November 17, 2008 CONGRESSIONAL RECORD — SENATE S10541 

vote on this kind of economic aid. The 

question I would supplement is—I 

heard it from my constituents—Who is 

next? Bear Stearns was given economic 

aid, Lehman Brothers was not, and perhaps that was a mistake—perhaps not. 

AIG was given considerable economic 

aid. Fannie Mae and Freddie Mac were 

given considerable economic aid. If we 

are to make an intelligent decision, we 

are going to have to take a look at 

these important questions. 

EXHIBIT 1 

UNITED STATES SENATE, 

Washington, DC, September 21, 2008. 

Senator HARRY REID, 

Majority Leader, U.S. Senate, 

Washington, DC. 

Senator MITCH MCCONNELL, 

Minority Leader, U.S. Senate, 

Washington, DC. 

DEAR HARRY AND MITCH: As you project the 

Senate’s schedule, I urge that we not rush to 

judgment and take whatever time is necessary on any proposed legislation to deal 

with the nation’s economic problems. The 

public, our constituents, have a great deal of 

skepticism, which I share, about legislation 

which will let Wall Street ‘‘off the hook’’ and 

pay insufficient attention to Main Street, 

middle class Americans. 

It is important to focus the legislation on 

the hundreds of thousands of homeowners 

who are at risk of losing their residences to 

foreclosure. 

In deciding what additional powers to give 

to the federal regulators, I believe we should 

give careful consideration to not extending 

those powers beyond the current crisis and 

take steps to prevent a recurrence. 

I have read reports that some Wall Street 

firms, whose conduct has created the crisis, 

will benefit from a congressional legislative 

fix. We should do our utmost to see to it that 

those responsible for the crisis bear the maximum financial burden on any bailout in 

order to minimize the taxpayers’ exposure. 

There are reports that the bailout might 

be extended to foreign firms with United 

States affiliates. In my view, the legislation 

must be carefully tailored for United States’ 

interests and if foreign firms, even if United 

States affiliates are to be involved, then consideration should given to appropriate contributions from those foreign governments. 

I realize there is considerable pressure for 

the Congress to adjourn by the end of next 

week, but I think we must take the necessary time to conduct hearings, analyze the 

Administration’s proposed legislation, and 

demonstrate to the American people that 

any response is thoughtful, thoroughly considered and appropriate. 

Sincerely, 

ARLEN SPECTER. 

(The remarks of Mr. SPECTER pertaining to the introduction of S. 3686 

are located in today’s RECORD under 

‘‘Statements on Introduced Bills and 

Joint Resolutions.’’) 

The PRESIDING OFFICER. The Senator from Maryland is recognized. 

(The remarks of Ms. MIKULSKI and 

Mr. BOND pertaining to the introduction of S. 3684 are printed in today’s 

RECORD under ‘‘Statements on Introduced Bills and Joint Resolutions.’’) 

Mr. BOND. I yield the floor and suggest the absence of a quorum. 

The PRESIDING OFFICER. The 

clerk will call the roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. NELSON of Florida. 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. NELSON of Florida. Mr. President, as I understand it, we are in 

morning business? 

The PRESIDING OFFICER. The Senator is correct. 

Mr. NELSON of Florida. Mr. President, I would like to be recognized. 

The PRESIDING OFFICER. The Senator from Florida is recognized. 

f 

FEDERAL LOAN TO THE AMERICAN AUTOMOBILE INDUSTRY 

Mr. NELSON of Florida. Mr. President, later this week the Senate is 

going to consider this question that befalls our American automobile industry and the question of whether to extend assistance to the American automobile industry and its workforce. 

What we are going to do—either this 

week or whether it is postponed into 

January—is going to determine the future of a key manufacturing sector and 

millions of American jobs. 

Some of our colleagues have said we 

should not interfere with the free market, that we should allow businesses 

that have acted irresponsibly to fail 

and to be replaced by more efficient 

competitors. I must say I have some 

sympathy for that view. For too long, 

our U.S. domestic automakers have 

sailed against the winds of change and 

have failed to produce vehicles for the 

21st century—for that matter, for the 

last half of the 20th century. 

This is not the first time this Senator from Florida has faced this issue, 

for, as a young Congressman years ago, 

we had a similar issue facing us with 

the bailout of the Chrysler Corporation. I voted for that bailout, which included some $4 billion. In retrospect, 

that was the right decision because 

Chrysler did reinvent itself. But the 

circumstances were different because 

Chrysler had at its helm a man who we 

believed would go in and reform Chrysler, and that was Lee Iacocca. As I look 

across the landscape of the American 

automobile industry, I am wondering, 

where are the Lee Iacoccas? We do not 

see them. 

It is this Senator’s judgment that 

there should be no bailout of the American automobile industry. There should 

not be a reward for poor management. 

But because of the American jobs at 

risk, because of American manufacturing at risk, I support a Federal loan 

with serious restrictions. 

I want to discuss some of those restrictions. I come to this position having fought tooth and nail against the 

automobile companies when they 

dragged their feet on implementing responsible fuel economy standards. 

They insisted, sometimes with crocodile tears, they could not meet those 

miles-per-gallon requirements, and: 

Oh, by the way, let the consumers decide. Those automobile makers are now 

coming to us asking for our assistance. 

But that is not the full picture. As 

the President-elect has said, a failure 

of the American auto industry would 

be disastrous not just for many Americans who work for the industry but for 

the entire economy because those jobs 

ripple with the multiplier effect 

through the economy. So whether you 

are considering assembly plants or suppliers or dealerships, we would face significant layoffs in all 50 States. It 

would push us further and further into 

an economic hole. We simply cannot 

let that happen, but we cannot allow a 

bailout. It has to be a Federal loan 

with a workout, and that is a financial 

term to restructure how a company 

can get out of its economic problems. 

We need to bring all of the stakeholders to the table—management, 

labor, lenders, suppliers—to figure out 

how to revitalize the American auto industry to make it competitive in the 

future while saving those good American jobs. 

So this Senator’s conclusion is that 

any Federal assistance we provide for 

the American auto industry is going to 

have to include these conditions. 

First, we must insist that the automakers increase average miles per gallon to 40 miles per gallon in 10 years 

and to 50 miles per gallon by 2020. Why 

do I say this? There are cars, fleets in 

Japan, that are already driving at 50 

miles per gallon. In Europe, the cars 

are being driven at 40 miles per gallon. 

We are talking about 12 years in the future to achieve this. Technically, it 

can be done if we but have the will. 

Look, in the 8 years this Senator has 

been in the Senate, every year we have 

gotten beaten by the U.S. automakers 

as we have tried to increase the miles 

per gallon in the fleet average. They 

beat us one way or another, and they 

would always say: Let the consumer 

decide—all along while the foreign 

automobile makers were getting prepared to eat their lunch. As their lunch 

was being eaten, year by year, they 

continued to still fight us on the milesper-gallon standards. Finally, we had a 

little victory, just a year ago, that was 

conditioned upon giving them—giving 

them—$25 billion in return for them 

agreeing they would move to 35 miles 

per gallon but not until the year 2020. 

We have to stop this kind of foot-dragging that has gotten them to the place 

they are now. So for any Federal assistance in the form of a loan we must 

insist they increase their miles per gallon. 

Second, the automakers must increase the production of flex-fuel, electric, and plug-in hybrid vehicles. Prices 

of gasoline at the pump have obviously 

fallen in recent weeks, but they are not 

going to stay low forever, and that is 

another whole subject. As soon as all 

the speculators start getting back into 

the oil futures contracts market 

again—which have been deregulated, so 

there is no regulation on the speculators—they will run the price right 

back up. Remember, the price of a barrel of oil is down in the range of $50 or 

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S10542 CONGRESSIONAL RECORD — SENATE November 17, 2008 

$60 now. It went all the way to $147 a 

barrel. When the world economy started getting into trouble and they needed 

cash, they started bailing out of those 

futures accounts, so that brought the 

price of a barrel of oil down. While sure 

as shootin’, if we do not impose some 

regulations on the commodity futures 

trading market, those speculators are 

going to take over in the future, the 

price of oil is going to go back up, and 

the price at the pump—which I just 

filled up my car for $2.12 a gallon back 

in Orlando, FL—is going to go back up. 

We need to end our dangerous addiction to oil, and we need to find new and 

renewable sources of energy. American 

automobile makers ought to be leading 

the way instead of the opposite of what 

has happened over the last three decades. 

Third, we must place limits on executive compensation and eliminate the 

executives’ golden parachutes. Taxpayer money should not be used to reward individual executives until the 

taxpayers have been repaid. 

Let me divert from the automobile 

industry for a minute. There is a similarity about executive compensation 

and golden parachutes and what we 

have done with the big economic bailout of Wall Street, which this Senator 

voted against. Well, lo and behold, over 

the course of the weekend, I happened 

to be talking to a major bank CEO. 

This banker told me his bank is in good 

shape; he doesn’t need any of the bailout money. But because some of his 

competitors are in bad financial shape 

and need the money and are taking it 

from the Secretary of the Treasury, he 

needs to take it, too, because they 

would be at a competitive disadvantage 

against the ones that are hurting that 

need to take the money. He says: We 

don’t want to take it, but we don’t 

want to be at a competitive disadvantage. Because of that, whenever they 

do take it—remember, there are supposed to be some rules in there on executive compensation and golden parachutes. This CEO is retiring before the 

money comes in, so the bank still pays 

out the huge compensation. What we 

are dealing with, with the Wall Street 

$700 billion bailout, has to apply to 

automakers as well. We should not reward those executives until the taxpayers have been repaid. 

Fourth, the automakers should not 

pay dividends to shareholders until 

they have returned to financial health. 

It is a simple, straightforward condition on us giving them taxpayer money 

in order to get them back to financial 

health. 

Fifth, I wish I didn’t have to say this, 

but there are no Lee Iacoccas now. The 

current senior management should be 

replaced. We need new leadership. We 

need fresh thinking. We need new people, new eyes, new ears to steer us out 

of this mess. We cannot reward those 

leaders whose poor decisions and poor 

judgment and sometimes selfishness 

got us to where we are now. 

We are going to face difficult choices. 

There are going to be tough times. 

Again, to quote a phrase from the 

President-elect: We need to act with all 

deliberate haste but with an emphasis 

on deliberate. We cannot simply provide our automakers with enough cash 

to continue their current operations 

for another 3 months or even another 6. 

We must instead put them on a path 

that leads to global competitiveness. 

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

The PRESIDING OFFICER. The 

clerk will call the roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. DORGAN. 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. DORGAN. Mr. President, I ask 

unanimous consent to speak for 20 minutes as in morning business. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

FINANCIAL CRISIS 

Mr. DORGAN. Mr. President, I think 

it is obvious to all Americans that we 

face a very severe and difficult financial crisis. We have had an election. 

The American people have voted for 

change. We now face significant challenges. I was thinking, as I was walking over to the floor of the Senate, 

about a visit I had recently at a nursing home in North Dakota. 

This financial crisis is probably the 

most significant financial crisis since 

the Great Depression. We don’t know 

where this will go. We don’t know how 

many will ultimately be unemployed. 

We don’t know how long it will last. 

This is a recession. We hope it is not 

extraordinarily deep. We hope we can 

find the menu to overcome it and the 

kinds of policies to try to make certain 

we move from this position to a position of economic strength and economic growth, once again. 

But I went to a nursing home in 

North Dakota because North Dakota’s 

oldest citizen was there. She had a 

birthday. She is a 110-year-old woman; 

very lucid, very conversational. We 

talked about the Great Depression, as a 

matter of fact. We talked about the 

tough times in her life. She was born in 

1898. By the way, her niece was there at 

the nursing home who had put on a 

birthday party for her in August. Her 

niece is 103 years old and her son, who 

is still farming, is 80 years old. 

I had a chance to talk to them all 

about what life was like from 1898 to 

2008. One of the significant things she 

remembered was the difficulty of the 

Great Depression in the 1930s, when it 

was hard to find jobs and people had 

soup lines in the major cities and people were struggling to try to make ends 

meet. 

Well, I think a lot of folks from the 

1930s forward felt we would never again 

see these days because we put in place 

economic stabilizers and we put in 

place provisions in law that prohibited 

the kind of activities in the roaring 

1920s that led us to the 1930s and the 

excess, the unbelievable debt, the greed 

that resulted in the economic collapse 

of the 1930s. So we put in place things 

such as the Glass-Steagall Act and 

other provisions that prevented banks 

from being engaged in real estate and 

securities and things that were inherently risky that caused major problems 

and collapse in the 1930s. 

It is easy to forget lessons. The Congress over the years, Presidents over 

the years, and certainly the financial 

services industry moved ahead. I harken back to 1999, when something called 

the Financial Modernization Act was 

passed by the Congress. I said then it 

was a terrible thing to have done. It 

stripped apart the Glass-Steagall Act 

and essentially said you can create big 

bank holding companies, you can put 

firewalls in, you can merge real estate 

and securities with banking; it will all 

be fine. That was in 1999. 

In fact, here is what I said during 

that debate on the floor of the Senate: 

I say, to people who own banks, if you 

want to gamble, go to Las Vegas. If 

you want to trade in derivatives, God 

bless you. Do it with your own money. 

Don’t do it through deposits that are 

guaranteed by the American people. 

When we passed the Financial Modernization Act—and I was one of eight 

Senators to vote no, I said this during 

debate: The bill will, in my judgment, 

raise the likelihood of future massive 

taxpayer bailouts. It will fuel the consolidation and mergers in the banking 

and financial services industry at the 

expense of customers, farm businesses, 

and others. 

I regret I was right. Massive taxpayer 

bailouts. It didn’t take quite a decade. 

It took 9 years. Now we see the largest 

proposed bailouts in the history of our 

country. 

It was a time of self-regulation. Alan 

Greenspan, the head of the Federal Reserve Board, said the financial services 

industry will regulate itself. Well, not 

quite. Here is what Alan Greenspan 

said last month: 

I made a mistake in presuming that self interests of organizations, specifically banks 

and others, were best capable of protecting 

their own shareholders and their equity in 

the firms. 

What an unbelievable mistake. Regulators that were willfully blind saying: 

You know what. We will pass the Financial Modernization Act allowing 

real estate, securities, and banking to 

come back together, forgetting the lessons of the Great Depression. Then, 

those who were hired to regulate decided self-regulation will work. We 

don’t have to regulate. We will be willfully blind. So what happened? Well, 

the subprime loan scandal happened. 

The subprime loan scandal, of course, 

is at the root of this because it is most 

evident of the greed that exists in our 

economy in recent years. It resulted in 

bad mortgages spread all around this 

country and around the world. They 

were put into securities and sold up 

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