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New Direction for Energy Independence, National Security, and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007

Floor Speech

Location: Washington, DC



Mr. SPECTER. Mr. President, I have sought recognition to discuss with the chairman of the committee the status of the bill and the pendency of my amendment No. 4392. This is a very important amendment which would give relief to homeowners with variable rate mortgages where there is foreclosure action, where they suddenly find the monthly payments increased unexpectedly from as much as $1,400 to $1,900, which they cannot afford and then their house goes into foreclosure. The borrowers do not understand that, and frequently there is misrepresentation, fraud.

This amendment differs markedly from the Durbin amendment, which was defeated, which would have had a serious impact on the availability of lenders to put up money if there is undue interference with the contractual rights.

This amendment protects the homeowners. It does little harm to the fluidity of the availability to get loans.

We are moving toward a cloture vote at 2:30 p.m. By all indications, cloture is going to be invoked, although I intend to fight it, to talk about it in the caucus which will be held in a few minutes.

On the Republican side, we talked about denying cloture in order to give Members an opportunity to have their amendments heard and voted on, and I intend to press that issue. I was prepared to vote on this amendment last Thursday, when I was taken from the floor to go to a Judiciary Committee hearing because the expectation of another Republican covering it was not fulfilled. So I had to go over to the hearing as ranking member because we had a number of nominees in the Judiciary Committee hearing. Now I find we are moving to cloture, and there is no opportunity for a vote.

In my judgment, that is not the way this place ought to operate. I know the chairman of the committee is bound by leadership decisions, but I hope we can find a way to get a vote on this amendment. I know there are other Members who have amendments who want votes.

May I ask the chairman for a response?

The ACTING PRESIDENT pro tempore. The Senator from Connecticut.

Mr. DODD. Mr. President, let me say to my colleague from Pennsylvania, I appreciate the substance of the idea he has offered and, of course, the amendment by Senator Durbin as well. I will not belabor my colleagues with the history of why it is that provision exists.

There were about 10 or 12 of us who strenuously objected to the bankruptcy reform bill. So I had problems with that bill across the board. I will not go into all that here. Let me try and frame this again.

The majority leader, back about a week or so ago, talked with the Republican leader about the possibility of us breaking this logjam that existed, where nothing could even be debated on the housing issue. So the idea was Senator Shelby and myself were designated by our respective leaders to try to come up with a consensus package of ideas, one Republicans and Democrats, by and large, could support to come out with as a core, and from that other amendments would be offered and added along the way, and if there was consensus, we would try to add those.

It is a complicated process, but it was the only way we were going to move beyond the gridlock that was allowing no debate whatsoever.

I am in the position, obviously, of trying to accomplish what our leader is trying to achieve--and he should and I applaud him for it--of trying to get us moving on this issue. We are losing 8,000 people a day in foreclosure and the country and the economy is suffering terribly and we were in gridlock on this issue.

There are some very meritorious ideas. Those who have been in this position of managing legislation, of trying to get it through, know from time to time you are confronted with substantively agreeing with what a colleague is offering but find yourself in the position of where, to move the product along, you do not agree at that particular time to deal with the issue for a variety of reasons.

Mr. SPECTER. Mr. President, will the Senator yield for a question?

Mr. DODD. Let me finish the thought. The idea is we are watching the legislation, quite candidly, because it is a tax bill, with which Senator Grassley and Senator Baucus are dealing. All of a sudden, we found ourselves dealing with other issues. That is not to say this is one. This is one that could clearly relate to the subject matter. There are others dealing with energy policy and the like. It is one of the few vehicles that may move. So I understand the frustrations people may have about putting something on this bill.

The fact is, we could be here endlessly and fail to get a housing bill--albeit short of what I would like or others would like--to get us to a conference with the House to do something about this issue. We can stay the rest of this week or next week and debate a variety of amendments or try to get moving to get something accomplished.

That, I believe, is the motivation behind the majority leader, and I will let Senator Shelby talk for the minority leader. That is the general thought. That is not to suggest these other ideas do not have merit or do not have value, including the idea promoted by the Senator from Pennsylvania. There is a reason why the leadership is responsible for trying to move product through here that may not include every idea everyone has that they would like to see added to legislation.

My hope is cloture will be invoked, that we can go forward, and there can be amendments in postcloture, and if they are germane and deal with the issues at hand, then we will try to accommodate them and, where we have consensus, add them and come to some closure and move forward.

This is not the end of the debate. This is not the end of ideas. We will have hearings this week in the committee. We have proposals we are going to bring up in our committee in markup in the next couple weeks, and we will be back on the floor with other ideas directly related to this subject matter. We are merely trying to move this subject along to achieve some of the results involved.

I admire what the Senator is trying to do. He and I have worked on a lot of issues over the years and certainly this idea. As my colleague from Alabama knows, when Senator Durbin's amendment was offered, I told my colleagues this is one area where I am going to be supportive of that effort to deal with primary residences.

I agree with what my colleague wants to achieve, but there are other considerations we are trying to accomplish with this legislation.

I will be happy to respond to a question.

Mr. SPECTER. Mr. President, the problem with the argument by the chairman is that looking to the future, the reality is that nothing will happen. It is a long way from the representation, which I know the chairman makes in very good faith, to have a bill come out of committee and come back to the floor, in light of what has happened on the calendar. It is just that the chances are so small, it cannot remotely be relied upon.

When the chairman makes the comment about postcloture germaneness, the Senate rules on what is germane are so arcane as to be un-understandable, just un-understandable. Here we have a housing bill. What could be more material to a housing bill when foreclosures are happening across the country as we speak? The Senator from Connecticut comments about the high rate of foreclosures, and this is an amendment which seeks to stop the foreclosures, and it seeks to stop the foreclosures where the lender has provided an instrument, which is a variable rate mortgage, that the borrower does not understand; it has not been explained; there are probably misrepresentations in many cases and probably fraud in many cases. That is why this amendment opens up the court to make a determination of that.

It does not impede upon the fluidity of the market and the availability of capital, such as the Durbin amendment did, which changed the principal sum.

The legislation which is coming out of the Congress and what is happening on the administration is very heavily tilted to Wall Street and not to Main Street. Those are the expressions. It is the little guy who is not being taken care of.

I have admired what the Senator from Connecticut has had to say about that. This bill is imbalanced--a bailout of Bear Stearns but you cannot protect the borrower who has a variable rate mortgage which he did not understand, where the rates have ballooned and he is being foreclosed. That is not fair, and that is not right.

This bill is not balanced. It has a loss carried forward, which I think is a good provision, but that does not help the little guy. It has a tax credit for somebody who buys a house where the mortgage is in foreclosure, but that does not keep the homeowner in the house. I don't think the Senate ought to move ahead. This is not half a loaf, this is a crumb. This bill is a crumb.

I yield the floor.

Mr. DODD. Mr. President, I have been notified that at least one Member, on the side of my good friend from Pennsylvania, will object to any process going forward. So maybe he can spend some time in his conference lunch to convince some of his colleagues to be more supportive of some of these ideas.

This is not a crumb, let me say to my colleague from Pennsylvania. The idea we are modernizing the FHA is critically important. The fact we have money in here for disclosure, we have resources for counseling, the fact we are getting resources back to the States, $4 billion to assist them as they try to deal with the problems in their local communities, the fact we are providing some tax support for people to move into foreclosed property so we don't add to the supply is critically important as well. These are some very solid ideas.

There are some provisions in the bill, I will be the first to admit, frankly, had I written this all by myself without having to deal with other people who care about some of these issues, I would not have included.

This is far more than a crumb in terms of trying to deal with this issue. More needs to be done, but the suggestion somehow that the community development block grants, counseling, disclosure, and modernization of the FHA and raising loan limits and the like are insignificant is to fail to understand what is in this bill.

More can be done, I do not disagree. But the suggestion that what we have done falls into that category is a vast exaggeration in terms of what we have been trying to accomplish, and more will be done with this issue as well.

The ACTING PRESIDENT pro tempore. The Senator from Pennsylvania.

Mr. SPECTER. Mr. President, metaphors are meant to be extreme. We cannot quantify a crumb as opposed to a loaf of bread. But no one would say this is half a loaf. The criticism of this bill has largely come from the chairman of the committee who has said it does not go far enough.

Mr. DODD. Agreed.

Mr. SPECTER. When we have foreclosures across the country on variable rate mortgages and no action is being taken to deal with them--let me ask the Senator from Connecticut: If we consider the action which has been taken by the Fed on Bear Stearns and otherwise and we consider what this legislation is, isn't it significantly out of balance between Main Street and Wall Street?

Mr. DODD. Mr. President, I say to my colleague from Pennsylvania, what was done in the Bear Stearns-JPMorgan Chase issue, I would argue alternatives may have been available. In the final analysis, what was done that Sunday night to allow the merger of Bear Stearns with JPMorgan Chase--and this is the conclusion, I think, unanimously of our committee, having had a hearing on it--was probably the right decision, given the alternative of bankruptcy of Bear Stearns and what could have happened on that Monday had the action not been taken by the Fed, the Treasury, and the New York Fed. That is one separate issue. It is a legitimate point to say, shouldn't we do something where we can help out communities and individuals and to get this economy moving in the right direction.

I made that case for a year now, not just in the wake of Bear Stearns. We had our first meetings on this matter in March of last year trying to get something done. I am not going to take a backseat to anyone who discovered this issue in the last couple days and how much they care about it. I have been at it for 13 months, trying to get things moving in this area.

We are doing some things here. My colleagues know very well what objections there have been to doing anything in this area: Let the market take care of it; the problem has been contained; no further problems. Quite the contrary. We are now down to the business of doing something about it, and I regret we are not accommodating everyone on every idea they have the moment they want it considered.

We are doing our best, Senator Shelby and I and members of the committee, to come out with something. Four weeks ago, we couldn't do what we are doing now. We couldn't even debate the issue, I say to my colleague from Pennsylvania.

I am suggesting to the Senator from Pennsylvania this bill does a lot more than provide crumbs. It goes to the heart of very significant issues that need to be dealt with. There are other matters that need to be dealt with.

As my colleague knows, I agree with him about what bankruptcy courts can do with primary residences. I also understand the history of the seventies, why that provision was included, but I believe the times have changed, and under this fact situation, we ought to allow a bankruptcy judge to be able to modify that agreement to allow that individual to stay in their home.

I thought Senator Durbin was right with his idea. The Senator from Pennsylvania has a more modest idea in this area and may attract a few more votes than the 36 we got with Senator Durbin's amendment. So I am willing to support that, but the idea of trying to come to some closure is also important so we can move on, get with the House, resolve some of these matters, and come back. That is what this chairman is trying to accomplish. That is what we were doing last week when we were directed to do so by the leaders of our respective parties.

Mr. SPECTER. Mr. President, a final word. I don't disagree with what the chairman has had to say about what was done with Bear Stearns. I think we are all opposed--I certainly am opposed--to bailouts when highly sophisticated Wall Street operators are looking for big profits and their judgment is bad and they lose money. They ought not come to the taxpayers for a bailout. I do recognize the situation with Bear Stearns could have had a domino effect, which could have been devastating. So I don't disagree with that action.

I am not going to retreat from my crumb metaphor, but let the record show that on the question to the chairman as to whether there was not substantial imbalance between what has happened with the Fed and what is happening with proposals in the Congress, substantial imbalance between Wall Street and the Main Street, the chairman did not deny that, did not deal with it.

Let me close with a question, if the chairman would give favorable consideration to my amendment when he reconvenes the Banking Committee and take up this issue in the future.

Mr. DODD. Mr. President, we will be happy to consider it. It is a matter under the proper jurisdiction of the Judiciary Committee, of which the Senator is a member, and it is not in the jurisdiction of the Banking Committee. That is one of the other issues we face. If he is unable, as a leading member of that committee, as a former chairman of that committee, to have that adopted by his committee and come forward, we certainly would consider it.

I point out we only had 36 votes for the Durbin amendment. I regret that. We only had 12 of us who opposed the bankruptcy reform bill for 6 years around here. Those matters we widely endorsed and supported, including the efforts, as my colleagues may recall, that I tried to do with credit card companies that are gouging the public on a daily basis.

So I will take a back seat to no one in my determination to get far better reforms out of the bankruptcy proceedings in the country, and we will certainly do our best. But I want to be realistic with my colleague as well. Unfortunately, the Senator from Pennsylvania and I don't represent a majority in this body when it comes to that issue. The realities are that we only have about half of us who seem to agree with the two of us on this matter.

Mr. SPECTER. Mr. President, if the Judiciary Committee did report out the Durbin amendment favorably, and my amendment on a second degree was defeated along party lines, it is true there is primary jurisdiction in the Judiciary Committee. But when this matter comes up before the Banking, Housing and Urban Development Committee, these ideas could be incorporated, and I would urge my colleague to do just that.

Mr. DODD. I thank my colleague. I know there have been a number of other amendments, Mr. President, and I have just been informed that objection will be expressed on every amendment, I guess, that is being offered by a Member of the other side on this matter. So I would inform my colleagues where we stand procedurally.

We are going to have our caucus luncheons where, I am sure, this will be the subject of some discussion as we try to move forward, but, again, I thank Senator Reid, the majority leader. He has a thankless job when it comes to these issues, and he asked Senator Shelby and I to try to do our best to come up with a consensus package. Granted, now the subject matter has become of great interest to everyone, and it should, and we have tried to do just that, to put together a consensus package--not an easy thing to accomplish in this body, but we tried to do that. Again, we will try to move forward with other ideas that we can incorporate through our committee and others.

Mr. President, the Senator from Arkansas wants to be heard on this matter as well, and I thank her for her patience.

I yield the floor.


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