[Congressional Record Volume 160, Number 110 (Tuesday, July 15, 2014)]
[House]
[Pages H6261-H6284]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 2015
The SPEAKER pro tempore. Pursuant to House Resolution 661 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the state of the Union for the further consideration of the bill,
H.R. 5016.
Will the gentleman from Pennsylvania (Mr. Thompson) kindly take the
chair.
{time} 1703
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole
[[Page H6262]]
House on the state of the Union for the further consideration of the
bill (H.R. 5016) making appropriations for financial services and
general government for the fiscal year ending September 30, 2015, and
for other purposes, with Mr. Thompson of Pennsylvania (Acting Chair) in
the chair.
The Clerk read the title of the bill.
The Acting CHAIR. When the Committee of the Whole rose earlier today,
an amendment offered by the gentlewoman from California (Ms. Waters)
had been disposed of, and the bill had been read through page 152, line
15.
Mr. SERRANO. Mr. Chairman, I move to strike the last word.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. Mr. Chairman, I yield to the gentleman form Maryland
(Mr. Hoyer).
Mr. HOYER. Mr. Chairman, I thank my dear friend from New York (Mr.
Serrano) for yielding.
I rise to speak on this bill, but not to offer an amendment. I don't
offer an amendment because, to offer an amendment, I would have to
identify an offset within the body of this bill. This bill is deeply
and harmfully underfunded. Therefore, I will not seek to take from an
object that already is underfunded to fund the elimination of the
Election Assistance Commission.
At the outset, I want to say that I served on this subcommittee for
23 years. I know a little bit about the subject of this committee. Not
only that, I was the sponsor of the Help America Vote Act with Bob Ney,
my friend from Ohio. That bill overwhelmingly passed with over 350
bipartisan votes. Unfortunately, too frequently, bipartisanship eludes
us in this body today.
I voted against Ryan-Murray because I said at that point in time it
did not provide sufficient resources to meet the responsibility this
Nation has to stay strong, stay free, and to grow our economy and grow
jobs for our people.
As I said, I was the sponsor of the Help America Vote Act. Within
that bill, we created the Election Assistance Commission. Again, it was
overwhelmingly supported by both sides of the aisle and the United
States Senate and signed into law by President Bush. The offices and
programs covered under that program were focused on trying to assist
States and local governments to ensure the appropriate administration
of elections.
Is there anything, I ask my colleagues, more important in a democracy
than ensuring that elections are well run and that every voter's vote
counts? I suggest to you there is not.
The Election Assistance Commission, established by the Help America
Vote Act in the aftermath of the 2000 Presidential election debacle, to
be specific, had 357 Members of this body vote for it. The
appropriations bill on this floor today, however, would essentially
eliminate that commission.
I am not surprised because, frankly, when the Republicans became the
majority in this House, it was at that point in time they started
focusing on the elimination of the Election Assistance Commission, as I
said, designed to make our elections more efficient, fairer, and more
honest.
Initially, my Republican colleagues suggested that the duties of the
Election Assistance Commission would be done by the Federal Election
Commission, which has a totally different responsibility, and that is a
responsibility to make sure that the funding of elections is done
appropriately and within the law.
I am going to vote against this bill not simply because of the
zeroing out of the Election Assistance Commission. Very frankly, I am
chagrined and disappointed that my Republican colleagues too often are
trying to undermine America's right to vote, undermine America's
incentive to vote, undermine the facilitating of Americans voting.
Frankly, I don't understand that.
The Election Assistance Commission, for the first time in history,
said that for over 200 years States and localities had run Federal
elections. They were concurrent with State elections and local
elections. But they ran our elections with no assistance from us--for
President, Vice President of the United States, United States Senators,
and Members of the House of Representatives. We did not participate.
Under HAVA, we have contributed a substantial sum of money so that
they could update and make efficient the election systems that they
had. But recently, the Republican Party, Mr. Chairman, has refused to
recommend appointments for the Commission, and now they want to
eliminate the Commission.
Mr. Chairman, in a country that looks at the right to vote and the
exercising of franchise as central to our democracy, I would urge us to
defeat this bill, to re-fund this critically important agency, and to
do what we ought to do as Americans and as Members of this Congress.
Mr. SERRANO. Mr. Chairman, I yield back the balance of my time.
Amendment Offered by Mr. Frelinghuysen
Mr. FRELINGHUYSEN. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. The amount otherwise provided by this Act for
``National Security Council and Homeland Security Council--
Salaries and Expenses'' for the National Security Council is
hereby reduced by $4,200,000.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from New Jersey and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from New Jersey.
Mr. FRELINGHUYSEN. Mr. Chairman, this amendment would reduce the
amount available for the National Security Council staff by $4.2
million, or by approximately one-third.
The National Security Council staff is the President's staff. They
serve solely to provide advice to the President on national security
matters. They have no authority to manage programs. They have no
authority to allocate funds or otherwise decide spending levels. And
they have no authority to determine or dictate congressional access to
classified information involving sensitive military matters or
operations. As the President's staff, it is appropriate that they are
accountable to him, just as our staff is only accountable to us.
Therefore, they are not subject to congressional questioning nor other
forms of oversight.
Over the past few years, the size of the National Security Council's
staff has grown, and it appears that they have moved beyond their
Presidential advisory role to involve themselves in decisions which are
not in their purview. Over the last few months, we have had several
instances in which the National Security staff has mandated that the
Department of Defense and other agencies selectively withhold
information from congressional oversight committees.
While the President has constitutional authority as Commander in
Chief to provide for the Nation's defense, this Congress was vested
exclusively with the constitutional authority to fund that defense, a
constitutional authority that is vested in the Appropriations
Committee.
Mr. Chairman, it is important that all appropriate oversight
committees are not restricted from the information they need to have to
do their jobs.
I reserve the balance of my time.
Mr. VISCLOSKY. Mr. Chairman, I ask unanimous consent to claim the
time in opposition to the gentleman's amendment, although I am not
opposed to it.
The Acting CHAIR. Without objection, the gentleman from Indiana is
recognized for 5 minutes.
There was no objection.
Mr. VISCLOSKY. Mr. Chairman, I appreciate the recognition, and I
would strongly emphasize that I join with my chairman and colleague
from New Jersey in support of his amendment. So that there is clarity
as to the purpose of his offering this amendment, I would reiterate two
of his remarks.
Over the last few months, we have had several instances in which
National Security staff has mandated that the Department of Defense and
other agencies selectively withhold information from congressional
oversight committees, and in one case specifically, excluding the
Appropriations Committee. As the chairman rightfully pointed out, the
Congress is vested exclusively with the constitutional authority to
fund that defense, and the authority in this instance rests with the
Appropriations Committee.
The committee has included clear direction in the Fiscal Year 2014
Defense
[[Page H6263]]
Appropriations Act and in the House-passed Defense Appropriations bill
for fiscal year 2015 for the Department to report on the conduct of
various programs as well as the obligation and expenditure of
associated funding.
{time} 1715
This direction addresses not only funds expressly provided in the
Department's appropriations bill but Department actions that may cause
the reprogramming of funds provided by the Congress.
Accurate, complete, and timely reporting by the Department of Defense
is essential for the committee to conduct its oversight
responsibilities. It informs committee deliberations to prepare the
annual appropriations bills. It helps prepare the committee for
negotiations with the Senate, and at present, it will help the
committee formulate recommendations on the recently submitted fiscal
year 2015 budget amendment on the overseas contingency operations.
The committee's responsibilities for funding are specific. Article I,
section 9 of the Constitution states:
No money shall be drawn from the Treasury but in
consequence of appropriations made by law, and a regular
statement and account of the receipts and expenditures of all
public money shall be published from time to time.
I strongly urge the adoption of the gentleman's amendment, which
underscores the constitutional prerogative of the Congress as well as
of the Committee on Appropriations.
I yield back the balance of my time.
Mr. FRELINGHUYSEN. Let me thank Chairman Crenshaw and Ranking Member
Serrano for this opportunity to propose this amendment.
Mr. Chairman, I am happy to yield the remainder of my time to the
gentleman from Florida (Mr. Crenshaw), the chairman of the committee.
Mr. CRENSHAW. I thank the chairman for yielding and for bringing this
to the attention of the full House. I will refer to the gentleman as
``chairman'' because I have the pleasure of serving on the Defense
Subcommittee, and he acts as the chairman of that.
Mr. Chairman, as the chairman has said, the National Security Council
and the National Security Adviser have gotten into a bad habit, I
think, of bypassing the Appropriations Committee, including the
chairman of the Defense Subcommittee and the ranking member of the
subcommittee, when it comes to issues of national security. I can tell
you firsthand that I have had situations in which I have asked for an
update on some matters, and they haven't been followed up on.
I want to thank the chairman for his leadership in all things
defense. I want to encourage my colleagues to follow his lead, and I
urge that we adopt this amendment.
Mr. FRELINGHUYSEN. Mr. Chairman, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from New Jersey (Mr. Frelinghuysen).
The amendment was agreed to.
Amendment Offered by Ms. DeLauro
Ms. DeLAURO. Mr. Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used to enter into any contract with an incorporated
entity if such entity's sealed bid or competitive proposal
shows that such entity is incorporated or chartered in
Bermuda or the Cayman Islands, and such entity's sealed bid
or competitive proposal shows that such entity was previously
incorporated in the United States.
Ms. DeLAURO (during the reading). Mr. Chair, I ask unanimous consent
that the amendment be considered as read.
The Acting CHAIR. Is there objection to the request of the
gentlewoman from Connecticut?
There was no objection.
The Acting CHAIR. Pursuant to House Resolution 661, the gentlewoman
from Connecticut and a Member opposed each will control 5 minutes.
The Chair recognizes the gentlewoman from Connecticut.
Ms. DeLAURO. Mr. Chair, I yield myself 2 minutes.
My amendment would prohibit Federal contracts from going to entities
incorporated in Bermuda and the Cayman Islands--the two nations most
often abused as tax havens.
In the past few weeks, this body has accepted similar provisions for
the Department of Defense Appropriations bill; the Transportation,
Housing and Urban Development bill; and the Energy and Water bill. The
latter passed on a rollcall vote.
As before, we should not be spending taxpayers' money on Federal
contracts for companies that have renounced their American citizenship
in favor of an island tax haven.
Let me quote from an article from Saturday's Washington Post by Allan
Sloan, a senior-editor-at-large from Fortune, and the title of the
article is: ``Tax-Dodging Firms Are Sticking Us with the Bill.''
He writes:
These companies don't hesitate to take advantage of the
great things that make America America--our deep financial
markets, our democracy and rule of law, our military might,
our intellectual and physical infrastructure, our national
research programs, all the terrific places our country offers
for employees and families to live--but inverters do
hesitate, totally, when it is time to ante up their fair
share of financial support for our system.
He is right, and we should not be rewarding bad behavior and gifting
these firms with lucrative Federal contracts.
Nearly two-thirds of the companies that have established subsidiaries
in tax havens have registered at least one in Bermuda or in the Cayman
Islands. If a firm is going to abuse tax loopholes by pretending to be
from these two island nations, we should make sure we are doing
business with companies that are paying their fair shares instead.
We now have taken strong, decisive, and bipartisan action against
these tax havens in three appropriations bills. I urge all of my
colleagues to act here as well and stand for American businesses that
are meeting their responsibilities to our Nation.
I reserve the balance of my time.
Mr. SERRANO. Mr. Chairman, I claim the time in opposition even though
I am not opposed to the amendment.
The Acting CHAIR. Without objection, the gentleman from New York is
recognized for 5 minutes.
There was no objection.
Mr. SERRANO. Mr. Chairman, very briefly, this is one of those issues
that really gets you angry. Both sides believe that people should play
by the rules, and what you have are people not playing by the rules.
People in my district, people in Ms. DeLauro's district and people in
Mr. Crenshaw's district have to pay their taxes and pay their taxes
where they live. They don't have the option of doing these kinds of
things. For me, it is not only a legislative issue but a personal
issue--the fact that these folks continue to get away with this kind of
a situation.
This is an issue that Ms. DeLauro has been working on for years. It
is one that she deserves a lot of credit for, and that is why we have
to thank her for it.
I would like to take this opportunity to yield the balance of my time
to the gentlewoman from Connecticut (Ms. DeLauro).
The Acting CHAIR. Without objection, the gentlewoman from Connecticut
will control the remaining time of the gentleman from New York.
Ms. DeLAURO. Mr. Chairman, how much time remains?
The Acting CHAIR. The gentlewoman from Connecticut has 5\1/4\ minutes
remaining.
Ms. DeLAURO. I thank the gentleman for yielding.
Mr. Chairman, at this time, I yield 2 minutes to the gentleman from
Texas (Mr. Doggett).
Mr. DOGGETT. Thank you for your good work on this amendment. This
will be the third bill that we have amended on it.
Mr. Chairman, seldom has a day gone by recently without a headline
about some American company that is running for the border to avoid its
tax bill. Indeed, today's New York Times has ``Patriot Flees
Homeland,'' ``Drug Firms Make Haste to Elude Tax,'' and an excellent
piece in Fortune magazine and The Washington Post that Ms. DeLauro
referenced by Allan Sloan, entitled, ``Positively un-American tax
dodges.''
It all gives new meaning to the term ``sunshine patriot'' when some
corporation renounces its citizenship and
[[Page H6264]]
claims it is a citizen of the Cayman Islands or of Bermuda, where it
does little or no business other than tax evasion.
The willingness of corporations to renounce their citizenship and
leave America behind, at least in name only and at least when the tax
bill is due but not when the desire for a government contract is there,
has been recognized in the Senate Finance Committee, where Senator
Wyden will conduct hearings next week on the best legislative approach
to put a stop to this. But we can do something today to put a stop to
what are called ``inversions,'' which are truly perversions of the Tax
Code. As Mr. Sloan writes, ``Inverters are deserters.''
Today, Members can respond to this desertion by denying them
government contracts. I would like to do more, but I believe this
legislation adopted now in these other appropriations acts--repeating
it for every one of them--will do a great deal to send a message about
those who shirk their responsibilities to America at the same time they
ask other taxpayers to use their tax money to finance government
contracts.
The Acting CHAIR. The time of the gentleman has expired.
Ms. DeLAURO. I yield the gentleman an additional 15 seconds.
Mr. DOGGETT. The amendment says, if you renounce your citizenship and
go abroad to avoid paying taxes, don't come with your hand outstretched
to ask other taxpayers who stayed here and worked and contributed to
the success of America--those that are proud to be American businesses
and are paying their fair share--to pay for you to get a government
contract. Don't ask them to put up their tax dollars to pay for your
success.
We believe that this approach provides protection to the Treasury and
responds to those corporations that have abandoned America.
Ms. DeLAURO. Mr. Chairman, I yield myself such time as I may consume.
I mentioned Mr. Sloan's article of this past weekend, and I just want
to read this quote because I think it really puts this whole issue into
perspective:
How much mone are we talking about inverters sucking out of
the U.S. Treasury? There is no number available for the tax
revenue loss that is caused by the inverters and the never-
heres so far, but it is clearly in the billions. Congress'
Joint Committee on Taxation projects that failing to limit
inversions from evading their responsibility like this will
cost the Treasury at least another $19.5 billion over 10
years and possibly much, much more.
At a time when we struggle here day by day to look for the resources
to extend unemployment benefits, to pass a highway trust fund, to
increase the minimum wage, to increase the dollars for biomedical
research, to look for funds for education in this Nation for our
children, we have corporations that are siphoning off $19.5 billion.
Not only do they do that, but they take with them, and we give to them,
billions in Federal contracts. No more should we do it.
I and others long fought for this. We have passed through the
appropriations process a ban on Federal contracts for U.S. companies
that acquire businesses in lower tax jurisdictions, and then they claim
that their headquarters are there despite still being U.S. companies.
We can send another strong statement to these companies today as we
have already done on Defense, on Energy and Water, on Transportation-
HUD, by coming together and passing this amendment. I urge all of my
colleagues to support it. Tell them that they are not allowed to give
up their American citizenship and, yet, claim it for billions in
Federal contracts.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Connecticut (Ms. DeLauro).
The amendment was agreed to.
Amendment No. 4 Offered by Mr. Bachus
Mr. BACHUS. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used to reinstall the Red Mountain sculpture on the plaza
of the Hugo Black Courthouse in Birmingham, Alabama.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Alabama and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Alabama.
Mr. BACHUS. Mr. Chairman, this is a very straightforward amendment,
which I am joined by my colleague, Ms. Terri Sewell, in offering.
The chief judge of the Northern District of Alabama, Karon Bowdre,
and the U.S. marshal who was appointed under the previous
administration but who serves under this administration, Martin Keeley,
have designated this statue as a security risk. We are more concerned
over the opinions of the senior officials in that bill than we are of
the GSA's in not having that statue located where it poses a security
risk to the employees and visitors to that courthouse. Accordingly, I
ask for the support of this important amendment.
Mr. CRENSHAW. Will the gentleman yield?
Mr. BACHUS. I yield to the gentleman from Florida.
{time} 1730
Mr. CRENSHAW. I just want to let you know that we are happy to accept
your amendment.
Mr. BACHUS. Thank you.
Mr. Chairman, I yield the balance of my time to the gentlewoman from
Alabama (Ms. Sewell).
Ms. SEWELL of Alabama. I want to thank the gentleman from my home
State of Alabama for yielding.
Mr. Chairman, I rise in support of my colleague's amendment to
prohibit funding in the underlying bill from being used to reinstall
the Red Mountain sculpture on the plaza of the Hugo Black Federal
courthouse in Birmingham, Alabama.
Despite the security concerns shared by both the United States
marshal and the chief justice, Karen Bowdre, the GSA has planned to
reinstall the sculpture. Both Chief Justice Bowdre and Marshal Keely
believe that the sculpture is nonessential and will pose a serious
security risk if reinstalled.
Chief Justice Bowdre noted, in correspondence to GSA, that the
location of the statue will be roughly 10 to 12 feet from the only
public entrance door, which is completely made of glass and, further,
that the monument would create a fatal funnel where someone could hide
behind the statue and possibly not be seen and cause a security risk.
Federal law clearly states that the United States marshals have the
final authority regarding the security requirements for the judicial
branch of the Federal Government. The Administrative Office of the
United States Court has also agreed with the chief justice and the U.S.
marshal that the final authority over these matters should lie with the
U.S. marshal.
If the marshal and the chief justice believe that putting the
sculpture back could threaten the safety of our court, then GSA should
follow the law and not put the monument back up. Unfortunately, GSA is
ignoring the concerns of the court and has plans to reinstall the
statue.
Now, while I am a steadfast supporter of the arts, I also believe
that the safety of our courts and the citizens must come first. This
amendment simply reinforces that GSA must follow the law by prohibiting
the reinstallation of the sculpture at the Birmingham, Alabama, Federal
courthouse.
I want to thank my friend, Congressman Spencer Bachus from Alabama,
for introducing this bipartisan amendment and urge my colleagues to
join me in support of it.
Mr. BACHUS. Mr. Chair, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Alabama (Mr. Bachus).
The amendment was agreed to.
Mr. SERRANO. Mr. Chairman, I move to strike the last word.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. Mr. Chairman, I yield to the gentleman from New York
(Mr. Maffei) for the purpose of a colloquy.
Mr. MAFFEI. Thank you, Ranking Member Jose Serrano.
Mr. Chairman, I am here because, on March 14, 2013, in my upstate New
York district, a school librarian named Lori Bresnahan and a 10-year-
old child were attacked in a mall parking lot.
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The attacker was facing Federal child pornography charges and was out
on bail and ordered to wear an electronic monitoring bracelet. He
disabled the bracelet, left his home, stabbed Mrs. Bresnahan to death,
and sexually assaulted the young girl.
In the days following the attack, it was revealed that the attacker
had been removing and reassembling the GPS monitoring bracelet. The
device sent out tamper alerts every time he disabled the device, but
the Federal probation office responsible for monitoring this defendant
before his trial failed to respond to 46 total tamper alerts.
On the day of the attack, he again disabled his bracelet, and the
office again ignored the alert. If they had investigated any of these
46 tamper alerts, maybe this tragedy could have been avoided.
This appropriations bill funds the Administrative Office of the
United States Courts, the organization tasked with overseeing the
system of Federal probation offices all over this country.
After this case, I wrote to the Administrative Office of the United
States Courts, asking them to investigate this gross negligence. In
their response was, ``Nothing can excuse the deficiencies in the
supervision of this case,'' but it also said, ``Reduced resources due
to the sequester is harming the efforts to keep it from happening
again.''
Mr. Chairman, we have addressed the sequester for now, but serious
funding issues remain. The administrative office is continuing to use
their funding to backfill cuts they have had to make in previous years.
We cannot allow funding issues to hamper efforts to prevent cases
like this from happening again, and to be clear, this has happened
again around the country.
I ask that the committee take note of the serious problem and ensure
that the administrative office gets the funds it needs to enact real
reform and protect our communities.
I want to thank particularly the ranking member's willingness to work
with me, Chairman Crenshaw and your staff and the minority staff, your
willingness to work with me on this.
Tragedies do happen, but this one could have, should have been
avoided, and I am dedicated to help Congress do anything in our power
to make sure it never happens again in central New York or anywhere in
this great country.
Mr. SERRANO. I thank the gentleman.
The gentleman is seeking to bring the salaries and expense of the
courts of appeals, district courts, and other judicial services up to
an appropriate level in part, as he mentioned, to address a tragic
incident that took place in his district.
It highlights the problems the judiciary suffered while under
sequestration and with the lower funding levels that agencies in the
executive branch have also had to face.
We will work with the gentleman, the majority, and with the
judiciary, as we do every year, to ensure that we can meet their
funding needs and address the gentleman's concerns.
Mr. Chairman, I yield back the balance of my time.
Mr. CRENSHAW. Mr. Chairman, I move to strike the last word.
The Acting CHAIR. The gentleman from Florida is recognized for 5
minutes.
Mr. CRENSHAW. Mr. Chairman, I would like to engage the gentleman from
Florida (Mr. Yoho) in a colloquy and I yield to the gentleman.
Mr. YOHO. Mr. Chairman, in 2010, this body passed the Hiring
Incentives to Restore Employment Act, the HIRE Act. Included in that
measure was the Foreign Account Tax Compliance Act, or FATCA.
FATCA requires U.S. citizens living abroad to prepare tax returns
that include both non-U.S. income and non-U.S. financial accounts.
Additionally, FATCA requires financial institutions in other countries
to report on assets held by American clients to the IRS.
If those institutions do not supply that information, they would be
subject to a 30 percent withholding tax. In a recent report, nearly
77,000 institutions have agreed to hand over that information to the
IRS.
The unintended consequences of this law are affecting over 7 million
Americans living overseas. Due to the additional reporting burden, many
institutions are simply denying access to our citizens.
Simply put, added regulations from the Federal Government are putting
our citizens at a competitive disadvantage around the world, and
foreign firms now view our citizens as too much of a hassle and a
liability to hire, making America less competitive.
One of the solutions to this would be to switch from a citizen-based
taxation to a territorial or to simply repeal FATCA.
The U.S. citizens who live and work abroad are our Nation's biggest
spokesmen for our America and our way of life and what America stands
for. They represent our country in areas of the world that typically
see Americans in a skewed light. We, as those in government, should
give them every opportunity to succeed throughout the world.
However, we have so many stories like the American living in
Australia, where her husband is an Australian citizen and they share a
mutual bank account, but they have to comply with IRS rules, and she
has no income; or the gentleman from Thailand who has retired. He
worked for a U.S. company for the last 15 years, and he has to abide by
U.S. tax laws, even though he has been over there and he resides
outside of the U.S.
What Fidelity Mutual told him is we can no longer accept your money
and invest because you live outside of the U.S., but you are a U.S.
citizen.
Mr. Chairman, this is unacceptable. We in government should do
everything possible to bring certainty to our citizens, regardless of
where they live, and as a sign of a true great Nation, it is the
ability for the Nation's citizens to travel and work wherever they
choose in the world, without being disadvantaged by their own
government.
I look forward to working with my colleague from Florida.
Mr. CRENSHAW. I thank the gentleman.
As you point out, this is an extensive regulation. It is going to
have a profound and far-reaching impact on our economy.
I believe these regulations, as you pointed out, are fraught with
unintended consequences. As you point out, the regulation is creating
headaches for many Americans who must report their foreign financial
activities on the U.S. tax return, so they spend countless hours to
prepare and file their tax forms necessary to comply with the
regulation.
Mr. Chairman, we don't need more burdensome regulations. We need some
pro-growth tax reform, to make it easier for Americans, whether living
at home or living abroad, to comply with our tax laws.
Now, it is good to go after tax dodgers, that is understandable, but
this is overkill, and I look forward to working with the gentleman to
address these unintended consequences.
Mr. Chairman, I yield back the balance of my time.
Amendment Offered by Ms. Schakowsky
Ms. SCHAKOWSKY. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available in this Act may
be used to enter into a contract with any person whose
disclosures of a proceeding with a disposition listed in
section 2313(c)(1) of title 41, United States Code, in the
Federal Awardee Performance and Integrity Information System
include the term ``Fair Labor Standards Act.''.
The Acting CHAIR. Pursuant to House Resolution 661, the gentlewoman
from Illinois and a Member opposed each will control 5 minutes.
The Chair recognizes the gentlewoman from Illinois.
Ms. SCHAKOWSKY. Mr. Chairman, all of us know that hardworking men and
women in all of our districts are having a rough time these days. Many
are paid low wages or wages that are not enough to meet their family's
basic needs. Those problems are made even worse when workers are the
victims of wage theft.
Billions of dollars are actually stolen from workers through wage
theft, and wage theft occurs when workers are forced to work off the
clock, denied earned overtime pay, or paid less than the minimum wage.
Workers can lose pay because of illegal paycheck deductions, be denied
their final paychecks, or not be paid at all.
[[Page H6266]]
Interfaith Worker Justice, based in Chicago, has been working to stop
wage theft for years. In 2008, its executive director, Kim Bobo, wrote
a book called ``Wage Theft in America: Why Millions of Working
Americans Are Not Getting Paid--And What We Can Do About It.''
My amendment is one step we can take to do something about it. My
amendment is simple. The idea is the same idea that has been offered on
the House floor by my friend and colleague, Representative Keith
Ellison, and is supported by the Congressional Progressive Caucus.
It says that Federal contractors have a duty to pay their workers
their legally-earned wages and that corporations that don't pay their
workers their legally-earned wages shouldn't benefit from Federal
contracts. Similar language has successfully been added to the Energy
and Water and Department of Defense Appropriations bills.
Wage theft has been documented. One study of workers in Chicago, Los
Angeles, and New York City found that 26 percent were paid below legal
minimum wage levels, 76 percent were denied earned overtime, and 70
percent were not paid for work outside of their regular shifts.
The North Carolina Justice Center found that workers in that State
lost $33 million in pay because of wage theft over the course of 5
years. The Economic Policy Institute found that, ``In total, the
average low-wage worker loses a stunning $2,634 per year in unpaid
wages, representing 15 percent of their income.''
This is a problem in many sectors, and that includes Federal
contractors. A report by the Senate Health, Education, and Labor and
Pensions Committee revealed that 32 percent of the largest Department
of Labor penalties for wage theft were levied against Federal
contractors.
National Employment Law Project found that 21 percent of Federal
contract workers were not paid overtime and 11 percent had been forced
to work off the clock.
Federal contract employees deserve to receive the dollars they have
earned, the dollars that they need, the dollars they would spend in
their communities, and the dollars that taxpayers awarded the
contractors for those wages.
All workers should be safe from wage theft, but my amendment is much
more modest. It just says that a contract under this FY 2015
Appropriations bill can't be awarded to a corporation found to be in
violation of wage requirements under the Fair Labor Standards Act.
It says that corporations that cheat their employees out of hard-
earned wages are not deserving of taxpayer-funded Federal contracts. It
sends a clear message: obey the law, pay your workers the wages they
have earned, or we won't give you the benefit of a taxpayer-financed
Federal contract.
{time} 1745
Allowing corporations to get away with violating the law is not just
bad for their workers and taxpayers, it is unfair to the businesses
that are competing for Federal contracts but won't engage in wage theft
to get a competitive edge.
Do we really want to tell corporations that they can violate the law
and steal wages from their workers and still get a Federal contract, or
do we want to take a small stand by saying that only companies that
play by the wage rules we have enacted will be eligible?
I hope we can agree that breaking the law in order to underpay
workers is not acceptable, certainly should not be rewarded, and
certainly not with taxpayer dollars. I urge my colleagues to help the
workers who work for us. Support the Congressional Progressive Caucus
amendment.
I certainly urge a ``yes'' vote on the amendment, and I yield back
the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Illinois (Ms. Schakowsky).
The amendment was agreed to.
Amendment No. 2 Offered by Mr. Meehan
Mr. MEEHAN. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
At the end of the bill, before the short title, insert the
following:
Sec. ___. None of the funds made available in this Act may
be used to modify or rebuild any portion of the White House
bowling alley, including using phenolic synthetic material.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Pennsylvania and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Pennsylvania.
Mr. MEEHAN. Mr. Chairman, I rise today to offer an amendment to the
FY15 Financial Services Appropriations bill.
But first, before I start, I would like to commend Chairman Crenshaw
for his tireless commitment to stopping the culture of spending and
continuing the culture of savings that we have seen from his
subcommittee chairmanship. Given our country's current fiscal
situation, we need to be mindful of our limited resources and that we
need to do more with less. And one of the most basic concepts in
budgeting is balancing wants versus needs. A need is something that you
have to have, something you can't do without. A want is something that
you would like to have. A good example is calcium. You know, calcium is
necessary for survival, but ice cream, on the other, hand is a want.
Everyone needs calcium, but plenty of people would do just fine without
ice cream.
What will my amendment do? It will demonstrate to the taxpayers that
this Congress understands the difference between wants and needs. My
amendment prohibits any funds from this bill being spent by the General
Services Administration towards the renovation of the bowling alley in
the White House Eisenhower Office Building.
With our Nation $17 trillion in debt, upgrading the President's
private bowling alley shouldn't be a priority. A spiffy new bowling
alley may suit the wants for Commander in Chief, but I think I speak
for the taxpayers of the Seventh Congressional District when I assert
that it is certainly not a need. I think when the administration came
forward with this proposal, they rolled a gutter ball.
The hardworking Americans expect and deserve better. These are
difficult times in our country. This is no time for business as usual.
Mr. Chairman, I reserve the balance of my time.
Mr. SERRANO. Mr. Chairman, I claim the time in opposition to the
amendment.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. Mr. Chairman, this has very little to do with a bowling
alley. This is not even about the picture of Richard Nixon fully
dressed, bowling at the White House. This is about this desire of
Republicans and the Tea Party segment of Republicans, in some cases, to
make Barack Obama seem like an illegitimate President.
The legitimacy of his Presidency has been questioned on and on. There
were questions about his birthplace. There were questions about what he
said his religion was. There were questions about whether he was old
enough to be President. There have been questions about everything. So
now, these petty attacks continue.
This is a nonissue. This is a nonstarter. First of all, this was
about fixing up a bowling alley that has been there forever. I don't
think the American public, with all due respect to the people in the
gentleman's district, really spend a lot of time concerned about the
fact that all Presidents--and I mean all Presidents--are not allowed
just to pick up and go to a local place to have a beer or bowl a game
of bowling or whatever. So this is not an issue that we should be
dealing with.
But what is important about it is that GSA, furthermore, has canceled
the project. The Federal contractor posting was pulled on July 9. So I
am sure that the other side knows that this no longer is an issue, but
it continues to be something that sounds good. I am sure people will be
writing about it tonight, that the bowling alley was going to be built
at the White House. No. This was an existing one that was going to be
refurbished. That contract has been pulled back. That idea has been
pulled back.
There just continues to be more and more and more of this petty
attack on a President. And I think it is not so
[[Page H6267]]
much that he was elected President, which caused a lot of pain for a
lot of people, but the fact that he was reelected. That really has
turned a lot of people to a point where they will come up with
anything.
So by tonight, we may see even the plumbing at the White House
attacked, as we did a couple of years ago. And at that time, I remarked
that there hadn't been any plumbers at the White House since the Nixon
administration, and that was the truth. We have leaks. We have a White
House that needs fixing, and this Congress wastes time on these kinds
of issues.
So I would just hope that the gentleman would pull his amendment. If
he doesn't, then I would hope we could defeat the amendment because it
is just silly and not necessary at all.
I reserve the balance of my time.
Mr. MEEHAN. Mr. Chairman, I suspect it is only silly if you are the
people who don't care about the important expenditures of the taxpayers
of the United States of America. This isn't some trivial issue. This is
a question of priorities at a time where every family is struggling.
And the justification here in Time magazine of one of the individuals
was this needs renovations. Would you believe it? According to their
first-person testimony--and this is just the staffers and the
President--there is no electric scoreboard down there, so you have to
score by hand. And that is just debilitating when you are focused on
bowling a 300 like I am.
Well, maybe we ought to have people who are focused on other kinds of
things at this point in time. This is a serious issue in terms of the
mispriority of spending Federal dollars.
Mr. Chairman, I urge my colleagues on both sides of the aisle to
assert the appropriate priorities in terms of our spending, and I urge
a ``yes'' vote.
Mr. Chairman, I yield back the balance of my time.
Mr. SERRANO. Mr. Chairman, just in closing, it is silly. And I am not
suggesting the gentleman is silly.
We spend money, large amounts of money on the military and on other
things that we never, ever, ever attack. We send money overseas in
misguided military situations, and we don't complain about that. But it
makes good headlines to say that today we stopped the bowling alley
from being built at the White House. ``Refurbished'' was the question
at hand, and it has been pulled back since July 9. There is no plan
whatsoever to do anything with the existing old, decrepit bowling alley
at the White House.
So this is not a gutter ball. This is not a strike for anyone. This
is just more of their silliness that we will see for the next 24 hours.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Pennsylvania (Mr. Meehan).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. SERRANO. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Pennsylvania
will be postponed.
Amendment Offered by Mr. Grayson
Mr. GRAYSON. I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
SEC. __. None of the funds made available by this Act may
be used to enter into a contract with any offeror or any of
its principals if the offeror certifies, pursuant to the
Federal Acquisition Regulation, that the offeror or any of
its principals--
(1) within a three-year period preceding this offer has
been convicted of or had a civil judgment rendered against it
for commission of fraud or a criminal offense in connection
with obtaining, attempting to obtain, or performing a public
(Federal, State, or local) contract or subcontract; violation
of Federal or State antitrust statutes relating to the
submission of offers; or commission of embezzlement, theft,
forgery, bribery, falsification or destruction of records,
making false statements, tax evasion, violating Federal
criminal tax laws, or receiving stolen property; or
(2) are presently indicted for, or otherwise criminally or
civilly charged by a governmental entity with, commission of
any of the offenses enumerated in paragraph (1); or
(3) within a three-year period preceding this offer, has
been notified of any delinquent Federal taxes in an amount
that exceeds $3,000 for which the liability remains
unsatisfied.
Mr. GRAYSON (during the reading). Mr. Chair, I ask unanimous consent
to dispense with the reading.
The Acting CHAIR. Is there objection to the request of the gentleman
from Florida?
There was no objection.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Florida and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Florida.
Mr. GRAYSON. Mr. Chairman, this amendment is identical to other
amendments that have been inserted by voice vote into every
appropriations bill that has been considered under an open rule during
this Congress. It is also identical to the amendment I offered to last
week's Energy and Water bill, which was passed by voice vote.
My amendment expands the list of parties with whom the Federal
Government is prohibited from contracting due to serious misconduct on
the part of the contractors. It is my hope that this amendment will
remain uncontroversial, as it has been, and will again be passed
unanimously by this House.
Mr. CRENSHAW. Will the gentleman yield?
Mr. GRAYSON. I yield to the gentleman from Florida.
Mr. CRENSHAW. I would be pleased to accept the amendment.
Mr. GRAYSON. I thank the gentleman and yield back the balance of my
time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Florida (Mr. Grayson).
The amendment was agreed to.
Mr. CRENSHAW. Mr. Chairman, I move to strike the last word.
The Acting CHAIR. The gentleman from Florida is recognized for 5
minutes.
Mr. CRENSHAW. I would like to engage in a colloquy with the gentleman
from Pennsylvania, and I yield to the gentleman.
Mr. ROTHFUS. I thank the gentleman for his offer to engage in a
colloquy.
Mr. Chairman, as you know, money market funds are an important tool
used by a variety of different organizations, such as businesses, State
and local governments, school districts, pension funds, nonprofits, and
more. In fact, it is estimated that between 1985 and 2008, people and
organizations that invested in money market funds have earned $450
billion more than they otherwise would have earned.
Since the financial crisis, there has been significant discussion
about regulating the industry further. In 2010, the Securities and
Exchange Commission, or SEC, put in place new rules to prevent future
runs by imposing additional disclosure and liquidity standards.
Even after these changes, the Federal Reserve, through the Financial
Stability Oversight Council, has attempted to usurp the jurisdiction
and expertise of the SEC and proposed additional regulations on money
markets. While the FSOC has since backed off their proposal, the SEC is
poised to vote soon on a rule to impose a floating net asset value on
certain funds.
I share many of the concerns that commenters on the SEC's rule raised
about how a floating net asset value would adversely impact money
market funds and the people and organizations that rely on them. In
fact, it is worth noting that, of the 1,428 comments on the rule, 98
percent were against the floating net asset value.
Before regulators impose any additional changes on money markets,
they must be certain that the costs and benefits have been thoroughly
weighed. This includes ensuring that the likely tax changes that will
need to be considered with a floating NAV are reviewed by the public in
an open and transparent manner before moving forward. We should not
eliminate money markets as an option for businesses, communities,
workers, and retirees to grow and thrive.
In closing, I would like to thank the committee for its positive
report language with respect to money market funds and thank the
chairman for his time and consideration of this important matter.
[[Page H6268]]
Mr. CRENSHAW. Well, I appreciate the gentleman giving attention to
this issue.
As you noted, we have included report language on money market funds
within the bill. We are concerned about the issue, and we will work
with you as this bill moves forward.
Mr. ROTHFUS. I thank the gentleman and look forward to working with
him on this important issue.
Mr. CRENSHAW. I yield back the balance of my time.
Amendment Offered by Mr. Sherman
Mr. SHERMAN. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used to implement, administer, or enforce final leasing
accounting standard rules, regulations, or requirements in
FASB Project 2013-270, Accounting Standards Update Topic 842.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from California and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from California.
{time} 1800
Mr. SHERMAN. So much of what we do on this floor is so partisan,
going over the same old issues. I bring to you an amendment that I
cowrote with the Chamber of Commerce which deals with an issue that has
not yet been discussed on this floor.
The Financial Accounting Standards Board is funded by the SEC through
a convoluted process designed to claim that they are not a government
agency, but they are funded by a mandatory tax, and if you don't follow
their prescriptions, you can, indeed, face criminal, as well as civil,
penalties.
If it is not broke, don't fix it. For 100 years, we had good rules on
how to account for leases. The tenant pays rent, the owner of the
building owns the building, and the financial statements disclose in
the footnotes all the details any financial analyst would want to see.
Since it is not broke, the folks at the Financial Accounting
Standards Board have decided to fix it. They want to list on every
balance sheet in America the future amount that will be paid in all
lease payments as a liability. The effect of that is to increase the
liabilities shown on the balance sheets of American business by $2
trillion. That is right, this is a $2 trillion issue that has not yet
been discussed on this floor.
The Financial Accounting Standards Board has done some outreach and
taken some testimony. By the standards of the accounting world, they
have listened. But by the standards of democracy that we are familiar
with, trust me, far more is done before you permit a single three-story
apartment building.
Mr. Chairman, almost 70 Members of Congress have urged the Financial
Accounting Standards Board to stop. They keep going. They want to act
in concert with the European International Accounting Standards Board,
and that board is beholden to the European Parliament in Brussels. That
is right. Those who, in effect, enact American law are not listening to
Congress; they are listening to the only Parliament in the world held
in lower esteem than Congress.
What will be the effect on our economy? Well, this will add $2
trillion to the balance sheet liabilities of American businesses. It
will put a tremendous disincentive on businesses to sign long-term
leases. If your tenant won't sign a long-term lease, you can't fund a
new building project, a new shopping center, or a new industrial park.
So that is why an economic study funded by the American Association of
Realtors, the Economic Roundtable, the Business Owners and Management
Association, and others says that the best-case scenario is that this
will destroy 190,000 American jobs and reduce our GDP by almost $28
billion a year. The worst-case scenario is over 3 million jobs and
nearly half a trillion dollars decline in our GDP.
It is time for us to tell the Financial Accounting Standards Board
not to go down this road in an effort to fix something that isn't
broken.
It is time, also, to focus on an additional disadvantage of this
accounting proposal, and that is it will cause tens of thousands--
hundreds of thousands--of businesses in this country to be in violation
of their loan covenants, which means that they will have to immediately
pay off their liabilities or renegotiate with their bankers, who will
insist upon higher personal guaranties and higher interest rates, et
cetera.
Thousands and thousands of long-term bonds that have been sold in the
public market will be held to be in violation of their loan covenants
and will become immediately due--not because the businesses were wrong,
but because the accounting standards changed.
Now, I have often thought that accounting principles ought to be
written by the Financial Accounting Standards Board and not by
Congress. I am clinging to that belief. As I see this disaster unfold
in the preliminary--in the discussions of the Financial Accounting
Standards Board, it is harder and harder to cling to that belief. But I
still retain hope that the accounting standards board will change
direction and will not adopt this new policy, which solves no problem
and which will add $2 trillion to the liabilities of American business
and cost us hundreds and hundreds of thousands of jobs.
Mr. Chairman, because I am hopeful that they will change course, I
ask unanimous consent to withdraw this amendment.
The Acting CHAIR. Is there objection to the request of the gentleman
from California?
There was no objection.
Amendment No. 1 Offered by Mr. Fleming
Mr. FLEMING. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR (Mr. Wenstrup). The Clerk will designate the
amendment.
The text of the amendment is as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used to implement guidance FIN-2014-G001 (relating to BSA
Expectations Regarding Marijuana-Related Businesses) issued
on February 14, 2014.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Louisiana and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Louisiana.
Mr. FLEMING. Mr. Chairman, I rise today to stop the implementation of
Treasury guidance that is in direct conflict with the Federal anti-
money laundering statutes.
On February 14, 2014, the Department of the Treasury Financial Crimes
Enforcement Network, FinCEN, issued compliance guidance for ``Bank
Secrecy Act, BSA, expectations for financial institutions seeking to
provide services to marijuana-related businesses.''
I am concerned that Treasury forgot one detail: the Bank Secrecy Act
and Federal anti-money laundering laws are explicitly clear that banks
and financial institutions may not engage in marijuana-related
transactions.
Despite trending State laws, Federal law remains unchanged. The
Controlled Substances Act prohibits the manufacture, possession, and
distribution of marijuana. Anything but compliance with the CSA, the
law of the land, will trigger criminal anti-money laundering penalties,
fines, and possible incarceration for perpetrators.
Instead of issuing guidance to reinforce Federal prohibitions, the
FinCEN memo offers banks ways to report suspicion activities as
required under Federal law, while blatantly ignoring the fact that
banks are not allowed to participate in any marijuana transactions,
without exceptions. In other words, instead of enforcing the law, there
is just a suspicion alert sent out, which we don't even know if anyone
is even going to pay attention to. The very act of depositing drug
money runs afoul of Federal law.
Mr. Chairman, it is important to note that the Department of Justice
also issued a memo in 2014, ``Guidance Regarding Marijuana Financial
Crimes.'' This separate memo reinforces Federal law and outlines
possible prosecution and criminal offense for ``transactions involving
proceeds generated by marijuana-related conduct.''
My amendment would stop the Department of the Treasury from
implementing their February 2014 guidance, which is confusing and is
actually creating problems throughout the industry. And it is the
government, again, it
[[Page H6269]]
is the administration not enforcing its own laws. This is nothing short
of tacit approval for money laundering, all the while encouraging
banks, credit unions, and other financial institutions to engage in
illegal and criminal activities.
With that, Mr. Chairman, I would like to yield some time to my good
friend from Florida (Mr. Crenshaw).
Mr. CRENSHAW. Well, I thank the gentleman for yielding, and let me
see if I got this straight. Right now, manufacturing, distributing, or
dispensing marijuana is still illegal under federal law. Right?
Mr. FLEMING. That is correct, sir.
Mr. CRENSHAW. And the Bank Secrecy Act still prohibits banks from
laundering the proceeds of illegal activities. Is that right?
Mr. FLEMING. Right.
Mr. CRENSHAW. But in spite of the Controlled Substances Act and
despite the Bank Secrecy Act, Treasury has given banks guidance on how
to facilitate the sale of marijuana. That seems wrong, absolutely
wrong. This amendment corrects that wrong, so I urge my colleagues to
adopt this amendment.
Mr. FLEMING. Mr. Chairman, I reserve the balance of my time.
Mr. SERRANO. Mr. Chairman, I rise in opposition to the amendment.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. Mr. Chairman, there are a couple of other speakers, so I
will be very brief.
This really has very little to do with the substance that we are
talking about, or that appears to be marijuana. It is about the fact
that, whether we like it or not, there are States that have already
legalized either recreational use, in two cases, or medical use in 22
States, and those situations require banking decisions and banking
abilities. Jack Lew, Secretary of the Treasury, said at our hearing:
Without any guidance there will be a proliferation of cash-
only businesses, and that would make it impossible to see
when there are actions going on that violate both Federal and
State law.
So an attack on the use of marijuana may be misleading here because
what we are doing is really ignoring the banking aspect of this and the
fact that there have to be some regulations and some issues put in
place to do the right thing and to uphold the law, the banking laws and
other laws.
With that, I would like to yield to the gentleman from Colorado (Mr.
Perlmutter).
Mr. PERLMUTTER. Mr. Chairman, I say to my friend, Dr. Fleming, and to
the chairman of the committee that the guidance has already been
implemented--the guidance from the Justice Department, the guidance
from the Treasury Department to banks and to the regulators how to
report activity around a marijuana business.
Mr. Chairman, there are now 22 States that allow for medical
marijuana. There are two States that have legalized it for all adult
purposes. We are at 24 States, and by the end of this year, we will be
at about 30 States.
What is happening is because banks may not be following--they are
doing what Dr. Fleming would like to see. They are operating just in
cash, which creates its own potential for crime, robbery, assault and
battery. You cannot track the money. There is skimming and tax evasion.
So the guidance by the Justice Department and the guidance by the
Treasury Department is to bring this out into the open.
Mr. Chairman, I will insert in the Record yesterday's article in USA
Today concerning the security issues dealing with all cash accounts,
and the Treasury officials there say:
Our goal is to promote financial transparency and make sure
law enforcement receives the reporting from financial
institutions that it needs to police this activity.
[From USA Today, July 13, 2014]
Pots of Marijuana Cash Cause Security Concerns
(By Trevor Hughes)
Denver.--The unmarked armored truck rumbles to a stop in a
narrow alley, and former U.S. Marine Matthew Karr slides out,
one hand holding a folder, the other hovering near the pistol
holstered at his hip.
With efficient motions he retrieves a locked, leather-bound
satchel from a safe set into the truck's side and presses a
buzzer outside the door. It swings open to reveal a cavernous
warehouse filled with marijuana and a safe stuffed with cash.
Welcome to the rear guard of Colorado's rapidly expanding
legal marijuana industry, where eager users pour millions of
dollars--most of it in small bills--into buying pot, hashish,
and marijuana-infused foods and drinks. All that cash adds
up, and there are few places to put it: Federal regulations,
which still classify pot as an illegal drug, make it
difficult for marijuana producers to deposit their profits
into traditional bank accounts.
And those cash-heavy small businesses make awfully
attractive--and vulnerable--targets for criminals.
That's where Karr and the company he works for come in.
Heading through the warehouse where workers tend young
marijuana plants, Karr greets a young woman, and the two
empty a safe of tens of thousands of dollars in cash neatly
packed in plastic envelopes. Like every room in this combined
marijuana store and grow house, the smell of pot hangs heavy
in the air. Karr double-checks the ledger, locks his satchel
and hustles outside, where former cop Phil Baca waits at the
wheel of the armored car.
Karr opens the truck's safe, pitches the satchel inside and
climbs back into the passenger seat, an AR-15 rifle stashed
behind him. It's a scene that plays out six times in three
hours. Their take for the day: somewhere close to $100,000 in
cash.
``For the first three months, people were just keeping the
money everywhere--in the walls, in mattresses, at home,''
says Sean Campbell, CEO of Blue Line Protection Group, which
provides marijuana security services, including Karr, Baca
and the armored car. ``And banks don't even want to deal with
it. You have a quarter-of-a-million dollars in cash show up
all at once. The counting time alone is going to take an
hour.''
The unusual problem of having too much cash is forcing
business owners to hire security firms like Campbell's,
especially after Denver police warned in June of a credible
threat against marijuana stores and couriers.
Marijuana-store owners have suffered some smash-and-grab
robberies over the last several years but surveillance
systems and close police attention have solved many of them.
Experts say those robberies were largely committed by
amateurs, rather than sophisticated crime rings.
Campbell said he believes it will take a serious high-
dollar heist to force smaller marijuana stores to take their
security more seriously.
State law requires marijuana businesses to have security
cameras and systems on the premises, and many have armed
guards, but they remain easy targets. The stores and grow
operations often are in remote industrial areas, in
warehouses that have not been hardened against a determined
intruder. Many stores have large amounts of pot sitting
around in rooms secured only by flimsy wooden doors.
Options are limited, however. Unlike most other businesses,
marijuana-store owners can't easily open bank accounts for
fear of running afoul of federal law. Despite Washington
state joining Colorado last week in legalizing sales of
marijuana for recreational purposes and 23 states plus the
District of Columbia permitting medical pot, the federal
government still classifies the plant as an illegal drug more
dangerous than cocaine or methamphetamine.
By opening a bank account, pot growers and shop owners run
the risk of being charged with money laundering, because
federal banking laws and regulations are deliberately aimed
at tracking large flows of cash like those generated by both
legal and illegal drug sales. A single such charge can bring
decades in prison, and most banks and pot-shop owners don't
want to run that risk.
``When you go into the business, and you know it's
federally illegal, you're taking your chances,'' said Tom
Gorman, who runs the federally funded Rocky Mountain High
Intensity Drug Trafficking Area task force. ``That's the
problem when the state legalizes something that remains
illegal at the federal level.''
While declining to be quoted by name, many marijuana store
owners interviewed by USA TODAY shared tales of playing cat-
and-mouse with banks, managing to keep accounts open for only
a few months at a time before getting shut down.
U.S. Treasury officials require banks to file what are
known as ``suspicious activity reports'' whenever they
suspect someone is trying to launder money. Anyone bringing
in a pile of cash sets off internal alarms for bank workers,
pot-shop workers say. Federal financial-crimes investigators
encourage banks to report suspected marijuana transactions
because pot remains illegal at the federal level.
``Our goal is to promote financial transparency and make
sure law enforcement receives the reporting from financial
institutions that it needs to police this activity and to
make it less likely that this financial activity will run
underground and be much harder to track,'' said Steve Hudak,
a spokesman for the Treasury Department's Financial Crimes
Enforcement Network.
Tax-and-marijuana attorney Rachel Gillette said she's seen
banks' concerns firsthand--several banks she deals with said
they wouldn't let her open an account, even though both the
federal and state government are allowed to deposit tax
payments from pot sellers. Gillette said federally regulated
banks say it's just easier for them not to risk getting their
hands tainted by pot.
``They literally told me they would not take my account
because I do business with
[[Page H6270]]
the marijuana industry,'' Gillette said. ``That seems
fundamentally unfair--the state is taking that money and
putting it in the bank; the IRS is taking that money and
putting it in the bank.''
Gillette is suing the IRS on behalf of one of her clients
who has been paying federal payroll tax bills with cash. The
IRS calls for electronic payments and adds a 10% surcharge
for cash payments, she said. With some marijuana businesses
paying payroll taxes of $100,000 a quarter, those penalties
are substantial.
Colorado has tried to solve the problem with a new state
law permitting creation of marijuana banking cooperatives,
which would have the power to accept deposits, lend money and
make electronic payments. But that system likely won't begin
operating for at least another year, said Gov. John
Hickenlooper, and even then federal officials would need to
bless the plan.
The amount of cash already flowing through the fast-growing
system has forced state tax officials to change how they
accommodate payments. While Colorado allows businesses to pay
their taxes in cash, most pay electronically. Marijuana
businesses, however, must trek to a central Denver office,
cash in hand, where they're met at the curb by armed guards
and escorted inside. ``Some people walk in with shoe boxes.
Some people have it in locked briefcases. We've had people
bring it in buckets,'' said Natriece Bryant, a spokeswoman
for the Colorado Department of Revenue.
Campbell, who runs the armored-car company, said the vast
cash flows are a clear come-on for criminals. He said he's
working with banks to offer alternatives for marijuana
businesses, including vault services. For many in the
marijuana industry, the scene from the Emmy-winning
television series Breaking Bad of a storage unit filled with
drug cash hits uncomfortably close to reality.
Says Campbell, ``You're effectively creating a magnet for
crime.''
Mr. PERLMUTTER. So I would urge a big ``no'' vote on this amendment.
It is going backwards.
Mr. SERRANO. Mr. Chairman, I yield the remainder of my time to the
gentleman from California (Mr. Sherman).
Mr. SHERMAN. So many have spoken on this floor in favor of states'
rights. A majority of Americans live in States in which medical
marijuana is legal, and yet we have this bizarre circumstance where
these have to be all cash businesses. The result, as the gentleman from
Colorado points out, is tax evasion--or potentiality for tax evasion--
and also an invitation to crime--violent street crime--as people figure
out how they can invade with guns a store that is licensed by my State
or his State and try to steal huge quantities of cash.
It is absolutely absurd to tell people that they cannot use medical
marijuana when they are in physical pain and they live in a State where
that is allowed, and it is even more absurd to have to keep millions of
dollars of cash there for the possible criminal taking because we have
businesses that are actually operating that are outside the banking
system.
Mr. SERRANO. Mr. Chairman, I yield back the balance of my time.
Mr. FLEMING. Mr. Chairman, how much time do I have remaining?
The Acting CHAIR. The gentleman from Louisiana has 1\1/2\ minutes
remaining.
Mr. FLEMING. Mr. Chairman, first of all, it is absolutely a fact that
marijuana, the use of marijuana and the sale of marijuana, is against
federal law. Now, you may want to change that law, but that is the law.
Also, our banking system, even those that are State banks, State
charter banks, fall under a Federal banking system.
You are talking about money laundering. Well, what about other drugs?
What about heroin? What about methamphetamines? Should we also have
exemptions and carve-outs for those as well? Why even have a system
that detects money laundering and actually enforces that if we are
going to begin to create exemptions and carve-outs for that as well?
Also, I would remind folks that with regard to medical marijuana,
that is still very controversial. The reason why marijuana is still a
Schedule I drug, illegal, is that it is neither known nor accepted by
authorities that raw marijuana has an acceptable medical use.
{time} 1815
Now, yes, extracts of marijuana, even Marinol--which is synthetic
THC--is a schedule III, like hydrocodone, and that can be prescribed
and monitored by a physician. There is no problem with that, and the
money can go into any banking system.
So if there are beneficial parts of the marijuana, we can extract
that and create medication from it, whether it is liquid or tablet,
injection or whatever, and then that will certainly be delivered,
prescribed by physicians.
I urge a ``yes'' vote on this amendment.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Louisiana (Mr. Fleming).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. FLEMING. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Louisiana
will be postponed.
Amendment Offered by Mr. Gosar
Mr. GOSAR. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used to pay a performance award under section 5384 of
title 5, United States Code, to any employee of the Internal
Revenue Service.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Arizona and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Arizona.
Mr. GOSAR. Mr. Chairman, I rise today to offer one final amendment to
the Financial Services and General Government Appropriations Act for
the fiscal year 2015.
Let me first say that I am especially grateful to Chairman Crenshaw
and Ranking Member Serrano for working with me on my variety of
amendments to this bill. They have been exceptionally cooperative and
congenial. I would also like to thank the staff of the Financial
Services Subcommittee. They have also been very courteous and
cooperative with my staff.
My final amendment to the bill seeks to effectuate a policy of
accountability in government. Historically, the IRS has never been
liked by the American people. The agency takes our hard-earned wages
and enforces the Internal Revenue Code.
I would argue that the power wielded by this agency is matched only
by the Department of Defense because, as we all know, the power to tax
is the power to destroy, and although no one ever liked the IRS, most
Americans quietly trusted them.
They trusted that the agency was enforcing the law with fairness and
impartiality and were beyond reproach in terms of political pressure.
That trust has not only been questioned, it has been annihilated.
This year, House Republicans have gone above and beyond to hold this
President and his lawless administration accountable for their actions
and inactions, and this is another opportunity to act rather than to
speak.
My final amendment to the bill follows in the footsteps of another
that I cosponsored and supported in the MilCon-VA Appropriations Act
just a few weeks ago. This amendment would prohibit bonuses or
performance awards to be paid to senior executive employees at the IRS.
The saying goes with great power comes great responsibility. The IRS
is responsible for administering tax laws fairly and justly. They have
failed at that responsibility, and they now must be held accountable.
Senior management should never have let this happen.
Moreover, they should not be given performance awards in the wake of
one of the largest scandals in recent history. Giving out bonuses is
ludicrous and amounts to a slap in the face to the American public.
I would also like to quickly note that I appreciate the committee's
inclusion of a provision, section 112, in the bill. That section
prescribes that, before a bonus may be awarded to an IRS employee, an
assessment of the employee's conduct, in addition to a mandatory check
for back taxes or delinquent taxes, must be performed and taken into
account.
As a duly-elected Member of Congress representing hundreds of
thousands of Arizonans, I cannot, in good
[[Page H6271]]
conscience, allow any sort of bonus to be awarded to senior management
at this rogue agency.
As long as I remain a Member of this body, I will seek to ensure that
this policy becomes law each and every fiscal year. It is my hope that
this amendment will ultimately be signed into law and that no bonuses
at all will be awarded in the next fiscal year.
None should have been given this last year, but Commissioner John
Koskinen decided to dole out bonuses anyway, despite the anger he knew
it would cause. Overall, my hope is that this amendment will
incentivize one of these senior executives at the IRS to come forth
with copies of Lois Lerner's magically vanishing emails.
Should that day come and should the Congress and the American people
receive closure to this scandal, I will cease my efforts to prohibit
these awards, and the IRS may begin the process of rebuilding the trust
it has so blatantly violated.
This agency has shown contempt for the American taxpayer, and the
ensuing outrage at the IRS has been bipartisan. When the House voted on
House Resolution 565 to demand that Attorney General Eric Holder
appoint a special counsel to look into the scandal, 26 Democrats voted
to support that measure.
As I mentioned with my last IRS amendment, if you disapprove of the
IRS leaking tax information about the President's political opponents,
then support my amendment.
If you disapprove of the IRS targeting conservative groups for their
political beliefs, then support my amendment. If you disapprove of the
IRS ignoring congressional subpoenas, then support my amendment.
If you disapprove of this agency stonewalling Congress, destroying
evidence, and lying to the American people, then support my amendment.
Finally, if you disapprove of IRS senior executives receiving bonuses
for their failures, then support my amendment.
Again, I thank the chairman and ranking member for their continued
work on the committee.
Mr. CRENSHAW. Will the gentleman yield?
Mr. GOSAR. I will certainly yield to the chairman.
Mr. CRENSHAW. The gentleman has made a couple of interesting points
that I think bear emphasis. Some of the actions of the IRS have been
outrageous, and we have talked about that from time to time. As the
gentleman pointed out, this year, $63 million in bonuses were paid to
IRS employees.
It is interesting they were paid by the new Commissioner when the
prior Commissioner had decided that it was not appropriate to pay those
bonuses, and then the new Commissioner testified before our
subcommittee how he was outraged that he didn't have enough money to
answer more than 61 percent of his phone calls.
I said: Sir, what is outrageous to me is you don't have enough money
to answer the phone calls, which is the first thing you ought to do,
yet you paid $63 million in bonuses, and then we find out that some of
the people who received the bonuses were delinquent on their taxes.
I urge adoption of the amendment
Mr. GOSAR. I thank the gentleman, and I yield back the balance of my
time.
Mr. SERRANO. Mr. Chairman, I claim the time in opposition to the
amendment.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. Mr. Chairman, I get tired of saying this, but it has to
be said. I realize that the other side's desire is to bring the IRS
down to nothing. It is a constitutional question. We have the power to
collect taxes. One would argue that we must have a department that
collects taxes.
They may not always be the department--the agency--we want them to
be. Both sides, whether one believes it or not, were outraged that
something wrong might have been done, but to suggest and paint with a
broad brush the whole IRS and say that everyone there at the senior
level is not worthy of a bonus or not worthy of our respect is really
to do a disservice to public service employees. These folks do a job.
They do a job on a daily basis.
Are there problems with the IRS? There have always been problems at
the IRS. Has the IRS been an agency that is loved by the American
public? No, because we as Americans would love somehow to do everything
we need to do, but have taxes that are either very low or nonexistent.
That is not a knock on us. We would all rather pay less taxes than we
pay, but we continuously just spend time knocking and knocking. If you
measure the time that we have spent on this bill so far and you measure
how much of that time has been allocated to the IRS and to bringing it
down, not to helping it in any way, not to coming up with any
solutions--the whole argument has been they did something wrong, we are
going to punish them.
We are not talking about children. We are not talking about a foreign
government that attacked us. We are talking about an agency that might
not have done everything the way we want them to do it, and therefore,
we have to use our resources, our power, and our legislative ability to
make them do a better job, to help them along the way, not to destroy
them.
So here we are saying if you have executives at the higher level that
are doing a good job, you can't help them in any way. You have to
ignore that.
Now, we talk about morale. We talk about morale with our staff. We
talk about morale with our Membership. Why do we have so many Members
who are retiring?
If you asked them, a lot of them are retiring because we don't get
along the way we used to or maybe because we spend so much time on
wasteful issues.
So we can't paint with a brush the whole IRS. We have to find a way
to help, to make them a better agency--yes, to use tough love.
Absolutely, I will be the first one to agree to that and to join the
majority in doing that, but this whole word of punishing of a worthless
institution, of a corrupt institution, of an institution that does not
follow the law, that is not true, that is not fair, and that is not
correct.
That is why this amendment is misguided, and it may do just the
opposite, like so many of these amendments. By punishing, you bring
down morale, and you bring down the support of those who could help us
do a better job at the IRS like we all would like.
I hoped that we would get Mr. Gosar to withdraw his amendment, but
his facial expression tells me that I am crazy in asking that question.
You don't have to agree that I am crazy in asking that question, but I
think we should defeat this amendment.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Arizona (Mr. Gosar).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. GOSAR. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Arizona will
be postponed.
Amendment Offered by Mr. Heck of Washington
Mr. HECK of Washington. Mr. Chairman, I have an amendment at the
desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available in this Act may
be used, with respect to the States of Alabama, Alaska,
Arizona, California, Colorado, Connecticut, Delaware,
Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Montana, Nevada, New Hampshire, New Jersey, New Mexico, New
York, North Carolina, Oregon, Rhode Island, South Carolina,
Tennessee, Utah, Vermont, Washington, or Wisconsin or the
District of Columbia, to prohibit or penalize a financial
institution from providing financial services to an entity
solely because the entity is a manufacturer, producer, or
person that participates in any business or organized
activity that involves handling marijuana or marijuana
products and engages in such activity pursuant to a law
established by a State or a unit of local government.
Mr. CRENSHAW. Mr. Chairman, I reserve a point of order on the
gentleman's amendment.
The Acting CHAIR. A point of order is reserved.
Pursuant to House Resolution 661, the gentleman from Washington and a
Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Washington.
[[Page H6272]]
Mr. HECK of Washington. Mr. Chairman, I offer this bipartisan
amendment to carry forth an important issue of public safety to provide
legally-constituted marijuana businesses access to banking services. To
do otherwise is to render them an all-cash sector of the economy, which
is fraught with peril.
If you supported the Rohrabacher amendment to the Commerce-Justice
and Science Appropriations which passed clearly, then you will support
this as well. It brings forth the terms and conditions of the
Department of Justice and Financial Crimes Enforcement Network.
Yesterday morning, on the very front page of USA Today was an article
setting forth the dangers of all-cash businesses in our States that
have approved legally marijuana-related businesses. In the words of the
Attorney General:
You don't want just huge amounts of cash in these places.
They want to be able to use the banking system. It is a
public safety component. Huge amounts of cash, substantial
amounts of cash just kind of lying around with no place for
it to be appropriately deposited is something that worries
me, just from a law enforcement perspective.
{time} 1830
If you support public safety, if you supported the Rohrabacher
amendment to the Commerce, Justice, and Science bill, you will support
this amendment as well. In the interest of public safety, you will do
this. Because in the words of the Department of Justice, the two most
important terms and conditions: keep marijuana out of the hands of
children and keep cash out of the hands of gangs and the cartels. To
oppose this amendment is to support that, and I know you don't want
that.
So, I urge you in the strongest terms to support this amendment, this
bipartisan amendment, as was adopted earlier on the Commerce, Justice,
and Science Appropriations bill.
Mr. Chairman, I reserve the balance of my time.
Point of Order
Mr. CRENSHAW. Mr. Chairman, I make a point of order against the
amendment because it proposes to change existing law and constitutes
legislation in an appropriation bill and, therefore, violates clause 2
of rule XXI.
The rule states in pertinent part:
``An amendment to a general appropriation bill shall not be in order
if changing existing law.''
The amendment requires a new determination.
Therefore, I ask for a ruling from the Chair.
The Acting CHAIR. Does any other Member wish to be heard on the point
of order?
Mr. PERLMUTTER. Yes, I do.
The Acting CHAIR. The gentleman from Colorado is recognized on the
point of order.
Mr. PERLMUTTER. Mr. Chairman, I would just urge the Chair, in ruling,
that this does not change the law in any respect. It respects the
guidance that has been promulgated by the Justice Department and the
Treasury Department and does not make a change and is not outside of
the rules.
I would say to my friend from Florida that his point of order is
incorrect, and would ask the Chair to rule that the gentleman's
amendment is in order.
The Acting CHAIR. The Chair is prepared to rule.
The Chair finds that this amendment includes language requiring a new
determination as to the reason a financial institution provides
financial services to an entity.
The amendment, therefore, constitutes legislation in violation of
clause 2 of rule XXI.
The point of order is sustained, and the amendment is not in order.
Amendment Offered by Mr. Walberg
Mr. WALBERG. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available in this Act may
be used in contravention of chapter 29, 31, or 33 of title
44, United States Code.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Michigan and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Michigan.
Mr. WALBERG. Mr. Chairman, I rise to offer an amendment which builds
off the good work accomplished by Chairman Crenshaw and Ranking Member
Serrano in the underlying bill.
At a recent Oversight and Government Reform Committee hearing, we had
the opportunity to hear testimony from David Ferriero, the Archivist of
the United States and head of the National Archives and Records
Administration, which oversees the Federal Records Act.
In his testimony before Congress, Mr. Ferriero gave an account of how
the IRS failed to notify him about the unauthorized disposal of Lois
Lerner's hard drive, a hard drive which contained key emails and
information about her actions in the targeting of conservative groups.
In fact, during my questioning of Mr. Ferriero, he stated that the IRS
``did not follow the law.''
It is clear the IRS has not made it a priority to comply with the
intent of the law, whether in the form of intimidating taxpayers,
ignoring congressional requests for documents, or ignoring requirements
to document valuable records that are in the public interest. My
amendment would address one of these failures and prohibit any funds in
this bill to be used by the IRS to act in contravention of the Federal
Records Act.
It is a commonsense check on the IRS's recent behavior, and I urge my
colleagues to support it.
Mr. CRENSHAW. Will the gentleman yield?
Mr. WALBERG. I yield to the gentleman from Florida.
Mr. CRENSHAW. I just want you to know that in the bill we have a
provision that applies to the IRS. This is a little bit broader, but I
think it is a good amendment, so I encourage folks to support it.
Mr. WALBERG. I reserve the balance of my time.
Mr. SERRANO. Mr. Chairman, I claim the time in opposition to the
amendment.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. Mr. Chairman, the gentleman is primarily concerned with
records management at the IRS, which does not surprise us--the IRS
again. However, this bill already contains a provision preventing the
use of funds by the IRS to violate these very same sections of the
code. In other words, the bill that we are debating today, the full
bill, already accomplishes what the gentleman seeks to do. Every agency
is already required to follow Federal records management law, so this
amendment seems particularly unnecessary.
I realize Members on the other side want to continue to issue press
releases stating how tough they are on the IRS, but there is no need to
restate current law. I think that this one is different in the sense
that while other amendments that I may not approve of or support speak
to an issue that hasn't been spoken to before or repeat something we
have dealt with before, this one speaks to an issue that Mr. Crenshaw
already took care of in the bill.
That is my opposition to it, and that is why I think the amendment is
unnecessary.
I yield back the balance of my time.
Mr. WALBERG. Mr. Chairman, I thank my colleague from New York for his
concern about this. I am concerned as well.
I appreciate the fact what the chairman has said, that this expands
the reach; it expands the authority. If, indeed, all of our agencies
had a requirement under the Federal Records Act and they followed it, I
wouldn't be here. But under significant questioning of the Archivist of
our Nation, he indicated to me under significant questioning that the
IRS ``did not follow the law.''
That is the purpose of this amendment: to make sure there are more
teeth available even than what is put in this good bill to make sure
that the IRS follows the law.
I ask my colleagues for support for this amendment, and I yield back
the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Michigan (Mr. Walberg).
The amendment was agreed to.
Amendment Offered by Mr. Farenthold
Mr. FARENTHOLD. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
[[Page H6273]]
The Clerk read as follows:
At the end of the bill (before the short title), add the
following:
Sec. __. None of the funds in this Act may be available
for the Office of Management and Budget to process or approve
an apportionment request that does not include the following
phrase: ``Apportioned amounts are not available for any
position that is held by an employee with respect to whom the
President of the Senate or the Speaker of the House of
Representatives has certified a statement of facts to a
United States attorney under section 104 of the Revised
Statutes (2 U.S.C. 194).''.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Texas and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Texas.
Mr. FARENTHOLD. Mr. Chairman, today I rise to offer an amendment that
would prohibit funding to any Federal employee who has been found in
contempt of Congress.
As a member of the Oversight and Government Reform Committee, I have
had serious concerns about the nonresponsiveness of certain Federal
officials to legitimate congressional oversight activities. In some of
these situations, the actions have been taken by this House to hold
these officials in contempt of Congress.
Specifically, my amendment prevents funds from being made available
for the Office of Management and Budget to process or approve an
apportionment request from an executive agency that does not include
the following language:
Apportioned amounts are not available for any position that
is held by an employee with respect to whom the President of
the Senate or Speaker of the House of Representatives have
certified a statement of facts to a United States attorney
under section 104 of the Revised Statutes (2 U.S.C. 194).
What the experts and lawyers tell me this means is we won't pay folks
who have been held in contempt of Congress. The taxpayers don't need to
be funding somebody who is not cooperating with their elected
representative, and it has gotten so bad that this entire body has held
them in contempt.
If somebody has failed to do his or her job in the private sector or
in any other environment, they wouldn't get paid, and I think the
Federal Government needs to follow this.
Let me give you a little bit of background on the process so you
understand how this is going to work.
Funds apportioned to executive agencies are apportioned or handed out
by the OMB. Executive agencies must submit a request to the OMB 40 days
before the start of the fiscal year or within 15 days of the enactment
of the appropriations act. The OMB then determines how the executive
agency's fund will be apportioned.
This amendment would require an executive agency to include the
quoted language in their apportionment request to the OMB, which would
prevent the OMB from allocating funds to an agency for the salaries of
Federal employees who have been found in contempt of Congress.
To me, this is just common sense. We don't pay employees who don't
cooperate with their boss. We are the elected representatives of the
people. We are the boss, and we need to enact this legislation to
ensure those in contempt of Congress do not continue to receive
taxpayer funds.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Texas (Mr. Farenthold).
The amendment was agreed to.
Amendment Offered by Mr. Grayson
Mr. GRAYSON. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. ___. None of the funds made available by this Act may
be used to pay any individual at an annual rate of Grade 1,
Steps 1, 2, 3, 4, 5, or 6; or Grade 2 Step 1 or 2 as defined
in the ``Salary Table 2014-GS'' published by the Office of
Personnel Management. Further, none of the funds made
available by this Act may be used to pay any individual at an
hourly basic rate of Grade 1, Steps 1, 2, 3, 4, 5, or 6; or
Grade 2, Step 1 or 2.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Florida and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Florida.
Mr. GRAYSON. Mr. Chairman, this amendment would end the Federal
Government's practice of paying poverty wages to its workers and
hopefully set an example for the private sector to stop paying poverty
wages to its workers.
My metropolitan area of Florida has the lowest average wages of any
of the 50 biggest cities in America. It is time to end this and to pay
people fairly. A fair day's work should result in a fair day's pay.
The reason why we have to end poverty wages in America is simple. It
is just too expensive to be poor in America. If you are poor, it is
difficult to buy or rent a place to live, to buy or lease a car to
drive, even to get electricity from a utility company, to save any
money at all, or even open a bank account. It is just too expensive to
be poor in America.
Journalist Barbara Ehrenreich put it best:
If you can't afford the first month's rent and security
deposit you need in order to rent an apartment, you may get
stuck in an overpriced residential motel.
If you don't have a kitchen or even a refrigerator and
microwave, you will find yourself falling back on convenience
store food, which--in addition to its nutritional deficits--
is also alarmingly overpriced.
If you need a loan, as most poor people eventually do, you
will end up paying an interest rate many times more than what
a more affluent borrower would be charged.
To be poor--especially with children to support and care
for--is a perpetual high-wire act.
{time} 1845
Mr. Chairman, when I say ``it's too expensive to be poor in
America,'' I am not just quoting a poverty advocate. I am quoting Noah
Wintroub, an official for JPMorgan Chase. Yes, even the bankers are
telling us that it is too expensive to be poor in America.
Right now, the Federal Government can pay as little as $8.62 an hour
for a grade 1, step 1 worker. That is not enough. You get what you pay
for. That is the capitalist way. If a government worker has to take
another job just to get by, then that worker can't focus on doing a
good job serving the public. If a Federal worker is working 80 hours a
week instead of 40 just to survive, he is not going to do a good job at
either job.
My amendment simply would not allow the government to pay anyone less
than $10.10 an hour--still a very modest amount. According to CBO, it
doesn't cost the government a single dime extra. It is supported by the
American Federation of Government Employees. Paying Federal workers
$10.10 an hour is still not enough, but at least it is a start.
Right now, the minimum wage gives you $1,200 a month to live on if
you work a full-time job for 40 hours a week. From that $1,200 a month,
you must pay your Social Security taxes, your Medicare taxes, pay for
your food, your clothing, your housing, your transportation. You must
also pay, by the way, for the food and clothing of your children.
That is not possible. It is simply not possible to live that way, and
we can't expect people to do that. In fact, the taxpayers end up
subsidizing them through food stamps, Medicaid, the earned income
credit, and a dozen other ways that we make up for the shortfall when
their employers are not paying them enough to keep them alive.
I think it is time that we take a stand. I hope this body sees the
wisdom of paying at least Federal workers, to start, above poverty
wages. I urge this body to accept this amendment and set a proper
standard for labor in this country. Let's have $10.10, not $7.25. You
can't survive on $7.25.
I reserve the balance of my time.
Mr. CRENSHAW. Mr. Chairman, I claim the time in opposition.
The Acting CHAIR. The gentleman from Florida is recognized for 5
minutes.
Mr. CRENSHAW. Mr. Chairman, I just got this amendment a little bit
ago. I don't quite understand what the gentleman is trying to do.
As I read the amendment, it basically says you just can't pay Federal
employees. If I am a Federal employee and somebody says you can't pay
me this wage, I guess I can either come to work and not get paid or I
can just decide that you decided not to pay me so I don't think I will
come to work anymore.
I don't know how many people are affected by this, but I have got to
believe
[[Page H6274]]
a lot of people would look at this and say: Gee, the gentleman from
Florida says we are just not going to pay you.
I guess on behalf of the Federal employees, I have to oppose that,
because I think all Federal employees ought to be paid. I don't think
we should pass legislation saying they can't be paid.
So I would urge my colleagues to oppose this amendment, and I reserve
the balance of my time.
Mr. GRAYSON. Mr. Chairman, I appreciate the creativity of my
colleague from Florida's argument, but no one is suggesting Federal
employees have to work for free. All this amendment does is simply
eliminate the poverty rates set forth in the General Schedule and
replaces them with the existing higher rates.
All we are saying here is that grade 1, steps 1, 2, 3, 4, and 5 are
below poverty level; grade 2, steps 1 and 2 are below poverty level.
I don't see how this amendment could possibly lead to the scenario
that the gentleman from Florida, the chairman, is describing. It simply
would mean that these workers would no longer be paid poverty wages.
They would be paid under the existing GSA schedule a proper day's pay
for a proper day's work.
Therefore, and given the fact that the AFGE, which is responsible for
representing these workers, supports this amendment and rejects the
nightmare scenario described by the gentleman from Florida, I would
hope to have the gentleman from Florida's consent and support for this
amendment.
I yield back the balance of my time.
Mr. CRENSHAW. Mr. Chairman, I just want to read this again. It says
that none of the funds made available by this act may be used to pay
any individual at an annual rate of grade 1, step 1, 2, 3, 4, 5, or 6.
So if you are grade 1, step 6, it says you can't be paid at that
rate. It doesn't say anything about raising your salary or lowering
your salary. It just says you can't be paid.
I really think that this is something we ought to reject. I urge my
colleagues to vote ``no,'' and I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Florida (Mr. Grayson).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. GRAYSON. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Florida will
be postponed.
Amendment Offered by Mr. Massie
Mr. MASSIE. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act,
including amounts made available under titles IV or VIII, may
be used by any authority of the government of the District of
Columbia to prohibit the ability of any person to possess,
acquire, use, sell, or transport a firearm except to the
extent such activity is prohibited by Federal law.
Mr. SERRANO. Mr. Chairman, I reserve a point of order on the
gentleman's amendment.
The Acting CHAIR. A point of order is reserved.
Pursuant to House Resolution 661, the gentleman from Kentucky (Mr.
Massie) and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Kentucky.
Mr. MASSIE. Mr. Chair, I rise today to offer an amendment that would
stop the District of Columbia from taking any action to prevent law-
abiding citizens from possessing, using, or transporting a firearm.
Despite the U.S. Supreme Court's decision in District of Columbia v.
Heller that struck down the unconstitutional D.C. handgun ban, it is
still difficult for D.C. residents to exercise their God-given right to
bear arms. Congress has the authority to legislate in this area
pursuant to article I, section 8, clause 17 of the Constitution, which
gives Congress the authority ``to exercise exclusive legislation in all
cases whatsoever'' over the District of Columbia.
Through unreasonable regulation, arbitrary time limits and waiting
periods, and a ridiculous registration renewal process for guns that
have already been registered, the government bureaucrats of the
District continue to interfere with the District's residents' right to
self-defense.
As the Washington Times reported earlier this year, the District of
Columbia has passed the first law ever in the United States that
requires a citizen who has already legally registered a gun to pay for
reregistration, go to police headquarters and submit to invasive
photographing and fingerprinting. This is pure harassment.
Why would the D.C. government want to punish and harass law-abiding
citizens who simply want to defend themselves from criminals? As
everyone with even the smallest bit of common sense knows, criminals,
by definition, don't care about the laws. They will get the guns any
way they can.
Does anyone actually believe that strict gun control laws will
prevent criminals from getting guns? Strict gun control laws do nothing
but prevent good people from being able to protect themselves and their
families in the event of a robbery, home invasion, or other crime.
I reserve the balance of my time.
Point of Order
Mr. SERRANO. Mr. Chairman, I make a point of order against the
amendment because it proposes to change existing law and constitutes
legislation in an appropriation bill and, therefore, violates clause 2
of rule XXI.
The rule states in pertinent part:
``An amendment to a general appropriation bill shall not be in order
if changing existing law.''
It also adds a requirement on D.C. that it doesn't add anywhere else.
It imposes additional duties by requiring law enforcement or the D.C.
Council to determine what is prohibited by Federal law before they are
allowed to legislate.
We know that folks like to sound good on certain issues by
legislating from here, but the city council should not be asked to
incur these extra duties that they don't have now.
I ask for a ruling from the Chair.
The Acting CHAIR. Does any other Member wish to be heard on the point
of order?
Mr. MASSIE. Mr. Chair, I certainly disagree with the gentleman's
points there.
First of all, Congress has the constitutional authority to legislate
and exercise over all matters in the District of Columbia. Furthermore,
if a law enforcement officer in the District of Columbia is not already
familiar with Federal laws, then I question whether he should be a law
enforcement officer.
But most of all, I would make the point that the underlying bill
already contains language that is virtually identical in form to the
amendment that I have offered. For instance, section 809 states that
``none of the Federal funds contained in this Act may be used to enact
or carry out any law, rule, or regulation to legalize or otherwise
reduce penalties associated with the possession, use, or distribution
of any schedule I substance under the Controlled Substance Act.''
There are multiple examples in the underlying bill where the
structure of those portions of the bill are identical to my amendment
and require knowledge of law.
The Acting CHAIR. The Chair finds that this amendment includes
language requiring a new determination by the District of Columbia as
to the state of Federal firearms law. The gentleman has not shown that
this determination is already required.
The amendment, therefore, constitutes legislation in violation of
clause 2 of rule XXI.
The point of order is sustained, and the amendment is not in order.
Mr. MASSIE. Mr. Chairman, I move to appeal the ruling of the Chair.
The Acting CHAIR. The question is, Shall the decision of the Chair
stand as the judgment of the Committee?
The question was taken; and the Acting Chair announced that the ayes
had it.
So the decision of the Chair stands as the judgment of the Committee.
{time} 1900
Amendment Offered by Mr. Marino
Mr. MARINO. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
[[Page H6275]]
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used to collect any underpayment of any tax imposed by the
Internal Revenue Code of 1986 to the extent such underpayment
is attributable to the taxpayer's loss of records (except in
the case of fraud).
Mr. CRENSHAW. Mr. Chairman, I reserve a point of order on the
gentleman's amendment.
The Acting CHAIR. A point of order is reserved.
Pursuant to House Resolution 661, the gentleman from Pennsylvania and
a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Pennsylvania.
Mr. MARINO. I thank the chair and the ranking member for their hard
work and dedication during the appropriations process, and I look
forward to working with them on a number of important issues
surrounding the treatment of taxpayers by the IRS.
Mr. Chairman, I will be withdrawing this amendment at the conclusion
of my allotted time. However, I wish to make a point.
I agree with the steps the committee has taken within this
legislation, but feel more must be done to ensure equal treatment for
all taxpayers. My amendment would prohibit the IRS from pursuing claims
against taxpayers for underpayment where the issue is lost records,
except in the case of fraud.
According to its own publications, the IRS recommends that taxpayers
keep records up to 7 years--and more in some cases--to respond to
potential audits. This is often necessary for individuals and
corporations to retain records for years and potentially longer for
businesses depending upon the circumstances and types of records.
The loss of records can have significant repercussions for the
taxpayer and can result in penalty fees and payments of back taxes with
interest. Should these taxpayers be audited, the burden is on them--
yes, the burden is on them--to produce proper records, not the IRS.
While these regulations make sense, as we do not want taxpayers
improperly withholding taxes they properly owe under the current tax
system, it is unfortunate that the one agency promulgating the
regulations does not follow these strict standards.
We now know the IRS, through its employee Ms. Lois Lerner, Director
of Exempt Organizations, unfairly targeted and scrutinized conservative
groups in their applications for tax-exempt status. Under the IRS'
rules, Ms. Lerner was required to retain her records discussing policy
decisions and discussions in paper form, including those related to the
decision to probe conservative organizations. However, Ms. Lerner
refused to follow protocol, and to make matters worse, her email copies
were lost due to a so-called computer crash.
Given Ms. Lerner's blatant disregard to keep records properly in
accordance with IRS rules, it is patently unfair to require taxpayers
to follow such burdensome standards. In addition, the IRS Commissioner
testified on the topic of Ms. Lerner's emails multiple times before the
Oversight and Government Reform Committee, suggesting that there would
be no issue in producing the emails. However, the Commissioner knew
there was an issue with Ms. Lerner's computer in February and that the
emails were certainly lost in March. Despite this knowledge, he failed
to notify Congress until June.
This is outrageous. While the IRS is trying to evade explaining the
loss of records, we should prohibit the IRS from mercilessly pursuing
taxpayers for the exact same fault.
With that, I yield 30 seconds to the gentleman from Florida (Mr.
Crenshaw), my colleague and the chairman of the subcommittee.
Mr. CRENSHAW. Mr. Chairman, I support the gentleman's amendment even
though I reserved a point of order.
I would just inquire if the gentleman intends to withdraw the
amendment.
Mr. MARINO. I do. I am going to do that in my closing, sir.
I thank the chairman for his support of the principle of my
amendment. While I recognize this would be legislative language in an
appropriations bill, I welcome the opportunity to work with the chair
and my other colleagues to properly investigate this situation and
ensure that similar situations of government abuse do not arise in the
future.
Mr. Chairman, I ask unanimous consent to withdraw my amendment.
The Acting CHAIR. Is there objection to the request of the gentleman
from Pennsylvania?
There was no objection.
Amendment Offered by Mr. Heck of Washington
Mr. HECK of Washington. Mr. Chairman, I have a new and improved
amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available in this Act may
be used, with respect to the States of Alabama, Alaska,
Arizona, California, Colorado, Connecticut, Delaware,
Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Montana, Nevada, New Hampshire, New Jersey, New Mexico, New
York, North Carolina, Oregon, Rhode Island, South Carolina,
Tennessee, Utah, Vermont, Washington or Wisconsin or the
District of Columbia, to penalize a financial institution
solely because the institution provides financial services to
an entity that is a manufacturer, producer, or a person that
participates in any business or organized activity that
involves handling marijuana or marijuana products and engages
in such activity pursuant to a law established by a State or
a unit of local government.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Washington and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Washington.
Mr. HECK of Washington. Mr. Chairman, I yield myself such time as I
may consume.
This is a referendum on public safety. It follows the exact intent--
but is technically perfected--of the earlier amendment that was
offered, and I thank the gentleman from the majority for pointing out
its technical flaws. They have been corrected.
It is a referendum on public safety. If you want to render an all-
cash sector of the economy in the 23 States that allow for medical
marijuana and in the two States that allow for the adult recreational
use of marijuana, you will make them unsafe. That is for certain.
I entreat you to pick up yesterday's USA Today and read the excellent
article, including the citation of several security experts, about what
will happen with a certainty, inevitably, if we do not take this
measure.
If you want to keep marijuana out of the hands of children and if you
want to keep cash out of the hands of gangs and cartels, you will
support this amendment.
With that, Mr. Chairman, I yield 1 minute to the gentlewoman from the
State of Nevada (Ms. Titus).
Ms. TITUS. I thank the gentleman for yielding.
Mr. Chairman, I rise in support of this amendment.
The medical marijuana industry is rapidly taking root in Nevada. Our
local governments are developing regulations and are issuing licenses
as we speak. Yet representatives of this exciting industry continue to
raise the same concern--a lack of access to banks, which is critical
for the safe operation of any small business.
This commonsense measure would respect states' rights, add more
transparency, facilitate regulations, protect the public, and foster
the growth of small business. I urge a vote in favor.
Mr. HECK of Washington. Mr. Chairman, I yield 1 minute to the
gentlewoman from the State of California (Ms. Lee).
Ms. LEE of California. I thank Congressman Heck for yielding and for
his really bold and tremendous leadership on this.
I am proud to join you, Mr. Perlmutter and Mr. Rohrabacher, in
cosponsoring this bipartisan, commonsense amendment.
Mr. Chairman, this amendment would provide important certainty to
business owners, employees, government agencies, and financial
institutions in 34 States and jurisdictions that have passed marijuana
reform laws.
By prohibiting Federal agencies from unduly penalizing financial
institutions for providing basic banking services, like opening a
checking account, this amendment would ensure that legitimate business
owners can comply
[[Page H6276]]
with State regulations and that regulators and law enforcement can hold
businesses accountable.
{time} 1915
I recently had a chance to visit one of these small businesses in my
home district of Oakland, California, and know how big an impact the
access to financial services can have.
When these businesses are unable to access financial services, they
are forced to use unsatisfactory cash-based transactions that lack
transparency, accountability, and create a threat to public safety.
I was proud to cosponsor a similar amendment to the Commerce,
Justice, and Science Appropriations bill that passed the House. I want
to thank Mr. Heck again for his leadership and hope this passes.
Mr. CRENSHAW. Mr. Chairman, I claim the time in opposition.
The Acting CHAIR. The gentleman from Florida is recognized for 5
minutes.
Mr. CRENSHAW. Mr. Chairman, a little earlier, we had a discussion
about this, and I pointed out that it is very clear that, right now, it
is still illegal under Federal law to manufacture, to distribute, or to
dispense marijuana. That is the Federal law.
There is also a Federal law that says banks can't launder the
proceeds of illegal activities, and as we talked about earlier, we have
got the fact that the Treasury has given guidance on how to facilitate
the sale of marijuana.
The point is the law is the law. The Federal law, I just stated, and
I don't think we can go around picking and choosing which States the
Federal law applies to. The Federal law is the Federal law, and that is
the way it ought to be.
I think that the fact that we have those two laws, when somebody
violates those laws, that is wrong. Earlier this evening, we adopted an
amendment that corrected that. This seeks to go back the other way.
I would just urge people to vote ``no'' on this because we have a
Federal law that controls, and we can't pick and choose who gets to
comply and who doesn't.
Mr. Chairman, I yield back the balance of my time.
Mr. HECK of Washington. Mr. Chairman, I yield 1 minute to the
gentleman from Colorado (Mr. Perlmutter).
Mr. PERLMUTTER. Mr. Chairman, to my friend from Florida, I agree,
except that the world has moved, and businesses that are legal in these
vast array of States should be able to operate in a businesslike
fashion.
They should be able to have checking accounts and credit cards and
payroll accounts, instead of operating solely in cash that invites
robberies, invites assault and batteries, invites tax evasion.
The system--the banking system should be able to provide for that,
instead of just operating in a cash setting. So we need to limit and
avoid the crime that the cash invites, and we need to allow these
businesses to operate in a businesslike fashion.
The States and the people of those States have chosen to move
forward. We should not, through the banking system, try to stop that
and then create crime in its wake.
Mr. HECK of Washington. First, let's correct the Record. The earlier
vote did not approve the opposite amendment. In fact, the decision, as
announced by the Chair, was to affirm the amendment, and then the
rollcall was provided and is yet pending.
Secondly, the will of this body has, in fact, been manifested on one
occasion, and that was an amendment highly similar to this one, to the
Commerce, Justice, and Science Appropriations, and it passed by a clear
bipartisan majority in this Chamber.
Lastly--and again, this is about public safety. This is about keeping
marijuana out of the hands of children and cash out of the hands of the
gangs and the cartels. That is what this amendment is about.
I am frankly stunned to learn that the party whose heritage was in
support of states' rights now no longer sees fit to uphold those States
who have gone in this direction who, through votes of people and votes
of their duly-elected legislatures, have created tightly-controlled
markets for this particular substance.
This is not about being in favor or against marijuana consumption.
This is about public safety. This is about providing access to banking
services for safe environments, safe communities, and I entreat you to
support it as you once did before.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Washington (Mr. Heck).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. CRENSHAW. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Washington
will be postponed.
Amendment No. 6 Offered by Mr. Price of Georgia
Mr. PRICE of Georgia. Mr. Chairman, I have an amendment made in order
by the rule at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used in contravention of section 6103 of the Internal
Revenue Code of 1986 (relating to confidentiality and
disclosure of returns and return information).
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Georgia and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Georgia.
Mr. PRICE of Georgia. Mr. Chair, I want to commend the chairman of
the Appropriations Subcommittee for the work that he has done on this.
This has been yeoman's work, a difficult task.
We haven't done a Financial Services appropriations bill in a number
of years, and so I want to commend the chairman for his leadership on
this issue.
My amendment deals with the Internal Revenue Service, and I know a
lot of these amendments have addressed the issue.
The Internal Revenue Service, Mr. Chairman, as you and the American
people know, by law--by law--may not release any personal taxpayer
information. It must be protected, and it is clear that what we have
had over the past year or so is the revelation of a huge violation of
the public trust that has occurred as it pertains to the IRS' lawful
requirement to protect taxpayer information.
Internal Revenue Code section 6103 is what this amendment deals with.
It is a portion of the Code that is a taxpayer protection provision
written to prevent unlawful disclosure of confidential taxpayer
information.
The recent actions of the IRS, whether it is the targeting of
conservative social welfare groups or the unlawful disclosure of an
organization's confidential tax return and donor list, are nothing less
than chilling, Mr. Chairman.
What the IRS has done is targeted conservative groups, allegedly to
determine whether or not they ought to be granted tax-exempt status. In
so doing, they have asked for those organizations' donor lists, the
lists of hardworking Americans who have taken some of their resources
and provided support for these organizations.
Then the IRS took that donor list information, not only kept the
organization from getting tax-exempt status, as would be appropriate,
took that donor list information and released it to political enemies
or political opponents of the organization, apparently for political
purposes.
This is outrageous activity, Mr. Chairman. This amendment is a very
simple amendment that reminds the Internal Revenue Service that their
primary responsibility is to serve the American taxpayer.
Given the information that has come to light over the last year or
so, I would suspect that every Member of this Congress should support
holding the IRS accountable to the rule of law.
The IRS has violated the trust of the American people, and it is
imperative that this body hold the IRS accountable for their egregious
actions.
It is a simple amendment. It is a commonsense amendment. It is an
amendment that is supported and responsive to our constituents, and I
urge its adoption.
Mr. Chairman, I am pleased to yield such time as he may consume to
the
[[Page H6277]]
gentleman from Florida (Mr. Crenshaw), the chairman.
Mr. CRENSHAW. I thank the gentleman for yielding.
Mr. Chairman, I think every American taxpayer needs to be assured
that their personal information is going to be held in strict
confidence, and that is what this amendment does.
I think, particularly at a time when the IRS has demonstrated a lack
of ability to either self-police or self-correct, when each week we
read about a new revelation of some sort of bureaucratic incompetence
or maybe willful disregard for the law, I think it is more important
than ever to make sure that every taxpayer knows that personal
information is going to be held in strict confidence.
I urge the adoption of this amendment.
Mr. PRICE of Georgia. I thank the chairman for his support, and I
urge support of this amendment by all colleagues in the House.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Georgia (Mr. Price).
The amendment was agreed to.
Amendment Offered by Mr. DeSantis
Mr. DeSANTIS. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used for any Internal Revenue Service instant message or
other electronic communications system that is not
operationally searchable and archivable at all times.
Mr. CRENSHAW. Mr. Chairman, I reserve a point of order on the
gentleman's amendment.
The Acting CHAIR. A point of order is reserved.
Pursuant to House Resolution 661, the gentleman from Florida and a
Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Florida.
Mr. DeSANTIS. Mr. Chairman, it was really troubling to be reviewing
emails that the IRS finally produced to us after we asked for these
emails for over a year. Of course, they gave them to us on the
afternoon of July 3, so as to minimize the press damage.
Basically, the emails showed Lois Lerner sending an email to a
technician saying, you know, Congress will ask for our emails, and I
have told people in the IRS they need to be careful about what they
say; question, if we do an instant message in the system that is called
OCS, will those be immune to congressional oversight?
The technician basically said, well, that is the default setting, you
can make it so that it would be archivable and searchable.
That was very troubling because it was almost like Lerner, as a
matter of course, is conducting herself in a way to obstruct the proper
oversight, and that is very troubling with an agency that is this
powerful.
So I think what this amendment will do will be to simply prevent
that. This is saying exactly what Lois Lerner was asking about, the
settings. If you are going to use funds, the settings have got to be
turned on, and if you don't, then you can't use funds to operate it.
So I think it is a commonsense amendment, and I urge my colleagues to
adopt it.
Mr. Chairman, given that the point of order has been lodged, I ask
unanimous consent to withdraw amendment No. 52.
The Acting CHAIR. Is there objection to the request of the gentleman
from Florida?
There was no objection.
Amendment Offered by Mr. DeSantis
Mr. DeSANTIS. Mr. Chair, as an alternative to the prior amendment, I
offer amendment No. 54.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used by the Internal Revenue Service to create machine-
readable materials that are not subject to the safeguards
established pursuant to section 3105 of title 44, United
States Code.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Florida and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Florida.
Mr. DeSANTIS. Mr. Chairman, I think this amendment accomplishes the
similar objective that I articulated just a moment ago, and I would
just add that it is very troubling, if you were called into court to
defend yourself against the IRS and they asked you to produce certain
documents in discovery and your defense was, well, the documents have
been destroyed, you would be presumed essentially guilty. They would
have an adverse inference lodged against you.
I think that is what this amendment is getting to. The IRS has to
practice what they preach. They should be held to the exact same
standards as the American people are held to with their taxes, and they
should follow the record retention requirements under Federal law.
So I think it is a commonsense amendment, and I urge that my
colleagues adopt the amendment.
Mr. Chairman, I yield my remaining time to my colleague from Florida
(Mr. Crenshaw).
Mr. CRENSHAW. I thank the gentleman.
Mr. Chairman, I simply want to applaud him for correcting any
procedural flaws. He makes an excellent point, and I accept the
amendment.
Mr. DeSANTIS. Mr. Chairman, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Florida (Mr. DeSantis).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. DeSANTIS. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Florida will
be postponed.
{time} 1930
Amendment Offered by Mr. DeSantis
Mr. DeSANTIS. I have an amendment at the desk, Mr. Chair.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of funds made available by this Act to the
Internal Revenue Service may be obligated or expended on
conferences.
The Acting CHAIR. Pursuant to House Resolution 661, the gentleman
from Florida and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Florida.
Mr. DeSANTIS. Mr. Chair, last year, the House Oversight Committee
conducted a hearing to review an IG report documenting a lavish
conference that was put on by the IRS--over $4 million for one
conference. Expenses included $135,000 on outside speakers, including
$17,000 for a speaker who created paintings on stage to make his point
that one must free ``the thought process to find creative solutions to
challenges.''
The troubling thing about the report was that the bulk of that money,
$3.2 million, came from unused funds that were allocated for hiring.
Now, this is at the exact same time that the IRS began to single out
conservative groups that sought tax-exempt status, in part, they said,
because the agency simply did not have the manpower to handle the
number of applications pouring in.
Now, we have debunked that idea that somehow there was a torrent of
applications, but golly gee, if that is really true, why are you
spending $3.2 million on these conferences? So I think the IRS has
abused the trust of the American taxpayer with respect to conferences,
and I think it should be held accountable.
Now, some say in response to this amendment that taxpayers need to be
forced to fund these conferences because it helps with IRS employee
morale. I have just got to tell you, I am more concerned with the
morale of the American people. When taxpayers see an arrogant agency
flout the law, refuse to produce evidence, and waste tax dollars, they
become demoralized, and rightfully so.
So at a time when military officers are receiving pink slips, there
is no way we should allow the IRS to persist with these conferences.
[[Page H6278]]
I yield back the balance of my time.
Mr. SERRANO. I rise in opposition to the amendment.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. Mr. Chair, I think the mistake we are making here is the
one we have been making all day. Not only is it targeted only at the
IRS, which seems to be the desire to continue to do this for the next
24 hours or for so long as this bill lasts, but secondly, it paints it
with a wide brush. If you say no conferences of this type or if you
limit the number of conferences, okay, we could discuss that; but to
say that one agency in the Federal Government cannot have any kind of
conferences, none at all--zero, nada--that really speaks to just a
continuous desire to destroy the IRS.
Now, there were issues concerning the conferences. There were issues
concerning the conferences for other agencies. We have dealt with that.
We can deal with this. But to say no conferences at all is to suggest
that an agency cannot operate the way it needs to at times.
So I think that this is just another attack on the IRS. It makes for
good headlines, even at this time of night. I think it is the wrong
thing to do, and I would hope that we could oppose it or that the
gentleman will withdraw the amendment.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Florida (Mr. DeSantis).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. DeSANTIS. Mr. Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Florida will
be postponed.
Amendment Offered by Mrs. Blackburn
Mrs. BLACKBURN. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. (a) Each amount made available by this Act is
hereby reduced by 1 percent.
(b) The reduction in subsection (a) shall not apply with
respect to the following accounts and programs:
(1) Payment of Government losses in shipment under
``Department of the Treasury--Bureau of the Fiscal Service''.
(2) ``Supreme Court of the United States--Salaries and
Expenses''.
(3) ``United States Court of Appeals for the Federal
Circuit--Salaries and Expenses''.
(4) ``United States Court of International Trade--Salaries
and Expenses''.
(5) ``Courts of Appeals, District Courts, and Other
Judicial Services--Salaries and Expenses''.
(6) Payment to judiciary trust funds for Judiciary
Retirement Funds under section 624.
(7) Payments to the Civil Service Retirement and Disability
Fund for the Office of Personnel Management under section
624.
Mrs. BLACKBURN (during the reading). Mr. Chair, I ask unanimous
consent to waive the reading.
The Acting CHAIR. Is there objection to the request of the
gentlewoman from Tennessee?
There was no objection.
The Acting CHAIR. Pursuant to House Resolution 661, the gentlewoman
from Tennessee and a Member opposed each will control 5 minutes.
The Chair recognizes the gentlewoman from Tennessee.
Mrs. BLACKBURN. Mr. Chairman, first of all, I want to thank the
gentleman from Florida (Mr. Crenshaw), who has done a wonderful job
bringing this bill to the floor.
As I do with all of the appropriations bills, it is a focus of mine
to come in and ask for an additional 1 percent cut on top of the great
work that has already been done.
I think it is important to give credit to our Appropriations
Committee. This is a $21 billion bill, and it is appropriating $566
million less than what was appropriated in fiscal year 2014, and it is
$2.2 billion less than what the President requested. That is to be
commended. Our appropriations team has done a terrific job on beginning
to rein in what the Federal Government spends. The Republican House
leadership is to be commended for making their focus to get our fiscal
house in order.
I think we have to go a step further, and that is the purpose of my 1
percent across-the-board spending cut amendment. What we need to do now
is to engage the bureaucracy, engage these Federal agencies, rank-and-
file employees, to come to the table with their recommendations of how
we continue to cut.
We are $17 trillion in debt. We cannot continue to borrow 30 cents of
every dollar that we spend. We have to think about the future for our
children, our grandchildren. This is an amendment that we should all
support because we do this for our children, for the sovereignty of our
Nation, and for the fiscal health of our Nation for years to come.
I think it is important to note that through the years, Governors
have used across-the-board spending cuts, Democrat Governors--a former
Democrat Governor from my home State of Tennessee. You have got the
Democrat Governor in New York. You have got the Governor over in
Missouri. They have all used across-the-board cuts.
The American people like this idea. They like having the bureaucracy
engaged in saving money. A Washington Post/ABC News poll from March 6,
2013, revealed that 61 percent of all Americans even supported a 5
percent across-the-board cut in Federal spending.
It is time for us to rein this in and get our fiscal house in order.
This is a way to save an additional $228 million.
I reserve the balance of my time.
Mr. CRENSHAW. Mr. Chairman, I rise in opposition to the amendment.
The Acting CHAIR. The gentleman from Florida is recognized for 5
minutes.
Mr. CRENSHAW. Mr. Chairman, I rise in reluctant opposition to the
amendment offered by my good friend from Tennessee. She makes an
excellent point, and I think everyone agrees that we ought to try to
rein in this culture of spending and put in place a culture of savings.
I have been working my entire congressional career to do that.
One of the things that we do in the appropriations process is we have
hearings. We listen to people. They try to justify their request.
Sometimes when programs work well, they might receive an increase. When
people are not doing very well, like the IRS, they have their request
denied and are actually funded at lower levels.
What is interesting, last night on this floor, we added about $1
billion to our debt reduction by taking that billion dollars out of the
IRS. So when we set our priorities, we do that day to day. In this
case, we had 12 hearings.
If you look at our bill, there are actually nine programs that are
just flat out eliminated. They are gone. It wasn't a 1 percent or an X
percent cut. It was just, that is not a program that is vital to the
functioning of the Federal Government so it is gone. It has been
eliminated. There are several agencies where we have reduced their
funding because we figured out that they could do with a little bit
less.
But when you take an additional 1 percent across the board after you
have had a lot of time and energy put into place to set the right
priorities, I don't think you take into consideration that some
programs are better than others.
I know my friend from Tennessee cares a lot about Women's Business
Centers, and they received an increase under our appropriations bill
because we think they are doing a great job. The Small Business
Administration does great work at creating private sector jobs. The
Women's Business Centers, because we thought they were doing well, they
received an increase. Now, I don't know that she really wants to cut
them.
She says she is not going to apply these cuts to the Federal
judiciary, and I think that is appropriate. Actually, the Federal
courts are pretty happy. Last night, several millions of dollars were
added to the Federal courts.
I guess the simple point is that you have to take into consideration
the merit of every program. If we didn't do anything and we just showed
up one day and said how should we fund these people, then I think it is
appropriate to say, well, let's just cut them across the board. But
when you spend time and energy in setting the priorities and making
hard choices, that is what we have done, and we are proud of the work
we have done. I appreciate her compliment that we have done great work.
The fact that she would like to cut 1 more percent across the board I
don't
[[Page H6279]]
think is the right way to observe the situation. I appreciate what she
is trying to do, but I don't think in this case it is the right
approach.
I would also like to yield such time as he may consume to the
gentleman from New York (Mr. Serrano), the ranking member.
Mr. SERRANO. Mr. Chairman, I also rise in opposition to this
amendment. The only difference here, Mr. Chairman, is that we are not
attacking the IRS. Now we are attacking the Financial Services
Subcommittee. The fact of life is that this committee took the biggest
hit of any subcommittee in the House.
And while I may disagree with how some of the bill came out, I have
made it clear to the gentleman from Florida (Mr. Crenshaw) that what I
disagree with the most are the riders and the allocation. With a
different allocation, we would have had a different bill. So to now cut
1 percent from the committee that took the biggest hit is really to
just to try to cripple the bill completely, and it serves no purpose
other than to be able to say that you cut it.
Now, it would be nice to see if these kinds of things were mean, what
happened on the military budget every so often, but we are not going to
see that. We are only going to see it on bills like this one, which
really services a lot of people. I think that the chairman is right. I
join him in opposing this amendment, and I hope that it will be
defeated.
Mr. CRENSHAW. I yield back the balance of my time.
Mrs. BLACKBURN. Mr. Chairman, I do appreciate the work that the
chairman has done on this bill, and our Appropriations Committee is to
be commended.
I think we do have to recognize Washington has a spending problem.
They don't have a revenue problem. They have got a spending and a
priority problem. We see it every single day.
What I am asking is to engage those rank-and-file employees, have
them find 1 penny on the dollar out of their appropriations that they
could save in order to get this burden of debt off the backs of our
children and grandchildren--one penny on the dollar. It has worked in
the States. It works in our county and city governments. People like
that and appreciate that you push for better stewardship, and it is the
right thing for us to do as we watch the debt totals climb, skyrocket,
and explode.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Tennessee (Mrs. Blackburn).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mrs. BLACKBURN. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from Tennessee
will be postponed.
Amendment Offered by Mrs. Blackburn
Mrs. BLACKBURN. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available in this Act may
be used to provide funds from the Hardest Hit Fund program
established by the Secretary of the Treasury under title I of
the Emergency Economic Stabilization Act of 2008 (12 U.S.C.
5211 et seq.) to any State or local government for the
purpose of funding pension obligations of such State or local
government.
The Acting CHAIR. Pursuant to House Resolution 661, the gentlewoman
from Tennessee and a Member opposed each will control 5 minutes.
The Chair recognizes the gentlewoman from Tennessee.
{time} 1945
Mrs. BLACKBURN. Mr. Chairman, I rise to offer an amendment that would
prevent the Federal Government from bailing out public pensioners in
cities such as Detroit and Chicago.
We have been reading for the past several months that the Obama
administration has been in talks with the city of Detroit to transfer
$100 million to the city.
According to an April 16, 2014, article from the Detroit Free Press,
the administration has looked to transfer $100 million from the Hardest
Hit Fund to shore up Detroit's unfunded pension liability. The Hardest
Hit Fund was created by the Obama administration in 2010 with money
from the 2008 stimulus package. The money is meant to help States that
have been adversely affected by the housing downturn, and that is
according, again, to the Detroit Free Press.
The article adds that:
The $100 million in Federal money was discussed Tuesday
night in breakneck negotiations that resulted in a tentative
deal to reduce pension cuts for the city's retired general
workforce.
Mr. Chairman, I refuse to let Federal taxpayers be on the hook for
unfunded pension liabilities made by Big Labor organizations. Cities
such as Detroit, Chicago, and others where Big Labor has created
extremely generous retirement benefits for public service workers are
going to have to find their way out of the mess that they have created.
Now, it is my understanding that the city of Detroit has reached an
agreement with the State of Michigan to shore up Detroit's unfunded
pension liability for the time being. However, it does not foreclose
this as a possibility to occur in the future for Detroit or any other
city where Big Labor agreements have caused financial destruction.
According to an April 7, 2014, article from chicagobusiness.com,
Chicago's unfunded pension liability stands at $19.5 billion. A
February 20, 2013, article in Forbes notes that Federal bailouts of
State pension funds ``would implicitly encourage States to keep
spending and doling out entitlements, as doing so is popular for
politicians, even if unsustainable.'' The article adds that this is
especially true in liberal-leaning areas where public-sector labor
unions have a lot of control.
Mr. Chairman, we must foreclose the administration's bailout of Big
Labor as a possibility. I refuse to stand by and watch hardworking
taxpayers be on the hook for the irresponsible decisions of liberal,
Big Labor groups.
Mr. CRENSHAW. Will the gentlewoman yield?
Mrs. BLACKBURN. I yield to the gentleman from Florida.
Mr. CRENSHAW. I just want to agree with you that I don't think that
taxpayers should bail out Detroit's pension shortfall or any other
city's shortfall. So I want you to know that I support your amendment.
Mrs. BLACKBURN. I appreciate that. I reserve the balance of my time.
Mr. SERRANO. Mr. Chairman, I rise in opposition to the amendment.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. Mr. Chairman, this is really a mean amendment to single
out one city, one city that is hurting; to single out labor when, in
fact, it is not labor, but it is the people that have those pension
plans and now may not have a pension plan, to single them out.
With all due respect to the gentlewoman, I am sure there have been
many instances throughout history and in recent years when your area,
your State, has been helped by Federal dollars when it was hurting, and
we all got together and did that, be it a flood, be it a fire, be it a
natural disaster. Whatever it may be, we came together to help. Detroit
has its problems, and Detroit might have made some mistakes. But to
single it out in an amendment and to say that we cannot help in any
way, shape, or form is really mean, mean-spirited and wrong.
It may look good to single an urban center out. It may look good to
single out a place that is hurting. But that is not the American way.
The American way, I can tell you, as a New Yorker, when New York was
hurting, people came to its aid. When we were attacked, we came to its
aid.
Sure, this is different, but Detroit, it's hurting right now. And to
single it out on this House floor at 10 minutes to 8, at this time, to
single it out as not being worthy of Federal help, is really just
wrong. And then to take the opportunity to attack organized labor by
suggesting that somehow they are to blame and therefore they should not
get any help is also mean-spirited.
So I have seen, in the time that I have been here, difficult
amendments. But this one is one that really takes the cake. Mr.
Chairman, Republicans
[[Page H6280]]
have supported bailing out banks and financial institutions that were
deemed too large to fail. We were all for saving the auto industry, and
I was for it, too. We were all for making sure that big institutions
did not fail. And while I questioned it, many of us went along with it.
And here to single out Detroit at its worst moment when it is hurting
like no city has hurt in a long time is just the wrong thing to do.
If this is what the gentlewoman wants to do, I guess there is no way
to stop her, but I would really wish that she would take a moment to
think about this before she goes any further with this.
Mr. Chairman, I yield back the balance of my time.
Mrs. BLACKBURN. Mr. Chairman, I find the gentleman's choice of words
so interesting. I think he used ``mean'' and ``mean-spirited'' several
times.
Let me tell you what is mean-spirited. Mean-spirited is looking at
future generations and saying, you didn't want this, you didn't ask for
it, but guess what? You have got a $17 trillion bill on your head.
Right now, the birth tax for every child born in this country is
$54,000. Is that good? Of course not. Is that mean-spirited? You bet it
is. You are saying you owe this money like it or not because Washington
can't get its spending habits under control. Washington is spending
money it does not have to pay for programs that my grandkids do not
want.
You are saying it is not the American way. Let me tell you something.
Using borrowed money to pay for debts that have not been created by
this government is not the way we do business.
I would remind you of a Congressman from Tennessee who stood on this
floor at one point in history, and he reminded the body that this was
not their money to give. It is the taxpayers' money. That Member of
Congress was Davy Crockett.
This is the taxpayers' money. They expect us to be good stewards.
Bailing out cities that have not been good stewards of their money is
not what this body should be doing with Federal tax dollars that come
into our coffers.
With that, Mr. Chairman, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Tennessee (Mrs. Blackburn).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. SERRANO. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from Tennessee
will be postponed.
Amendment Offered by Mrs. Blackburn
Mrs. BLACKBURN. Mr. Chairman, I have an amendment at the desk. It is
amendment 080.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available in this Act to
the Federal Communications Commission may be used, with
respect to the States of Alabama, Arkansas, California,
Colorado, Florida, Louisiana, Michigan, Minnesota, Missouri,
Nebraska, Nevada, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, Utah, Virginia, Washington, and
Wisconsin, to prevent such States from implementing their own
State laws with respect to the provision of broadband
Internet access service (as defined in section 8.11 of title
47, Code of Federal Regulations) by the State or a
municipality or other political subdivision of the State.
Mr. SERRANO. Mr. Chairman, I would like to reserve a point of order
mainly because we haven't seen this text or the amendment until this
very moment. In fact, we still haven't seen it.
The Acting CHAIR. A point of order is reserved.
Pursuant to House Resolution 661, the gentlewoman from Tennessee and
a Member opposed each will control 5 minutes.
The Chair recognizes the gentlewoman from Tennessee.
Mrs. BLACKBURN. Mr. Chairman, my amendment seeks to prohibit any
taxpayer funds from being used by the Federal Communications
Commission, the FCC, to preempt State municipal broadband laws.
In other words, we don't need unelected Federal agency bureaucrats in
Washington telling our States what they can and can't do with respect
to protecting their limited taxpayer dollars in private enterprises.
As a former State senator from Tennessee, I strongly believe in
states' rights. I know that is an issue that is important to many of my
colleagues in this Chamber. And that is why I found it deeply troubling
that FCC Chairman Tom Wheeler has repeatedly stated this past year that
he intends to preempt states' rights when it comes to the role of state
policy over municipal broadband.
Chairman Wheeler's statements posed a direct challenge on the
constitutionality of States' sovereign functions. It wrongly assumes
Washington knows what is best and forgets that the right answer doesn't
always come from the top down.
Mr. Chairman, 20 States across our country have held public debates
and enacted laws that limit municipal broadband to varying degrees.
These State legislatures and Governors have not only listened but have
responded to the voices of their constituents. They are closer to the
people than the chairman of the FCC. They are accountable to their
voters.
Mr. Chairman, States have spoken and said that we should be careful
and deliberate in how we allow public entry into our vibrant
communications marketplace, a sector of our economy that invests tens
of billions of dollars each year, accounts for tens of thousands of
jobs, and serves millions of consumers.
Municipal broadband projects have had a mixed bag of results. There
have been some successes and also some spectacular failures that have
left taxpayers on the hook. For example, look at the failed UTOPIA
project that has created massive disruption and is challenging
taxpayers. In fact, it was recently reported that the ``residents of 11
Utah cities would be billed as much as $20 a month as part of a plan to
salvage the State's once-heralded UTOPIA fiber optic network.''
That doesn't sound like a model the Federal Government needs to force
against the wishes of State-elected officials. That doesn't sound like
competition, and it sounds like another Federal bailout waiting to
happen.
State governments across the country understand and are more
attentive to the needs of the American people than unelected Federal
bureaucrats in Washington. That is why this past June I was joined by
59 of our colleagues in sending a letter to Chairman Wheeler stating
our concerns and requesting a response to a list of questions,
questions that we are still waiting for him to respond to. The U.S.
Senate also sent a letter to the FCC on this issue, and they are,
likewise, waiting for a response. It seems the FCC is content to tell
our States how they will manage their sovereign economic affairs, but
they won't answer to the Congress who is responsible for exercising
oversight of the agency.
Inserting the FCC into our State's economic and fiscal affairs sets a
dangerous precedent and violates State sovereignty in a manner that
warrants deeper examination. This Congress cannot sit idly by and let
an independent agency trample on our states' rights. This is an issue
that should be left to our States, and if it comes to a point where we
need a national standard, then that debate should be held by Congress,
not the FCC, and should be done with the participation of the American
people. I urge adoption, and I reserve the balance of my time.
Mr. SERRANO. First, I wish to withdraw my point of order, Mr.
Chairman.
The Acting CHAIR. The point of order is withdrawn.
Mr. SERRANO. Mr. Chairman, I rise in opposition to the amendment.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. I do have, and I know it comes at a different time, but
I do have letters from different groups opposing the amendment from the
National League of Cities, National Association of Counties, National
Association of Telecommunications Officers and Advisors, including the
gentleman who gets credit for inventing the Internet, and I am not
talking about Vice President Gore, I am speaking about someone else.
[[Page H6281]]
National League of Cities, National Association of
Counties, National Association of Telecommunications
Officers and Advisors
July 15, 2014.
U.S. House of Representatives,
Washington, DC.
Dear Representative: The National League of Cities (NLC),
the National Association of Counties (NACo), and the National
Association of Telecommunications Officers and Advisors
(NATOA) strongly urges you to oppose any amendment to HR 5016
that would hamstring the Federal Communications Commission
(FCC) from taking any action on--indeed, even discussing--the
issue of state laws that prohibit or restrict public and
public/private broadband projects. It is clear that such laws
harm both the public and private sectors, stifle economic
growth, prevent the creation or retention of thousands of
jobs, and hamper work force development.
The United States must compete in a global economy in which
affordable access to advanced communications networks is
playing an increasingly significant role. As the FCC noted in
challenging broadband providers and state and municipal
community leaders to come together to develop at least one
gigabit community in all 50 states by 2015: ``The U.S. needs
a critical mass of gigabit communities nationwide so that
innovators can develop next-generation applications and
services that will drive economic growth and global
competitiveness.'' This is especially true in rural America.
The private sector alone cannot enable the United States to
take full advantage of the opportunities that advanced
communications networks can create in virtually every area of
life. As a result, federal, state, and local efforts are
taking place across the Nation to deploy both private and
public broadband infrastructure to stimulate and support
economic development and job creation, especially in
economically distressed areas. But such efforts are being
thwarted in some areas by State laws that prohibit or
restrict municipalities from working with private broadband
providers, or developing themselves, if necessary, the
advanced broadband infrastructure that will stimulate local
businesses development, foster work force retraining, and
boost employment in economically underachieving areas.
Consistent with these expressions of national unity, public
entities across America are ready, willing, and able to do
their share to bring affordable high-capacity broadband
connectivity to all Americans. State barriers to public
broadband are counterproductive to the achievement of these
goals. Efforts to strip funding from the FCC to even discuss
this issue, let alone take action, are misplaced and wrong.
Please oppose any amendment to HR 5016 or any other measure
that could significantly impair community broadband
deployments or public/private partnerships.
Sincerely,
National League of Cities,
National Association of Counties,
National Association of Telecommunications Officers and
Advisors.
____
Preserving a Free and Open Internet
Whereas, since its inception, the Internet has existed
based on principles of freedom and openness, core values that
have made it the most powerful communication medium ever
known; and
Whereas, the FCC is currently debating how to enshrine
these Open Internet Principles into 21st century regulation;
and
Whereas, the U.S. Court of Appeals in Washington, D.C. in
2010 determined that the long-observed Open Internet
Principles of nondiscrimination, nonblocking, and
transparency, described below, should not be declared in an
FCC Policy Statement, but instead should be enshrined in a
formal rulemaking seeking to reinstate those principles; and
Whereas, the FCC issued its Open Internet Order,
reinstating these rules for preserving a free and open
internet, on December 23, 2010, formalizing the three basic
protections: transparency, no blocking of lawful content and
no unreasonable discrimination of network traffic; and these
rules were made effective November 20, 2011; and
Whereas, these rules enshrine the values of what is
commonly referred to as net neutrality; and
Whereas, the first principle of the Open Internet Order
states that fixed and mobile broadband providers must
publicly disclose accurate information regarding network
management practices, performance characteristics, and
commercial terms of their broadband services; and
Whereas, the second principle states that fixed broadband
providers may not block lawful content, applications,
services, or non-harmful devices; mobile broadband providers
may not block lawful websites, or block applications that
compete with their voice or video telephony services; and
Whereas, the third principle states that unreasonable
discrimination shall not be permitted, that fixed broadband
providers may not unreasonably discriminate in transmitting
lawful network traffic; and
Whereas, these principles, applied with the complementary
principle of reasonable network management, guarantee that
the freedom and openness that previously enabled the internet
to flourish as an engine for creativity and commerce under
the protection of the original policy statement will
continue, providing greater certainty and predictability to
citizens, consumers, innovators, investors, and broadband
providers, while retaining the flexibility providers need to
effectively manage their networks; and
Whereas, since the beginning of the internet, broadband
Internet access services have continued to invest in a single
infrastructure which has increased average speeds for all
users across our nation, without resorting to the practice of
prioritization for users who can afford to pay the most; and
Whereas, online companies, or edge providers, have also
invested in new innovative products and services that have
driven economic growth and consumer demand for improved
internet services and faster speeds from broadband internet
access providers; and
Whereas, the dual investment of broadband Internet access
service providers and edge providers has fostered a virtuous
cycle of investment and innovation online; and
Whereas, two key rules of the three rules comprising the
Open Internet Order, one pertaining to no blocking and
another pertaining to no unreasonable discrimination, were
again vacated on January 14, 2014 by the U.S. Court of
Appeals in Washington, D.C. in the Verizon Communications
Inc. v. Federal Communications Commission (2014), ruling that
the FCC has no authority to enforce these rules; and
Whereas, the FCC on May 15, 2014, voted 3-2 to open the
process of public comment on their proposed net neutrality
rules that could in some circumstances allow paid
prioritization of internet traffic based on a commercially
reasonable standard; and
Whereas, paid prioritization under a commercially
reasonable standard allows paid prioritization that has
heretofore been understood to be unjust and unreasonable; and
Whereas, unreasonable paid prioritization is antithetical
to a neutral Internet, and nondiscrimination is an inherent
and indivisible characteristic of net neutrality; and
Whereas, all data on the Internet should be treated
equally, not discriminating or charging differentially by
user, content, site, platform, application, type of attached
equipment, and modes of communication; and
Whereas, innovation relies on a free and open Internet that
does not allow individual arrangements for priority treatment
over broadband Internet access service; and
Whereas, preventing access to any lawful websites, slowing
speeds for services, or redirecting users from one website to
a competing website creates asymmetrical access which is
antithetical to an Open Internet; and
Whereas, startups are the engine of an innovation economy,
yet may not have the cash flow to pay for paid
prioritization, and will therefore be unable to compete with
large companies to deliver content to customers, impeding
startup growth, thus limiting economic development and the
creation of jobs: Now therefore, be it
Resolved, That the US Conference of Mayors supports a free
and open internet as outlined in the FCC's original Open
Internet Order; and be it further
Resolved, That the US Conference of Mayors supports
comprehensive nondiscrimination as a key principle for any
FCC rulemaking; and be it further
Resolved, That the US Conference of Mayors supports
securing a commitment to transparency and the free flow of
information over the internet, including no blocking of
lawful websites and no unreasonable discrimination of lawful
network traffic; and be it further
Resolved, That the US Conference of Mayors calls on the
White House to offer their support of these principles; and
be it further
Resolved, That the US Conference of Mayors calls on
Congress to offer their support of these principles and if
necessary use their lawmaking power to enshrine access to a
free and open Internet and give the FCC a clear mandate; and
be it further
Resolved, That the US Conference of Mayors recommends that
the FCC preempt state barriers to municipal broadband service
as a significant limitation to competition in the provision
of Internet access.
____
Coalition for Local Internet Choice
Washington, DC, July 15, 2014.
House of Representatives,
Washington, DC.
Dear Representative: The Coalition for Local Internet
Choice has heard that Rep. Marsha Blackburn is planning to
propose an amendment to House Appropriation bill H.R. 5016.
The amendment would preclude the Federal Communications
Commission from using its appropriated funds to take any
action that would preempt a State law governing whether or to
what extent the State or a municipality or other political
sub-division of the State may provide broadband Internet
access service. The Coalition urges you to oppose any such
amendment.
As Congress and the Commission have often recognized,
ensuring that all Americans have reasonable and timely access
to advanced telecommunications capabilities, particularly in
rural and other high-cost areas, is ``the great
infrastructure challenge of our time.'' Toward this end,
Congress has assigned the Commission a central role in
defining the relevant terms and standards and in identifying
and removing barriers to broadband investment and
competition. While preemption of State barriers to
[[Page H6282]]
broadband investment and competition should be used rarely,
in only the clearest of cases, it should not be ruled out
categorically in all cases, as the Blackburn amendment would
do.
Our Coalition was established to support local choice in
acquiring advanced communications capabilities. Our members
believe that communities should be free to decide to work
with willing incumbents, enter into public-private
partnerships, develop their own networks, if necessary, or do
whatever else may work for their citizens, businesses, and
institutions. Where communities have been free to do this, we
have seen robust economic development enhanced educational
and occupational opportunity, access to more affordable
modern health care, improved public safety, greater energy
efficiency and environmental protection, and much more that
has contributed to a high quality of life. In contrast, where
state barriers to community broadband initiatives and public-
private partnerships exist, both the public and private
sectors, particularly high-technology companies, are failing
to meet their potential.
At this critical time in our country's history, we should
not preclude or inhibit any potentially successful strategy
that will enable our communities and America as a whole to
thrive in the emerging knowledge-based global economy. Nor
can we afford to take off the table any approach that may be
necessary in certain cases to remove barriers to broadband
investment and competition.
Sincerely,
Joanne Hovis,
Chief Executive Officer, CLIC.
Mr. SERRANO. Whatever happened to localism or local control? This
amendment means the Federal Government will tell every local citizen,
mayor, and county council member that they may not act in their own
best interests.
Any such amendment is an attack on the rights of individual citizens
speaking through their local leaders to determine if their broadband
needs are being met.
Congresswoman Blackburn only has to drive an hour and a half down
Interstate 24 to Chattanooga to see where the city-owned electric
utility owns a broadband network. It charges $70 per month, enough to
cover expenses but affordable enough to attract businesses.
{time} 2000
Her State passed a bill to prevent nearby towns from joining
Chattanooga and to block other communities from doing themselves.
Companies have moved jobs or expanded in Chattanooga after learning
that the minimum connection speed on the city-owned network was faster
than the maximum they had available at headquarters.
Preemption will not force anyone to do anything that the
municipalities alone don't want to do. This is not about forcing States
to do anything, but instead stopping States from choking grassroots
competition and stopping States from blocking faster networks or new
networks where none exist.
It may sound one way, but it is a total different interpretation that
we have, and this amendment could really hurt--in fact, may even hurt
the efforts that she claims she wants to put forth.
I reserve the balance of my time.
Mrs. BLACKBURN. Mr. Chairman, I think it is important to note that
what this amendment does is to allow those citizens in those cities, in
those States that have made this decision--this is how they want to
handle broadband--to do it.
It gives the power to them. It keeps bureaucrats, sitting at the FCC,
from making these decisions and overriding the wishes of our States and
of those cities that are located therein. I urge adoption of the
amendment.
I yield back the balance of my time.
Mr. SERRANO. Mr. Chairman, it is interesting to note that Chairman
Upton has legislation and has spoken out on this issue, and the whole
issue here is to allow cities to do what they need to do without having
the major cable companies and so on lobby the States and stop them from
doing so.
Broadband is something that we need to expand--that may sound like a
pun--to make it broader, not to make it limited. It should be available
everywhere, and it should be available in every possible place--rural,
suburban, inner city, in homes, in schools.
We have to build the infrastructure to make that happen. Again, I
repeat, I really think that her intent is not being met by her
amendment, and that is why I oppose it and hope we would all oppose it.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Tennessee (Mrs. Blackburn).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. SERRANO. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from Tennessee
will be postponed.
Amendment Offered by Mrs. Blackburn
Mrs. BLACKBURN. Mr. Chairman, I have one final amendment at the desk.
The Acting CHAIR. The Clerk will report the amendment.
The Clerk read as follows:
At the end of the bill (before the short title), insert the
following:
Sec. __. None of the funds made available by this Act may
be used by the Consumer Product Safety Commission to
finalize, implement, or enforce the proposed rule entitled
``Voluntary Remedial Actions and Guidelines for Voluntary
Recall Notices'' (CPSC Docket No. CPSC-2013-0040).
The Acting CHAIR. Pursuant to House Resolution 661, the gentlewoman
from Tennessee and a Member opposed each will control 5 minutes.
The Chair recognizes the gentlewoman from Tennessee.
Mrs. BLACKBURN. Mr. Chairman, my amendment would prohibit funds for
the voluntary recall proposed rule at the Consumer Product Safety
Commission and would prevent them from moving forward with a rule that
would cripple the highly successful voluntary recall program that is
currently in place.
For nearly 40 years, the CPSC and manufacturers and retailers, big
and small, have partnered to ensure that the system of voluntary
recalls is effectively reducing the safety risks that are posed to the
public.
In fact, the CPSC recently highlighted the success of the program,
noting that 90 percent of the recalls through the award-winning Fast
Track program are implemented within 20 days. The Fast Track program
was created by former CPSC Chairman Ann Brown to greatly reduce the
amount of time it takes recalls to be implemented.
Instead of working to increase the efficiency of its programs, the
CPSC's proposed rule change effectively kills its most successful
program. On May 30, Ann Brown, a Democratic former Chairman appointed
by President Clinton, sent a letter to the Energy and Commerce
Committee expressing deep concerns over the impacts of the Commission's
proposed rule.
Concerning the substantive provisions of the proposal, former
Chairman Brown stated:
A Fast Track procedure would be rendered impossible under
these circumstances.
The success of this Fast Track program is based on the shared
commitment of the Commission and the private sector to remove harmful
products from the marketplace.
The Commission, however, now seeks to transform the voluntary recall
process into a legal negotiation equivalent to a settlement agreement.
The proposed substantive changes would require companies seeking to
implement a recall to hire an attorney to negotiate binding and
enforceable terms with the CPSC staff.
This places significant burdens on small businesses that use the Fast
Track program because the program allows them to work with the
Commission staff without having to pay expensive legal fees. The CPSC
should not discourage companies from working closely, efficiently, and
effectively with the CPSC when potential hazards or defects are
identified.
As the letter from former CPSC Chairman Brown shows, this is not a
political issue. Senators from Pennsylvania--Casey and Toomey, a
Democrat and Republican, respectively--submitted a letter in January
for the docket, raising concerns about the proposed changes.
Senator King sent the Commission a letter in March expressing similar
concerns, and I include these letters, Mr. Chairman, from former
Chairman Brown and from the Senators into the Record.
[[Page H6283]]
Ann Brown,
Palm Beach Gardens, FL, May 30, 2014.
Hon. Fred S. Upton,
Chairman, Committee on Energy and Commerce, Washington, DC.
Hon. Henry A. Waxman,
Ranking Minority Member, Committee on Energy and Commerce,
Washington, DC.
Dear Chairman Upton and Ranking Minority Member Waxman, I
had the privilege of serving as Chairman of the U.S. Consumer
Product Safety Commission from March 1994 until November 1,
2001. During my time as Chairman, we prevented numerous
deaths and injuries through enforcement actions, product
recalls and working with consumers, consumer groups and firms
regulated by the Commission. Product safety is best
accomplished when government, Industry and consumers work
together.
Under the Consumer Product Safety Act (CPSA),
manufacturers, distributors, and retailers of consumer
products must report certain potential product hazards to the
Commission. They must report immediately if they obtain
information which reasonably supports the conclusion that a
product (1) fails to comply with certain mandatory or
voluntary standards, (2) contains a defect which could create
a substantial product hazard, or (3) creates an unreasonable
risk of serious injury or death.
If the Commission believes that a product presents a
substantial product hazard to the public, it may pursue
corrective action. Early in my Chairmanship, I learned that
some number of companies were offering to conduct product
recalls but because of entrenched procedures, those firms
were not allowed to proceed with a recall until the CPSC
staff performed a technical evaluation of the product
involved, agreed that there was a product safety problem by
making a ``Preliminary Determination'' (PD) of hazard, and
then sent a letter to the firm advising it of the preliminary
determination of hazard and requesting a product recall.
This process could and often did take many months-months
without a recall, months where consumers were at risk, even
though the firm was ready, willing and able to proceed with a
recall at the time of its report. We changed this
bureaucratic process early in my tenure as Chairman by
creating the Fast Track Product Recall program in August
1995.
Originally called the ``No PD'' program, firms who reported
to CPSC, identified a product safety problem, agreed to and
initiated a recall within 20 working days of their report, no
longer required a staff technical evaluation of the problem
reported. Rather than performing a technical evaluation to
confirm the product problem reported upon, the CPSC staff
evaluated the remedy proposed to assure that it adequately
addressed the problem identified and spent time working with
the firm on conducting the product recall.
The Commission made this Fast Track program permanent on
March 27, 1997, and it has been hugely successful. More than
one-half of all CPSC recalls are now conducted through the
Fast Track Program. Recalls conducted through this program
benefit consumers, the recalling firm and the CPSC. Recalls
are announced faster better protecting consumers from injury.
Recalling firms do not receive a letter stating that the CPSC
staff has preliminarily determined their product is a
substantial product hazard. And the government spend less
resources investigating a product that a company has already
agreed should be recalled.
The CPSC staff received a ``Hammer'' Award from Vice
President Albert Gore's National Partnership for Reinventing
Government for the Fast Track Product Recall Program. This
award honored federal employees for significant improvements
to customer service and for making the government work more
efficiently. Also in 1998, the Fast Track Program was named a
winner of the prestigious Innovations in American Government
award, an awards program of the Ford Foundation and Harvard
University, administered by Harvard University's John F.
Kennedy School of Government in partnership with the Council
for Excellence in Government.
Now this award winning program appears to face the risk of
being unintentionally undermined by a rule proposed by the
CPSC in November 2013 that is Intended to enhance voluntary
recalls by setting forth principles and guidelines for the
content and form of voluntary recall notices that firms
provide as part of corrective action plans. One of the CPSC's
proposals is to prohibit firms desiring to conduct a
voluntary recall from disclaiming that there is a hazard
presented by their product unless the Commission agrees to
the disclaimer. I am concerned that this proposal if adopted
could undermine the efficacy of the Fast Track program.
Another proposal would classify a voluntary Corrective Action
Plan (CAP) as ``legally binding'' thus transforming a CAP
into a Consent Decree, potentially delaying an otherwise
effective recall weeks or even months due to haggling over
legalities. A Fast Track procedure would be rendered
impossible under these circumstances.
CPSC urges firms to err on the side of caution by reporting
potential product safety problems and conducting recalls. It
is my understanding that virtually every firm that reports
under the CPSC mandatory reporting requirement and requests
to participate in a Fast Track recall, asserts that their
product does not present a substantial product hazard, but
nonetheless they wish to conduct a recall. If reporting firms
are not allowed to make this disclaimer, they have no
incentive to participate in the Fast Track Program.
Not making the disclaimer may be perceived in product
liability litigation as akin to admitting that the product
reported on is a substantial product hazard. If so, reporting
firms might just as well report to CPSC, not offer to conduct
a recall, and take the chance that the CPSC staff might
conclude their product is not a substantial product hazard
and that no recall is necessary.
If this occurs, recalls would be delayed, CPSC would be
required to use substantial technical resources to evaluate
products so that the staff can determine whether to make a
preliminary determination of hazard, and consumers are left
unprotected potentially for many months.
I respectfully request that the Committee urge the
Commission to consider its proposed rule carefully and to
assure that it does not adversely affect CPSC's Fast Track
Product Recall Program.
Sincerely,
Ann Brown.
____
United States Senate,
Washington, DC, January 30, 2014.
Re Proposed Rulemaking on Voluntary Product Recalls
Robert S. Adler,
Acting Chairman, U.S. Consumer Product Safety Commission,
Bethesda, MD.
Dear Chairman Adler: We have recently become aware of a
proposed rule by the Consumer Product Safety Commission
(CPSC) that could greatly increase the cost and complexity of
recalling harmful consumer products.
As you know, the agency currently operates a ``Fast Track''
program that is well regarded and has a history of success.
Since its inception in 1997, the program has allowed
companies to recall products when they have reason to believe
their products will harm consumers. The vast majority of
companies across the nation comply with the program, and
companies in Pennsylvania often initiate product recalls as a
precautionary measure, even where there is no evidence of
injury to consumers. As the CPSC itself points out, the
advantage of its award-winning program is that it permits
companies to remove potentially hazardous products from the
marketplace as quickly and efficiently as possible, without
requiring CPSC staff to make a preliminary determination that
the product is hazardous. Because the program makes recalls
voluntary and utilizes standard-form documents that can be
expeditiously reviewed and executed, product recalls occur
rapidly and efficiently.
Unfortunately, the proposed changes seem to jeopardize the
efficacy of the existing process, which could increase the
risk of harm to consumers. The proposed rule makes
``voluntary'' product recall Action Plans legally binding and
requires companies to state with specificity each instance in
which a product causes harm. We worry that these changes may
discourage companies from initiating precautionary recalls
and increase compliance and administrative costs. Companies
that recall products will have to utilize lawyers to
negotiate their ``legally binding'' documents and will
involve upper corporate management to approve forward-looking
obligations. Similarly, the CPSC will have to devote more
time and personnel to negotiating recall documents and may be
subject to litigation to determine whether a particular
product is hazardous. Given these issues, we are concerned
that the proposed change could ultimately keep harmful
products on store shelves for longer periods of time, and
thus increase the risk of harm to consumers.
Given the longstanding success of the Fast Track program,
and the paramount importance of maintaining effective
procedures for recalling dangerous products, we encourage the
Commission to very carefully consider any changes it seeks to
make to its Fast Track recall program.
Sincerely,
Robert P. Casey, Jr.,
United States Senator.
Patrick J. Toomey,
United States Senator.
____
United States Senate,
Washington, DC, March 21, 2014.
Hon. Robert S. Adler,
Acting Chairman, U.S. Consumer Product Safety Commission,
Bethesda, MD.
Dear Chairman Adler: I write today to communicate serious
reservations about the rulemaking being conducted by the
Consumer Product Safety Commission (CPSC) regarding remedial
actions and guidelines for voluntary recall notices. While
framed as ``interpretive'' guidance, the CPSC's proposed rule
makes substantial changes to current practice surrounding
voluntary recalls--changes that could result in significant
compliance burdens for businesses wishing to voluntarily
recall a product.
The CPSC currently has in place a highly successful ``Fast
Track'' process that enables a company to make use of an
expedited process, in consultation with the CPSC, to recall a
defective product. This innovative program eases regulatory
requirements and enables businesses to work with the CPSC to
get defective products off store shelves within days, rather
than the weeks and months a normal recall process might take.
The ``Fast Track'' program demonstrates a smart blend of
strong consumer protections and ease of business compliance,
creating an environment that encourages businesses to report
[[Page H6284]]
defective products and quickly remove them from circulation.
The proposed rule under consideration would make
substantial changes to the ``Fast Track'' program and could
threaten the incentives for businesses to undertake voluntary
recalls, as well as substantially increase the cost of
completing the process. Most significantly, the proposed rule
makes the corrective action plans in voluntary recall
agreements legally binding, which could dramatically shift
the incentive structure for businesses to report incidences
of defective products. Making a plan legally binding will
slow down the voluntary recall process, leaving consumers at
risk for a longer period of time as the plans will first need
to be subject to detailed review by legal counsel.
The proposed rule would also allow the CPSC to require the
adoption of a compliance program as a component of corrective
action plans. This requirement--if not properly calibrated--
could introduce further delays in the voluntary recall
process, even when a business has no history of recalls or
violations. Thus, in the midst of working with the CPSC on
the parameters of a voluntary recall agreement, a business
might also have to negotiate the parameters of a compliance
program and provide description of said program in the recall
announcement.
While Section 214 of the Consumer Product Safety
Improvement Act of 2008 required the CPSC to establish
requirements for mandatory recall notices, the statute bears
no mention of establishing similar requirements for voluntary
recalls. I understand that the CPSC bases its authority to
establish guidelines from language in a House committee
report, but I am not convinced that the proposed rule's
sweeping changes to the existing voluntary recall process is
congruent with either the intent of the statute or the
language in the committee report.
Existing regulations require companies initiating a
voluntary recall to propose and implement a formal corrective
action plan, but these plans were never intended to be
legally binding. Part 1115.20 of title 16 of the Code of
Federal Regulations describes a corrective action plan as
``[a] document, signed by a subject firm, which sets forth
the remedial action which the firm will voluntarily undertake
to protect the public, but which has no legally binding
effect.'' In effect, the regulations expressly prohibited the
Commission from making these agreements legally binding in
order to encourage--not deter--businesses to recall defective
products. The CPSC's proposed rules may have the opposite of
the intended effect--and, at the very least, could
substantially delay the timely distribution of product safety
information to the public.
Make no mistake: I have long been an advocate for strong
regulations that protect public health, safety, and the
environment. However, I also believe that we must regulate in
a manner that is sensitive to the burdens placed on
individuals and businesses. My opinion is that the CPSC's
proposed rule may go too far--and may have the unintended
consequence of delaying the recall process and extending the
period of time in which defective items remain in
circulation.
I urge the Commission to take my comments into
consideration. The proposed rule could have a widespread and
indiscriminate effect on voluntary recalls, and I ask the
Commission to do its due diligence in fully vetting the
impacts on businesses across the country, particularly for
those wishing to initiate a voluntary recall as a
precautionary measure. For large businesses, who already
employ legal counsel and compliance officers, these new
requirements will be substantial; for small businesses, they
could be crippling.
Sincerely,
Angus S. King, Jr.,
United States Senator.
Mrs. BLACKBURN. I also ask that Members of this Chamber recognize
that the proposed rule change would slow a process meant to be
conducted with speed and without red tape and would harm a system that
ensures that consumer products sold in the U.S. are the safest in the
world.
I reserve the balance of my time.
Mr. SERRANO. Mr. Chairman, I rise in opposition to the amendment.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. SERRANO. Mr. Chairman, there is a contradiction with what the
gentlewoman says because, on one hand, she doesn't want government
involved in localities, and on the other hand, she wants to tell
localities how to act.
On the other hand, she doesn't want us to tell the Consumer Product
Safety Commission how to act, so it becomes very confusing. This is an
issue we should leave to the discretion of the Consumer Product Safety
Commission. This is not something we should be micromanaging the CPSC
on.
Furthermore, it is a proposed rule, and the CPSC is simply reviewing
comments at this stage, and that is important to note. They are simply
reviewing comments at this stage. We in this body should let the
process of issuing rules play out, as is required in law, instead of
cherry-picking where and when we want to interfere.
This is simply not an area of overregulation, since no regulation is
yet in effect, so this amendment is unnecessary. I oppose the
amendment, and I hope my colleagues will as well.
I reserve the balance of my time.
Mrs. BLACKBURN. Mr. Chairman, I yield such time as he may consume to
the gentleman from Florida (Mr. Crenshaw).
Mr. CRENSHAW. I think the gentlewoman has very well explained the
amendment. We have a system that has been working well for 40 years,
and so I don't think we need to make any unnecessary changes, and so I
urge Members to support her amendment.
Mrs. BLACKBURN. Mr. Chairman, I thank the chairman.
I urge support of this amendment. The program in place at the CPSC
has worked well. It is supported by both Republicans and Democrats. The
process they are going through at CPSC is expending a tremendous amount
of time and money.
Looking at setting up a system that would force these retailers into
legal negotiations and settlements is not the way to address this.
The Fast Track program has been enormously successful. Former
Chairman Brown worked during the Clinton administration--was appointed
by President Clinton. They did a great job putting this program
together. We should leave it in place. I urge a ``yes'' vote.
I yield back the balance of my time.
Mr. SERRANO. Mr. Chairman, this agency is one of the better agencies.
Every so often, we read about baby seats and blankets and all kinds of
issues that affect our communities and our daily lives.
We should stop trying to attack it, as some people do. I just think
that this is not a good amendment and that it should be defeated.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Tennessee (Mrs. Blackburn).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. SERRANO. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from Tennessee
will be postponed.
Mr. CRENSHAW. Mr. Chairman, I move that the Committee do now rise.
The motion was agreed to.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
LaMalfa) having assumed the chair, Mr. Wenstrup, Acting Chair of the
Committee of the Whole House on the state of the Union, reported that
that Committee, having had under consideration the bill (H.R. 5016)
making appropriations for financial services and general government for
the fiscal year ending September 30, 2015, and for other purposes, had
come to no resolution thereon.
____________________