S10848 CONGRESSIONAL RECORD — SENATE December 10, 2008 

A lot of tough negotiations have gone 

on. This is a tough bill on accountability, it is tough on oversight. It is 

much tougher than anything that anyone on Wall Street has been asked to 

do, that is for sure. At the same time, 

it recognizes that we are in a global 

credit crisis and that the ability for 

them to borrow—to get a loan for a 

short period of time—is essential if we 

are going to have American manufacturing. 

Mr. President, I hope we are going to 

come together. I know the House intends to vote, and we will be coming 

together to vote on this issue. I hope 

we will see a resoundingly bipartisan 

‘‘yes’’ for a commitment to the middle 

class of this country to advance manufacturing for the future and that we 

will make sure people’s feet are kept to 

the fire, that the right things are done, 

but that we will not give up on the 

middle class of this country. We are 

not going to give up on 21⁄2 to 3 million 

people who are watching everything we 

are doing now to determine whether 

they have a future for their families 

that will give them a living wage and 

allow them to continue to be a part of 

this great American dream. I hope we 

are going to come together. I am optimistic that we will come together in 

the next couple of days and say yes and 

allow a whole lot of people to have a 

holiday season, a Christmas, that will 

allow them to know they have a future. 

Mr. President, I yield the floor, and I 

suggest the absence of a quorum. 

The PRESIDING OFFICER. The 

clerk will call the roll. 

The legislative clerk proceeded to 

call the roll. 

Mr. 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the quorum call be rescinded.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 in morning business. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

THE ECONOMY 

Mr. DORGAN. Mr. President, all of us 

in this country are nervous and very 

worried about the American economy. 

This is an economic engine that has 

been the wonder of the world. It has 

provided so much good for so many 

people, expanding opportunities for 

jobs and careers, and for people to own 

homes. This is an extraordinary place, 

this place called the United States. We 

have been through tough times and 

good times, and this turns out to be 

one of those pretty difficult times for 

our economy. This ship of state has 

sort of stopped in the water, the engine 

isn’t working very well, and we have a 

lot of trouble. 

Since the first of this year, nearly 2 

million people have lost their jobs. 

That sounds like just a statistic, but in 

a home where one spouse had to tell 

the other that they had lost their job, 

that is a disaster. So almost 2 million 

people have lost their jobs, and the 

question is, How many more will lose 

their jobs before we find a way to provide a foundation for building this 

economy back to an economy of 

strength and opportunity once again? 

We are discussing here in the Senate 

and in the Congress a proposed $15 billion bridge loan for the automobile industry. My colleagues have been speaking about that, and there are a lot of 

jobs at stake, so there is a lot of passion on both sides of this issue. It appears to me that there are somewhere 

around 3 to 4 million jobs at stake with 

the automobile industry. I think the 

question is, at this precarious moment, 

teetering on the edge of a cliff with 

this economy, what would it mean if 

somehow we decide whatever happens 

will happen and we will let it happen, 

watch it happen, but we won’t take action? What would it mean if a couple of 

million American people lost their jobs 

on top of what we have just seen? So I 

don’t think the prospect is for us to sit 

around and be observers. We have to be 

active. We have to be involved, and we 

have to try to find ways to provide confidence that there will be an economic 

recovery. 

Now, I am concerned about this recession, which is very deep. It is devastating to American families who 

have lost a substantial part of their assets and their 401(k)s and their retirement accounts. It is devastating to 

those who have lost their jobs. But I 

am concerned about something else as 

well: I am concerned about a government and a constitution that somehow 

seems to have invented a completely 

separate approach to governing. And 

let me describe what I mean. I am perfectly understanding of those that need 

to take and want to take emergency 

action to try to provide opportunities 

for the recovery of this economy. I understand that. I have studied economics. I taught economics briefly. I understand, having studied what happened in 

the Great Depression, the need to take 

aggressive action. But no one, in my 

judgment, has ever suggested that the 

need to take aggressive action should 

somehow obliterate the requirement 

for oversight and for accountability. 

But that is exactly what I think is happening today with an extraordinary 

kind of government outside of the regular process that we understand government to adopt based on our Constitution. 

Let me describe what I mean and my 

concern about it. As I look at what has 

happened with bailout funds, rescue 

funds, all kinds of emergency actions, 

there is about $8.5 trillion in taxpayer 

funds that has now been put at risk. I 

am not talking billions, I am not talking about millions or thousands, I am 

talking about $8.5 trillion of taxpayer 

funds that appears to me to have been 

placed at risk. In almost all cases, this 

was done without the consent of the 

Congress, outside of any vote that occurred here in the Congress. 

Now, I am not suggesting that the 

emergency powers, for example, at the 

Federal Reserve Board that Chairman 

Bernanke is using—should not have 

been a significant part of this effort to 

try to create emergency measures to 

address the economic trouble we face. I 

am not suggesting that at all. What I 

am saying is this: We have people 

huddled in rooms around here for days 

and days and days talking about what 

kinds of conditions should you put on 

the proposal of $15 billion that would 

be a bridge loan for the automobile industry, what kinds of tough conditions 

should they be, spell them out, make 

sure they are there. Well, guess what. 

With almost all of the Wall Street bailout money, there are no conditions, no 

real accountability that I am aware of. 

Nobody was sitting in a room saying: 

You know what, let’s establish tough 

conditions when we open the Fed’s window for the first time in history for the 

investment banks to come and get direct lending from the Federal Reserve 

Board. I didn’t see any conditions attached to that. You go down the list of 

things, and the Federal Reserve programs are $5.55 trillion. 

Now, I am not suggesting the taxpayers are going to lose that money. 

They will perhaps lose some of it for 

sure, but some of it represents mortgages that likely will be good in the 

long term. The guarantee of certain 

kinds of mortgage securities, the funding for certain investment bank operations—you know I am not suggesting 

all of this is going to be lost, but clearly some will be lost. The taxpayers are 

at risk. Did anyone talk about what 

kinds of conditions should exist for 

that? 

As I said, for a week now there have 

been people huddling about what are 

the strict and strong conditions you 

can attach to this $15 billion. I am in 

favor of strict and strong conditions to 

the things we do to move money into 

these circumstances. I am in favor of 

that. But why is it just here? Why not 

the $5.5 trillion? The FDIC program, 

$1.5 trillion, the Treasury Department, 

$1.1 trillion, $700 billion of which is 

called the Troubled Asset Relief Program—that, by the way, is a misnomer. 

That is what the Secretary of the 

Treasury asked for. He asked for $700 

billion to buy troubled assets from financial firms. The Congress gave him 

the $700 billion. I did not vote for that, 

but the Congress gave him $700 billion, 

and very quickly he said: Well, that is 

not what I meant. I have changed my 

mind. We are not going to buy troubled 

assets, we are going to invest in capital 

in banks. So he promptly put $125 billion into nine banks—some of which 

apparently didn’t want it—in order to, 

as the Treasury Secretary said, expand 

lending because the credit markets 

were frozen. 

Well, guess what. That $125 billion 

called troubled asset relief money was 

put into banks instead as capital investments with no requirement at all 

that they expand lending. The purpose 

December 10, 2008 CONGRESSIONAL RECORD — SENATE S10849 

of the investment was to expand lending, but there was no requirement that 

they expand lending. Pretty inexplicable to me. But the point is, $700 

billion of this $1.1 trillion is the troubled asset relief fund, and then Federal 

housing has about $300 billion. 

By the way, this has not been easy 

information to get. Some enterprising 

work by a number of reporters— 

Bloomberg, for example—was first to 

try to figure out what is out here in 

terms of liability. What are the risks? 

What are the American taxpayers 

being asked to assume with respect to 

a burden? The fact is, it was hard to 

find. And despite the promises and 

pledges of transparency and accountability, it doesn’t exist. We are told: 

Well, this is not transparent because it 

is difficult to do that, to tell folks at 

so-and-so that this company got a loan 

and this company didn’t. I don’t understand that. The promise of transparency was not some sort of tepid 

promise; it was a promise that what 

was going to be done would be available to be observed by the American 

people. That regrettably has not been 

the case. 

So the Troubled Asset Relief Program was a program that actually was 

the only portion of this $700 billion 

that was considered by the Congress. 

Despite the fact that the Secretary of 

the Treasury wanted $700 billion with a 

three-page piece of legislation, those 

who worked on that did put some conditions, accountability and oversight 

requirements in the legislation. These 

requirements that have existed for the 

TARP program don’t exist for any 

other program. 

What I suggest we do is this: I am 

going to introduce legislation that 

would the apply the conditions and 

other safeguards that exist for the 

TARP program—the Troubled Asset 

Relief Program—to all of the other federal lending activities so that we have 

tough conditions attached to all of 

these activities and some accountability and transparency and oversight. 

It is almost unbelievable to me that 

we have this massive amount of money 

being moved around with no one—except for the $700 billion—in an elective 

position responsive to the American 

people. The American people, after all, 

are the ones who assume the risk of all 

of this—with no one in an elective position making these judgments. 

This is kind of an extraordinary form 

of government we are seeing. It is one 

I do not think you read in the Constitution. Again, my criticism is not to 

those who are interested in being active to address an economic crisis. I believe you have to be active to address a 

crisis. But I think those who are working now on the auto issue, who are insisting on strict conditions, are completely at odds with virtually everything else that has been done without 

conditions or oversight at all. That 

makes no sense to me at all. 

The TARP program has conditions of 

oversight, accountability, and transparency. None of them are applicable 

to the other portions—which is about 

$7.8 trillion. Is anybody asking why? Is 

anybody asking why should they not be 

applicable? I am going to introduce 

legislation that would make these 

same conditions applicable to all these 

areas. It doesn’t matter whether it is 

an open Fed window or some other 

guarantee—we have $7.8 trillion of 

other guarantees that put the taxpayers at risk. In one way or another 

the American people deserve to be able 

to see what is happening to them. 

I am going to introduce a number of 

pieces of legislation. One of them will 

be to impose the same conditions and 

oversight in the troubled asset program to all the other programs that 

exist here. Second, I am going to propose a piece of legislation called the 

Financial Reform Commission, creating a high-level commission that 

would report back to the Congress in 

about 6 months about how we would reform our system of finance in this 

country. 

We can’t continue this. The fact is, 

what happened threw this country’s 

economy into the ditch. It caused an 

enormous wreck. And we are going to 

keep doing it? I don’t think so. It has 

to change. It has to be reformed. Some 

of the largest financial enterprises in 

this country have gotten massive 

amounts of money, hundreds of billions 

of dollars, but no one has shut the gate, 

as I described yesterday. 

I come from a rural background 

where we had cattle and horses. I understand about closing the gate. No one 

has closed the gate here. I described 

yesterday what caused all this—unbelievable reckless behavior, unbelievable greed. Lots of interests were making lots of money. 

The story the other day was about 

someone who was in charge of risk 

management for one of the big investment banks. One guy is in charge of 

risk management, the other guy is in 

charge of trading CDOs—collateralized 

debt obligations. The guy in charge of 

trading CDOs didn’t have a very difficult time getting his activities 

through the risk manager and they 

loaded up. Both of them were making 

over $20 million a year. Let me say 

that again—both of them make over 

$20 million a year. This company loads 

up with massive quantities of toxic assets. 

Now we are all stuck with the proposition of the Federal Reserve Board, 

the Treasury Department, and others, 

including the FDIC, trying to come to 

the rescue but coming to the rescue 

without any notion of how you close 

the gate on that kind of behavior, first 

of all; and, second, what kind of conditions attach to that rescue. 

Again, I say about all this effort 

today and in the last week about imposing conditions on the automobile 

industry—sign me up. I am for that. I 

am not for using taxpayers’ money 

without substantial limitations and 

conditions. But then why are we standing here with $7.8 trillion having been 

put at risk for the American taxpayer 

with few or no conditions, with little 

or no transparency, with almost no accountability, when Treasury comes up 

and says we will stick $45 billion into a 

big financing agency, one of the biggest 

in the country, and, by the way, you 

don’t have to get rid of anybody. Nobody loses his job. We don’t impose a 

requirement that you cannot pay big 

bonuses. We will just give you the 

money. 

The question is, What caused the requirement to give them the money? 

The answer is unbelievable recklessness by people who were greedy, making lots and lots of money. Why would 

you provide money to an enterprise of 

that type without very substantial restrictions and conditions attached to 

that money? That is a question I think 

the Treasury Secretary should answer, 

the Chairman of the Federal Reserve 

Board should answer. The American 

people deserve that answer. We need a 

financial reform commission that decides how do we reform this going forward. 

Let me tell you about the reform 

that happened 9 years ago. The reform 

9 years ago, by the ‘‘smartest guys in 

the room,’’ was: We are hopelessly oldfashioned in our finance, hopelessly out 

of date. 

Leading up to the Great Depression— 

the 1920s, leading up to the 1930s—we 

saw banks that were engaged in very 

risky enterprises: Real estate, securities, a whole series of things that were 

risky. The country plunged into a big 

old depression, banks closed all over 

the country, and emergency legislation 

was put together—Glass-Steagall 

among them—that said: You know 

what. It is nuts to have banks engaged 

in risky enterprises. We are going to 

separate them, and we are going to 

make sure you can never do it again. 

That is why legislation such as GlassSteagall was passed. It protected that 

banking system whose not only reality 

of safety and soundness is important, 

but the perception of safety and soundness is critical, because without that 

perception, a run on the bank can bring 

a bank down. 

We went on after the Great Depression, having separated those kind of 

risk activities from banking. Then, in 

1999, Senator Phil Gramm from Texas 

led the effort in the Senate, and the effort was in the House as well, to say: 

This is hopelessly old-fashioned. Are 

you kidding me? We can’t create big financial institutions, holding companies that allow us to merge investment 

banks with real banks and get involved 

in the issues of real estate and securities and so on? Let’s pass a piece of legislation called the Financial Modernization Act and get rid of all this 

obstruction that has been put in place 

after the Great Depression. 

I wish to put up what I said during 

the debate in 1999 on the floor of the 

Senate. When the Financial Modernization Act left the Senate, the conference 

S10850 CONGRESSIONAL RECORD — SENATE December 10, 2008 

report, eight of us voted no. I was one 

of the eight who voted no. Here is what 

I said in a speech on the floor of the 

Senate: ‘‘This bill will also in my judgment raise the likelihood of future 

massive taxpayer bailouts.’’ 

I am not prescient. I am not someone 

who can see the future. But I believed 

what we were doing in 1999 was unbelievably ignorant of the lessons we 

should have learned from the Great Depression. 

‘‘The bill will also in my judgment 

raise the likelihood of future massive 

taxpayer bailouts,’’ I said in May of 

1999. I wish I was wrong. Nine years 

later, here we are on the floor of the 

Senate, and we are seeing bailouts in 

every direction from the Federal Reserve Board, the Treasury, and others. 

I also said during that same debate: ‘‘I 

say to the people who own banks, if 

you want to gamble, go to Las Vegas.’’ 

But that wasn’t enough. We had a lot 

of folks who decided, you know what, 

we need to get banking, once again, involved in some of the more profitable 

enterprises such as real estate and securities. We ought to be able, they 

said, to pass a financial modernization 

act that allows the creation of big financial holding companies with a homogenization of all kinds of different 

enterprises under one roof. They said 

we will put up firewalls, apparently 

firewalls made of balsa wood or paper, 

but we will put up firewalls, and things 

will be great, and so it passed. Only 

eight of us voted no in the Senate when 

that conference report left. 

Yesterday, I described what happened 

as a result. It was similar to hogs in a 

corncrib, grunting and shoving and 

snorting. You heard it for a decade, especially in recent years. The most 

egregious part of it started with the 

subprime loans, but it was also with 

derivatives and credit default swaps. I 

said this back in 1999: 

If you want to trade in derivatives, God 

bless you. Do it with your own money. Do 

not do it through the deposits that are guaranteed by the American people. 

There were four pieces of legislation 

I introduced during the interim going 

back to 1995 to try to prohibit banks 

from trading in derivatives. Let me put 

up a chart that shows what has happened with derivatives. The top five 

bailed-out banks: JPMorgan Chase got 

$25 billion in bailout funds from the 

U.S. Government. They have a notional 

value of derivatives of $91.3 trillion. 

The Bank of America got $15 billion in 

bailout funds. They have a $39.7 trillion 

notional value of derivatives. The list 

goes on. Citigroup, $45 billion in bailout funds, $37 trillion in notional value 

of derivatives. 

This sort of mixes the terms. There is 

something called credit default swaps 

out there, something over $50 trillion 

of credit default swaps. If someone 

wants to know what they are, look at 

the AIG story. You will understand 

what brought them down. It was run by 

a little operation over in London with 

several hundred people. All this represented an unbelievable amount of 

reckless speculation that should never 

have been allowed to happen. That bill 

passed the Congress. President Clinton 

signed it. We have people—some of 

whom will come into this new administration—who were supportive of it. I 

think it was a horrible mistake. If we 

do not recognize it now, even as we are 

trying to dig out of this hole, we are 

going to head right back to the next 

hole. We need to have the Financial 

Reform Commission that develops the 

recommendations similar to what happened post-depression that will allow 

us to put together the kind of protections, once again, to make sure this 

will never again happen. 

Let me also say I am going to introduce legislation calling for a National 

Financial Crimes Task Force. There 

needs to be accountability. I am not 

suggesting all of it is criminal or even 

a major part of it is criminal, but some 

of it undoubtedly represents criminal 

behavior. Yet there is virtually no investigation going on, on these issues. It 

is so unbelievable. I chaired the hearings in the Senate on the Enron Corporation. You remember Enron. That 

was a criminal enterprise that bilked 

particularly the west coast taxpayers 

and ratepayers for electricity out of 

billions of dollars. I chaired the hearing when Ken Lay, the chairman of 

Enron, came and lifted his hand to tell 

the truth and then took the fifth 

amendment. 

Think of this, Enron was a big deal, 

a big scam and, in part, a criminal enterprise. In retrospect, the amount of 

money involved there is minuscule 

compared to the trillions of dollars we 

are talking about here that resulted 

from reckless business management 

and reckless practices. 

I talked about derivatives and credit 

default swaps. I’ll just mention, once 

again, the issue of subprime loans, 

when companies were advertising to 

the American people they should come 

to their company to get a loan, because 

if you were bankrupt, if you had slow 

pay, if you had bad credit, they wanted 

you to get a loan with them. In fact, 

they would encourage you to get a loan 

with them, and you wouldn’t have to 

document it. That is called a no doc 

loan. You don’t have to document your 

loan. Come to us, Zoom Credit said, 

come to us and get a loan. Slow pay? 

Bankruptcy? Troubles? It doesn’t matter—come to us. That is just an example. 

In fact, yesterday I showed that the 

largest mortgage banker in the country was engaged in the same sort of 

thing and that has already collapsed as 

well and the guy who ran it got off 

with a couple hundred million dollars, 

at least as I understand it. 

My time is about up. My interest is 

in protecting the economy and protecting this country and protecting 

American taxpayers. We need to try to 

give some protection to American jobs 

and to protect taxpayers and that 

means strong conditions, strong oversight, transparency, and accountability. I am for taking emergency action. I am for doing what we can to 

pull this country out of this hole. But 

we ought not decide we are going to 

impose very strict conditions on this 

tiny little piece and on all the rest of 

trillions of dollars, it is Katy bar the 

door; whatever happens, happens; and 

don’t complain. 

That is not what the role of the Congress should be. This Congress should 

insist on every dollar that is committed on behalf of the American taxpayers that we have accountability, responsibility and transparency and 

strong conditions. That has not been 

the case to this point and I intend to 

introduce legislation that requires it. 

I yield the floor. 

f 

RECESS 

The PRESIDING OFFICER. Under 

the previous order, the Senate stands 

in recess until 2:15 p.m. 

Thereupon, the Senate, at 12:30 p.m., 

recessed until 2:15 p.m. and reassembled when called to order by the Presiding Officer (Mr. LIEBERMAN). 

The PRESIDING OFFICER. In my 

capacity as a Senator from the State of 

Connecticut, I suggest the absence of a 

quorum. 

The clerk will call the roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. BROWN. Mr. President, I ask 

unanimous consent that the order for 

the quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

EXTENSION OF MORNING 

BUSINESS 

Mr. BROWN. Mr. President, I ask 

unanimous consent that morning business be extended until 3:30. 

The PRESIDING OFFICER. Is there 

objection? Hearing none, so ordered. 

f 

AUTOMOBILE INDUSTRY 

Mr. BROWN. Mr. President, almost a 

quarter million Ohioans are employed, 

directly or indirectly, by the automobile industry. The compromise bill 

we have negotiated—which I hope will 

pass tonight—means much more than 

just bridge loans for auto companies. 

This legislation means hundreds of 

thousands of middle-class workers in 

Ohio, in Missouri, in Indiana, in Pennsylvania, in Michigan, and all over this 

country; hundreds of thousands of middle-class workers in my State will be 

able to keep their jobs—jobs for car 

dealerships in all 50 States, jobs for 

suppliers in all 50 States. It means jobs 

at auto assembly plants and it means 

jobs at auto-stamping plants and engine plants in all those States I mentioned. It means communities would 

not suffer yet another blow from massive job loss. It means Ohio’s economy 

and our Nation’s economy will have a 

fighting chance to get back on track.