Continuing Extension Act of 2010--Motion to Proceed

Floor Speech

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Mr. DORGAN. Mr. President, we are going to have a cloture vote this evening at 5:30. It is about a subject that is very important. Yet I have been listening to the floor today and hearing the discussion about saving our country, about the issue of large Federal budget deficits, and the things that threaten our country's future.

I wanted to talk a little bit about some of those issues because I have been reading a book recently, quite an interesting book, called ``Too Big to Fail.'' I was listening this afternoon to some of the debate and thinking about too big to fail and too small to matter.

Interesting dichotomy: Too big to fail is talking about the biggest institutions in this country, the largest financial institutions in America, are too big to fail. So they run themselves into serious trouble. They get the benefit of no-fault capitalism. We are told if they fail, it will be a disaster for America's economy; therefore, we will have the taxpayers pony up $700 billion to make sure they do not fail. I am talking about the people at the top.

The question is, What about the people at the bottom, the people who work for a living, who like their jobs, want to have a better future for themselves and their children, but who discovered that as we sailed into this economic storm, while the people at the top got a big old parachute and they were lifted gently to the ground or allowed to get gently grounded, the folks at the bottom were just pushed off a cliff.

We ran into this serious economic trouble, and a whole lot of people lost their jobs. We have had millions and millions of people lose their jobs. We estimate somewhere around 17 million Americans woke up this morning without a job. They went looking today, as they do every day, but they have not found a job. They, their spouse, their children, they are all victims of this economy.

So then the question is, the difference between too big to fail--those institutions, by the way, which for some of our colleagues, they could not be quick enough to get the pillow and the aspirin to say: Can we help you to bed? Is there any way we can be of help? Here is $700 billion on the too-big-to-fail side. But on the too-small-to-matter side--it is the person who lost their job--we had folks in here saying: You are just out of luck. We do not have the ability or willingness to deal with you.

I taught a little economics a couple of years in college. We always understood the basic lessons on economics are simple enough when you run into a very severe recession or depression. But let's talk about recession, a deep recession, and in this case the deepest since the Great Depression. The government's revenues dried up; we have lost somewhere around $400 billion a year in revenue. The economic stabilizers that are required in a recession would be unemployment insurance, food stamps, and those kinds of things to try to help people out, help them through some difficult periods. I am talking now about helping people at the bottom of the economic ladder. Those things automatically go up.

So the revenue goes down, that goes up, and your deficit balloons. There is no question about that. Everybody understands that. I understand why the deficit has gone out of sight. I also understand it is a very serious problem for our country. But I think we should all understand we should not do the things that would move us right back into a recession. The economic stabilizers and the expenditures on them is very important in order to get us out of this problem and in order to help those at the bottom of the economic ladder who cannot help themselves.

What bothers me is we have people coming to the floor of the Senate saying: I am the champion to try to reduce the Federal budget deficit. I am the person who is going to solve this.

Well, I would say to those folks: Where were you? Where have you been? It has been a decade and you were not around. I recall nearly 10 years ago when President Bush came into office, and he said: We have a budget surplus. Yes, they did. The first budget surplus in three decades under the last year of President Clinton's Presidency, a budget surplus at the Federal level, the first one. By the way, that resulted from a series of fiscal policy judgments that were made beginning in 1993. I voted for it. It passed by one vote in the Senate. It passed by one vote in the House. Senators such as--I guess I will name him because he was proud of it--Senator Phil Gramm from Texas stood up and said: You pass this, you will bankrupt the country. No, it did not bankrupt the country. It actually led us out of the problems we were in to a budget surplus in the year 2000.

President George Bush came to town and said: You know what. We have this budget surplus. It looks as though we are going to have budget surpluses for the next 10 years. Let's give very large tax cuts to people, but the largest tax cuts to the highest income people in America.

Well, I stood on this floor and said: I do not support that. What if we do not have these surpluses for 10 years. These are just economic predictions by economists who cannot remember their phone numbers for 3 days, and they are telling us what is going to happen in 3, 5, and 10 years. Let's be a little bit conservative.

President Bush and his colleagues on the floor of the Senate said: Katey, bar the door. We are pushing this. They did, and they had the votes. They passed it, and all of a sudden we substantially cut the revenue that was coming into the Treasury.

Then what happened almost immediately? Then we were hit with 9/11, a terrorist attack in this country. Then we were at war in Afghanistan. Then we went to war in Iraq, and year after year after year the President brought to this Congress proposals for emergency spending for the war. This President said--I am talking about President George W. Bush--we do not intend to pay for a penny of it. Every single penny for the war is going to be on an emergency basis, put on top of the Federal debt.

I did not hear those folks who now say they are going to stand between us and catastrophe come to the Senate floor then to say that did not make any sense. I did. I said: Why don't we pay for some of this?

The President said: If you try to pay for it, I will veto the bill.

There we were for 8 years spending money we did not have on a war we probably should not have fought, borrowing every single penny of it. Now the folks who speak the loudest these days about these issues are the ones who decided: Oh, that made a lot of sense: cut the government's revenue, fight a war without paying for any of it.

By the way, many of them, 10 years ago when we voted on the floor of this Senate to repeal the restrictions that were put in place after the Great Depression to protect our country, they were the ones who voted for the repeal to say: You know what. Let's let these big financial companies create holding companies, and you can put them all together. You can put real estate and securities and banks and investment banks, FDIC-insured banks, put them all in one big holding company. It will be just fine.

Well, I was on the floor of the Senate saying: This will not be just fine. It will be a catastrophe. I said 10 years ago--I did not know for sure, but I said: Within 10 years we are going to see big taxpayer bailouts if we do this.

Some of the same people on the floor of the Senate back then were saying: Look, let's create these big financial behemoths so we can compete. It will be good.

Then the President, George W. Bush, brought in regulators who boasted they were willing to be willfully blind for almost a decade: It does not matter what you do, you can do that. We will not watch. They said: There is a new sheriff in town. We are business friendly.

So in all of these agencies where we were supposed to have regulators to make sure the free market worked, regulators who were the referees with a striped shirt to blow the whistle to call the foul when the free market was the victim of a foul, they were not around. They were just in a Rip Van Winkle sleep for nearly a decade.

Meanwhile, Wall Street went out to play, and they created the most unbelievable instruments of deception: credit default swaps, synthetic credit default swaps, CDOs. I mean it is unbelievable. The circumstances that developed, the subprime scandal, the creation of these exotic financial instruments, the development of substantially more lending approved by regulatory agencies--all of this set us up for an unbelievable fall.

Some of the same people who were cheerleading for these very activities are now telling us they are going to protect America. And you know where they are going to make their last stand? Their last stand on these deficit issues is to deal with the poor people by saying: No, you cannot get that unemployment insurance extension.

By the way, unemployment insurance is something that people pay for out of their paychecks. Unemployment insurance is something we pay for out of our paychecks. Extending it during a recession is certainly the thing to do. It is something we have always done. Yet this is the last stand.

What about making the last stand when it comes to bailing out Wall Street? How about making the last stand a couple of weeks from now when we have Wall Street reform on the floor of the Senate, when we have a real fight about trying to do reform that is necessary on Wall Street?

In 2008, the financial firms on Wall Street--I am just talking about the Wall Street firms now--the biggest financial firms lost $36 billion and paid $18 billion in bonuses.

I have an MBA. I went to graduate business school. There is nowhere they teach in graduate school that if you go out and lose $35 or $36 billion, you ought to expect to be able to pay $17 or $18 billion in bonuses to those who helped you do it. Yet that is exactly the kind of carnival that existed in this country at the top of the financial food chain.

So we are going to have a big fight about that in a couple of weeks. How do we plug the holes? How do we solve this problem of Wall Street reform? We are going to have a lot of votes, and it will be interesting to see whether those who now speak the loudest about being able to protect the American taxpayer, standing up on the issue of debt and deficits, whether those are the people who are going to join us in taking the action to try to make sure that cannot happen again because, when we talk about what has contributed to this country's debt and deficit, the largest contribution by far are the supportive votes of those who were friends of Wall Street, and in the last 10 years have given them every single opportunity to do what they have done--that is, to create a casino-like economy and to have FDIC-insured banks trading on their own proprietary accounts.

They may just as well have had a blackjack table in the lobby. I mean, it is unbelievable. To fuse together inherently risky investment banks with FDIC-insured banks and having both of them, instead of providing the kinds of things banks used to provide--that is, doing lending--and having both of them trading securities on their own proprietary accounts in order to make big fees and big money.

It is unbelievable.

The question is, Who will stand up for our economic interests? Spending on someone who is out of work in a deep recession, is that where you want to take your last stand?

Let me help with a couple other suggestions. How about making a last stand in asking people, like one person who made $3.6 billion in one year, to pay their fair share of taxes to the government. My calculation says that is a $300 million-a-month paycheck. When that person comes home and the spouse asks, Honey, how are we doing? Every single day he can say: We are doing really well. Ten million we earned today. But even better than that, he can now say: And by the way, we paid one of the lowest income tax rates in America. We get to pay a 15-percent income tax. People who work with their hands for a living can't do that. People who take a shower in the morning and after work can't do that. People who work hard all day pay tax rates far higher than 15 percent. We have some of the biggest income earners paying just a 15-percent tax rate on carried interest.

I say to my friends: If you want to do something about the deficit, join me. Let's get rid of that nonsense.

Or I wish they would have joined me the dozen times I have been here talking about the tax dodges that allow people to avoid paying taxes by creating shams. I have shown pictures of American banks that buy German sewer systems. You can't actually touch them. You wouldn't want to feel them. You can't move them. But American banks buy a sewer system in a German city and then lease it back to the city so the city keeps using the system, and the bank gets to write off a sewer system to reduce its American tax obligation. They want all the benefits of being American, but they don't want the responsibility of paying taxes. I say to somebody who comes to the floor and wants to reduce the Federal budget deficit: How about joining me and getting rid of these things?

Or perhaps you could have joined me on the floor when I have shown the picture of the Ugland House, now reasonably famous, a 5-story white building on Church Street in the Cayman Islands. When I showed the photograph, it was an enterprising piece of reporting by a man named David Evans from Bloomberg News who went to the Cayman Islands and found a 5-story white building that in 2004 was the official home to 12,748 corporations. No, they don't all fit in that building. I understand that. It was a legal dodge by companies setting up an address in order to funnel revenue through that address to avoid paying taxes to the United States. By the way, since that time, since 12,748 corporations used that little 5-story house to avoid paying taxes, it has now grown to over 18,000 corporate addresses, as I understand. I say to my friends talking about dealing with budget deficits, how about helping me on that? How about helping me close those loopholes? Those are unbelievably ridiculous loopholes that allow some of the people and companies who make a great deal of money to pay almost no income tax.

That is the tax side. I could talk forever about that, but I won't. But if we got a little help on that, we would reduce the budget deficit.

On the spending side, I have held 20 hearings on spending dealing with contracting in the wars in Iraq and Afghanistan. There is a place in Iraq. If somebody ever gets there, I suggest they drive by and take a look at it. It is American taxpayer dollars sitting in the desert. It is called Kahn Bani Sa'ad. We paid for it. We built it. We tried to build it. I think we spent $20 to $30 million for the first contractor and then fired the contractor and brought in another one. When the other one was finished, the money was gone. But there is a prison sitting on the sands of Iraq that the Iraqi Government said they didn't want and would never use that our Federal Government insisted be built. It is now sitting unused, and it doesn't even look like a finished building. It is huge. Millions, tens of millions of dollars were spent, poured down a hole in the desert. I held 20 hearings on the most unbelievable waste, fraud, and abuse on war contracting in Iraq and Afghanistan that I think has occurred in the history of the country. There is an area of spending we can tackle. We ought to tackle. There are so many areas for us to decide to do something about.

Yet the last stand on the floor of the Senate on a Monday is to say: We have ratcheted up all the strength, the muscle, the courage we have to say we don't think those at the bottom of the economic ladder, those who have lost jobs, those who are out of work, those who feel hopeless and helpless, those whose families are victimized, we don't think they ought to get unemployment insurance extended or we will put enough conditions on it to delay it. The same folks rushed to the altar to say: We can give $700 billion to the biggest financial firms in the country that ran this country into a ditch.

My point is not that we don't have a very serious economic problem. We do. The budget deficits are unsustainable. We have to fix them. My point is, there are some Johnnies-come-lately going on in this Chamber by people who have never come to the floor of the Senate on these issues in the last decade and now believe this budget deficit problem began to emerge on January 1 a year ago. That is not the case. This budget deficit problem, which is serious, results, in significant part, because this country ran into a very serious economic recession. It was not some natural disaster such as a flood, a fire, or tornado we couldn't do anything about. This was manmade. I warned about it 10 years ago. Those warnings were largely ignored.

Bad choices and bad policies have brought us to this position. Now it is required of us to make good choices. One of the good choices would be to recognize our responsibility to those at the bottom of the economic ladder, the folks who have, millions of them, lost their jobs in this recession and didn't do anything wrong. They weren't underperformers at work. They just were swept away by a very substantial recession. They paid for unemployment insurance in their paychecks. We all do.

My hope is we will get some cooperation on this vote today. It is a vote by which an effort to extend unemployment insurance for those who are the most vulnerable in the country has been blocked so we have a cloture petition. It ripens today at 5:30. My hope is we can do that and then move ahead.

There are plenty of us who are anxious to work on reducing the Federal budget deficit. This government needs to tighten its belt in a wide range of areas. There is no question about it. The spending side is important. We need to tackle the spending side and do it seriously. But it is not the only side. There is a whole series of folks who are not paying taxes who should pay. There are some of the biggest corporations in the country avoiding taxes that they should be paying. We ought to bring in the revenue we are required to bring in, ask some to pay what everybody else is paying, and we also ought to tighten our belt. All of that can help us address this very serious economic problem.

Let me look forward again 2 weeks to say if this is the last stand by those who are worried about the Federal budget deficit; that is, trying to make those at the bottom of the economic ladder, the most vulnerable Americans, wait and wonder whether they will get help from this Congress--if that is their last stand, 2 weeks from now, when we take on Wall Street reform and decide to do the things that are necessary to fix what caused this economic problem, fix what caused a substantial portion of the Federal budget deficits and fix what caused this deepest recession we have been in since the Great Depression, will we not get some help in 2 weeks? By the way, the bill that came out of the Banking Committee is a good first step. It needs to be strengthened in a number of areas. But even that bill didn't get any Republican support, not one vote in the Banking Committee. There are a lot of people here who support making sure that we are not too aggressive in trying to deal with the Wall Street folks and Wall Street interests. If we are not aggressive enough to make sure we have closed the loopholes and make sure we have tightened the reins so the American people have some confidence this will not happen again, we will rue the day if we end with a result that doesn't measure up in the minds of the American people.

Again, my point is to suggest we have a very serious, unsustainable budget deficit. It ought not to be surprising to anybody in this Chamber, moving along for a decade, fighting wars without paying for them, running into a very deep recession with revenues drying up when expenditures increase for economic stabilization. That is not surprising. But we need to come together and work together to find ways to not only get the taxes paid that are owed while at the same time we reduce the Federal budget deficit through those means, tighten our belts, and do the things that are necessary to move away from a decade of irresponsibility. If we are going to fight a war, send men and women off to war but don't have the courage to pay for it along the way, that is unbelievable to me. I have been to so many sendoffs, and every one of my colleagues has.

We are prepared to take people away from their families and send them off. I was just at Camp Bondsteel in Kosovo last week visiting the troops. They are away from home for a year. They have courage. When the country asks, they go. When they are called, they don't ask why. Shouldn't this Congress have the same courage to say: If we are going to send people to war, we will pay for it; we will have to ask the American people to pay the cost of that war? That is another significant part of this debate about how to deal with Federal budget deficits.

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

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