecedented financial strain today, as we seek 
     to control costs where possible. . . .While our customers 
     certainly appreciate the convenience of electronic 
     transactions, few understand that the costs of accepting 
     credit and debit card payments for motor vehicle agencies are 
     higher today than ever before, and that these fees compound 
     the current budget crisis that many states face.

  The cost of interchange fees affects every local government, every 
State, every Indian tribe, and even the Federal Government. Right now, 
even the Federal Government is as helpless as any small business when 
it comes to trying to reduce their interchange costs.
  The amendment which I offered, which was adopted on the floor of the 
Senate by a vote of 64 to 33, requires debit interchange fees to be 
kept at a reasonable level, and it allows sellers to offer discounts to 
consumers without threat of punishment from Visa and MasterCard. The 
amendment was adopted in a broadly bipartisan vote, as 17 of my 
Republican colleagues joined me in passing it. The amendment is going 
to help American families, each of whom pays an estimated $427 a year 
to subsidize the credit card companies and the banks issuing these 

  Lobbyists for the financial industry have thrown the kitchen sink at 
my amendment in an effort to keep the $50 billion interchange fee 
system completely unregulated. Imagine, here is Durbin's amendment 
getting into $50 billion worth of profit-taking these credit card 
companies and their banks, the biggest banks, are engaged in.
  Incredibly, the card companies and banks have even argued that they 
need to preserve the $50 billion interchange system in order to protect 
consumers. Give me a break. On the issue of consumers, they have no 
shame. Do my colleagues recall that we passed a credit card reform bill 
and the credit card companies said: We will need 6 months to really get 
all this stuff together, all these changes. Give us a little time.
  Remember what happened in that 6-month period? Every time you would 
go to pick up the mail and there was something from the credit card 
company, you would open it and they would announce they were raising 
interest rates. So they ran the rates up as high as they could before 
the Credit Card Reform Act went into effect.
  When have Visa and MasterCard and the big banks ever stood up for 
consumers? Didn't we just see them fall all over themselves to gouge 
cardholders before this last credit card act went into effect? Where do 
the banks and card companies think their $50 billion in interchange 
fees comes from? It comes from consumers who subsidize the interchange 
system by paying higher retail prices. It is a massive hidden transfer 
of wealth from consumers to big banks.
  The amendment represents one of the big wins for small businesses and 
consumers in years. It will help small businesses grow and create jobs.
  Don't let the Wall Street lobbyists fool you. They will say anything 
to protect their big bank profits.
  I have received some letters from Illinois small businesses 
supporting my interchange reform. From James Phillip, Jr., owner of 
Phillip's Flower Shops in Westmont, IL:

       As an 87-year old family business, over one-third of our 
     customer purchases are paid by credit and debit cards; yet we 
     found that over the years our cost of clearing credit cards 
     and complying with their rules has increased faster than the 
     total amount cleared--to the point that it is now extremely 
     burdensome on the independent retailer. . . .I am writing to 
     voice my support for legislation that would make credit card 
     fees and rules for merchants more reasonable and competitive.

  Mr. President, whether it is Colorado or Illinois, if we are coming 
out of this recession, it will be because small businesses are on the 
move, expanding their employment, expanding their efforts, expanding 
their businesses. This is a drag on small business.
  From Robert Jones, president of the American Sale patio store in 
Tinley Park, IL:

       I am a small businessman in Illinois. I want to thank and 
     encourage you to push for credit card and debit card 
     interchange reform. Being a small business we have absolutely 
     no choice and no power to negotiate with the big credit card 
     companies over their fees. They basically tell us ``take it 
     or leave it.'' Since the vast majority of our customers now 
     pay with credit cards due to all the points and perks they 
     are getting for doing so, we have no alternative. They 
     essentially have a monopoly on taking payments from our 
     customers. I applaud your amendment to level this playing 

  From George LeDonne, owner of LeDonne Hardware in Berkeley, IL:

[[Page S4931]]

       As the owner of a hardware store in Berkeley, IL, I am 
     directly affected by these fees. Small businesses are closing 
     every day as it becomes more of a struggle to stay 
     profitable. Your help in recognizing and acting on this is 

  Russ Peters, owner of Mobile Print, Inc., a printing company in Mount 
Prospect, IL:

       I wish you to know I definitely support this reform. Credit 
     cards are ubiquitous in today's marketplace and these common 
     sense reforms will benefit a small business like mine.

  Jim Dames, he owns the Snackers Cafe in Western Springs:

       Please help small businesses, I can't fight the credit card 
     companies alone.

  And here is an old friend of mine, George Preckwinkle, president of 
Bishop Hardware and Supply. He has 10 locations in central Illinois. I 
have known George for 40 years. He wrote me a letter. And George is not 
of the same political faith that I am, so I accept this as being a 
genuine statement, not partial in any way. George writes:

       It is very important to business, especially smaller 
     business, to solve the problems retailers are having with 
     exorbitant fees and contractual restrictions imposed by Visa 
     and MasterCard. Senator Durbin's amendment would be a huge 

  I cannot tell you how great it is to hear from my friend George, who 
probably has never voted for me but just sent me the nicest note about 
this effort.
  I could go on with a long list, but I will not. But I will just tell 
you this: The information we are receiving is very clear. Whether the 
business is small or large, whether it is a private entity or a public 
entity, such as the city of Chicago, the city of Springfield, IL, 
whether we are talking about universities that are trying to keep their 
costs down for students, whether we are talking about charities that 
literally are trying to raise enough money to do the good things that 
need to be done in our country and in our world, the credit card 
companies are always there with their hand out and their demands for 
these fees. For years, there has been virtually no competition. These 
small businesses do not have a fighting chance against these credit 
card companies.
  Well, I can tell you, I have roused a sleeping giant, if it was ever 
asleep, in the giant credit card companies in what they are trying to 
do on Capitol Hill. They are smothering this place with lobbyists who 
are calling, and they realize they have almost no credibility 
whatsoever, so they are finding surrogates.
  The latest group, which really saddens me, is the credit unions. 
Historically, I have always voted with the credit unions. I have 
thought they virtually represent the right way to loan money, and they 
get special treatment because of that approach. Their idea, of course, 
is they collect the money from their members in their savings, and they 
loan it out so that their members can buy cars and other things that 
are necessary. They keep their costs low because they are nonprofit. We 
do not tax them, so we give them special treatment. But they also issue 
credit cards, so we exempted them from my amendment. Virtually every 
credit union in America, but for three, is exempt. We put a $10 billion 
threshold for any financial institution that would be affected by it. 
That eliminates almost 8,000 credit unions. Only three would be 
covered. They are huge. Yet the credit unions are roaming all over 
Capitol Hill saying the Durbin amendment is the end of the world.
  Here is their logic: If we end up reducing the interchange fee on 
debit cards in the biggest banks, then Visa and MasterCard have said to 
the smaller banks and credit unions: We are going to reduce your 
interchange fee too. And they say they have to do that because they 
just cannot separate all these different banks and credit cards. Well, 
that is just a bunch of baloney, if I can say that on the floor of the 
Senate--and I just did--because Visa has 122 different categories of 
interchange fees today; MasterCard, over 100. So the argument that they 
cannot separate the little banks from the big banks--get out of here.
  Secondly, they have the power today to lower interchange fees 
unilaterally. They can just call and say to these credit unions and 
community banks: We are going to lower the interchange fee that is 
being paid to you. They can do it, and these banks have no recourse 
whatsoever. If the banks and credit unions think that is an unfair 
proposition, then they are standing in the shoes of small business--in 
exactly the same position.
  These Visa and MasterCard credit card companies have reached the 
point where they have so much power and virtually no competition, that 
it was confirmed last week in a hearing of the Senate Judiciary 
Committee that they are currently being investigated by the Antitrust 
Division at the U.S. Department of Justice. No details were provided in 
terms of this investigation, but the person who spoke for the 
Department of Justice confirmed that fact. They have reached the point 
where they virtually have no competition. They can impose whatever they 
  Let me make one last point about that. If Visa and MasterCard make 
their money because more people own credit cards and more banks issue 
credit cards, does it make sense that they would create an environment 
where credit unions and smaller banks would not want to issue credit 
cards? Of course not. The profitability of Visa and MasterCard is when 
more people are using credit cards, more banks are issuing credit 
cards. So if they are going to make it more difficult for banks and 
credit unions to issue credit cards, they are really cutting off their 
nose to spite their face, and I think that is pretty obvious.
  But it is interesting to me how fearful credit unions are of Visa and 
MasterCard. They are literally shivering in their boots. They do not 
understand that they are the victims as much as the small businesses 
are of these powerful credit card companies. I wish for once they would 
step back and take a look and not just automatically sign up whenever 
the largest banks in America say jump. It just should not be that the 
commercial banks, the community banks, the credit unions are doing 
this, and it really is a vast departure from where they have been 
  So at this point, the bill is now in conference committee, and I know 
Senator Dodd and Chairman Barney Frank of the House Banking Committee 
are working hard to try to enact this bill. I know the strong 
bipartisan vote in the Senate is an indication of how we feel about it. 
I hope our friends in the House, though they do not have that provision 
in their bill, will consider making this part of the conference 
committee report.
  It will be a positive day for us in America when the message is 
finally delivered to the credit card companies that they can no longer 
have this dictatorial grip over small businesses and the issuing banks 
they have today.
  I hope we can see, in the next 2 weeks, a bill coming forward on Wall 
Street reform with many important provisions. This is one that is 
certainly important to me personally and I think will be a way for us 
to help small businesses increase jobs and help this economy come out 
of this recession. I hope we can do that soon.
  Mr. President, I see another colleague on the floor, and I yield the 
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. First of all, Mr. President, let me thank the 
distinguished assistant majority leader for his continuing work on this 
issue. It protects small businesses and consumers from gouging by the 
credit card companies and the monolithic monopoly power they bring to 
bear. I was pleased to vote for and support this amendment on the 
floor, and I wish the assistant majority leader much success in the 
conference committee to get that in the final bill.
  Mr. DURBIN. I thank the Senator.
  Mr. WHITEHOUSE. Mr. President, I rise today to speak about the 
Foreign Manufacturers Legal Accountability Act, which I have filed as 
amendment No. 4324 to the package currently under consideration by the 
Senate. This amendment would close a loophole in Federal law that 
allows foreign manufacturers to evade accountability when their 
products injure Americans here at home. It would do so by requiring 
foreign manufacturers to meet the same standards as domestic 
manufacturers. It is a simple reform. It is much needed. It will 
protect American industry against unfair competition or having to, in 
effect, subsidize dangerous foreign products. It will foster American 
jobs for that reason. It will keep

[[Page S4932]]

American consumers safe, and it will help Americans who are injured 
make sure they get an adequate recovery for their injuries from the 
foreign manufacturer who caused them the harm.
  What happens here in America when a foreign manufacturer is able to 
avoid responsibility for a defective product that causes an injury to 
an American? When they are able to avoid responsibility, one of two bad 
things happen. One or the other has to be. One is that the injured 
American gets no recovery. Their injury goes unredressed. They cannot 
find the accountable company, and they just have to suffer without 
compensation. The second alternative is that an American company, under 
the theory of joint and several liability, has to make good for the 
harm caused by the foreign company. It becomes a cost to the American 

  This actually came up in the hearing on the bill when an Alabama 
contractor explained how he had to make good on the claims of 
homeowners whose homes he built when, without knowing it, he had used 
defective Chinese wallboard in the homes and they emitted sulfur that 
was bad for the health of the home occupants, that corroded piping, and 
that caused an immense amount of work that had to be redone to have his 
customers be satisfied customers. It became his problem when the 
Chinese wallboard company was nowhere to be found when their defective 
product caused all this harm down in Alabama. These are things that 
should not happen, and they are bipartisan concerns.
  I want to say I am proud and grateful to have had the opportunity to 
work with Senator Sessions and Senator Durbin to achieve these goals. 
Both Senator Sessions and Senator Durbin were original cosponsors when 
I first introduced this bill on a stand-alone basis. Thirteen other 
bipartisan cosponsors have since signed on to that bill, and I am very 
grateful for all their support.
  Let me describe for a few minutes the specifics of this particular 
  There are two legal hurdles that currently face an American harmed by 
one of these foreign manufacturers. As my lawyer colleagues know, 
someone who gets injured and brings a lawsuit must bring the 
responsible party into the proper court. This requires the injured 
party, one, to serve process on the defendant, to file the papers in 
the lawsuit with the defendant, and two, to establish personal 
jurisdiction over the defendant, consistent with the due process clause 
of the Constitution. No service of process, no jurisdiction, no 
lawsuit, no recovery, no assistance for the injured American.
  The problem is that service of process on a foreign manufacturer is 
often extremely costly and extremely slow because it often must be done 
abroad rather than here in the United States. For instance, when an 
American seeks to serve a defendant in a country that is a signatory to 
what is called the Hague Convention on the Service Abroad of Judicial 
and Extra Judicial Documents in Civil and Commercial Matters, the 
complaint must be translated into the foreign language, transmitted to 
the central authority in the foreign country, and then delivered 
according to the rules of service in the home country of the defendant, 
which may not be hospitable to foreign litigants. Even more complex 
procedural hurdles face an American seeking to serve a defendant in a 
country that has not signed the Hague Convention.
  But let's say you get through all that expense and all that hassle 
and all that delay. Even when an American does serve process 
successfully on a foreign manufacturer, personal jurisdiction then can 
prove an insurmountable hurdle. This is because Supreme Court decisions 
interpreting the due process clause make it hard to exercise 
jurisdiction over foreign companies, even those whose products have 
injured Americans.
  So something clearly needs to be done to bring the way we treat 
foreign manufacturers into line with the liability and responsibility 
of domestic manufacturers. They should not have this advantage over our 
domestic industry.
  This amendment provides a simple solution to both of these problems. 
It requires a foreign manufacturer that wants to import products into 
the United States for our consumers to use to register an agent in the 
United States who will accept service of process for cases in the 
United States. By designating such an agent, the manufacturer would 
consent to the personal jurisdiction of the courts in the State where 
the agent is located, and no further complicated service of process 
would be required. This is not dissimilar, for example, to the way a 
corporation from outside my home State of Rhode Island must register to 
transact business in our State--a requirement that exists in many 
States around the country. I suspect it exists in the distinguished 
Presiding Officer's home State of Colorado.
  Finally, let me make clear to whom this applies and how. The big 
foreign manufacturers that ship billions of dollars of products into 
the United States and whose names we would all instantly recognize 
already can be held accountable somewhere in the United States by 
virtue of their having American operations or by virtue of the size of 
their imports. They can usually be found. And for companies such as 
that, complying with the new law will be as simple as designating 
someone in their U.S. headquarters to be that agent for service 
process. It will be a 5-minute task to comply with this law.

  For foreign companies that have set up manufacturing operations 
somewhere in the United States, they will get the same treatment as 
domestic companies under this bill. Their domestic operation will be a 
location where they can be served. It is the foreign manufacturers that 
take advantage of our marketplace, but when their defective product 
injures someone and can't be found, that are the real targets of this 
amendment, they don't want to be held responsible anywhere.
  Who are they? Well, to give a few examples, they are the ones who 
make the drywall I talked about, full of sulfur, that corrodes wiring 
and makes the residents sick. They are the companies that make cheap 
toys with lead paint on them that is poisonous to children or metal 
plumbing fittings that rupture under routine use because they are so 
shoddy or those that contaminate medical supplies that are sold into 
the United States with unthinkable chemicals. These companies may look 
perfectly legitimate when they sell their products, but when you try to 
find them once you have been injured by them, it is like grasping 
smoke. They disappear, and they avoid all accountability when their 
products hurt our fellow Americans.
  It is these companies that this amendment will fully bring within the 
scope of the American legal system. It is important that we do this, 
because they should play by the same rules our American companies do 
with respect to service of process and availability for redress.
  The Foreign Manufacturers Legal Accountability Act applies to major 
product categories including consumer goods, drugs, cosmetics, and 
chemicals through the Federal agencies that already regulate those 
product categories and through the components of the Department of 
Homeland Security that oversee our Nation's imports. The amendment 
empowers those agencies to use their expertise in these fields to set 
appropriate thresholds; for instance, to exempt small foreign 
manufacturers from having to register an agent, and allows a working 
period to ensure that no disruptions in imports occur during the 
implementation period of this amendment.
  I urge my colleagues to support this amendment. I think it is 
important. By leveling the economic playing field, it will allow 
American manufacturers to compete fairly with foreign manufacturers, 
thereby protecting American jobs. By holding foreign manufacturers to 
the same standards as American manufacturers, it will protect our 
consumers and American businesses without raising any trade issues. It 
will eliminate this terrible situation of a foreign product causing an 
injury to an American for which that American can get no relief or a 
foreign company causing an injury to an American but because they can't 
be found, having an American company that worked on the installation of 
the product, that sold the product, that is for some reason jointly and 
severally liable for that injury having to carry the cost that belongs 
on the foreign manufacturer and would be their cost if only they could 
be found and served and brought to account in an American court. Both 

[[Page S4933]]

those things are rankly unfair, and this is the best solution to put an 
end to those two injustices.
  I think it is an important and a much needed fix to a quirk in our 
laws. We should pass it as soon as possible. I hope very much it can 
become a part of the legislation to which it is now a pending 
  I thank you very much.
  I yield the floor, and I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. 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. REID. Mr. President, I ask unanimous consent that on Wednesday, 
June 16, following morning business, the Senate resume consideration of 
the House message with respect to H.R. 4213; that there then be 5 
minutes of debate equally divided and controlled between Senators 
Baucus and Grassley or their designees; that upon the use or yielding 
back of that time, Senator McConnell or his designee be recognized to 
make a Budget Act point of order against the Baucus motion; that once 
the point of order is raised, Senator Baucus then be recognized to 
waive the applicable budget point of order; that if the waiver fails, 
then the Baucus motion to concur with an amendment be withdrawn, and 
Senator Baucus then be recognized to move to concur in the House 
amendment to the Senate amendment to the bill with an amendment; 
provided notwithstanding the withdrawal of the previous motion, the 
previously agreed-upon amendments Nos. 4302, as modified, 4326, and 
4311, as modified, be incorporated into the new Baucus motion to 
concur; that the Reid amendment No. 4344 be reoffered with the same 
text; that on Thursday, June 17, beginning at 10 a.m., the Senate 
debate the Thune substitute amendment No. 4333, to be reoffered with 
the same text; that the amendment be debated for 2 hours, with the time 
equally divided and controlled between Senators Baucus and Thune or 
their designees; that upon the use or yielding back of time, Senator 
Baucus be recognized to raise a budget point of order against the Thune 
amendment; that Senator Thune, or his designee, then be recognized to 
move the applicable budget point of order; that if the waiver fails, 
then the Thune substitute amendment be withdrawn; further, that if the 
waivers for either Baucus our Thune amendments succeed, the amendments 
remain pending; finally, that the cloture motion be withdrawn.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. CONRAD. Mr. President, pursuant to section 302(a) of S. Con. Res. 
13, the 2010 budget resolution, I made adjustments to the 2010 budget 
resolution earlier today for Senate amendment No. 4318, an amendment 
offered by Senator Sanders to S.A. 4301, an amendment in the nature of 
a substitute to H.R. 4213.
  The Senate did not adopt Senate amendment No. 4318. Consequently, I 
am further revising the 2010 budget resolution to reverse the 
adjustments previously made pursuant to section 302(a) to the 
aggregates and to the allocation provided to the Senate Finance 
  I ask unanimous consent that the following revisions to S. Con. Res. 
13 be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                        PRESERVE THE ENVIRONMENT

                        [In billions of dollars]

        Section 101
(1)(A) Federal Revenues:
    FY 2009...................................................1,532.579
    FY 2010...................................................1,612.278
    FY 2011...................................................1,939.131
    FY 2012...................................................2,142.415
    FY 2013...................................................2,325.527
    FY 2014...................................................2,575.718
(1)(B) Change in Federal Revenues:
    FY 2009.......................................................0.008
    FY 2010.....................................................-53.708
    FY 2011....................................................-149.500
    FY 2012....................................................-217.978
    FY 2013....................................................-189.810
    FY 2014.....................................................-57.940
(2) New Budget Authority:
    FY 2009...................................................3,675.736
    FY 2010...................................................2,907.837
    FY 2011...................................................2,858.866
    FY 2012...................................................2,831.668
    FY 2013...................................................2,991.128
    FY 2014...................................................3,204.977
(3) Budget Outlays:
    FY 2009...................................................3,358.952
    FY 2010...................................................3,015.541
    FY 2011...................................................2,976.251
    FY 2012...................................................2,878.305
    FY 2013...................................................2,992.352

                        PRESERVE THE ENVIRONMENT

                        [In millions of dollars]

Current Allocation to Senate Finance Committee:
    FY 2009 Budget Authority..................................1,178,757
    FY 2009 Outlays...........................................1,166,970
    FY 2010 Budget Authority..................................1,247,336
    FY 2010 Outlays...........................................1,241,472
    FY 2010-2014 Budget Authority.............................6,873,787
    FY 2010-2014 Outlays......................................6,845,735
    FY 2009 Budget Authority..........................................0
    FY 2009 Outlays...................................................0
    FY 2010 Budget Authority..........................................0
    FY 2010 Outlays...................................................0
    FY 2010-2014 Budget Authority................................-8,000
    FY 2010-2014 Outlays.........................................-4,830
Revised Allocation to Senate Finance Committee:
    FY 2009 Budget Authority..................................1,178,757
    FY 2009 Outlays...........................................1,166,970
    FY 2010 Budget Authority..................................1,247,336
    FY 2010 Outlays...........................................1,241,472
    FY 2010-2014 Budget Authority.............................6,865,787
6,840,905-2014 Outlays...............................................