Mr. President, this is a hard week around here because we are being asked to consider something that is historic. This question of bailing out financial institutions because of a struggling economy has called into question a lot of very basics about the way we govern this Nation.

I think most people understand the economy is in trouble. For working families, they have known it a long time. They have been falling behind for 8 years. Their incomes do not keep up with the cost of living. The expenses they face grow dramatically, whether we are talking about mortgage payments, utility bills, groceries or gasoline or health care costs. They know the economy is weak. No matter how hard they work, they cannot keep up with it. They are the ones who have been wondering when Congress was going to understand this and do something about it.

It took a tragedy in another sector of the economy for Congress to act, and that tragedy is in the credit institutions. You see, what happened to the credit institutions in America was totally avoidable. What happened was we created a parallel credit operation, parallel to the banks and other regulated institutions--investment banks and other Wall Street entities--which had basically no rules. They played by their own rules. They were not regulated. There was no Government oversight, very little transparency. They loaned money in ways and with terms that were not publicly disclosed on a regular basis.

The attitude for the longest time around Washington was: Keep your hands off of them. These are the dynamos of capitalism. Give them a chance.

They will just create wealth and opportunity in every direction. Well, that sounds too good to be true, and it turned out it was. They started making loans that were careless, negligent, and wrong.

They started loaning money, for example, on mortgages to people under terms that were unreasonable, to people who could not afford them in some instances, and started collapsing. They just counted on the fact that the default rate would be low when it came to mortgages, even if the mortgage was full of tricks and traps. They counted on the fact that real estate would always appreciate in value. Eventually, the house of cards tumbled and they ended up holding the mortgage securities and other mortgages that were worthless. Nobody wants to buy them. They are called illiquid assets.

As the portfolios of these investment banks got loaded up with worthless securities and paper, they started struggling to survive. Some of them didn't. Bear Stearns was about to go out of business, and the Federal Government stepped in. This administration said: We will keep you going. Lehman Brothers was about to go out of business, and they said: We won't step in. But for the portion rescued by Barclays, thousands of jobs were lost.

I think the net result of this is very clear. First, what we are facing today was avoidable. If we had not bought into the economic philosophy of those who argued that regulation is inherently evil, we could have avoided some of these mistakes and tragedies. But we didn't. Voices in the Senate, like former Senator Phil Gramm of Texas, argued with vigor: Get out of the way. Capitalism will work just fine. All the Government can do is mess it up.

Well, we saw what happened. In the last several weeks, some of the giants of Wall Street and some of the major institutions in Washington have either been compromised or perished. In some instances, the Federal Government stepped in. In stepping in, it has created new obligations for our Government and our taxpayers.

I think this chart I put together is fairly close to what we are facing. The current national debt of the United States of America is $9.73 trillion. That represents the accumulated debt of every administration in the history of the United States, from George Washington through George W. Bush. That is $9.73 trillion.

Look what happened in the last several weeks: First, we had the Treasury Secretary step in and say that we are going to keep Bear Stearns afloat. So they did that by allocating some $30 billion. Then they came in and said: We are going to stand behind--guarantee--the mortgages being held by Fannie Mae and Freddie Mac to the tune of $5.3 trillion.

Admittedly, there are security and collateral behind these, but we are on the hook now for $5.3 trillion.

AIG, the biggest insurance company in America, was about to go out of business. It would have been catastrophic. We stepped in and, for $80 billion, said we would stand behind them and purchase a share of AIG and expect to be paid back. I hope we are.

Money market insurance, money market mutual funds are those cash options for people who don't want to invest in securities and, at some point last week they could not pay a dollar on a dollar given to them. So we stepped in to provide insurance for them, an exposure of $3.35 trillion. Then comes President Bush's bailout plan that Secretary Paulson brought to us, to the tune of $700 billion.

So in the last several weeks, we now have a new exposure to taxpayers of this country, a liability of $9.46 trillion. The accumulated debt of America, from its beginning to today is $9.73 trillion, and the new exposure is $9.46 trillion. This is a dramatic and, in many ways, troubling scenario that has unfolded.

Lack of regulation, lack of accountability, lack of transparency led to terrible decisions based on greed and on the fact that no one was looking. Many people got rich in the process. Some of them went away with millions of dollars in income as executives, and others from the investments that did pay off, and some with golden parachutes did quite well.

Most of the American taxpayers didn't realize any gains from that, but now they are on the hook for this proposal of $700 billion. What does that come out to for every man, woman, and child? It is $2,300 in new liability that every man, woman, and child in America will have as a result of the Bush bailout proposal.

Many of us have serious problems with the President's bailout proposal. I don't question that we need to do something and do it in an expeditious way. But we should do as much as we need to do and not more. We should make certain we are not subsidizing the compensation of executives of these failed companies. These men and women who ran these companies into the ground, who bought these rotten portfolios we are now rescuing, don't deserve a gold watch or a million dollars as they leave the office. Certainly, the taxpayers should not have to pay it. That is No. 1.

Executive compensation ought to be off the table. If they want to play with taxpayer money, let them be restrained and restricted in terms of their income to the highest salary paid in the Federal Government, which is a generous $400,000. That is enough, nothing more--not a million-dollar going-away gift for incompetent and failed corporate executives.

Secondly, we have to make sure whatever we do is not torn apart by conflicts of interest. Whatever allocation of money is given to the Treasury Department is going to be spent on companies, and we have to make certain it doesn't go to buddies and friends but to the companies that can make a difference in the economy.

When the Treasury Secretary gave us this three-page bill asking for $700 billion, he specifically said none of the decisions or actions taken under that bill would be subject to review by any court in America, any administrative agency, and the rules he would draw up for the conduct of this activity would not be subject to the ordinary course of business and laws of America. I am sorry. I will never vote for that. I cannot.

How can the Secretary of the Treasury be above the law? Why wouldn't he be held accountable for conflicts of interest?

I believe Henry Paulson is an honorable man. I don't think he is out to do anything wrong. But what of those who work for him? There can be a lot of people spending taxpayer dollars. I want them to know they are held to the same standards of ethical and legal conduct as anybody doing business or anybody involved in our Government. So that is something I insist on.

The third point I want to make is this: If we are going to come to the rescue of some of these companies and buy their illiquid assets that nobody wants to buy--if the taxpayers are going to put that money on the line, I want them protected. If those companies survive and succeed, the American taxpayers should reap at least some of the profits. That is not unreasonable. Why should we be left holding the bag for $700 million for their mistakes, and when they get well, they will basically stand around and complain about Government getting in their way again. I would insist on that as well.

The other element is one that I authored and is included in both the House and Senate versions of the Democratic alternatives to the Bush bailout. This really goes to the heart of it. This economic mess started because of subprime mortgages--mortgages that were basically predatory lending, where people were being taken advantage of. We see what has happened. People were drawn into mortgages they could not pay, and they are about to lose their homes. Foreclosures are at the highest level since the Great Depression.

If we are going to get this economy moving forward again--and we should do it quickly--we have to go to the heart of the problem. The rot at the bottom of the pyramid is foreclosures. As long as mortgages are being foreclosed in record numbers, people will not only lose their homes, but every one of us suffers. I recently had an appraisal on my home in Springfield, and the value is down 20 percent. We made our payments. We didn't do anything wrong. That is the real estate market in Springfield, IL. That is what is affecting homes across America. Until we staunch the bleeding of this mortgage foreclosure crisis, I am afraid we are not going to get well.

One of the provisions in this bill relates to bankruptcy. It says if someone owns a home and goes into bankruptcy facing foreclosure, the Bankruptcy Court has the right to rewrite the terms of the mortgage so if it is possible, that person can stay in their home.

This is not a radical idea. It applies now to all second homes, vacation homes, farms, and ranches--just not your primary residence, for no good reason. It should apply. If we put this provision in the law, trust me, those institutions that are issuing the mortgages are going to be much more open to renegotiating the terms and making them more reasonable. Unless we put it in, they will continue to say let that homeowner lose their home. That is an outcome that doesn't help anyone.

I hope we can see a balanced package come through when this is all over. I hope we can see some equity and fairness for the taxpayers in this country. Lord knows, they have paid enough. To ask them to pay another $2,300 deeper into our national debt is unreasonable if we don't have safeguards to stop excessive executive compensation, to give the taxpayers the upside of these businesses, if they do get well; to make sure that we police against conflicts of interest and wasting of taxpayer dollars and, finally, make sure we do something about the homeowners who are at the root cause of the economic downturn we are now facing.

We need to do it and do it quickly. I know banks will hate this provision on bankruptcy. They have made up so many stories about what this will do to them. They talk about interest rates going up on mortgages across the board. But there was an analysis done by Adam Levitin, a Georgetown law professor. He said:

Taken as a whole, our analysis of the current and historical data suggests that permitting bankruptcy modification of mortgages would have no or little impact on mortgage markets.

I agree. It is just a smokescreen. The same banks that want to be bailed out don't want to be held accountable. They created this mess, and they want to continue to profit from it. They want the taxpayers to subsidize it, and they don't want to step up to the table and work with families and homeowners to keep them in their homes.

That is not the way we do business in America. I hope we have learned a bitter lesson. Those who were champions of deregulation--John McCain used to talk about that being his mantra. He was opposed to regulation. He was all for Senator Phil Gramm's attitude toward keeping your hands off the economy. Look where it brought us today: the mess that we face.

In just a matter of a couple weeks we will see an exposure of liability to our Federal Government almost equal to the combined national debt accumulated in the United States since its inception. That is poor management. It reflects poor thinking. It reflects an economic philosophy that needs to be tossed onto the dustbin of history.

I yield the floor.