September 30, 2008 CONGRESSIONAL RECORD — SENATE S10119 

to say a few words. Here I got up and 

said it all over again. What I didn’t do, 

I say to the Senator from Tennessee, I 

didn’t use the metaphor about a superhighway. 

Mr. KYL. I will use that. 

Mr. DOMENICI. I dreamt it up with 

my staff, and it is pretty darn good. 

That is one where what you are going 

to say, if the American people are telling their Congressmen that this is a 

bailout, if they listen to you, they will 

find out there is no bailout. They will 

find out there are some broken down 

cars in the middle of the road, and they 

have to be moved. 

In any event, let me say one other 

thing about your mentioning my activities and just say to you, a number 

of things I have done lately I could not 

have done without your help and your 

leadership. I want to tell you one of 

them because it is a good one—I will be 

gone, and you need to stand up for it; 

if you have to filibuster, you have to— 

that is opening all of the offshore of 

America for drilling for natural gas 

and crude oil. 

If the new President or the majority 

tries to reinstate those moratoria, I am 

saying thanks for helping me who 

started that thing. I got it started with 

a little bill because my staff and I said: 

What is the biggest thing we need. And 

we needed that so we put it in. Then, 

thanks to this leader, we made the bill 

grow. Then it grew, and then the people bought it. That is how it happened. 

The people said: Drill, drill, drill. 

Don’t let it go away when I am gone. 

I am just asking you. You are a good 

filibusterer, so do it. The first time 

they want to close up some of that, and 

the first one will be California, you tell 

them to get an estimate of how many 

billions California will get if they start 

that. Then you ask that Governor: How 

would you like to have a gift for your 

people over the next 10 years, 15 years 

of, say, for California, maybe $12 billion. They may fall over out of a chair 

if you told them that, and that might 

be the case. I don’t know the number. 

I am just telling you it is big. 

With that, I say thanks. It is nice 

being here again with you. 

f 

RESERVATION OF LEADER TIME 

The ACTING PRESIDENT pro tempore. Under the previous order, the 

leadership time is reserved. 

f 

FEDERAL RAILROAD SAFETY 

IMPROVEMENT ACT OF 2007 

The ACTING PRESIDENT pro tempore. Under the previous order, the 

Senate will resume consideration of 

the House message to accompany H.R. 

2095, which the clerk will report. 

The assistant legislative clerk read 

as follows: 

Message from the House of Representatives 

to accompany H.R. 2095, entitled an Act to 

amend title 49, United States Code, to prevent railroad fatalities, injuries, and hazardous materials releases, to authorize the 

Federal Railroad Safety Administration, and 

for other purposes. 

Pending: 

Reid amendment No. 5677 (to the motion to 

concur in the amendment of the House of 

Representatives to the amendment of the 

Senate to the bill), to establish the enactment date. 

Reid amendment No. 5678 (to amendment 

No. 5677), of a perfecting nature. 

The ACTING PRESIDENT pro tempore. The Senator from Arizona. 

NOT A BAILOUT

Mr. KYL. Mr. President, I would like 

to continue the conversation Senator 

DOMENICI and I were engaged in. I assure him that Senator ALEXANDER and 

I came to the floor this morning to try 

to do exactly what he suggested; that 

is, to tell the stories of real Americans 

who are confronting the challenges of 

the market that need to be fixed. Senator ALEXANDER and I will do that for 

a few minutes to demonstrate that this 

is not a problem that requires a bailout 

of Wall Street. It is unfortunate that 

the media has spoken in those terms. 

We understand the media likes to use 

shorthand to describe problems, but it 

can do great damage. It is wrong to 

call this a bailout of Wall Street. 

About 3 weeks ago, the Federal Reserve Board and the Department of 

Treasury did bail out some businesses 

and Fannie Mae and Freddie Mac. 

Those were bailouts. They acquired assets, took them over, and they restricted the compensation of the people 

running the companies and did all the 

rest. 

This is something different. It addresses the problem that Senator 

DOMENICI has described akin to a big 

automobile accident in the middle of 

the freeway. 

One of those great freeways in the 

State of the Acting President pro tempore can flow very nicely until there is 

an accident. Then when there is an accident, particularly involving four or 

five cars, it stops traffic for a long 

time, and unless somebody comes and 

unclogs it, it is stopped dead. That is 

the analogy he has used to describe the 

problem in our economy today. 

I am going to indulge my colleagues 

for just a moment and go back in time. 

When my grandmother, who was an immigrant from Holland, was running 

their household with my grandfather, 

they never bought anything on credit. 

Everything was cash. They paid for 

their modest house when they had the 

cash to buy it and lived in it the entire 

time in a small community in Nebraska until they passed away. When 

they would buy a car, they would not 

buy it until they had the cash. That 

was the way a lot of people who lived 

through the Great Depression had to 

work because there was no credit during the Great Depression. 

It is not a bad lesson for all of us to 

try to have a little more cash on hand 

when we enter into big financial transactions because America has gotten 

into a bit of a bad habit. It is the habit 

of leveraging everything, buying everything on credit and, in effect, creating 

a situation where you have so many 

loans, so many credit card debts. You 

bought your home on credit absolutely 

to the hilt. You have mortgaged it. 

Your car is on credit. And, by the way, 

the day after you drive your new car 

off the lot, it is worth less than the car 

loan you have to repay. That is now 

the situation with a lot of homes because home values have declined to the 

point that some of the mortgages exceed the real value of the homes. 

So we found that in our society generally we have far too much debt. It is 

true, as Senator DOMENICI said, our 

country runs on debt. So what happens 

if all of a sudden the credit that is required to fuel this system dries up—nobody can get a loan anymore, there is 

not any credit available. Well, it is like 

the freeway accident that he describes. 

You have five or six cars in the middle 

of the freeway, and every car behind 

them is backed up and is going nowhere. 

Now, in one car you have a doctor 

who has to get to the hospital or a 

nurse or a teacher who needs to get to 

the school to teach kids or a mom who 

needs to pick up her kids from school 

and they are waiting and she cannot 

get to them. You can just imagine all 

the other reasons people are in their 

car trying to get someplace. It is serious business. They need to get going, 

and they cannot. If they cannot, people 

are hurt. 

Likewise, if you view those cars as 

the loans in our system, they were a 

nice shiny car until they got into the 

accident, and now they are not worth 

as much. They have been wrecked. 

Somebody has to come and haul those 

cars away and get rid of them. 

Well, what if there was not anybody 

to haul them away? What if nobody 

could be paid to come to haul them 

away? Then nobody is going to come 

and clear the freeway. That is the analogy to our financial system today. People say: Well, we would love to come 

and haul them away, but we don’t 

know—if we bought those cars, if we 

took them—that we could resell them 

for anything. They look kind of damaged to us. Nobody wants to buy this 

used car, so it is somebody else’s problem. 

None of us like Government involvement in our free market. We want to 

keep it to as low a level as possible. 

But in times of crisis, sometimes it is 

up to the Government to step in and 

lead the way so the private market can 

get unclogged and begin to work again. 

Just as with the freeway, we do call 

the public ambulance and the public 

highway patrol, and so on. This is a 

case where the public, represented by 

the Members of Congress and by the 

administration, need to come up with 

something to get that freeway cleared. 

Secretary Paulson and President 

Bush and the administration, as well as 

the Chairman of the Federal Reserve 

Board, Ben Bernanke, came to us a 

week ago and said: We have a huge 


wwoods2 on PRODPC68 with SENATE
S10120 CONGRESSIONAL RECORD — SENATE September 30, 2008 

wreck in the freeway. It is not going to 

be cleared up by the private sector. The 

Government has to get involved and 

clear it or credit in this country will 

absolutely come to a halt and, as we 

said, since the country runs to a large 

extent on credit, everybody will gradually come to a grinding halt in their 

personal lives and in their businesses 

in terms of being able to function fiscally. 

So the plan was to clear the freeway 

by having the Government come in and 

buy those cars that are clogging the 

freeway, buy the assets that do not 

have full value. We do not know what 

they are worth, so nobody in the private sector wants to buy them. But the 

Government could buy them with up to 

$700 billion in cash, in money to buy 

them, and we will try to buy them at a 

price the owner of that car or the 

owner of this mortgaged-backed security—maybe it is not as much as he 

would have liked to have gotten for it, 

but he is willing to take it in order to 

get some cash out of it and have cash 

to continue to operate—but at a value 

that is not so high that when the Government decides to then fix up that car 

that was in the accident or take this 

mortgage-backed security—these loans 

we are talking about—to take them 

back to the market and sell them, that 

the Government will not have paid 

such a high price that it is not getting 

the money back for the taxpayers. 

So that is what Secretary Paulson 

proposed. We will buy those assets at a 

reduced price, and then we will sell 

them, hopefully getting our money 

back, so the American taxpayer will 

have all the return on that $700 billion. 

They talk about a $700 billion bailout 

as if that money is all gone. Well, the 

idea, if it works, is to get all that 

money back. 

One of the good things about the legislation that was drafted is that it all 

goes to reduce the Federal debt. That 

is great for the taxpayers. 

So the legislation was drafted. Everybody realizes now that the House of 

Representatives failed to pass it yesterday. One of the things Senator ALEXANDER and Senator MCCONNELL and I 

and Senator GREGG from New Hampshire, who was so involved in the drafting of this plan, spoke to yesterday was 

the fact that this cannot fail. We have 

to put Humpty Dumpty back together 

again and get it passed in the House 

and the Senate. There seems to be a 

great deal of goodwill on both sides of 

the aisle and in both the House and the 

Senate to get this done and get it done 

before the end of the week. 

People are talking about the specific 

ways in which that might be done. 

They do not do any damage to the 

basic idea the Congress and Secretary 

Paulson worked on and, in fact, I think 

improve it a little bit. 

But now, what Senator ALEXANDER

and I want to do is talk about a few examples of why this is not about some 

bank on Wall Street. This is about 

folks back home. Let me give three examples of correspondence I have gotten 

in the last few days from people who 

wrote about their real-life problems. 

And we could repeat this story over 

and over with phone calls we have gotten. I have talked to so many people in 

Arizona who said: You have to do 

something about this because it is affecting me, it is affecting my family, 

and we are not going to be able to operate our business, or we are not going to 

be able to send our child to school or 

whatever the situation might have 

been. But let me recount three specific 

situations. 

I am going to quote from the correspondence I received. One is from a 

small businessperson in Arizona, and I 

am not going to put the names in, but 

you will get the gist. He said, Senator: 

I wanted to write to you to provide a real 

life example of the impact this issue has 

caused to my business and personal life. We 

need to be assured you are remembering and 

representing the foundation of America, the 

small business owner. 

We opened our first store in March 2006 and 

now have 8 stores operating, four in AZ two 

in TX and two in FL. Two of these stores are 

corporate stores and 6 are franchise locations. Collectively the operations generate 

over $3.5M in annual sales and employs 40 

people. 

It is a typical small business in 

America. He goes on: 

I hear politicians talking about what could 

happen if the bailout is not finalized, I want 

to tell you it has already had significant, 

negative impact to our business and only 

getting worst. 

Let me provide you with a real life example of the issue I am discussing. 

As with many small businesses we used equity in our home to provide lines of business 

credit. We conservatively used the credit to 

address cash flow issues or make investments in goods or capital to expand the business. 

We were notified about two weeks ago that 

our credit line has been closed due to the 

drop in house prices. This has created some 

manageable challenges but the after effects 

were more severe. 

With the credit line capped to our current 

balance, our debt to available credit percentages went from 30% to 100%. This in turn reduced our credit score from 750 to 680. This 

has put us under the 720 requirements for 

prime loans and has disqualified us from certain loans options as a business and on a personal level. 

We have not missed a payment, our business has not changed, but due to this action 

we have had a significant drop in our credit 

score. In fact the business is very healthily 

as we have realized a 40% increase over last 

year. 

We want to expand, hire more employees 

and create jobs. Without the flow of capital 

the people that can actually help the economy recover are being left out while the 

banks use our money to shore up their business. We are told just wait in line, when we 

are solid we will see if we can help you. 

Just to interject, that is the message 

a lot of banks are sending to people, 

and I do not blame them because they 

need to hold their cash because of the 

requirements the law requires. So he 

concludes: 

As individual businesses we are nothing in 

the grand scheme— 

By the way, I would choose to disagree. These are the backbone of what 

makes our country work. But he goes 

on: 

but, as a group, we are the most rapid and 

viable solution to job creation and economic 

recovery. We want to expand, we want to 

create jobs and do our part. Help us help you. 

Well, that is an eloquent statement 

from an Arizona businessman who appreciates how this crisis can affect everybody else and tells us how it is affecting him. 

Let me cite one other businessperson 

in Arizona. I am quoting again: 

My wife and I live in Arizona, and I want 

to let you know I support the emergency 

bailout now in review. I would like to bring 

one thing to your attention though. Something I have not heard mentioned at all in 

the media, and I believe is being played out 

across the Nation. 

My wife owns a small business in Tucson. 

Her business is actually up 5 percent from 

last year. She was unable to get a loan for 

opening the store 3 years ago and thus we 

put a Home Equity Line of Credit on our 

house, and she opened several credit cards 

who claimed they specialized in small businesses. 

She has not been late with payments, has 

not been over limit on the cards, nothing. A 

decent model of paying your bills on time in 

line with the card’s terms. Yet both the 

cards have raised her interest rate to 36 percent merely because she is a small business. 

This in effect doubles her minimum payment, and pushes her business from being 

able to maintain economic health, to 

stressed. With the additional stress from the 

unjustly raised interest rates, she has had to 

let employees go from the store, adding to 

the unemployment problem in Arizona 

today. 

Now, the third and last example I 

want to cite is the State of Arizona 

itself and its municipal and other political subdivisions because governments 

are hurt by this just as the private sector. The Arizona State treasurer invests the State’s and most of the individual localities of the State’s day-today operating funds in commercial 

paper. A lot of these are called overnight funds. They get cash in during 

the day, and they have to have a place 

to put it overnight before they then 

use it the next day to disburse it or do 

whatever they need. They can make a 

fraction of a percent by putting it in 

Government commercial paper. Sometimes they put it with a brokerage 

house or an investment bank, and in 

Arizona’s case some of this fund was 

put with Lehman Brothers, the entity 

that collapsed a couple weeks ago. 

The State, as a result, is going to 

need to sell as much as $250 million in 

funds at a loss. This directly affects 

taxpayers. Here is one of the excerpts 

from what the State treasurer said: 

However, with the current headline risk 

and market uncertainty, they [local governments] will likely flock to insured accounts 

if they are available. Without the same insurance, state backed investment pools may 

face a multi-billion dollar run on the bank. 

Both State and local governments will realize losses. 

A run on the bank would force assets and 

holdings to be sold at below par in order to 

meet redemptions as local governments 

transfer their investments from state-operated pools . . . 


wwoods2 on PRODPC68 with SENATE
September 30, 2008 CONGRESSIONAL RECORD — SENATE S10121 

The result is taxpayers at all levels would 

then be liable for losses on investments that 

are subject to force selling due to redemptions by investors transferring their funds, 

and losses on yields gained on their local investment dollars since private sector funds 

generally charge more for managing those 

investments than state-operated pools on top 

of the losses incurred at the federal level in 

the guarantee program. 

But in regular English, it means they 

are going to have to sell at a loss. The 

State will take a loss, these local governments will take a loss, and that will 

replicate itself throughout both the 

public sector and the private sector the 

more this goes on. 

These are just three examples of why 

it is important to do something now. It 

is up to leaders, people such as Senator 

DOMENICI, who was speaking earlier, to 

explain that it is not a bailout; that 

the legislation that has been put together has numerous taxpayer protections in it; that we would hope to be 

able to get the taxpayer investment 

back; that in those situations where 

there is direct involvement by the Federal Government in the business, they 

will totally control executive compensation and everything else relating 

to the executives; that even when they 

buy assets, if there are significant assets, those corporate executives’ salaries will be subject to taxation rules, 

which will, in effect, remove both their 

ability and their corporation’s ability 

to deduct these salaries from taxes. 

The bottom line is, all of the things 

our constituents have been asking us 

to do, through painstaking, bipartisan 

negotiations, have been put into this 

legislation. What I hope is that whatever modest change, if any, is needed 

to cause the support for this legislation 

to be manifested in a positive vote in 

the House and in the Senate will occur 

quickly; that we can reassure both the 

markets, which, as everyone knows, 

lost over $1 trillion yesterday, and our 

constituents so that before the end of 

this week we can pass the legislation 

through both Houses of Congress and 

get it to the President. 

I don’t blame anyone in the House of 

Representatives who voted the other 

way. The time for blame is gone. We 

need to fix the problem, not the blame, 

as the Senator from Tennessee has 

said. For those who believe there are 

one or two changes that would cause 

them to support the legislation, I welcome that, if that is what it takes to 

get this done. 

When we talk about over $1 trillion 

lost in the market yesterday, that is 

really not the right way to put it. Our 

constituents—the person who is retired 

and has money in the stock market, 

you and me, all of us; over 50 percent of 

Americans own stock—all of us lost a 

lot of money yesterday. It is on paper, 

but, after all, that is where the value 

is. Thousands and thousands of dollars. 

Everyone in the gallery who has an investment lost money. All of us here. 

All of our staff who are participants in 

the Federal retirement program lost 

money. This is real money for people in 

America. We can stop it if we provide 

the assurance that we are going to address the problem in a sensible way to 

restore the confidence in the market 

and the confidence of the American 

people. If we do not do this, then the 

warnings of these people from Arizona 

whom I quoted will surely come to 

pass. Small businesses will fail, families will be hurt, and America will be 

on a downturn that could be very difficult to stop at that point. 

So I wish to thank my colleagues 

who have worked on this problem in a 

bipartisan way. They have spent a lot 

of time and effort. The time to point 

blame fingers is over. We have proven 

we can get together and work together 

as House and Senate Democrats and 

Republicans and work with an administration that is desperately trying to 

work on the problem as well. We can 

get this done before the end of the 

week. I urge my colleagues to continue 

their efforts so that we can do our job 

in representing the people of America 

who, after all, are counting on us to do 

what they cannot do but what we are 

in a position to do. 

I will close with a comment I am 

fond of quoting from Theodore Roosevelt, who, as everyone knows, liked 

to get in and solve problems. I can’t 

think of a more apropos time to cite 

this quotation where he said that he 

appreciated the opportunity to work on 

work worth doing. Well, if this isn’t 

work worth doing, I don’t know what 

is. It is worth it for America, it is 

worth it for our constituents, and it is 

worth it for our children and grandchildren for the future. I appreciate the 

opportunity to be here working on that 

work, and I compliment all of my colleagues who have done the same. 

The ACTING PRESIDENT pro tempore. The Senator from Tennessee is 

recognized. 

Mr. ALEXANDER. Mr. President, I 

ask unanimous consent to speak as in 

morning business. 

The ACTING PRESIDENT pro tempore. Without objection, it is so ordered. 

Mr. ALEXANDER. I wish to congratulate the Senator from Arizona on 

his usual clear exposition on what is 

happening here and to thank the majority leader, Senator REID, and Senator MCCONNELL, the Republican leader, and the assistant Republican leader, 

Senator KYL, all for making it clear 

that the Senate has not finished its 

work on the economic recovery plan 

and we plan to continue our work and 

discuss it today and tomorrow and to 

complete our work on that by the end 

of the week. That is our intention. We 

believe that will happen. We are united 

in that purpose in a bipartisan way. We 

have been for the last week. We are disappointed by what happened yesterday 

in the House of Representatives. However, photographs of legislation are 

best taken sometimes at the beginning 

and at the end but not in the middle, 

and we are in the middle right now. 

Senator KYL and I have been giving 

Senator DOMENICI credit for an idea he 

had about how to explain what we are 

about in trying to deal with the financial crisis. He uses the analogy of a 

wreck on a highway. 

The Presiding Officer is a good 

Scotch Irishman from Virginia. He 

may have heard Roy Acuff’s song 

‘‘Wreck on the Highway,’’ which was a 

big song back in the 1940s and the 1950s 

and the 1960s. That is what we have 

here. We have had someone who should 

have known better empty a big pile of 

cars—or bad mortgage loans, based on 

the securities on these loans—right in 

the middle of the interstate, and it 

slowed down all the economic traffic. 

One lane might be your auto loan, the 

other lane might be your mortgage 

loan, another lane might be a student 

loan, in another one might be the 

trucks carrying your paycheck, or another lane might be the money for your 

farm credit loan, and you can’t get 

anywhere because there is this pile of 

junk in the middle of the road. It happens to be an eight-lane road, so the 

cars and the vehicles—the economic 

traffic—are backed up for 20 or 30 or 40 

miles. 

I was thinking as we were talking 

about this of another aspect of American life that all of us are familiar 

with—not just the backups on the 

interstate highways caused by wrecks, 

but what do we do when there is a 

wreck and we are nearby? We have to 

go look at the wreck. So everybody 

stops what they are doing and starts 

arguing about the wreck, and that 

slows everything down even more. 

That seems to be what we are doing 

in the Congress. It is the equivalent of 

somebody saying, well, they needed a 

stop light; or, he should have made a 

left turn; or, she was driving too fast. 

The crowd might get bigger around the 

wreck and say, well, it is a stolen car; 

or, he didn’t have insurance; or, one 

was driving too close to the other. 

Someone might have noticed that the 

wreck happened because this person 

was on the cell phone or this one 

wasn’t wearing a seatbelt. Someone 

might say, we need to get some legislators in here and build a wider road or 

another exit ramp. Someone else might 

say, let’s have a piece of legislation 

that would lower the speed limit or increase the speed limit. A lawyer might 

show up and say, well, let’s sue the 

manufacturer and start interviewing 

witnesses. So we would all be standing 

around just looking at the wreck. That 

is kind of what we are doing today in 

the Congress. We are just standing 

around looking at the wreck when 

somebody ought to be moving the 

wreck off the highway so the economic 

traffic can proceed. There is going to 

be plenty of time to talk about who 

caused the wreck and where the blame 

lies. There will be plenty of time to do 

that. But today we should fix the problem. Next week or the next week we 

should fix the blame. 

There is a lot of blame we need to 

talk about, apparently. The New York 

Times reported yesterday—well, we 


wwoods2 on PRODPC68 with SENATE
S10122 CONGRESSIONAL RECORD — SENATE September 30, 2008 

know this, to begin with: The Federal 

Government’s compassion got way out 

ahead of its common sense, going all 

the way back to the 1970s, by encouraging some people to buy homes who 

couldn’t afford to pay for the homes. 

Then clever financiers created exotic 

instruments, and these were based on 

some of the loans that turned out not 

to be so good, and some of these exotic 

instruments turned out to be worth 

less than the loans. Then, people who 

should have known better, who should 

have known what was going on in their 

own financial institutions or in their 

own companies, didn’t understand what 

was going on, or they misled people, or 

they turned a blind eye to it. We need 

to find out about that. 

As the New York Times described it 

2 days ago in an article, what apparently has happened is that mortgage 

foreclosures set off questions about the 

quality of debts across the entire credit 

spectrum. These questions set off a spiral of claims against insufficient insurance, as in the case of AIG, and of insufficient capital in the case of banks. 

So we end up with this massive wreck 

in the middle of the highway, and all of 

the vehicles carrying our auto loans, 

our student loans, and our paychecks 

are stopped while we in Congress stand 

around looking at the wreck instead of 

trying to get somebody to get it off the 

road. 

So we will have to turn to the Secretary of the Treasury. We could 

maybe find some other people to get it 

off the road as well. Senator DOMENICI, 

who first suggested that we think of 

this metaphor of the wreck on the 

highway, and Senator KYL, who talked 

about it a little bit, pointed out that 

the citizens aren’t going to go get the 

wreck off the highway. They are either 

going to go call the sheriff or the 

wrecker or somebody else to come get 

it. In Tennessee, we call the guy with 

the salvage company who has a wrecker, and he comes to get it. In our case, 

I guess what we have to do is call the 

Secretary of the Treasury. We have to 

give him enough money, enough authority to be able to buy all the junk 

in the middle of the highway, get it off 

the road, and hope he is able to sell it 

for about what he paid for it—or at 

least to minimize our losses. 

That is why it is wrong to call it a 

$700 billion bailout, because he may 

need up to $700 billion to buy all of this 

stuff in the middle of the highway. But 

he is going to buy it, and then he is 

going to sell it. We put in some taxpayer protections to try to make sure 

that we have clear oversight, and that 

people don’t get golden parachutes as a 

result of this, and that the Congress is 

involved, and that there is a board of 

directors to whom the Secretary must 

report—all of these are taxpayer protections. We want to make sure this 

Secretary, whose job it is to get everything out of the middle of the road, 

keeps us informed about what is happening. We don’t want to be guilty of 

having turned our backs and not paying attention to dealing with taxpayers’ money on this. 

I think the conclusion we have to 

come to by the end of the week is that 

we are not just going to sit around and 

look at the wreck. We are going to get 

it off the road. We are going to get it 

off the highway. We have to find the 

right way to do it. I believe most of the 

American people will understand that, 

agree with that, and be glad we did it. 

Most of my calls are like most of the 

other telephone calls that are coming 

in. People don’t like this. They are 

angry about it. If you have a wreck, 

you are mad about that as well. Somebody might have run into you, or you 

took your eye off the road. Of course 

we are mad about it. I am angry about 

it. But I am not just going to sit there 

and look at the wreck; I am going to 

try to solve the problem and then fix 

the blame next week. 

The good news is that is the attitude 

of Senator REID, the Democratic majority leader. That is the attitude of 

Senator MCCONNELL, the Republican 

leader. As I hear the House speaking, 

the Speaker of the House, a Democrat, 

the Republican leader, they say we are 

going to go back to work and see what 

we can do to fix this problem. We understand it is a big problem. 

Well, the stock market yesterday 

went way down, 777 points. That used 

to be something that people could say: 

Oh, that is a few rich tycoons on Wall 

Street, but we know better than that 

today. It was already down, and more 

than 50 percent of Americans own 

stocks. So as the Senator from Arizona 

said, that affects our pension funds, 

and that affects our IRAs and retirement accounts all across America. And 

that affects our individual accounts— 

so that is real money. That is $1.2 trillion yesterday. 

We are talking about an economic recovery plan that would have the authority to spend up to $700 billion, but 

our hope would be that it wouldn’t 

spend very much in the end because we 

are going to buy and sell assets. 

Now, the stock market—and this is 

good news—is back up some today, a 

couple hundred points up. It was down 

yesterday, it went 777 points down, and 

is back up a little bit today. The focus 

is on the stock market, but where the 

focus ought to be is not on the stock 

market, but on the credit market. 

Some things we take for granted: that 

the Sun will come up, that our breathing will be automatic, and that we will 

be able to get an auto loan or a student 

loan or a mortgage loan or farm credit 

loan, or that when we take our paycheck in and give it to the bank, that 

represents money. But what if that 

didn’t happen? That is what we are 

talking about. 

In the case of offshore drilling, we 

had to wait until the price of gasoline 

got up to $4 before we could get rid of 

the ban on offshore drilling so we could 

produce more American energy. That 

was legitimate debate here in the Senate. I hope we don’t have to wait for 

dozens and dozens of banks to fail, for 

payroll checks to bounce, and for auto 

loans to dry up before the Congress decides we need to act. 

What we are trying to do is prevent a 

more serious problem by taking a 

measured response, which will cost the 

taxpayers the least amount of money 

and clear up the economic traffic so we 

can start moving again, and so housing 

can gradually begin to come back. 

When housing gradually begins to come 

back, the economy will begin to come 

back. 

This is still a great big economy. 

Even in this slowdown, we will produce 

about a third of all the money in the 

world this year, just for the 5 percent 

of us who live here. So we are perfectly 

capable, with our great universities, 

with our energy laboratories, with our 

great corporations, with our terrific 

workforce, and with our system of education, of coming back—and we will 

come back—and we will lead the world 

in a great many areas. But we don’t 

want to cause unnecessary trouble for 

ourselves by leaving a big wreck sitting in the middle of the economic 

highway while standing around gawking about it and arguing about whether 

to change the size of the exit ramp 

when we can have all those debates 

next week. Fix the problem this week; 

fix the blame next week. 

‘‘Credit markets’’ is a short word, but 

a big-sounding word. The Wall Street 

Journal reported this morning people 

are so cautious about their money that 

yields—the amount of money you make 

in the credit market—had sunk so far 

that most investors will accept almost 

no return on their money as long as 

they believe their money is safe. In 

other words, bury it in a hole or put it 

under a mattress. You don’t make any 

interest on it, but at least you think it 

is safe. 

I think in a country such as ours, if 

everybody puts their money under the 

mattress or invests it somewhere 

where money is safe but produces almost no return, what that will mean is 

that many of the big boys and the big 

girls will be all right. A lot of the big 

corporations have a lot of cash. They 

don’t need to borrow very much 

money. What it will mean, though, is 

they will not be expanding. If they are 

a restaurant company, they will not be 

building new restaurants and hiring 

more people. They may even close a 

few restaurants. But the small business 

owners, the State and local governments that represent taxpayers, as we 

do, the one Senator KYL of Arizona 

talked about, they are going to be 

hurt. 

The State of Tennessee is in the same 

shape as the State of Arizona. The 

State of Tennessee has a triple A bond 

rating and very little debt. But it has 

to go on the market every now and 

then to borrow some money. Its shortterm borrowing was twice as much last 

week. It cost twice as much as it did 

the week before. That cost is passed directly on to the taxpayers of the State 

of Tennessee. 


wwoods2 on PRODPC68 with SENATE
September 30, 2008 CONGRESSIONAL RECORD — SENATE S10123 

Half our college students in America 

have a Federal grant or a loan to help 

pay for college. I used to be president 

of the University of Tennessee. I know 

how important that is. 

We made some unwise decisions in 

Congress earlier this year, in my opinion, that limits the amount of student 

loans that are available to students. 

But if banks are not lending to each 

other at night because they are hoarding their money, and if you and I with 

cash are investing in Treasury bills instead of money markets or other investments that then, in turn, can be 

loaned to other people, there is not 

going to be any money for student 

loans. And lots of people of all ages are 

going to have a harder time going to 

college. Or if there is money, they are 

going to have to pay a much higher interest rate because there is a shortage 

of money to lend. We know how that 

works. If there is a small supply, the 

price goes up. If there is a small supply 

of money for credit, then your student 

loan is going to cost more. If you go to 

the University of Tennessee, Virginia, 

Notre Dame—wherever you go—you are 

going to pay a lot more and you are 

paying a lot today. 

I was at the Volkswagen headquarters’ opening in Virginia two 

weeks ago. The head of Volkswagen 

Credit told me Volkswagen—which is 

the largest European car maker and is 

also opening a new car plant in Chattanooga, which we are very excited 

about—goes to the market every 

month to get about $300 million. Where 

do they get that money? They get that 

probably from people who put money 

into banks, into money markets. It is 

our money, upon which they pay some 

interest. What do they do? They turn 

around and loan it to you and me so we 

can buy a Volkswagen. 

I said something about this a week 

ago, and some people thought I meant 

the Volkswagen plant in Tennessee 

wasn’t going to be built. They are 

going to build the Tennessee Volkswagen plant. In our State, about a 

third of our manufacturing jobs are 

auto-related jobs. We have a big Nissan 

plant, we have a big General Motors 

plant, and we have 4,000 Toyota jobs 

and suppliers. So if the big credit companies for automobile manufacturers 

cannot easily get money or have to pay 

a lot for the money they get, what do 

you suppose happens to us? When we go 

to get a car loan, either we can’t get it 

or the price of it is too high and we 

don’t buy the car. If we don’t buy the 

car, then Volkswagen in Chattanooga 

or Nissan in Smyrna or General Motors, the Saturn plant, in Spring Hill, 

or the Toyota suppliers that are all 

over the State, they don’t make as 

many cars, they don’t build as many 

supplies, and they don’t have as many 

jobs. That is what happens when the 

credit squeeze comes. 

Those are some of the personal examples that are happening in Tennessee. 

We can see them all over the country. 

On PBS’s ‘‘Nightly Business Report,’’ 

September 26, which was Friday, 

Darren Gersh, Washington bureau 

chief, reported: 

You know, Susie, we just heard a lot from 

Washington, but I want to tell you something I heard from Ohio today. When I was 

there for the primaries, I met a machinist 

named Ron Gewax. Well, I talked to Ron this 

morning and he told me that his boss came 

to him in tears and said: ‘‘Look, Ron, you 

know, our customers’ loans have dried up, we 

can’t—we’re not getting business and we 

have to let you go.’’ So this credit crunch is 

now hitting home. That’s evidence of how 

it’s hitting home on Main Street. 

This is a Main Street problem. I 

know we have been getting a lot of 

telephone calls saying don’t do this, 

but a lot of my telephone calls are 

changing. We are elected to come here 

and understand the problem and act before there is a crisis, not after there is 

a crisis. 

When I was Governor of Tennessee in 

the 1980s, because of some problems 

with east Tennessee banks that represented illegal activity, we had about 

40–50 bank failures, one after another. I 

don’t want to go through that again because what that does is cause the 

stockholders to lose all their money. 

You say: Well, the FDIC comes in and 

buys the assets, straightens it out, and 

banks pay for it through their insurance program. They do, and they have 

done it in the last couple weeks a couple or three times, but it completely 

tears up the community when the bank 

fails. It disrupts relationships. It 

means individuals and small businesses 

that have depended on loans have a 

harder time getting them. It means 

there are individual bankruptcies as a 

result of it. 

If we had 50 bank failures in Tennessee, as we did 20 years ago, that 

would be a thousand across this country. We don’t want to go through that. 

We don’t want to have banks, insurance companies, individuals, small 

businesses, auto dealerships close. An 

auto dealership in Tennessee, one of 

the largest in the country, closed the 

other day. It was one of 13 dealerships 

for this particular Chevrolet company. 

The company had some other problems, 

but one reason it closed was because it 

could not get credit for its floor plan 

for its ability to finance its cars, and it 

is out of business, all 13 of those locations, and 7,200 employees in those 13 

locations are out of a job. 

Senator REID, Senator MCCONNELL, 

Senator DOMENICI, Senator KYL, and I 

wish to say to the American people and 

the American markets and the world 

markets that we intend to do our job in 

the Congress. We are not going to sit 

around and look at the wreck and 

argue about who is to blame. We can do 

that next week and the next week and 

the next week, and we should do that. 

We obviously need different kinds of 

regulations. No one seems to have understood what these exotic instruments 

based on mortgages were, or how they 

were sold, or whether they are properly 

valued. We need to figure that out. We 

need to deal with that. Maybe the Securities and Exchange Commission, the 

Federal Reserve, and other agencies 

need to do more. 

These rules and regulations we have 

today are primarily a result of the calamities in the 1930s—the Great Depression. I am sure many of them need 

to be changed. 

Next week, we need to fix the blame 

and find a long term fix for the problem. Today, tomorrow, and the rest of 

this week, we need to continue our discussion of the Paulson plan, which has 

been significantly amended by the congressional negotiators over the last 

week to protect the taxpayers. Then we 

need to act on it before the end of the 

week. The majority leader has very 

wisely given Members of the Senate— 

many of whom are here and some have 

gone back to their States these extra 

days to read the legislation, to consider it, to come to the floor, to debate 

the legislation, and to make up our 

minds whether we like this Paulson 

plan, as significantly amended to protect the taxpayers. 

I am going to vote for it, even if the 

stock market continues to go up today 

and tomorrow, which I hope it does. I 

do not want to see a credit freeze come. 

I want to get the wreck off the highway. I want to get the vehicles carrying the auto loans, and the mortgage 

loans, and the farm credit loans, and 

the money for payroll checks, moving 

again. We can get that moving again. 

It is a small step we will have to take. 

Then we will have the time to have aggressive supervision of the Secretary of 

Treasury, who will then have all the 

authority he needs to get the wreck off 

the highway and get things moving. 

And we can set about making sure we 

create a proper regulatory system for 

the kind of world in which we live. 

I am greatly encouraged by the tone 

and the words and the actions of the 

Democratic leader and the Republican 

leader in the Senate. I look forward to 

working with them over the next three 

days. We intend to finish our job before 

we go home this week. We intend to get 

that wreck off the highway so the economic traffic can start flowing again. 

I yield the floor, and I suggest the absence of a quorum. 

The ACTING PRESIDENT pro tempore. The clerk will call the roll. 

The legislative clerk proceeded to 

call the roll. 

Mr. ALEXANDER. 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. ALEXANDER. Mr. President, I 

would like to add to my remarks, briefly, these opinions and these examples 

about the credit crunch. 

In the Washington Post this morning 

there is an article by Michael A. 

Fletcher and V. Dion Haynes, in which 

they say the following: 

Meanwhile, tightening credit has made it 

harder and more expensive for many small 

businesses to borrow money, a process that 

many analysts say could accelerate with the 

turmoil on Wall Street. 


wwoods2 on PRODPC68 with SENATE
S10124 CONGRESSIONAL RECORD — SENATE September 30, 2008 

Dee Smith, who runs a small contracting 

firm that renovates and sells homes in Charlotte, Mich., said a bank he has dealt with 

for more than a decade has decided to finance a smaller share of his projects. While 

the bank would once give him construction 

loans for 80 percent of a property’s appraised 

value, it now will pony up only 75 percent. 

That might seem like small change, but 

Smith said it has shaken up his entire business. 

Because he cannot afford to put out the 

extra cash, he said, he has laid off four of his 

six workers. Meanwhile, because of the 

slowdown in the housing market, he’s been 

unable to sell three houses he has renovated. . . . 

Laura Richards said sales are down 10 percent at her two California Tortilla restaurants in Bowie and Annapolis. . . . 

That is in Maryland. 

She said she’s trying to attract customers 

with promotions. 

Worse still, with banks tightening credit, 

she’s been forced to put off expansion plans. 

‘‘Any plans of opening new restaurants are 

on the back burner until we see what’s going 

on on Wall Street,’’ she said. ‘‘Originally, I 

said that five locations was a goal. Now I’m 

trying to manage my down side. It will take 

two or three years to get back to where I was 

a year ago.’’ 

Although some corporations are sitting on 

large sums of cash—and those with top bond 

ratings are enjoying favorable access to 

credit markets—others are paying much 

more for short-term loans, if they can get 

them at all. 

And on the front page in, the main 

article in the Washington Post business section, Tuesday, September 30, 

Heather Landy and Renae Merle write: 

Underlying the panic is a seizing-up of the 

credit markets that provide companies with 

financing for expenses such as payroll and 

inventory. Analysts said banks are lending 

less as they try to conserve cash for their 

own balance sheets, while nervous investors 

are forcing companies to pay higher interest 

rates to borrow in the debt markets. 

The article quotes someone as saying: 

The credit markets are kind of like the oil 

for an engine that allows companies to buy 

something and finance it. And if they don’t 

have the ability to finance that at a reasonable cost, then all of the sudden their profit 

margins are going to get squeezed and 

they’re perhaps not going to be able to hold 

as much inventory, and this is happening 

around the globe. 

The article continues quoting: 

You need to be able to have credit, and it 

needs to be at a reasonable price for the 

economy to function. 

Mr. President, I ask unanimous consent to have this article printed in the 

RECORD. 

There being no objection, the material was ordered to be printed in the 

RECORD, as follows: 

[From the Washington Post, Sept. 30, 2008] 

THEY JUST DON’T GET IT

(By Steven Pearlstein) 

Oy vey. 

That is the technical economic term that 

best sums up a day in which the House of 

Representatives refuses to pass a $700 billion 

rescue plan pushed by the White House and 

congressional leaders from both parties, 

Wachovia is taken over in a deal that will 

have the government potentially owning 10 

percent of Citigroup, a few European banks 

fail, the Federal Reserve and other central 

banks are forced to inject an additional $300 

billion into the global banking system, the 

Dow Jones industrial average plunges 778 

points, and investors everywhere rush to the 

safety of gold and short-term Treasury bills. 

The basic problem here is that too many 

people don’t understand the seriousness of 

the situation. 

Americans fail to understand that they are 

facing the real prospect of a decade of little 

or no economic growth because of the bursting of a credit bubble that they helped create 

and that now threatens to bring down the 

global financial system. 

Politicians worry less about preventing a 

financial meltdown than about ideology, partisan posturing and teaching people a lesson. 

Financiers have yet to own up publicly to 

their own greed, arrogance and incompetence. And leaders of foreign governments 

still think that this is an American problem 

and that they have no need to mount similar 

rescue efforts in their countries. 

In the coming weeks and months, all of 

these people will come to understand how 

deep the hole really is and how we’re all in 

it together. 

They’ll come to understand that the giant 

sucking sound they hear is of a massive 

deleveraging of the global economy and the 

global financial system as households, governments, businesses and investment funds 

adjust to living in a world with less debt and 

more inflation. 

And they will come around, reluctantly to 

the understanding that the only way to get 

out of these situations is to have governments all around the world borrow gobs of 

money and effectively nationalize large 

swaths of the financial system so it can be 

restructured, recapitalized, reformed and returned to private ownership once the crisis 

has passed and the economy has gotten back 

on its feet. 

In the next few weeks, the center of attention here in the United States will shift from 

the Congress and an exhausted Treasury to 

the Federal Deposit Insurance Corp., which 

will now have to rescue any number of failing banks, either by taking them over directly or managing their transfer into 

stronger hands. It will also shift back to the 

Federal Reserve and other central banks, 

which will have to step up their efforts to 

maintain liquidity in money markets and 

prevent the credit crunch from taking down 

hedge funds businesses, and state and local 

governments. 

These will, alas, be only holding actions. 

Restoring real stability to financial markets 

will require the kind of systemic approach 

and extraordinary government interventions 

that the public has refused to authorize and 

finance. In better times the public might 

have put aside its reluctance in response to 

the strong and unified recommendation of 

political and business leaders. But it is a 

measure of how little trust remains in both 

Washington and Wall Street that voters are 

willing to risk a serious hit to their wealth 

and income rather than follow their lead. 

Mr. ALEXANDER. Mr. President, I 

suggest the absence of a quorum. 

The PRESIDING OFFICER (Mr. 

SALAZAR). The clerk will call the roll. 

The legislative clerk proceeded to 

call the roll. 

Mr. GREGG. 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. GREGG. Mr. President, I wanted 

to speak a little about where we stand. 

I know everybody is concerned about 

this relative to our efforts to provide 

for the economy and free up the credit 

markets and make sure Main Street 

continues to function and jobs are created and economic activity is pursued. 

Obviously, the House vote on Monday 

was disappointing, to be kind, and it 

had an immediate effect on America, 

with $1.2 trillion in wealth taken out of 

the American system almost instantly—a 770-point drop in value in 

the exchange. Those dollars are real. 

That is pension fund value. Most people 

who work have pension funds. It is 

IRAs and 401(k)s all losing value very 

quickly. People who are right on the 

cusp of retiring are especially impacted 

by that. Today, it is up a little bit, 

which is good. I am glad calmer heads 

have prevailed in the markets and that 

fear is not driving the markets today. 

That is good. But the problem that 

drove that hasn’t gone away. 

The problem that created that 

event—and that is that the credit markets, not the equity markets—and this 

is important for people to understand; 

the stock market is different from the 

credit market—the credit markets are 

moving toward the point of freezing up. 

What does that mean? That means the 

local employer who maybe has to finance his or her payroll, the small restaurant or the small seasonal business 

that one week doesn’t make enough to 

cover that payroll but the next week 

makes more than the payroll, in the 

week they have to borrow the money 

to make the payroll from the bank, 

they are not going to be able to do it or 

it will be less than what the total payroll is. The person who buys inventory—a restaurant has to buy food, a 

small business has to buy materials, a 

store has to buy its inventory and the 

things it puts on its shelves. That is all 

done through credit on Main Street. 

That credit won’t be available. The 

family who sends their child to college—that is an event that energizes a 

debt and creates credit. The family 

who uses a credit card—that again energizes a debt and creates credit. All 

these Main Street activities are freezing up. 

What does that lead to? It leads to a 

loss of jobs, a loss of economic activity, 

the loss of savings, the loss of the basic 

character of America to be a place of 

commerce and economic well-being. 

Unfortunately, whether we like it or 

not, we are on the cusp of that event, 

and it is severe and it is serious and it 

is real. 

So what did we suggest as a proposal? 

Well, the Treasury came to us and said 

the way to free up these markets, the 

way to get credit moving again—or 

part of the way to get credit moving 

again—is to buy off the books of a 

large number of the financial entities 

in this country what are known as nonperforming loans—loans which are 

based on mortgages, mortgages on 

homes where the value has dropped so 

precipitously that the mortgage actually exceeds the value of the home or, 

alternatively, or in combination, the 


wwoods2 on PRODPC68 with SENATE
September 30, 2008 CONGRESSIONAL RECORD — SENATE S10125 

mortgage reset because it was a 

subprime mortgage and the payer of 

the mortgage can’t afford to pay the 

mortgage anymore because interest 

rates went up so much on it. Those 

nonperforming loans are sitting on the 

books of a lot of lending institutions, 

and there is no way to value them because the value of those underlying assets has dropped so much. The practical effect of that is those institutions 

can’t lend against those assets. 

So what we were going to do was to 

step in and buy those assets, those nonperforming loans, so that those lending 

institutions could start to lend against 

real assets—valued assets—and thus 

create credit. Then we were going to 

take those assets which we purchased 

and we were going to hold them while 

the market started to settle down and 

the economy, hopefully, would improve, and then we would resell them 

into the market and we would get 

money back to the taxpayer. 

So even though $700 billion is the 

number we hear—and it has been, in 

the most inappropriate way, hyperbolized and demagogued, that we are 

taking $700 billion and throwing it at 

Wall Street, and that is not what is 

happening. We are taking $700 billion 

and with that taxpayer money we are 

buying assets which the taxpayer will 

own, and then later on we are going to 

sell those assets. We may sell them for 

what we paid for them, we may sell 

them for less than we paid for them, or 

we may actually sell them for more 

than we paid for them—in fact, a lot of 

people think we will. So the cost to the 

taxpayer is not going to be great, and 

it is not going to be anywhere near $700 

billion. There is a chance—an outside 

chance—the taxpayer may make some 

money. That is not our goal, but that 

is an opportunity that lies here. 

Let me describe it this way, to put it 

in simpler terms and more vivid terms, 

hopefully. If you had an eight-lane 

highway in your town or in your city— 

most people don’t, but let’s say there 

was one—and you had a crash on that 

highway that blocked the entire highway, and backed up behind that crash 

might be trucks carrying the payrolls 

for people who are working, carrying 

the money that made the hospital 

work, carrying the money to make the 

school system work, carrying the 

money that let the garbage get picked 

up, carrying the money that allowed 

the kids to go to college, all those 

trucks carrying that money are backed 

up behind this accident and they can’t 

get to the places they need to get to. 

So what we want to do as a government 

is to come in and take that accident off 

the highway and let the commerce flow 

again. Then we would take the cars 

that were in the accident, those cars 

that are all mangled, and we are going 

to repair them a little bit and resell 

them, hopefully for more than what we 

paid for them, but we are certainly 

going to resell them for a value which 

is considerable. That is what we are 

doing here. 

We need to act. This is not a theoretical or a virtual event. The market 

showed us yesterday just how worried 

people are and how important it is that 

we proceed. So what should we do now, 

now that the House has acted in this 

way and basically suspended the effort 

here? Well, we need to return to the 

issue. We need to, in a conscientious 

and constructive way, get this matter 

back up and get it moving in the right 

direction. 

I hope the Senate will act. I think we 

should act. We are obviously here at 

the Jewish holiday, so we are unable to 

take action today and maybe not until 

late tomorrow night because of that 

recognition and because we want to be 

appreciative of those sacred days. But 

the fact is, we need to act soon. 

This is not a situation which is going 

to get any better with time. It is going 

to get significantly worse, and at some 

point it is like the snowball rolling 

down the hill: It is going to get going 

so fast that our ability to stop the 

damage that is going to be caused is 

going to be dramatically lessened. 

Is this proposal we came forward 

with perfect? No, but it has a lot of 

safeguards in it. Taxpayers were safeguarded. This was all added on through 

the negotiation—at which negotiation, 

by the way, were representatives of all 

the players: the House Members, House 

Republicans and Democrats; the Senate Members, Senate Democrats and 

Republicans; and Treasury. We put in 

very strict, very aggressive taxpayer 

protection. For example, all the dollars 

which we get from selling these assets 

are going to go to reduce the debt. We 

limit executive compensation so people 

cannot take advantage of the situation. We limit golden parachutes. We 

put in place language which says that 

if we get these assets and they are 

mortgages of people who are in their 

home, we want to try to keep them in 

their home, and so we will try to reorient that mortgage so they can afford 

it. We have aggressive oversight, which 

is extremely important. So we have 

done a series of moves to make this 

work better and work to the benefit of 

the American taxpayers and the people 

who live in their homes. 

But it is critical that we do it. Now, 

does it solve the problem? No, it 

doesn’t solve the problem completely 

or even totally in any way. But here is 

what it does do. Think of it is as a person who has received a severe wound, 

and I mean a life-threatening wound. 

We are putting a tourniquet on that 

wound and stabilizing that person so 

we can take them to the hospital and 

hopefully get them cured and get them 

on the road again to a prosperous life. 

That is what we are doing with the 

economy. We are putting a tourniquet 

on the economy to stabilize it so it can 

stand back up on its own two feet and 

get going again. 

If we don’t go forward, there are 

going to be severe events, and most of 

the burden of the severe events is going 

to be borne by Main Street. Ordinary 

Americans are going to bear the burden. They are going to be the ones 

whose jobs are affected because payrolls can’t be made, and so they will 

lose their jobs. They are going to be 

the ones who can’t borrow money to 

buy a car, who can’t borrow money to 

buy a house or borrow money to send 

their kids to school. It is their hospitals that are not going to be able to 

roll over their revenue bonds. It is 

their industrial parks, where their jobs 

are located, that won’t be able to roll 

over their bonds to do the improvements that create the entities that expand the economy. Those are all the 

things that are going to be impacted 

here—on Main Street America. 

So I think our responsibility as a 

government is to take action. But in 

this instance, people have been misrepresenting what is happening. They 

have been hyperbolizing, and there has 

been a lot of theater in the marketplace by some people who basically are 

being irresponsible and demagogic, in 

my opinion, about what we were doing, 

and so the general public has been misinformed and really grossly misinformed. Of course, they naturally 

mistrust the Government, and they 

probably should. We should all be a little suspicious of the Government, to 

say the least. But as a very practical 

matter, in this instance, there has been 

a tremendous amount of misinformation, especially about the immediate 

impact this will have on people on 

Main Street if we don’t act. 

So we have this situation, and I 

think what we need to do is to step 

back, calm these waters, and act in a 

responsible way and move forward in a 

way that allows us to take this opportunity to try to settle out the markets, 

free up the markets, get credit flowing 

again, and hopefully relieve some of 

the pressure every American is going 

to be facing from what is a very severe 

economic situation. 

I hope we will vote soon. I would like 

the Senate to vote as soon as we can— 

and not in any way impinge on the 

Jewish holiday—because I believe we 

need to do that. We need to pass this 

legislation because the consequences of 

not passing it are so extraordinary and 

will be so detrimental to our country 

and to our people that it would be totally irresponsible of us to not take 

this action. 

Mr. President, I yield the floor. 

The PRESIDING OFFICER. The Senator from Virginia is recognized. 

Mr. WEBB. Mr. President, what is 

the business of the Senate? 

The PRESIDING OFFICER. The Senate is under cloture on the motion to 

concur. 

Mr. WEBB. I ask unanimous consent 

to speak as in morning business. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. WEBB. Mr. President, I would 

like to add my voice to a number of 

other people who have spoken today 

about this economic bailout situation 

and, perhaps from a bit different perspective, suggest that people need to 


wwoods2 on PRODPC68 with SENATE
S10126 CONGRESSIONAL RECORD — SENATE September 30, 2008 

calm down a little, that all of us are 

arguing responsibly with different approaches, but serious approaches, to 

try to resolve the issue. 

There is a lot of commentary out 

there today alleging that people in the 

Congress, a lot of people in the Congress are simply playing politics with 

this volatile issue. There is commentary about how the average American does not understand the problem 

and, as a result, has objected to the approach that has been taken. There are 

accusations that the Congress is not 

doing its job because of the approach 

that was taken in the vote in the House 

yesterday. 

I would suggest there are a lot of people who are not playing politics, who 

do understand the problem, who are 

doing their job, and yet, who still have 

grave concerns about the approach 

that has been taken with this proposed 

solution. 

Let’s take a minute and review what 

has been going on. Only 11 days ago, 

Secretary Paulson, on behalf of the 

Bush administration, came forward 

with a proposal, a three-page proposal, 

saying the Congress needed, within a 

couple days, to give him $700 billion or 

the authority to invest $700 billion, 

with very little supervision or oversight, in a very dramatic transfer of 

power to one individual. 

Then we started having this great 

discussion in the media and on the 

floor about us not acting quickly. Let 

me, first, say I was one of the first 

Members of this body to speak on this 

floor on September 22, on that Monday, 

questioning publicly the approach that 

had been suggested in this BushPaulson proposal to address our crisis. 

Also, last Friday, was joined by eight 

other Members of the Senate, urging 

that any bipartisan compromise addressing this crisis contain several important principles. I would say, with 

due respect to the Senator from New 

Hampshire and others, that there has 

been tremendous effort over this week 

to try to take a three-page proposal 

and make it into a piece of legislation 

we can all live with and that addresses 

the problems. They all have my appreciation and my admiration for that effort. But at the same time, we can do 

more. I hope, as they reconsider the 

vote yesterday, the drafters can take a 

hard look at some of these areas and 

tighten these provisions so some, myself included, can feel more comfortable in supporting it. 

Firstly, we need to recognize that we 

have, in this legislation, taken into 

consideration the idea that we are 

going to transfer a massive amount of 

power to the executive branch of this 

Government. This, at a time when the 

executive branch, over the past 8 years, 

has accumulated more power, than perhaps at any time in our history, as a 

result of 9/11, the war powers, and regarding the privacy of individuals, et 

cetera. 

We are not only transferring that 

power to the executive branch, we are 

giving the authority to one person, the 

Secretary of Treasury, who, as Senator 

FEINSTEIN had pointed out, may have a 

conflict of interest. This is an individual who has made hundreds of millions of dollars working on Wall Street. 

I respect his confidence and I respect 

his career. 

But at the same time, as a matter of 

policy, is this the best place or best 

way for us to transfer the money that 

would be invested in order to save our 

economy? In the past, when these situations have arisen, money has been 

transferred to entities such as the 

RTC. There were proposals brought forward, noting perhaps the necessity for 

a board of people, honest brokers, wise 

men and women who would make these 

determinations rather than simply one 

individual. 

I know in this process we have left 

oversight to individual discretion, but 

perhaps we ought to think about a 

panel of three or some other form 

where we can reassure ourselves that 

there would not be a conflict of interest on the other side. 

A number of us in this body and the 

other body have said, we need to proceed forward with an appropriate regulatory structure. There is language in 

the bill that was voted on yesterday 

that had a commitment to move forward, to looking at the problem but no 

specificity from the Congress saying we 

need to fix the problem, or that we 

need to reinstate regulations. 

There was an article in the Wall 

Street Journal today written by Robert Morgenthau, the Manhattan district attorney. In this article he points 

out: 

There is $1.9 trillion, almost all of it run 

out of the New York metropolitan area, that 

sits in the Cayman Islands, a secrecy jurisdiction. Another $1.5 trillion is lodged in four 

other secrecy jurisdictions. 

And Morgenthau adds: 

Any significant infusion to the financial 

system must carry assurances that it will 

not add to the pool of money beyond the 

safety net and supervisory authority of the 

United States. Moreover, the trillions of dollars currently offshore and invested in funds 

that can impact the American economy 

must be brought under appropriate supervision. 

This is a point that has been made 

many times on the Senate floor by 

other Members, particularly Senator 

DORGAN of North Dakota. This is a moment in which we can have a commitment by the Congress that regulatory 

structures will be put in place in order 

to properly protect our economy. 

Another area where you see the abandonment of regulatory structure, to 

the detriment of our economy, is in the 

commodities market. We had debates 

during the consideration of the Energy 

bill in August where many Senators 

came to the floor speaking relative to 

what happened when we took regulation out of the oil futures market. A 

barrel of oil cost $24 in 2002, when this 

Congress voted to go to war in Iraq. 

Since then the price has gone all the 

way up to $147. When you see the fluctuation in the oil markets that has attended this crisis, you see this is not 

an old-style commodities market, 

where people who are using the product 

are the ones who were purchasing the 

futures. This is now a speculative market. Just like a regular stock market, 

commodities should have a similar regulatory structure. 

We need, and I have pointed out, 

along with other Members of this body, 

the need to provide clear caps on executive compensation. The bill that was 

voted on yesterday has significant improvements over the Paulson bill which 

was totally lacking in this area. It 

could be tightened further. I would recount a conversation I had with an individual who had a long respected career on Wall Street, is one of the most 

brilliant Wall Street analysts, and now 

retired. When I called—I was calling 

around to as many people from different professional environments as I 

could to try and understand this crisis. 

This is someone who made good 

money on Wall Street and is very well 

respected. I asked him about the issue 

of executive compensation. His comment to me was, ‘‘The people who perpetrated this situation ought to be 

punished.’’ 

That was his word, ‘‘punished.’’ I do 

not believe specifically in punishing 

them, but I certainly believe strongly, 

as do most Americans, that the people 

who have gotten us into this situation 

should not be unjustly enriched as we 

fix it. 

Finally, we need to give the American taxpayer a clear up side in this 

process, as the securities and assets are 

bought and sold by whichever entity 

ends up doing that. An ‘‘up side’’ in the 

sense of returning money back to the 

Treasury and, an up side in the sense 

that our legislation should do something that directly helps the people 

who are at the bottom in this crisis, 

the people who want to stay in their 

homes. 

Again, there has been movement in 

that direction in the last week, but 

this area is where better assurances, 

clearer assurances could bring more 

people over to the side of passing this 

legislation. We want a solution. We all 

recognize there is a problem. My reaction, quite frankly, to the situation 

from yesterday, is that it brings me 

back to a saying from when I was in 

the Marine Corps that sometimes you 

have an opportunity that is masking 

itself as a disaster. 

Perhaps we can tighten this proposal, 

get the right kind of formula—it will 

not take a great deal of change—and 

bring the Congress to supporting provisions and move into the future with a 

strengthened economy, a better regulatory process, and an environment 

that truly takes care of the interests of 

the taxpayers who are going to have to 

foot the bill. 


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