Financial Crisis

Floor Speech

FINANCIAL CRISIS -- (Senate - September 26, 2008)

Mr. SCHUMER. Mr. President, of course, we live in very perilous times. Our economy, particularly our debt markets and our credit markets, is in very serious shape. To paraphrase Chairman Bernanke, the arteries of the patient--our financial system--are clogged and the patient will have a heart attack. We don't know if it will be tomorrow or 6 months from now or a year from now but, unfortunately, if we don't unclog those arteries, a heart attack will occur. So we must act.

I know there are some--particularly some very ideological people on the hard right--who say do nothing and let everyone learn their lesson; there are a lot of people, particularly at the high end of the economic spectrum, who should learn their lesson. But there are millions of innocent people who will be hurt if we do nothing: the auto worker who will be laid off because we sell fewer cars; the small businesswoman who has struggled to build her business over 15 or 20 years and can't get a loan; the waitress at a restaurant of a chain that has to shut down because it can't get credit. Average people get hurt when our financial arteries are clogged, even though they are blameless. That is the difficulty of our world. It is not fair, it is not right, but it is how it is.

We must come together and work in a bipartisan way to unclog those arteries, and we must do it soon. We should not leave here until we have a plan, whether it takes a day, several days, 1 week, or even more. We cannot abandon our responsibilities, and we should work. I believe we will stay here and work until a plan is agreed upon and we see some light at the end of this rapidly darkening tunnel. That is the first point I wanted to make.

Second, we need to pass a good plan. The President's initial offering was received with, let's say, lack of popularity, to put it kindly, by both Democrats and Republicans in this Chamber and people out in America. It is because it was a $700 billion blank check. There was no help for taxpayers' protection so they got paid back first. There was no help for homeowners.

Chairman Bernanke tells us that housing is the root cause of the problem and if we don't find a floor to the housing markets, we may need bailout after bailout, unfortunately. This bill had no protection for homeowners.

I know Secretary Paulson said the Government owns a large share of the bonds, that they will have more ability to renegotiate mortgages and avoid foreclosures but, frankly, that is hope over reality because the bonds are now broken up in 40 tranches. If the Government owns 10, 15, 20, 25, or even 30 of them, if 1 tranche holder objects to refinancing, it won't happen.

We need help for homeowners beyond what is in the legislation. We need oversight, tough oversight. This is a democracy. We are known for our checks and balances. It has served America well for over 200 years. And all of a sudden, in an unprecedented taking of power, to give so much power to the Treasury Secretary with no one looking over his shoulder would be, frankly, not the American way. So we need tough and strong oversight.

Point 1, we will work until we get this done, even if it means staying past recess. We must. We have an obligation.

Point 2, we will pass a better plan than the President's plan. We will work with the President, but we need protection for homeowners, taxpayers, and oversight.

The third point I wish to make is this: This cannot pass without strong bipartisan support. There will be some in both parties who will not vote for any plan. So neither party has a majority, neither the Democrats--we are a majority by a small margin--nor the Republicans, who are close to a majority. But we will need strong bipartisan support as many on each side of the aisle will not vote for a plan, and that is their prerogative.

We need the President to get the Republican house in order. Even if we were to want to pass a bill with just Democratic votes, we could not. It is obvious. Look at the math. We need to have this bipartisan support.

We began it yesterday under Chairman Dodd and Chairman Frank's leadership when we met in this building and crafted a very good compromise that was a basis to take to Secretary Paulson. It did far more for taxpayers, for homeowners, for oversight than the existing bill.

Unfortunately, however, we needed a four-legged stool, and one leg just vanished--the House Republicans--in a way that none of us still understand. In addition, Senator McCain's desire, even though he had not been involved in this legislation at all, to fly in put another fly in the ointment and created more trouble. I have not heard Senator McCain offer one constructive remark. We don't know what he supports. Does he support the House plan? Does he support the President's plan? Does he have his own plan?

By all reports, he hardly spoke at the meeting, which was his opportunity to try and do something. He spoke at the end and didn't say what his views were as to whether he supported each plan.

So we need two things on the Republican side: We need President Bush to take leadership. We need President Bush, first and foremost, to get the Republican House Members to support his plan or modify it in some way to bring them on board yet keep the Democratic House Members, the Republican Members of the Senate, and the Democratic Members of the Senate on board. Second, we need the President to respectfully tell Senator McCain to get out of town. He is not helping. He is harming.

When you inject Presidential politics into some of the most difficult negotiations, under normal circumstances, it is fraught with difficulty. Before McCain made his announcement, we were making great progress. Now, after his announcement, we are behind the eight ball and we have to put things back together again.

So this is a plea to President Bush, for the sake of America: Please get your party in line. Get the House Republicans to be more constructive. Get Senator McCain to leave town and not feed the flames and maybe we can get something done. In fact, not maybe, we have no choice but to get something done.

So, again, to reiterate my three points: No. 1, we will work until we have a product. The perilous state of our financial markets and our national economy, the danger to average Americans, now unforeseen but real and lurking behind the shadows, says we can do nothing else. No. 2, we will continue to work for a better plan than the one the President proposed, with protection for taxpayers, homeowners, and real oversight. No. 3, the President must get his Republican House in order by getting the House Republicans in line and asking Senator McCain, respectfully, to leave town. Because without Republican cooperation, we cannot pass this bill.

I yield the floor.

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