S10546 CONGRESSIONAL RECORD — SENATE November 17, 2008 

I voted to support this bailout, as did 

most of my colleagues, as we were assured, not only by members of the administration, but also with a great deal 

of hesitation by members of our own 

party in the Senate, that this was an 

essential act to avert an international 

calamity in the financial markets. We 

were told by the Secretary of the 

Treasury that we needed to reinforce 

the good will and the concerns people 

had by allowing him to take certain actions. We ensured oversight over the 

Secretary of the Treasury, but he still 

retained the total discretion that has 

been used over the past several weeks. 

At the same time, we all know now— 

it has been said several times already 

this afternoon—the decisions that were 

made, as to where this money has been 

going, were not in line with the reassurances that were given this body 

when the legislation was brought forward. There has been a great deal of inconsistency coming from the Secretary 

of Treasury, and it has created a mood 

of unpredictability that we have seen 

reflected in the markets and in the 

confidence of investors. 

I would agree with the concept that 

was recently put forward by the Senator from Oklahoma about slowing 

down the amount of money that is 

available to be spent under this bailout. I also would propose, in examining 

legislation to that effect, that we as a 

body revisit the whole idea of giving 

this kind of power to one individual in 

the executive branch. 

There are plenty of precedents in history which create a small body of honest brokers, perhaps three individuals 

who collectively can make decisions 

for the good of the country and who 

would not be burdened by conflict of 

interests because of their own background, either real or imagined, or the 

burden that goes with the discretion of 

one individual. I hope to place something to that effect before this body 

relatively soon. I hope other Members 

of the Congress will consider that idea 

as well. 

The second issue with respect to the 

abrogation of power by the legislative 

branch to the executive branch concerns the relationship that we are now 

about to finalize with Iraq. We have 

seen it reported in the media today 

that the Iraqi Cabinet has given a near 

unanimous agreement to a strategic 

framework agreement—which is very 

little discussed, and a status of forces 

agreement—which has been much debated, that ostensibly would define the 

future relationship between the United 

States and Iraq. 

I find it more than ironic, and I have 

mentioned it several times on this 

floor, that the Congress has not been 

invited to participate in this process. 

The Iraqi Cabinet is going to present 

this agreement to the Iraqi Parliament 

for a vote. The Congress of the United 

States is hardly even getting a look. 

If you turn to article II, section 2 of 

the U.S. Constitution, it says the 

President: 

. . . shall have Power, by and with the Advice and Consent of the Senate, to make 

Treaties, provided two thirds of the Senators 

present concur. . . . 

The question is, Is this a treaty? It is 

going to define the long-term relationship between the United States and 

Iraq in a situation where we are going 

to have military bases of some sort in 

Iraq and a security relationship with 

Iraq. That sounds quite a bit like a 

treaty to me. 

The administration has been claiming this is simply an executive agreement and, as a result, the Secretary of 

State can sign this; the Congress can 

be consulted but does not have to have 

a vote. But let us remember, at the end 

of this year, on December 31, the legal 

authority for the United States to be 

operating in Iraq ends under international law with the expiration of the 

U.N. mandate. So under what authority, legal authority, will we be operating in Iraq? An executive agreement 

is only constitutional when it is implementing a law. So what law or constitutional authority will this executive agreement be implementing? 

The members of the administration, 

when I raised this issue nearly 8 

months ago, claimed that the 2002 authorization to go to war in Iraq was 

their legal authorization to negotiate 

an executive agreement looking to the 

future relationships in Iraq. I have 

strong questions about that. First, if 

the 2002 authorization to go to war 

would be good in terms of an executive 

agreement to define our future relationship, then why did we even need 

the U.N. mandate in the first place? 

The second is, the 2002 authorization to 

go to war in Iraq took place at a time 

when the present Government of Iraq 

did not even exist. 

So I would state my strong belief, 

again, that the Congress needs to assert its constitutional authority on 

this matter. The Congress needs to 

concur with the strategic framework 

agreement in order for us as a nation 

under the Constitution to properly define our relationship with a government and a country where we are going 

to have military forces in place, and 

where we are going to have security 

guarantees. 

In that regard, I conclude by stating 

my strong hope that the incoming administration, under President-elect 

Obama, will, early on, take a comprehensive diplomatic approach to all 

the issues that affect the United States 

in that particularly troublesome spot 

in the world. We should be fostering 

the right kind of diplomatic environment with other countries such as Russia and China that have interests in 

this region. We should be exploring 

ways to formally and aggressively explore our relationships with countries 

such as Iran. We need to put the whole 

issue of Afghanistan, Pakistan, Iraq, 

and other countries in the Middle East 

on the table early on and forcibly. Reality indicates and history proves that 

the longer the new administration 

waits, the more strongly they are 

going to be embedded in the policies 

that have preceded them, and the more 

difficult it is going to be to put a comprehensive approach to the future into 

place. I strongly hope this administration, at an early time, will take a comprehensive approach to this region. 

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

The PRESIDING OFFICER. The 

clerk will call the roll. 

The legislative clerk proceeded to 

call the roll. 

Mr. KYL. I ask unanimous consent 

that the order for the quorum call be 

rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

AUTOMAKER BAILOUT 

Mr. KYL. Mr. President, I wish to address a matter that is supposedly before us, although to my knowledge 

there is not yet a bill on the floor that 

we can read and, therefore, debate. But 

I think the general concept of some 

kind of a so-called bailout for the auto 

companies is the reason why we have 

come back to Washington in this socalled lameduck session. I wish to address that and talk about the best way 

forward to assist the companies involved as opposed to what I understand 

the concept of this punitive legislation 

to be. 

Let me begin by saying that ordinarily in the Congress we have hearings. We develop legislation on big 

matters. We try to do it in a bipartisan 

way. We then mark up the bill in committee by discussing it, amending it, 

rewriting it. Then it comes to the floor 

of the Senate where we debate it and 

can amend it again and ultimately pass 

it to the other body. 

That is not what is happening today. 

We are told there is going to be legislation presented at some point to provide 

$25 billion to the three U.S. automakers. Beyond that, we know nothing. What I want to do is talk about 

the concept of it, and later we can talk 

about how the bill will actually get 

here, whether we can seek to amend it, 

and whatever else might be appropriate 

to try to conclude work on this matter. 

Obviously, everyone is hurting these 

days. The car companies aren’t the 

only folks who are hurting. Every family is hurting, especially as we have leveraged our debts. We have home mortgage debt, credit card debt, perhaps car 

loan debt. All of us are tightening our 

belts, because we appreciate the fact 

we have to get that debt down. That is 

happening in the business sector as 

well. One of the reasons Congress 

passed the so-called TARP legislation, 

the stabilization package that was designed to assist financial institutions, 

was because in some respects the financial institutions are the blood that 

courses through the entire economy. 

They provide the cash; in many cases, 

the credit. Unfortunately, our country 

runs on credit. You don’t buy anything 

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November 17, 2008 CONGRESSIONAL RECORD — SENATE S10547 

these days without a credit card. You 

certainly don’t buy anything big, such 

as a car or refrigerator, without a credit card. As a result, the question was 

whether banks were going to stop lending to consumers and businesses because the assets on their books were of 

such dubious value that they had to 

keep all the cash they could accumulate just to meet the law’s requirements for their reserves. 

What the administration decided 

originally was that the $700 billion 

could be used to buy these troubled assets, get them off of the banks’ balance 

sheets and, by giving them money to 

buy them, the banks would then have 

money to loan to a car dealer or the 

car dealer to loan to the car purchaser 

and the like. Ultimately, it was decided 

that the economy was in such a sorry 

state that we had to get the money infused directly into the banks and didn’t 

have time to set up the rather complicated procedure of buying these assets. Instead, the loans currently being 

made are going directly to the banks 

and other financial institutions. Of 

course, the hope is that money will 

then be lent out to us and to businesses 

so that the blood which keeps the economy going, called cash, can continue to 

enable us to buy things. 

There is some indication that is beginning to happen, although the process takes a while. There are many folks 

in the economy who get hurt when people don’t buy as much, whether it is 

from lack of credit or trying to tighten 

their belts. I think of one company 

that laid off 10,000 people in one small 

town in Ohio. The company is called 

DHL. I think of Circuit City which 

went bankrupt recently. A lot of folks 

are worried about Christmas season 

and consumers not buying. There are 

all kinds of folks who are in trouble 

economically, businesses and families. 

The question is whether we should respond to those with the largest voice in 

Washington, DC. Certainly the three 

big automakers have a big voice here 

and a constituency that would like to 

make their case that they should be 

bailed out and that is where we should 

draw the line. 

I have a hard time with that. Not because I don’t like the car companies. I 

readily buy cars from them. I think it 

is great that they build the kind of 

cars I like to buy. I am not faulting 

them for the decisions they have been 

making in what they manufacture. The 

fact is, they are in trouble pretty much 

for reasons that relate to their own decisions rather than a lot of consumers 

out there who have gotten caught up in 

this credit crunch, in effect through no 

fault of their own, except perhaps 

going into debt more than they should 

have. The car companies have made 

some contracts with the United Auto 

Workers labor union that are literally 

dragging them down. It is like asking 

somebody to swim with a 50-pound 

weight around their neck. It is no wonder they can’t meet their obligations 

under the contracts and need taxpayer 

assistance. But the question is whether 

an average family or small business 

should be asked to cough up the money 

to transfer to an auto company that 

has made these deals with the union or 

whether the car company should find 

an alternative way of dealing with it. 

Here is the order of magnitude I am 

talking about. According to the Bureau 

of Labor Statistics, the average hourly 

wage cost for the big three auto manufacturers is $73 an hour. The average 

for the Japanese automakers building 

cars in the United States is between $45 

and $48—substantially less. For the average manufacturing company in the 

country or average company, it is 

about $28.48. So you can see that these 

legacy costs of the big auto companies 

are like the 50-pound weight dragging 

them under. It does no good for taxpayers to pour $25 billion into the car 

companies and find a year later that 

money has been spent and yet nothing 

has changed to diminish their obligations. Where are they going to get the 

next $25 billion and then $25 billion 

after that? 

The reality is, they have to change 

the way they are doing business in 

order to warrant asking taxpayers for 

anything. This is where the alternatives come into play. There is already a law on the books that permits 

companies in financial straits such as 

this to reorganize their business, get 

rid of much of their debt obligation and 

start over again. You are required to 

slim down, to be sure, in order to be 

more competitive. It is called reorganization under chapter 11, sometimes 

chapter 11 protection. It falls under the 

Bankruptcy Code. When this is accomplished, the contracts that the car 

companies have made are renegotiated 

in such a way that the company can 

show it has the ability to emerge and 

make money, that the contracts are 

not going to continue to weigh them 

down. That would be the benefit of taking this reorganization. 

Some are more intent on preserving 

the status quo than being able to compete because they say things such as: 

Well, restructuring the business might 

mean there would be fewer employees. 

There might well be. It might be 10 percent or maybe even 20 percent fewer 

employees, if that is what it takes to 

compete successfully. There may be a 

number of dealerships cut. Maybe 10 or 

15 percent of the dealerships will have 

to go away. If that is what it takes for 

them to compete with the Japanese 

automakers, then that is what should 

be done. We should not say those legacy costs or those built-in costs of operation should be retained and then 

ask the taxpayers to throw in $25 billion to maintain something that isn’t 

working. It is true that these costs represent future obligations as well as 

current and so they are going to continue unless they are wiped out by the 

reorganization that is provided by 

chapter 11. 

Some people say: Well, what they 

need is better management, and we 

here in Washington know how to manage them better. That is the last thing 

we want, for Congress or folks in Washington to tell them how to do their 

business. Under reorganization, a committee of experts assists them in designing a business plan. They have 18 

months to develop a plan to move forward. They have breathing room. Basically all of the obligations are stayed. 

They have the opportunity to fix what 

is wrong, plan for the future, and then 

implement that plan. We wouldn’t have 

any of that if we simply gave them the 

$25 billion. They wouldn’t be protected 

at all from any of the obligations that 

they have either on an ongoing basis or 

their future obligations. 

In all chapter 11 reorganizations, prefiling debts become unenforceable except to the extent that they are incorporated into the reorganization plan. 

GM has $40 billion in long-term debt; 

Ford about $136 billion. A reorganization plan, a business plan would be set 

forth that provides how each of those 

obligations is treated and, if they are 

too much to enable the company to go 

forward, then they are reduced accordingly. 

A taxpayer bailout would provide 

none of that protection. Protecting the 

workers would still require negotiation 

with the labor unions, but some of the 

amount of those legacy costs could be 

reduced in the process. I mentioned the 

fact that there might be fewer dealerships. They might decide to reduce the 

number of brands. They would be doing 

so under the protection of chapter 11 

rather than the current situation. A 

taxpayer bailout wouldn’t give them 

any protection from State franchising 

laws that make it very costly to reduce 

the number of brands and dealerships. I 

have some information that when GM 

eliminated the Oldsmobile brand, it reportedly cost $1 billion, and there are 

still litigation proceedings about 

whether they can do that with their 

dealerships. 

Some are concerned about whether 

they could receive financing if they 

took chapter 11, the so-called debtor in 

possession financing. This is an area 

where the Federal Government might 

provide some assistance. The administration, as a matter of fact, has been 

talking about such assistance. But a 

pure taxpayer bailout wouldn’t guarantee any structural reforms or provide the possibility of debtor-in-protection kind of financing. It would, in 

fact, through the reorganization, at 

least provide taxpayers with the assurance that they could get repaid if they 

did provide some of this money as opposed to the current proposed bailout 

which has absolutely no guarantee that 

taxpayers would receive any of their 

money back. 

A final two quick points I wish to 

make. There is an argument by the car 

companies of who would buy a car from 

a company that is in chapter 11 protection. The answer is, probably the same 

people who are buying cars today. If I 

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S10548 CONGRESSIONAL RECORD — SENATE November 17, 2008 

drive down Camelback Road in Phoenix, where we have a lot of car dealerships, 6 months from now and some of 

those companies have asked for chapter 11 protection, I guarantee you, I 

will not know which ones. They will all 

have the same bright lights, the same 

eager salesmen ready to sell me something. With reorganization, you don’t 

go out of business. 

One of the myths is that this would 

put you out of business. If you take 

bankruptcy under chapter 7, you do go 

out of business. That is not what chapter 11 protection is at all. In fact, you 

are able to reorganize, and that is precisely why people would continue to 

buy the cars. 

Not everybody is going to lose their 

job through reorganization. I doubt 

that it would be more than a fraction 

of the people who would lose their jobs. 

Doug Baird, a bankruptcy professor at 

the University of Chicago, recently 

said, in response to the number 3 million which people have been bandying 

about: 

This three million figure is laughable . . . 

modern bankruptcy law is designed to protect against that. 

The bottom line is, there is a law 

that provides protection, breathing 

room, and an ability to get rid of the 

kind of debts burdening these companies. If all we do instead is throw $25 

billion at the problem, none of this protection comes into play. None of the 

ability to renegotiate what is dragging 

them down now would occur. It would 

simply literally be throwing good 

money after bad without a justification 

of why these companies, as opposed to 

many other companies in the country, 

were to receive that help. 

The money has to come from somewhere. It has to come from people who 

are working hard to make a go of it 

themselves. So we have to ask the kind 

of hard questions like this before we 

ask our fellow citizens to cough up the 

money for this kind of a bailout. I hope 

we will be able to do that during the 

debate on this legislation, which I hope 

we will see soon, assuming we are 

going to be deciding whether to vote on 

it this week. 

Thank you, Mr. President. 

The PRESIDING OFFICER. The Senator from Colorado is recognized. 

f 

AMERICA: A WORK IN PROGRESS 

Mr. SALAZAR. Mr. President, I rise 

today to celebrate this historic time in 

the history of the United States of 

America. 

I give my accolades to Presidentelect Obama and to Vice Presidentelect BIDEN for their transformative 

and historic campaign and election. 

I also recognize Senator JOHN

MCCAIN as a friend and for his extraordinary contributions to our Nation. I 

am certain Senator MCCAIN will continue to serve as a force for good on the 

floor of this Chamber, as he has for so 

many years. I look forward to working 

with him. 

Just a few short years ago, Presidentelect Barack Obama arrived in the Senate in the 109th Congress as an unlikely occupant from the Illinois State 

Senate. 

President-elect Obama’s story is an 

American story. The son of a mother 

from Kansas and a father from Kenya, 

he learned the values of hard work and 

service to others. He studied at some of 

our Nation’s finest schools but chose to 

apply his immeasurable talents to serving the people: a community organizer, 

an Illinois State senator, a U.S. Senator, and soon to be the President of 

these United States of America. 

President-elect Obama is, in fact, the 

personification of the American dream 

and the idea of what it is to be an 

American. His election is also a reminder of just how far our country has 

come. 

America has always been a work in 

progress—an idea that generation after 

generation has worked to perfect. We 

must never forget that for over 250 

years on this continent, and through 

the first century of this Nation, we 

lived in a society where slavery was allowed. 

It took the bloodiest war of our country’s history—the Civil War—where 

over a half million Americans were 

killed on our own soil, to bring about 

an end to slavery and to usher in the 

13th, 14th, and 15th amendments of our 

Constitution. These three amendments, 

in my view, are a significant part of 

the bedrock proposition that all constitutional liberties are endowed upon 

all Americans without exception. 

Unfortunately, neither the Civil War 

nor these amendments brought an end 

to the division or discrimination that 

were a part of our Nation’s past. 

In 1896, in Plessy v. Ferguson, our 

U.S. Supreme Court sanctioned a system of segregation under the law. The 

Court upheld an 1890 Louisiana law 

which mandated racially segregated 

but equal railroad carriages. It was a 

dark period in our Nation’s history. 

‘‘Jim Crow’’ laws extended across the 

South. In the Southwest, Mexican 

Americans were also systematically 

denied access to ‘‘White Only’’ restrooms and other public places. In the 

South, the signs read: ‘‘No Blacks Allowed.’’ In the Southwest in many 

places the signs read: ‘‘No Mexicans Allowed.’’ 

There were, however, many voices 

who knew that an America divided by 

race was an America which could not 

stand. In the now infamous Plessy 

case, Justice Harlan, in the dissent to 

that case that sanctioned segregation 

under the laws, said the following: 

The destinies of the races, in this country, 

are indissolubly linked together and the interests of both require that the common government law shall not permit the seeds of 

race hate to be planted under the sanction of 

law. 

It took more than a half century of 

an America in progress to revisit its 

decision in Plessy v. Ferguson and to 

begin achieving the vision of Justice 

Harlan. It was not until 1920 that our 

Constitution guaranteed the right to 

vote to women. In fact, for the first 

several hundred years women were not 

entitled to vote in the United States of 

America. It was not until 1954, in 

Brown v. Board of Education, that the 

Supreme Court, under the able leadership of Chief Justice Earl Warren, 

struck down the ‘‘separate but equal’’ 

doctrine as unconstitutional under the 

14th amendment. Thurgood Marshall, 

another American hero of ours who 

gave his life for equal opportunity for 

all Americans, argued that case before 

the U.S. Supreme Court. 

But even after the 1954 decision in 

Brown v. Board of Education, there was 

much more work to do. The 15th 

amendment, ratified in 1870, guaranteed all citizens the right to vote regardless of race. But almost a century 

later—in 1965—only a very small percentage of African Americans were registered to vote in States such as Mississippi and Alabama. 

In 1965, for example, in Mississippi, 

only 6.7 percent—6.7 percent—of African Americans were registered to vote. 

In Alabama, less than 20 percent of African Americans were registered to 

vote. 

To prevent people from voting, there 

were literacy tests, poll taxes, and language barriers, not to mention voter 

intimidation and harassment, which 

occurred in those days in the 1960s. 

But the 1960s also brought change to 

America and ensured that we continued as an America in progress. In 1964, 

President Lyndon Johnson signed the 

Civil Rights Act. In signing that law, 

he said: 

We believe that all men are created equal, 

yet many are denied equal treatment. We believe that all men have certain unalienable 

rights, yet many Americans do not enjoy 

those rights. We believe that all men are entitled to the blessings of liberty, yet millions 

are being deprived of those blessings, not because of their own failures, but because of 

color of the skin. 

Our work, President Johnson said 

that day, was not done. He was right. 

In early 1965, Jimmy Lee Jackson 

was shot by a State trooper during a 

civil rights demonstration. 

On March 7, in Selma, AL, more than 

500 nonviolent civil rights marchers attempting a 54-mile march to the State 

capital to call for voting rights were 

confronted by an aggressive assault by 

authorities. That day, still known and 

remembered as Bloody Sunday, stirred 

a nation to do what it knew was right. 

President Johnson, in those days, 

called for the country to summon its 

better angels. He said: 

At times history and fate meet at a single 

time in a single place to shape a turning 

point in man’s unending search for freedom. 

So it was at Lexington and Concord. So it 

was a century ago at Appomattox. So it was 

last week in Selma, Alabama. 

President Johnson continued: 

This time, on this issue, there must be no 

delay, no hesitation and no compromise with 

our purpose. We cannot, we must not, refuse 

to protect the right of every American to 

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