VA Hospital In Marion, IL

Floor Speech

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Mr. SANDERS. Mr. President, let me begin by congratulating my friend, Senator Brown of Ohio, for his leadership in this struggle for fundamental reform of the American health care system. He understands, as I do, that there is something absurd about a situation in which we as a nation end up spending almost twice as much per person on health care as any other nation on Earth; yet we end up with tens of millions of people who are uninsured, people who are underinsured, and we have almost 1 million Americans this year who are facing bankruptcy because of medically related illnesses.

As Senator Brown just talked about, understanding that small businesses are the economic engine of this country, there is something absurd when we have small businesses desperately trying to provide health insurance for their employees but are finding it harder and harder to do so. So I want to congratulate Senator Brown for the work he is doing on health care.

As I think every American understands, we are in the midst of the worst economic crisis since the Great Depression.

I find it interesting that there are some people out there, some economists, including the Chairman of the Federal Reserve, Mr. Bernanke, who have told us ``the recession is very likely over.'' I suggest to Mr. Bernanke, come to the State of Vermont, go to California, go to Nevada, go to Ohio, go to any State in the country and go out on the street and ask people whether they think this recession is over. They will say it may be over for the large banks that were bailed out by taxpayers but it is not over for working families. In fact, according to the latest Washington Post/ABC News poll, 82 percent of Americans disagree with Mr. Bernanke. The overwhelming majority of the American people do not believe the recession is over. Of course, they are right. The recession may be over for banks that are now starting to be profitable, for Goldman Sachs, which is paying out huge bonuses to its top executives, but trust me, on Main Street, on family farms all over this country, in factories all over this country, this recession most certainly is not over.

Since the beginning of this recession in December of 2007, 7.6 million Americans have lost their jobs. The official unemployment rate has doubled, going from 4.9 percent to 9.8 percent. But what is extremely important to understand when we look at the economy today is that the official unemployment statistics do not reflect the reality of what is going on in our economy. Official statistics do not include people who have given up looking for work. If you are in a community where 15 or 20 percent of the people are unemployed, you have given up looking for work, but you are not part of the official unemployment statistics. What happens if you want to work 40 hours a week but you can only find a job for 20 hours a week or 25 hours a week? You are also not in the statistics.

The reality is, if you add all those factors together, people who are officially unemployed, people who have given up looking for work, people who are working part time when they want to work full time, what you are looking at is 17 percent of working-age Americans today are in that category, which adds up to 27 million Americans--an astronomical number. That is an indication of a real catastrophe in our economy.

Mr. Bernanke, I am sorry to disagree with you, but in my view and in the view of the vast majority of the American people, this recession is not over. In fact, in terms of unemployment numbers, it may, in fact, even be getting worse.

On the issue we are dealing with right now, we have to address long-term unemployment. It is one thing to lose your job and get another job a few weeks later. It is another thing not to be able to find a job month after month, and there are millions of Americans in that category.

Today, 5.4 million Americans have been unemployed for over 6 months--the highest on record. Long-term unemployment is a major crisis in this country. It is one we have to address. It is one we have to deal with in terms of extending unemployment benefits. The average length of unemployment is now 27 weeks. That is over 6 months. That is over half a year. That is the longest since the end of World War II.

There are fewer jobs in America today than there were in the year 2000, even though the workforce has grown by 12 million since then. This is a shrinking workforce. We now have the fewest manufacturing jobs than at any time since April of 1941, 8 months before the start of World War II. The importance of that is that manufacturing was the mechanism by which working families were able to carve out a middle-class existence. They had decent wages, decent benefits. They had a union. They may have had a pension program. But today we have the fewest manufacturing jobs since April of 1941.

Home foreclosures are the highest on record, turning the American dream of home ownership into an American nightmare for millions of people.

There is nothing we should be proud of in saying this: Today, in the industrialized world, the United States has the highest rate of childhood poverty. We have the highest infant mortality rate. We have the highest overall poverty rate. At the same time, we have the largest gap between the wealthy and everybody else. What we have seen for a number of years is a collapse in the middle class. It has certainly gone on a lot longer than since the financial collapse. But we have also seen an increase in wealth amongst the top 1 percent. That gap between the very rich and everybody else is growing wider and wider. From a moral perspective, not to mention an economic perspective, we have to address the reality that the top 1 percent today earns more income than the bottom 50 percent. The top 1 percent owns more wealth than the bottom 90 percent. We are becoming two very different countries: people on top with incredible wealth--CEOs on Wall Street making hundreds and hundreds of millions of dollars, billions of dollars in a hedge fund--yet working people seeing their incomes decline, working longer hours for low wages. Actually, today a two-income family has less disposable income than a one-income family did 30 years ago. That is what is going on in America--poverty increasing, middle-class shrinking, the gap between the very richest and everybody else growing wider.

This is an important point to make. We know what happened on Wall Street a little over a year ago. We know what that collapse has done. We know that the outrageous behavior on Wall Street has precipitated us into this very severe recession. But we should not kid ourselves. If by some miracle tomorrow we manage to go back to where we were before the financial collapse on Wall Street, we would still be in very bad shape. It isn't a question of, weren't things great before the collapse on Wall Street and the development of this major recession--no, things were not great back then.

Let me just mention what happened during the Presidency of George Bush. Let me talk a little bit about what happened during that 8-year period.

When President Bush was in office from the year 2000 to 2008, 8.2 million more Americans slipped out of the middle class and into poverty. That is what happened during that period. I might mention, you may recall--it is really frightening to think about it--how during much of that period the Secretary of Treasury and the President were saying the economy is robust, the gross national product is expanding. But that was the reality for working families--people slipping out of the middle class and into poverty.

During that same period--we are dealing with health care right now. One of the reasons we need a national health care program guaranteeing health care to all people is during that same period, 7.8 million more Americans were uninsured; they lost their health insurance. We are now up to about 46 million people without any health insurance. That number is going up every single day. During the Bush era, close to 8 million Americans lost their health insurance.

During the years 2000 to 2008, 4.5 million manufacturing jobs disappeared. I talked a moment ago about the importance of manufacturing. I know it is not a sexy job, but it was a means by which millions of Americans went to work every day, they produced real products, they had real income. It was a vehicle--manufacturing was and is a vehicle by which working Americans could make it into the middle class.

During the Bush tenure, 3.2 million workers lost their pensions, with the result that about half of American workers in the private sector today have no pension whatsoever. There was a time--I know it is a radical idea to even think about--there was a time when millions of Americans who worked had a defined pension plan, a defined benefit pension plan. They actually knew they were going to have a pension. Boy, what a radical idea. That does not exist anymore.

During the Bush era, median household income declined by over $2,100, from $52,500 to $50,303. According to an article that appeared a couple of months ago in USA TODAY, from 2000 to 2008 middle-class men experienced an 11.2-percent drop in their incomes, a reduction of $7,700 adjusting for inflation. That is unbelievable. During that period, middle-class men saw an 11-percent drop in their income. Middle-class women in this age group saw a
4.8-percent decline in their incomes as well.

The important point to be made here is when you hear economists talking about the economy in abstract ways--we have 3 percent growth in this quarter; isn't that great? Yes, that is an important fact, but it is not the most important fact. The most important fact is what happens to ordinary people. This is what happens to ordinary people. People who were 45 to 54 years of age lost $7,700 in the Bush economy. That is true today, it was true then. Focus on what is happening to ordinary people.

With all of that, with the long-term trends in which the middle class has declined, with the fact that since the greed and illegal behavior of Wall Street has gotten us into the deep recession we are in right now, working families all over this country are desperately in need of help, and they are looking to their Federal Government to provide that help. That is why it is so important that we pass an extension in unemployment benefits. I find it hard to understand, why my Republican colleagues continue to delay this legislation being implemented.

We have to do more than that. We have to extend unemployment--that goes without saying--but we have to do more than that. We have to ask ourselves why our economy is in the shape it is right now. That will precipitate a major debate and major discussion, something we as a nation have to have. We have to ask ourselves not just the causation of the recession we are in right now, the role Wall Street has played, but, long term, why since the early 1970s has the middle class continued to shrink? What are the causes of that? Why do we have the highest rate of poverty of any major nation on Earth? Why is it today that people are losing their homes and their pensions and their life savings and their ability to send their kids to college?

Clearly, short term it is imperative that we investigate thoroughly and that we hold accountable those crooks on Wall Street who have done so much damage to the American people. It is simply not acceptable that they be allowed to continue the behavior that drove this country into the severe recession. We need to understand how it happened, we need to hold accountable those people who caused this crisis, and where there is illegal behavior, those people should learn what the penal system of this country is about.

One of the things that really amazes me is that I have yet to see, nor have the American people yet seen, one of those folks on Wall Street whose greed and recklessness has caused this recession, has caused this intense suffering all over this country--have you seen one of those guys go before television, get on TV and say to the American people: I apologize. I am sorry for our greed. I am sorry for the fact that we cost millions of people their jobs and their health care and their savings and their pensions. We are sorry.

I have not seen that. In fact, what we are seeing is these guys on Wall Street spending millions of dollars every day, every week, every month on lobbying in order to make sure we do not bring about the reforms to prevent them from continuing to do what they did, which caused this recession. These guys live in a world of their own, a world of entitlement. They do not seem to understand their actions have widespread consequences in terms of destroying the economic well-being of millions of people. All they seem to think about is, I only made $100 million last year. I can't get by on that. I need my 18th home or 16th car and 18th country club membership. For them, enough is never enough--more and more greed and more and more selfishness. That is an issue we have to deal with.

It only took a couple of weeks for Congress to give Wall Street the largest bailout in history, some $700 billion. But the truth is, up until this point we have done very little to make sure this financial crisis does not occur again. These guys want to go right back to where they were. They want the freedom to speculate, the freedom to convert their financial institutions into large gambling casinos. The Federal Government has provided $182 billion to AIG, $50 billion to Citigroup, $50 billion to Bank of America, a $25 billion bailout to Wells Fargo, a $25 billion bailout to JPMorgan Chase, and on and on it goes. Yet we have asked them for nothing in return. Here are tens of billions of dollars. What are you going to do? What are you going to do for the American people who have bailed you out?

I know reforming the banking sector is not going to be easy. After all, the banking and insurance lobbyists have spent over $5 billion on campaign contributions and lobbying activity over the past decade in support of deregulation. They were all over this place telling us, telling the Congress: Just trust us. Deregulate us. Let us do what we want to do. We are going to create wealth for all the American people.

There were some of my colleagues who actually believed that. I happened not to be one of them, but some of them did, and we deregulated and we let them do whatever they wanted to do and we are where we are today.

In 2007 alone, if you can believe this--this is what goes on--the financial sector employed nearly 3,000 separate lobbyists to influence Federal policymakers. Got that. There are 100 Members of the Senate, 435 in the House--that equals 535 Members of Congress--and they had nearly 3,000 individual lobbyists to influence Federal policymaking. Over a 10-year period, they spent $5 billion.

And that, my friends, is why the rich get richer and almost everybody else gets poorer. We have to address the issue of Wall Street. Let me make some suggestions as to what we have to do.

We need, in fact, a thorough investigation as to how this happened and we need to hold those people accountable. I hope we can do that. I think the American people are asking questions, and they are right to demand answers. But what we also have to do is to deal with this issue of ``too big to fail.'' What I have said ever since this financial crisis began is: If a financial institution is too big to fail, that financial institution is too big to exist.

We need to do exactly what Teddy Roosevelt did back in the trust-busting days, and we need to start to break up these huge financial institutions. We cannot continue to be held hostage by them such that if they fail, they take down the entire system with them so we have to prop them up and bail them out.

I would mention, interestingly enough, that is exactly what they are doing right now in the United Kingdom. Let me quote from the Washington Post:

The British government announced Tuesday that it will break up parts of major financial institutions bailed out by taxpayers. The British government, spurred on by European regulators, is set to force the Royal Bank of Scotland, Lloyds Banking Group and Northern Rock to sell off parts of their operations. The Europeans are calling for more and smaller banks to increase competition and eliminate the threat posed by banks so large that they must be rescued by taxpayers no matter how they conducted their business, in order to avoid damaging the global financial system.

And you know what. Our friends in the U.K. are doing exactly the right thing. That is what we should be doing. But that is not just my opinion. A growing number of experts, both on the left and on the right, are coming to the same conclusion.

On October 15, Alan Greenspan, probably the man more than any other individual responsible for the deregulatory efforts which led to this financial crisis, admitted last year that his views on deregulation were wrong. He was quoted in Bloomberg News as saying:

If they are too big to fail, they are too big. In 1911 we broke up Standard Oil--so what happened? The individual parts became more valuable than the whole. Maybe that's what we need to do.

Alan Greenspan, the man whose deregulatory leadership helped create this disaster, now perhaps understands that that whole philosophy of deregulation, letting big banks do whatever they want, letting them merge with insurance companies, maybe was not quite right.

Former Fed Chairman Paul Volcker, who has advised the Obama administration, supports breaking up big banks so that they no longer pose systemic risks to the entire economy. During a recent article in the New York Times, Volcker says:

People say I'm old fashioned and banks can no longer be separated from nonbank activity. That argument brought us to where we are today.

Absolutely right. The New York Times said that under Volcker's plan:

JPMorgan Chase would have to give up the trading operations acquired from Bear Stearns. Bank of America and Merrill Lynch would go back to being separate companies. Goldman Sachs could no longer be a bank holding company.

In my view, that is exactly what needs to happen. What insanity that when individuals lose their health insurance, tough luck; small businesses go bankrupt, tough luck; but if you are a large financial institution and you acted in a legal greedy way, we say: Hey, no problem. Taxpayers of this country are here to bail you out, because if we don't bail you out, you are going to bring down the entire economy. That is absurd. We have got to end that.

Robert Reich, President Clinton's former Labor Secretary, said:

No important public interest is served by allowing giant banks to grow too big to fail. Wall Street giants should be split up--and soon.

I agree with former Secretary Reich.

Let me touch on a few other issues we have to have the courage to deal with. I get calls all the time. I do a national radio show--get it on the radio show, get it from Vermont. People are saying, We bailed out these large financial institutions and what they then do is say ``thank you'' and they raised my interest rates on my credit card to 25 or 30 percent.

That is outrageous. That is usury. We need to pass national usury laws. The truth is, today one out of four credit card holders in this country is paying interest rates above 20 percent, as high as 41 percent, more than double what they paid in interest in 1990.

What we need to do is pass national usury legislation. I have introduced legislation that would mandate that the maximum interest rates that could be charged would be 15 percent. The reason I came up with that number is that is exactly what credit unions are doing today, 15 percent, except under unusual circumstances.

I am proud that on that bill we have as cosponsors Senators Durbin, Leahy, Levin, Harkin, and Whitehouse. That is what we have to do. It is immoral. It is wrong for these large companies to be charging 25 or 30 percent interest rates.

It goes without saying that as we take a look at Wall Street, we have to reregulate those institutions. We have to take a hard look at bringing back Glass-Steagall in one form or another.

Lastly, we also need more transparency at the Federal Reserve. Last year when Secretary Bernanke came before the Budget Committee, I asked him a very simple question. I said: Mr. Chairman, my understanding is that you have lent out over $2 trillion at zero interest to some of the largest financial institutions in America. Can you tell me who got the money? I mean, you are putting taxpayer money at risk. Who received this $2 trillion-plus dollars? And, amazingly enough, what Mr. Bernanke said is: No, I am not going to tell you. It is a big secret. I cannot tell you.

Well, on that day we introduced legislation that would mandate that he tell us, and also we would bring about a GAO audit of the Fed. The Fed, especially since the financial collapse, has assumed an enormous amount of power, and the American people have a right to have more transparency there.

Let me conclude by saying that anybody who thinks this recession is over has obviously not talked to real people. Millions of people are hurting. Millions of people are frightened. They are looking to us for some help in terms of extending unemployment benefits, but they are also looking to us to understand the causation of this problem, and to work on economic ideas which will prevent a continued collapse of the middle class in this country.

We have got a lot of work on our hands, and I look forward to working with you.

I yield the floor.

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