Page:Congressional Record - 2010-12-10.pdf/12

S8740 some people. It does not make a lot of sense to me.

Again, I have no particular knowledge, animus—I do not know if I ever met John Mack in my life. He is the CEO of Morgan Stanley. In 2006, he received a $40 million bonus, which at the time was the largest bonus ever given to a Wall Street executive.

Two years after receiving this bonus, Morgan Stanley received some $2 trillion in low-interest loans and billions from the Treasury Department. Instead of losing his job, under this agreement, Mr. Mack will be receiving an estimated $926,000 tax break next year. Congratulations, Mr. Mack. You are doing fine. We could not get $250 for a disabled vet.

Over the past 5 years, Ken Lewis, the former CEO of Bank of America, received over $165 million in total compensation. In 2008, Bank of America received hundreds of billions in taxpayer-backed loans from the Fed and a $45 billion bailout from the Treasury Department.

What will Mr. Lewis receive if the agreement negotiated between the President and the Republicans goes forth? He will get a $713,000 tax cut.

And on and on it goes. I did not mean to specifically pick on these guys. Some of the wealthiest people in the country will be receiving a million-dollar-plus tax break. So we as a nation have to decide whether that makes a lot of sense. I think it does not.

Let me mention that a couple weeks ago the Fed, the Federal Reserve, published on their Web site some 21,000 transactions that took place during the Wall Street meltdown period. That disclosure was made possible as part of a provision that I put into the financial reform bill because I thought it was important the American people, for the first time, lift the veil of secrecy at the Fed and get a sense of the kind of money that was lent out by the Fed and who received that money.

What is very interesting is that the American people and the media have focused on the $700 billion Wall Street bailout now known as TARP. I happen to have voted against that agreement, but, in fairness, that agreement was pretty transparent. The Treasury Department put up on their Web site all of those banks and financial institutions that received the money. If you want to know where the money went, it is right up there on the Treasury Department's Web site.

But at the same time, a bigger transaction than TARP was taking place, which got relatively little attention, and that was the role the Fed was playing in terms of the Wall Street bailout.

While the TARP issue was being debated during that period, Ben Bernanke, the Chairman of the Federal Reserve, Tim Geithner, who was then the president of the New York Fed, and a handful of other very powerful people were sitting behind closed doors getting ready to lend out trillions—underline trillions—of taxpayer dollars to large financial institutions and corporations, with no debate going on in Congress, no debate whatsoever.

On March 3, 2009—and I am a member of the Senate Budget Committee—I asked the Fed Chairman, Mr. Bernanke, to tell the American people the names of the financial institutions that received this unprecedented backdoor bailout from the Fed, how much they received, and the exact terms of this assistance. I will never forget that. I asked Mr. Bernanke for that information. He said: Senator, no, not going to give it to you, not going to make it public.

Well, on that day, I introduced legislation to make that information public, working with a number of Members of the House and the Senate. Some strange bedfellows—conservatives and progressives—came together on this issue. We managed to get in the Wall Street reform bill a disclosure provision, and on December 1—last week—that information was made public. Let me talk a little bit about what was in that information made public by the Fed.

After years of stonewalling, the American people have learned the incredible, jaw-dropping details of the Fed's multimillion-dollar bailout of Wall Street and corporate America—not just Wall Street. It is one of the things we learned. As a result of this disclosure, in my view—we are going to get into what was in what we learned—Congress has to take a very extensive look at all aspects of how the Federal Reserve functions and how we can make our financial institutions more responsive to the needs of ordinary Americans and small businesses.

What have we learned from the disclosure of December 1? This is based on an examination of over 21,000 separate Federal Reserve transactions. More work, more research needs to be done. But this is what we have learned so far.

As it turns out, while small business owners in the State of Vermont and throughout this country were being turned down for loans, not only did large financial institutions—and I am talking about every major financial institution—receive substantial help from the Fed, but also some of the largest corporations in this country—not financial institutions—also received help in terms of very low interest loans.

So you have every major financial institution, you have some of our largest private corporations, but here is something we also learned, and that is that this bailout impacted not just American banks and corporations but also foreign banks and foreign corporations as well, to the tune of many billions of dollars.

Then, on top of that, a number of the wealthiest individuals in this country also received a major bailout from the Fed. The "emergency response," which is what the Fed described their action as during the Wall Street collapse, appears to any objective observer to have been the clearest case that I can imagine of socialism for the very rich and rugged free market capitalism for everybody else.

In other words, if you are a huge financial institution, whose recklessness and greed caused this great recession, no problem. You are going to receive a substantial amount of help from the taxpayers of this country. If you are a major American corporation, such as General Electric or McDonald's or Caterpillar or Harley-Davidson or Verizon, no problem. You are going to receive a major handout from the U.S. Government.

But if you are a small business in Vermont or California or Virginia, well, guess what, you are on your own because right now we know one of the real impediments to the kind of job creation we need in this country is that small businesses are not getting the loans they need.

Furthermore, what we now know is the extent of the bailout for the large financial corporations. Goldman Sachs received nearly $600 billion. Morgan Stanley received nearly $2 trillion. Citigroup received $1.8 trillion. Bear Stearns received nearly $1 trillion. And Merrill Lynch received some $1.5 trillion in short-term loans from the Fed.

But I think what is most surprising for the American people is not just the bailout of Wall Street and the financial institutions, and the bailout of large American corporations such as General Electric, but I think the American people would find it very strange that at a time when the American automobile sector was on the verge of collapse—and goodness only knows how many thousands and thousands of jobs we have lost in automobile manufacturing in this country—the Federal Reserve was also bailing out Toyota and Mitsubishi, two Japanese carmakers, by purchasing nearly $5 billion worth of their commercial paper from November 5, 2008, through January 30, 2009. While virtually no American-made cars or products of any kind are bought in Japan, I think the American people would be shocked to learn that the Fed extended over $380 billion to the Central Bank of Japan to bail out banks in that country.

Furthermore, I think the American people are interested to know that the Fed bailed out the Korea Development Bank, the wholly owned, state-owned Bank of South Korea, by purchasing over $2 billion of its commercial paper. The sole purpose of the Korea Development Bank is to finance and manage major industrial projects to enhance the national economy not of the United States of America but of South Korea. I am not against South Korea. I wish the South Koreans all the luck in the world. But it should not be the taxpayers of the United States lending their banks' money to create jobs in South Korea. I would suggest maybe we want to create jobs in the United States of America. At the same time, the Fed also extended over $40 billion