Senate Proceeding on Sep 24th, 2008 :: 0:21:04 to 0:35:36
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0:13:58 to 0:21:04( Edit History Discussion )
Speech By: Tom Coburn

0:20:44 to 0:21:04( Edit History Discussion )

Tom Coburn: that out. i thank again the senator from florida for this time, and i would yield back at this time. mr. nelson: mr. president? the presiding officer: the nator from florida is recognized. mr.

0:21:04 to 0:21:24( Edit History Discussion )

Bill Nelson: nelson: mr. president, i wanted to speak to the senate today about this enormous decision that we have coming in the next few days about what to do about the financial catastrophe that we are potentially

0:21:04 to 0:35:36( Edit History Discussion )
Speech By: Bill Nelson

0:21:24 to 0:21:43( Edit History Discussion )

Bill Nelson: facing. we are in a recession. by any measure, we're in a recession. but the question is: what we can do to avoid the recession slipping into a full-blown depression. and that is the matter that is here

0:21:43 to 0:22:03( Edit History Discussion )

Bill Nelson: in front of the senate, that one way or another we're going to have to come to grips with by this weekend or either have an understanding that we're going to come back next week and try to finish this.

0:22:03 to 0:22:26( Edit History Discussion )

Bill Nelson: what ought to be the underlying policy that we're going to do. well, we ought to help the mortgage market that has caused this in the first place. now, let me just quickly recapitulate what is the problem

0:22:26 to 0:22:42( Edit History Discussion )

Bill Nelson: that got us into this financial mess. it's the fact that banks and financial institutions i acting as banks but not regulated asul banks started encouraging loans to people on their homes that the

0:22:42 to 0:22:57( Edit History Discussion )

Bill Nelson: people could not afford. and all the checks and balances that regulation would have required, the financial institutions did not do, such as doing their due diligence to try to find out did the people have

0:22:57 to 0:23:09( Edit History Discussion )

Bill Nelson: a sufficient income stream to be able to afford that mortgage? did they put some skin in the game by having to put some money down on the house that they were purchasing? could they afford the interest

0:23:09 to 0:23:29( Edit History Discussion )

Bill Nelson: rates and the terms of that mortgage? and people weren't paying any attention to that. and so a whole bunch of these loans were granted by financial institutions, sometimes very aggressively pushing

0:23:29 to 0:23:51( Edit History Discussion )

Bill Nelson: these loans on people that they could not afford. so then the banks don't keep these mortgages. they bundle them together and sell them to institutions as individual mortgages or perhaps as bundles. but

0:23:51 to 0:24:09( Edit History Discussion )

Bill Nelson: then those other financial institutions would package them in bundles of mortgages called securitized mortgages, or securities, and then different players of the financial institutions would then buy these

0:24:09 to 0:24:27( Edit History Discussion )

Bill Nelson: securities of these shaky mortgages, subprime mortgages, and they would in turn sell. and a couple years later, then when it started becoming apparent that the homeowner couldn't afford to make the

0:24:27 to 0:24:46( Edit History Discussion )

Bill Nelson: payments each month on their mortgage and the income stream on those mortgages started dwindling, then those financial institutions that had bought these bundles of mortgages suddenly got caught in a cash

0:24:46 to 0:25:05( Edit History Discussion )

Bill Nelson: shortage and had to start borrowing in the system to make up for their cash shortage orally quidity -- or liquidity, and the whole system started to unravel. so as we try to straighten out this mess,is

0:25:05 to 0:25:27( Edit History Discussion )

Bill Nelson: are we to do what the secretary of the treasury has said? , we ought to come up with almost three-quarters of a trillion dollars -- specifically he's saying $700 billion -- in order to infuse that back into these

0:25:27 to 0:25:45( Edit History Discussion )

Bill Nelson: financial institutions, these banks and investment banks -p and insurance companies, all which fed off of this frenzy that had this balloon get bigger and bigger until it started to burst. and if

0:25:45 to 0:26:06( Edit History Discussion )

Bill Nelson: we do that, aren't we rewarding the very people whose financial greed got us into trouble in the first place? and i think the answer to that question is "yes." and so i just want to tell the senate

0:26:06 to 0:26:24( Edit History Discussion )

Bill Nelson: that this senator is not going to vote for a bailout of the financial institutions by taking nearly 5% of the national budget and giving it, all of which we will have to borrow from banks in china and

0:26:24 to 0:26:47( Edit History Discussion )

Bill Nelson: japan and the governments in china, and giving it to these financial institutions. i am not going to ve for that. but at the same time we're caught in the horns of a dilemma dilemma, because the economic

0:26:47 to 0:27:04( Edit History Discussion )

Bill Nelson: recession is slipping into economic catastrophe. and so we have to act. well, i'm certainly going to be favorable instead of doing it all at one whack, of taking a portion of it. say $150 billion

0:27:04 to 0:27:23( Edit History Discussion )

Bill Nelson: or $200 billion, and seeing how it goes for a three- or four-month period and coming back. and, of course, those on wall street will say, no, we've got to have the whole amount of $700 billion in order

0:27:23 to 0:27:41( Edit History Discussion )

Bill Nelson: to give confidence to the markets. don't we here have a responsibility to the taxpayer to make sure that these funds are being wisely spent and doing what we intend to do? and can't we give a substantial

0:27:41 to 0:27:54( Edit History Discussion )

Bill Nelson: down payment on this problem, and in a few months require everody to come back and to see whether or not it's working as we intended? i think there's some wisdom to that. and i think there's some wisdom

0:27:54 to 0:28:14( Edit History Discussion )

Bill Nelson: to the fact of what everybody's been talking about out here, that we want to make sure that this money doesn't get into executive compensation and these golden parachutes and all of that. i mean,

0:28:14 to 0:28:29( Edit History Discussion )

Bill Nelson: that's the least we can do. i was amused to see a column by a conservative columnist, crystal, that said that maybe what we ought to do is put a provision in that no compensation for the executives of these

0:28:29 to 0:28:47( Edit History Discussion )

Bill Nelson: financial institutions that participate in this bailout, no compensation can be greater than the compensation to the president of the united states. that would certainly get some people's attention. but there

0:28:47 to 0:29:06( Edit History Discussion )

Bill Nelson: ought to be some limit on the compensation. but, the essential question is for this senator and i think for a lot of my colleagues is how are we going get this money not into the hands of the bankers and

0:29:06 to 0:29:21( Edit History Discussion )

Bill Nelson: the investment bankers, and the insurance companies. how are we going to get this money into the mortgage market so it will revive the lending, the borrowing, for -- the borrowing for people to get

0:29:21 to 0:29:48( Edit History Discussion )

Bill Nelson: into their homes and therefore restore the housing market? is this not the purpose of what we are trying to do? not only save the national economy, but get in and to resuscitate back to life the housing

0:29:48 to 0:30:10( Edit History Discussion )

Bill Nelson: market. therefore, i would suggest to the senate that we consider a couple of courses. that in the process of this package we should create a loan facility that would work with people who have mortgage

0:30:10 to 0:30:30( Edit History Discussion )

Bill Nelson: problems. that loan facility could well be freddie or fanny. -- fannie of which they would be able for people who have a problem with a mortgage, to have the legal authority, indeed, the mandate

0:30:30 to 0:30:46( Edit History Discussion )

Bill Nelson: to go in and work to change that mortgage's terms and interest rate so that, in fact, those people can still stay in their home. i see the chairman of the banking committee has just came in here and

0:30:46 to 0:31:16( Edit History Discussion )

Bill Nelson: this senator is laying out, in addition to what the esteemed chairman of the banking committee, who i think has come out with an excellent product, that in order to get the money, not into the banker's hands,

0:31:16 to 0:31:21( Edit History Discussion )

Bill Nelson: to get it to reserve the mortgage market, in other words, revive the housing market, create a loan facility such as fannie or freddie with the legal authority to get in there and help people change

0:31:21 to 0:31:37( Edit History Discussion )

Bill Nelson: the terms of their loan so that they can stay in their houses, in their homes. and then, secondly, as the chairman has suggested in his committee package, change the bankruptcy laws so that if

0:31:37 to 0:31:54( Edit History Discussion )

Bill Nelson: someone has already been foreclosed, gone into bankruptcy, that the bankruptcy judge under law would have the discretion to change the terms of the mortgage in order to keep the person in their home.

0:31:54 to 0:32:09( Edit History Discussion )

Bill Nelson: so through a loan facility with legal authority or if it went south and they had to declare bankruptcy, that the bankruptcy judge would have that authority. so that a lot of the authority of this money

0:32:09 to 0:32:26( Edit History Discussion )

Bill Nelson: that we're going to put into it would be able to go into revive the housing market by allowing people to stay in their homes and therefore not continue to have the multiples of mortgages that will

0:32:26 to 0:32:53( Edit History Discussion )

Bill Nelson: are foreclosed on and therefore the diminishing of the value of the homes. and this senator speaks as one area of my state, fort myers, florida, has the highest foreclosure rate in the country.

0:32:53 to 0:33:11( Edit History Discussion )

Bill Nelson: all right. now, that's for starters. and i think as we look to this huge bailout that we ought to set up a regulatory syste for capital requirements -- regulatory system for capital requirements for all

0:33:11 to 0:33:26( Edit History Discussion )

Bill Nelson: financial institutions, not just commercial banks. in other words, we should regulate all executes that are -- security that's are traded -- securities that are traded publicly or privately so that

0:33:26 to 0:33:44( Edit History Discussion )

Bill Nelson: we don't get into the problem that we got in. why? because what happened to the problem that we got in? that the financial managers were encouraged to leverage all of their investments so much in

0:33:44 to 0:34:02( Edit History Discussion )

Bill Nelson: order to increase their own personal compensation. and we ought to avoid that at all costs. and, i'll tell you, unless we get something, this senator is not going -- unless we get something that is close

0:34:02 to 0:34:26( Edit History Discussion )

Bill Nelson: to what this senator is trying to share with the senate and the esteemed chairman of the banking committee, who is going to have more influence on this than any other person in this senate is here,

0:34:26 to 0:34:48( Edit History Discussion )

Bill Nelson: unless we can get these checks and balances in the system, this senator is not going to vote for it. it is my responsibility to try to be a careful steward of the money that has been entrusted

0:34:48 to 0:35:05( Edit History Discussion )

Bill Nelson: to us. and we are talking about such mega amounts of money that will just almost defy description and tie the hands of the next president and the next congress that we will have gone out and borrowed

0:35:05 to 0:35:26( Edit History Discussion )

Bill Nelson: so much extra money, that the new congress and the new president won't be able to even turn around because there won't be any money left for the federal government. so, mr. president, i wanted to

0:35:26 to 0:35:36( Edit History Discussion )

Bill Nelson: share this and i would love to hear from the chairman of the banking committee, who i see is ready to speak. and because he is, thi senator will yield the floor. the presiding officer: the senator from connecticut's

0:35:36 to 0:35:48( Edit History Discussion )

Christopher Dodd: recognized. a senator: i thank my colleue from florida for his remarks this morning. mr. dodd: i'm about to speak on a matter other than matter that the senator's been addressing. i want to commend him

0:35:36 to 0:37:07( Edit History Discussion )
Speech By: Christopher Dodd