National Nurses Week

Floor Speech

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Mr. DURBIN. Mr. President, I wish to join my colleague from the State of Oregon in speaking on behalf of nurses across America.

We know that with the baby boom generation, we are going to need more nurses than ever, and with these nurses, we will have the professional medical care we need across this Nation, but we better get busy. We are falling behind. We don't graduate enough nurses now to take care of the anticipated needs, and we have to change that.

Sadly, in many instances we have been poaching nursing talent from other poor nations around the world. Filipino nurses in Chicago play a major role at many hospitals, particularly inner-city hospitals, and nurses from other parts of the world. Many times, the Philippines, for example, generates more medical professionals and expects they will serve overseas, but some places in Africa lose their best medical professionals to higher and more predictable pay in places such as the United States, England, France, and Germany. So we have to reach a point where we are graduating more nursing students each year. Last year in Illinois, 2,000 qualified nursing applicants were turned down because we didn't have the capacity in our nursing schools.

We don't have enough nursing faculty, enough clinical opportunities. We need to really focus on that. So in addition to lauding the nursing profession--I certainly echo my colleague in that regard--we also need to think ahead to make sure we have more nurses when we need them, and that day is going to be fast upon us. So I thank the Senator from Oregon for his words.

FINANCIAL REGULATORY REFORM

Mr. DURBIN. Mr. President, for those who are here following the Senate today, as announced earlier, we are resuming consideration of this bill, and, of course, it is the Wall Street reform bill, the Financial Stability Act. It is over 1,400 pages long.

The Senator from Virginia who is presiding over the Senate now is a member of the Senate Banking Committee. Senator Mark Warner has worked on this bill, and large sections of it are his handiwork in an effort to try to deal with changes on Wall Street which will protect our economy and make certain we don't relive some of the horror stories we have seen over the last several years, and we all know those stories pretty well.

There was a time not that long ago--about a year and a half ago--when, under the previous President, I was brought into a meeting just a few steps away from the Senate floor with the chairman of the Federal Reserve, Ben Bernanke, and the Secretary of the Treasury, Henry Paulson. They basically sat down in the first meeting and said: We wanted to let you know the largest insurance company in the world, AIG, is about to go broke. When it goes broke, it is going to bring down so many companies and corporations with it that it can literally crater the American economy. At that point, Chairman Bernanke said: So the Federal Reserve is giving $85 billion to AIG Corporation.

There was a moment of silence in the room, and finally someone in the room--I don't remember who it was--had the nerve to ask: Where did you get $85 billion at the Federal Reserve?

Chairman Bernanke said something like: Oh, we have our resources.

Someone asked: Where did you get the authority to give it to a private company?

They said: Well, there was a law passed during the Great Depression which said that if it looks as if the economy is going to crater, the Federal Reserve can step in.

So an obscure law that was over 75 years old and a fund of money most Members of Congress had never seen--since they are a separate agency and don't go through our appropriations process--ended up propping up a company. And it didn't cost $85 billion; I think when it was over it was $180 billion or somewhere in that range. The reason, of course, we couldn't let that company go down was they had literally insured contracts and corporations all around America, that there would be no default. They insured more contracts than they had a reserve to cover. As the contracts started to fail, they didn't have the reserves to back up their promise of insurance.

That was the first meeting. Only a few days later, they asked us to meet again, and I thought, this ought to be equally interesting, and it was. They brought us to a meeting, and Secretary Paulson, the Secretary of the Treasury, said: Now we are seeing, with the failure of Lehman Brothers and other companies, the potential that many large financial institutions in America are also going to fail. Then Secretary Paulson said: So we need a fund of money immediately, by Friday--and this was a Tuesday meeting--we need a fund by Friday of $800 billion to buy the so-called toxic assets, TARP funds, toxic assets relief program.

Again, there was a stunned silence in the room because even those of us in Washington who deal with millions and billions on a regular basis were stunned to get a request for $800 billion in a matter of days.

So the first question that was asked was: Who is going to prepare the legislation that actually asks for the money?

They looked around, and no one had kind of thought of that detail, and we said: We think the White House should. President Bush's White House, with Secretary Paulson, prepared a bill and sent it to us. The bill was exactly three pages long asking for $800 billion. Naturally, many of us thought that was not adequate. We needed to put provisions in there about how the money would be spent, the supervisory authority in Congress, and so forth.

Eventually, it was passed on a bipartisan rollcall. People like myself who voted for it did it out of a feeling of desperation. What else could we do? If we were being told by the financial leaders of our government that our economy was about to fail--we had seen it already in the stock market going down in value, and we knew people were losing their jobs and businesses were failing--we felt this was the only way to try to stop this terrible crisis from becoming much worse.

Well, the toxic assets relief program ended up sending billions of dollars to these struggling financial institutions. They were struggling because they made bad judgments. They bought, created, and sold securities, derivatives, and interest which were, in fact, toxic. They were based on a mortgage market and the premises of that market which turned out to be totally wrong. They had made bad business decisions. Their companies were about to fail.

The Federal Government--make that the taxpayers of this country--was expected to step in and save them, which we did. To show their gratitude for this act of mercy--rescuing them from their own bad works--they declared bonuses for one another. They gave one another bonus checks after the Federal taxpayers bailed them out. Is it any wonder people across this country have a bad taste in their mouth about Wall Street, about the TARP program, about the bonuses? Is it any wonder we are here this week considering a bill to make sure we never relive this financial crisis? It is overdue--long overdue.

We know what this crisis cost us in real human terms. The estimates are that it took $17 trillion out of the American economy--$17 trillion in value--and it hit almost everybody. Anybody with a savings account, a retirement account knows what I am talking about. The value of the account went down 20, 30, 40 percent or more. So your net worth, your nest egg, your retirement plan was diminished because of this recession.

In addition to that, 8 million people are currently unemployed across America, having lost their jobs by this recession, and another 6 million have been unemployed long term and are not trying as hard as they once did. Even though those numbers are getting better--in fact, last week there was a good report--we know it is still serious. There are still too many people out of work because of this recession.

When we tried to bring this bill to the floor 2 weeks ago, we had a tough time. We had three votes Monday, Tuesday, and Wednesday, 2 weeks ago, and they were filibustered from the Republican side of the aisle. They refused to let us bring the bill to the floor.

While the filibuster votes were going on on the floor of the Senate, though, on another stage on Capitol Hill, the Permanent Subcommittee on Investigations of the Homeland Security Committee, chaired by Senator Carl Levin of Michigan, was holding a historic hearing and bringing in the top leaders of Goldman Sachs, including its CEO, asking them about their practices that had led to financial difficulties at that company and were being questioned now even in a lawsuit that has been brought by our government against that company.

That display and that testimony was happening at the same time the Republican filibuster to stop this reform bill was going on here on the floor. Finally, several Republican Senators spoke up to their leadership and said: That is it. We want to engage in this debate. We want to get it started. We want to do it in a prompt way.

The filibuster finally broke and we started, nominally, the debate last week. You could count, I think, on one hand all the amendments we considered in that week. We could have done much better. We wasted a lot of time. There are important policy considerations that have to be asked and answered by votes on the Senate floor--some from the Republican side, valid questions, and some from our side. What we are looking for--and I think the American people are looking for--is for the Senate to be the Senate, not just a dead end for debate, to deliberate these issues and cast a vote and move forward.

There was an amendment--of great moment--offered by Senator Sherrod Brown of Ohio and Senator Ted Kaufman of Delaware as to whether we should limit the size of financial institutions. They had a very catchy mantra, which was: Too big to fail means too big. They would limit the size of financial institutions so you could not have these big giants dominating the scene. There would be more competition and more financial institutions involved in our economy's business. That amendment failed. It got 31 votes. I was 1 of the 31 who voted for it. I was disappointed, but let's be honest, that amendment had its day in court, on the floor of the Senate. We debated it and a vote was taken.

Now we are moving on to other amendments. Senator Sanders of Vermont will offer an amendment, probably tomorrow, as to whether there should be an audit of the activities of the Federal Reserve. This is a big amendment and one that is somewhat controversial, but I think we have reached a point where Senator Sanders is likely to prevail. He came up with a bold idea, and now I think we are going to move toward that idea. The Senate is doing what it is supposed to do. There are other things we need to take up as well.

Senator McCain will offer an amendment about the future of Fannie Mae and Freddie Mac, which are two government-type entities that literally back up the mortgages for most of the homes across America. They are in trouble because so many homes across America are going underwater; that is, the value of the home is lower than the mortgage balance. If that affects one of the homeowners across the country, you can understand that these agencies are going to be in trouble financially. What are we going to do about it? If we eliminate the agencies, the housing market will collapse without this government guarantee. But if there is going to be a government guarantee, how much will the taxpayers be on the line for? It is an important policy issue.

I am glad we are moving into that debate. I wish to offer an amendment on credit cards. Two years ago, we debated credit card reform. At the time, we passed a historic bill that changed some of the rules and gave consumers across America more rights and disclosure when it came to the use of credit cards. If there was one mistake made in that credit reform, it was the argument between the large banks and credit card companies that they could not implement the changes, unless they were given a long lead time before it occurred. They were given that lead time in the bill, and they have used that lead time consistently to raise interest rates on credit cards across America. It was a mistake. We should not have given them that much time. We should have anticipated they would have done the wrong thing during that period of time.

There is another aspect of credit cards I would like to discuss, which I will offer an amendment on, which is the interchange fee. If I reach in my wallet and pull out my credit card at a restaurant in Chicago and use it to pay, I am going to be billed for the cost of that dinner on my monthly bill, and I have to deal with the credit card company about how much interest I would pay on the balance I owe, for example. However, there is another part of the transaction that takes place between the restaurant and the credit card company. If I use a credit card, then the restaurant is going to pay to the credit card company some percentage of the bill for my dinner. It turns out this so-called interchange fee between the retail establishment and the credit card companies has become a serious problem.

Let me give you an illustration. I go to the same restaurant and instead of using a credit card, I pay by check. It used to be done a lot but not much anymore. The restaurant takes your check to their bank and their bank calls your bank, transfers the funds in, and no fee is involved. However, if you use a debit card, which would take the money directly out of my checking account, the same as with my check, it turns out the interchange fee is applied. So many restaurants and retail establishments are saying: Why is it with a check the bank gets no extra money and with a debit card the credit card company gets money. What is that all about? Should it be the same fee as a credit card?

These are legitimate questions that aren't a minor issue. They turn out to be a major issue. I had the CEO of Walgreens contact me last week. He told me that when they look at the expenses of this national chain of drugstores, the No. 1 expense is compensation of employees, personnel costs; No. 2, mortgage and rent payments; No. 3, health insurance; No. 4, interchange fees. It turns out the fees Walgreens pays to credit card companies is the fourth largest item of cost for their business.

Imagine that instead of being Walgreens, a national chain of drugstores, you are a small town store. Let's think it through. How many times have you gone to the cash register and stood behind as somebody handed them a credit card or a debit card for a pack of chewing gum or something even smaller? I saw it at National Airport. After the person left, I said to the person at the cash register: What is the smallest amount anybody has ever put on a credit card here? He said it was 35 cents.

When you look at the interchange fees, it turns out that the retailer loses money on that sale. Most of these involve a flat fee that is certainly more than the profit they are going to make on a 35-cent or even a $5 sale and a percentage of the actual item that is charged to the credit card. I would say, when you look at this circumstance, you can understand why some smaller businesses want to say there will be a minimum amount you can charge--not 35 cents but obviously something where they are not losing money. They will lose money if somebody uses a credit card under the current interchange fees.

The major card companies currently--Visa and MasterCard--prohibit companies that accept their credit cards from establishing a minimum amount that can be charged. They are going to make money, and they are not going to give the retail establishments that kind of opportunity.

Of course, they also prohibit that company--that small retailer--from saying: I get a better deal on the interchange fee from Visa than MasterCard, so I will favor Visa. They used to say: If you go to the Olympics, so and so is the official credit card of--they can say that, but the retailer cannot say that. If you own a restaurant and say: I prefer this credit card or that credit card, you violate the agreements of the credit card companies.

With this amendment, we are trying to establish that the fees charged to retailers for debit card usage at their establishments will be reasonable and proportional. It will be monitored by the Federal Reserve, which has that responsibility when it comes to credit card charges for consumers. So there is some parallel thinking here. The Federal Reserve will look at both sides--the retail establishment as well as the retail customer--in terms of the reasonable fees that can be charged by credit card companies.

Secondly, we eliminate the prohibition against what I consider to be competitive practices, where you would say you cannot use a credit card or a debit card at my establishment if your bill is less than $5 or something of that nature. That is currently prohibited, but it would not be under my amendment. This amendment has the support of some of the largest retailers and small businesses in America. Thousands have come to me and said: Please give us a fighting chance with the credit card companies. They are killing us. I cannot tell you how many speeches have been made on the floor of the Senate--on both sides of the aisle--about small businesses. We believe--I think both parties believe--if we are going to come out of this recession, it will be because of the strength and recovery of small business. This amendment is the No. 1 priority of small businesses across America. I wish to bring this amendment to the floor for a debate and a vote.

My colleagues can decide, do they want to come down on the side of retail establishments and small business or on the side of the credit card companies? Some will say: Wait a minute, what about community banks, the small banks that issue credit cards too? We specifically exempt them when it comes to this question of debit cards. If your establishment has less than $1 billion in assets--your bank--you will not be subject to this regulation. We are going after the largest banks that make the largest amount of money out of this, not the smalltown banks with local credit cards. We are trying to make this focused and fair and help small businesses.

On Friday, I went to a press conference at a supermarket in downtown Chicago. Potash Brothers have been around for decades, and it is a great success story of a family that came and opened a store. They have two or three and they are well liked and respected. They came and testified at this press conference about what they are going through, the struggle they have to make it as a small business in downtown Chicago--a supermarket that has to pay these high fees to the credit card companies. All they are asking is that the fees be fair.

We know that with the use of a credit card, the credit card company runs a risk that you would not pay off the balance. With the debit card, it comes out of your checking account or it doesn't. There is not a big risk factor involved.

Many people don't realize the size of this credit and debit card involvement in today's economy. Those cards are rapidly replacing cash and checks. There are over 1 billion credit and debit cards in the United States. In a nation of 300 million, that is more than three cards per person in the United States. Last year, Americans conducted $1.7 trillion in transactions on credit cards and $1.6 trillion on debit cards.

Credit cards and debit cards are now used in more than half of all retail sales in America, and the number is growing. Yet while paying with plastic may be a convenience for some, it turns out to be a real problem for small businesses. That is why this amendment is so important--to give small businesses a fighting chance. Individual businesses have no chance against the giants. Visa and MasterCard control about 80 percent of all the credit and debit cards in the United States. About $50 billion in interchange fees were collected in 2008, and about 80 percent of that money went to 10 big banks--the ones we think should be the subject of this requirement that the fees be reasonable and proportional, based on the amount of work that is being done.

It is no surprise these 10 banks hate the Durbin amendment like the Devil hates holy water. They cannot wait to see it defeated on the floor. I wish to debate it on the floor on behalf of retailers and small businesses across America, and I would like my colleagues to have a chance to join me in this effort. I don't think it is unreasonable. The big banks will try to stop this amendment from coming to the floor, but I will fight for it, and we are going to put people on record on how they want to vote on this issue. This will be the first time interchange fees will be taken up, to my knowledge, in the history of the Congress. It is about time. It is a major part of our economy. I think a fair and reasonable fee for the use of credit and debit cards is something we should stand behind and unreasonable charges should be basically prohibited based on the regulation of the Federal Reserve.

I will be offering that amendment this week. Those who want to cosponsor it are welcome to.

I suggest the absence of a quorum.

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