Providing for consideration of the bill (H.R. 1000) to amend title I of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 to provide additional protections to participants and beneficiaries in individual account plans from excessive investment in employer securities and to promote the provision of retirement investment advice to workers managing their retirement income assets.

Mr. Speaker, I thank the gentlewoman from New York for yielding me this time.

Mr. Speaker, today we confront an issue that is absolutely fundamental to the interests of our constituents, to their well-being, and the question of whether or not they will have the assets to properly retire in the future, and that is because we address the issues of the security of the American pension system.

In the wake of the worst pension scandals in recent history, the response of the Republican congressional leadership is to see no evil, hear no evil and do no good.

Once again, in the shadow of the failures of Enron and Global Crossing, and with the new disclosures about Delta and American Airlines, the Republicans bring forward a pension bill that does nothing to help employees, but includes lucrative benefits for corporate interests. How tone-deaf can they be?

Pension scandals that move from page 3 of the business section to page 1 in every newspaper and magazine of popular nature of this country, but it is still the business as usual for Republicans in Congress. The only problem they see is that the investment companies are making even more money, while pensions and 401(k)s of employees dwindle with less and less.

The pension bill the Republicans want to steamroll through the House today fails to address the pension scandals that have outraged Americans and left so many Americans destitute. It is as though Enron and Global Crossing and these other pension scandals never happened. It is business as usual for business, and let the employees fend for themselves.

The heart of the Republican bill would change the law to allow investment firms for the first time to give biased and conflicted financial advice to employees, something that is currently prohibited under the law. Does this make sense when many of these same investment firms that would be giving the employees this advice just copped a plea to Eliot Spitzer, the New York attorney general, if firms like Credit Suisse, First Boston, Bear Stearns, JP Morgan, Chase, Goldman Sachs and many others just paid out over a billion and a half dollars in committing these kinds of abuses?

Now, I recognize that they do not think they copped a plea, because they said they did not admit any wrongdoing. But they paid $1.5 billion just in case they might have. That $1.5 billion is chump change alongside the hundreds and hundreds of billions of dollars that people lost in their pension plans during the stock market bubble and because of conflicted advice and bad advice.

Now, here we are 2 years after Enron, and we are coming back to simply allow the same thing to happen that

happened in those corporate scandals. It is no wonder that the American public, the small investor is reluctant to return to the stock market. It is no wonder they are reluctant to invest again in mutual funds, because they recognize the devastation that they received at the hands of what was essentially criminal activity. Today, the Republican bill makes that activity legal.

That is why the Attorney General, Eliot Spitzer, of New York said this about this legislation: ``This legislation opens the loophole that will sharply erode, rather than enhance, the safeguards for employees seeking independent and untainted advice about how to invest their retirement savings. Clearly, this bill puts the interests of Wall Street firms far ahead of the interests of millions of working Americans who simply want a fair shake in making sound decisions about their retirement investments.''

That is what the American public is entitled to. That is what the people are entitled to as they contemplate how to provide for their future retirement. That is not what this legislation does. That is not what the Republican legislation proposes. It now says that those firms can provide that conflicted advice to our constituents and to the workers, and that is what we should not allow in this legislation.

Mr. Speaker, I yield myself 8 minutes.

Mr. Speaker, today we will have a choice about what to do on behalf of America's future retirees, the employees of America's corporations and the protection of their pensions. We can do, as has been suggested in the Republican bill, a bill that essentially does nothing for retirees and for employees. What it says is that employees should be offered advice, and then it also suggests that that advice can be conflicted, it can be biased, it can be compromised, because under the current law, if we are given investment advice, we cannot be given conflicted advice.

And yet in the wake of Enron and Global Crossing, the answer to the Republicans is to change the current law to allow advice to be given to employees about their retirement futures but to allow that advice to be conflicted, to allow that advice to be conflicted by the very same institutions that just recently settled for $1.4 billion because they had offered conflicted advice and bad advice to their clients. $1.4 billion, that is what those companies agreed to pay. That does not even begin to speak to the hundreds of billions of dollars that the shareholders lost, that employees lost in their mutual funds, their retirement plans because of those conflicts and that essentially criminal behavior. Yes, the deal was struck for $1.4 billion.

Now along comes the Republicans 2 years after Enron, and they say we are going to give them the right to have advice, but that advice gets to be conflict. How tone deaf can one be? How shocked will the American public be when they find out they took their retirement plans and put them exactly in the hands of people who just copped a plea for a billion and a half dollars for giving people bad advice, maybe illegal advice, almost criminal activity, if the Members will. The Republicans' answer is to take America's retirees and turn them over to those firms.

One has to fail to understand what America saw after Enron, what they saw after the bust in the stock market of their retirement plans being depleted, the same kind of outrage that Americans felt when they saw the CEOs and executive officers of American Airlines guarantee their pensions at the same time they were negotiating several billions in givebacks from pilots and flight attendants and workers. They were shocked when they heard this. So shocked and so bad was the reaction, that the CEO of American Airlines had to resign, and they had to give back their compensation package.

Delta Airlines, going through givebacks of billions of dollars from their workers, secures and guarantees their compensation and pension for the CEOs, where former Delta executives, corporate executives, write Delta and say it is a shameless act, an embarrassing act that they would do this. And yet today, after all of those actions, after that public response to that failure to protect the employees, the reaction of the Congress is to essentially do nothing.

But the Democrats offer a different alternative because I think we are listening to the public and to the employees. Yes, pensions is a dull subject. It has not captured the imagination of all the politicians. But the fact of the matter is it has moved from the back pages of the business section to the cover of every major business magazine and every major business; journal, and Fortune Magazine got it about right and that is the oink factor. How far will these corporate executives go? How far will these pigs go at the trough to grab hold of the assets of a corporation at the same time that they are letting their employees go down the tubes? Yes, it is the oink factor. It is CEO pay, it is guaranteed pension plans.

These captains of capitalists, these crusaders of the capitalist system, what do they want out of the system? They want a guarantee that no matter if the company goes bankrupt, no matter if they run the company into the ground, no matter if the company is successful, they want a guarantee that they will be protected financially forever into the future. That is what they wanted at American Airlines. That is what they wanted at Delta Airlines. That is what they wanted at Enron.

Today, the Republican bill is silent on that greed, on that oink factor.

But the Democratic bill offers something different to the Members of this House, who have heard from their constituents about the devastation of their retirement plans. There is none of us in this House that have not gone to a picnic, have not gone to a family gathering, have not gone to a graduation where people have not said that they are postponing their retirement because the retirement plan is not all they thought it would be, who say their spouse is going to have to work a little longer than they thought, who thought the place they were going to retire to in another State or in the country is not available to them any longer because their retirement plans have been devastated because of the activities of so many corporations.

Today we have a chance to take the oink, to take the oink, out of this pension system. We will be given the opportunity to vote on a substitute to where the problem is when executives loot, as the Delta people tried to loot the pension plan of the Delta workers, but to guarantee and insure their own pension plans. The Republican answer is oink. The answer in the Democratic bill is equity for employees.

As the President said at the beginning of the Enron scandal, what is good for the captain is good for the sailor. But the Republicans in Congress do

not think so, and the Delta executives did not think so 2 years later, where executives lie to their employees and do not provide full disclosure about what the executives are doing with the corporate assets and with the pension assets. Once again, there is nothing in their bill, just a big oink for those executives. We require full disclosure for those employees.

With regard to the conflicts of interest on investment advice, the heart of the Republican bill is to provide that conflicted investment advice to flow to those employees; not independent investment counselors, but the very people who will be earning commissions and fees from the investment of those funds.

The question is, are the American public and employees not entitled to better? These are the same people who will allow corporate executives to dedicate hundreds of thousands of dollars to giving investment advice of all different kinds to the executives of those corporations, but do not want to give that kind of advice or help those people out with respect to advice for the employees.

Finally, with regard to older workers, now with hundreds of companies poised to move from a defined benefit plan to a cash balance plan, where the shorthand is this, that older workers in their fifties who have been with companies 10 or 15 years stand to lose 30 to 50 percent of their retirement assets. This is not speculation, this is what happened last time they did this. We have a bar on them doing that again. This administration wants to remove that bar.

There are hundreds of corporations who are poised to make this conversion, and those employees will lose those pension assets. If you are 50 or 55 years old, there is no place you can go to make that up. But the company thinks that they can loot your pension assets to help out their bottom line.

So there is a stark contrast to be offered to the Members of Congress. There is a stark contrast to be offered to the workers of this country about the protection and the security of America's pensions, about the protection and the security, because that is the issue here today. It is not whether or not employees should have access to conflicted information. That is of no real value to those employees.

Mr. Speaker, I yield 4 minutes to the gentleman from Massachusetts (Mr. Tierney), a member of the committee.

Mr. Speaker, I yield 4 minutes to the gentleman from New Jersey (Mr. Andrews), the senior Democrat on the subcommittee.

(Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to the gentleman from Arizona (Mr. Grijalva), a member of the committee.

Mr. Speaker, I yield 2 minutes to the gentlewoman from Texas (Ms. Jackson-Lee).

Mr. Speaker, the Democratic substitute that we offer today is based on a very simple principle. It is a principle that we all grew up with. It was a principle that was articulated by the President of the United States just days after the Enron catastrophe when America saw that so many people who worked for Enron were trapped in a system during the meltdown of that company, during the corruption in that company, during the unlawfulness in that company, that they were trapped in that system and unable to protect their retirement while corporate executives in the penthouse suites were unloading stock, getting golden parachutes, getting secured pension plans, getting insured pension plans, having pension plans put into trusts. They took good care of themselves even though they took the company over the edge. But down below, just like in the Titanic, just like in the Lusitania, the poor people were trapped as the ship was going down. They were trapped because of a class system.

That very simple principle that has been articulated by the President was that if it is okay for the sailor, it ought to be okay for the captain. What the President was saying there was those protections that are in place for the executives should have been in place for the employees, that employees' pensions ought to be treated as executive pensions are treated.

We grew up with this. Our parents told us when you got into a fight with our brothers and sisters and maybe it did not go our way, they said, ``What's good for the goose is good for the gander.'' What is good for the captain is good for the sailor. We have said it to our spouse, we have said it to our children, we have said it to our partners in business, we have said it to our staff. It is about fairness.

What the Democratic alternative recognizes is the basic dignity of the American worker and the right of that worker to control the pension plan, which is their money. This is money that was given to them for the work that they gave to the corporation. It was figured out by the corporation, how much they would pay them an hour, how much they would give them in health care, how much they would give them in pension benefits, and they went to work for them. When they gave it to them each month, it is theirs. But now they do not want to have them have any control over it. They do not want them to have the same protections as the corporate elite. They do not want them to have the same rights as those individuals. Why?

Enron was not just built on the back of Ken Lay. Big parts of that company were built on the utility workers in the Pacific Northwest, the pipeline workers in the Southwest, the power plant workers in California and everybody in between. Why were they not entitled to these protections? Why were they not entitled to these rights?

But the Republican bill today, as the Republican bill last year, keeps in place that class system, that the corporate elites will get taken care of, these great captains of capitalists, these crusaders of the free enterprise system, the people who come to Congress and talk about risk, that they take risk. What we now see is the CEO of Delta Airlines, we see the CEO of American Airlines, we see the CEOs of so many companies and the board of directors, they do not want any risk, they want their compensation guaranteed, they want their golden parachute guaranteed, and they want their pension plan guaranteed. Even if they drive the company into the ground, even if they take it into bankruptcy, they will be protected.

That is what has so incensed the American public, and the pilots, and the flight attendants, and the machinists, and the workers at American Airlines that they were willing to risk their whole future to say, that is unfair. And America recognized it like that, Wall Street recognized it like that, and the chairman of American Airlines resigned, admitting that he had made a tragic mistake in being so selfish on behalf of the board of directors and himself at a time he was asking workers to give back billions of dollars.

So what do we say? We say that workers are entitled to advice about the selling and the coming and going in the corporate suites when they are selling their stock because they do not think the corporation is doing so well; we are entitled to know that on those inside sales. We say that workers are entitled, if they have their pensions guaranteed, that the crew, the workers, will have their pensions guaranteed just like the people in the corporate suites. We are saying for those workers, that they should be represented on the boards of the retirement plan so that they will have the information, because as we saw in Enron, the executive representative on the retirement plan, the captain, so to speak, never told the crew that she was selling her stock because she had investment advice to get out of the company. Those people lost their fortune. She walked away with hundreds and hundreds of thousands of dollars because she did not tell them.

We are simply saying, you must tell them, that you must be on the board so you have a chance. That is what this bill does. It is about the equity for the worker, it is about the dignity of the worker, and it is about the rights of the worker to be protected.

They say this will cause trouble in corporations, this will cause concern. A little democracy? A little democracy in the corporation? A little recognition that the corporate body is more than just the CEOs and the executives, that it is also the workers? That causes concern?

Ladies and gentlemen, that is what we are talking about spreading to the rest of the world, the free enterprise system. We are talking about spreading the democratic system. But somehow when it comes to carving up billions of dollars, we cannot have too much democracy in the workplace.

It is simply unfair to the workers. This bill also closes a loophole of having conflicted advice that the Republican bill opens for the first time, and this bill responds to the concerns of the Attorney General of New York, who just settled a case for $1.4 billion, when he said that this bill would open up a huge loophole, a huge loophole for conflicted advice, and put at risk the pensions of these individuals, that this bill goes too far. That conflicted advice, Jane Bryant Quinn, the financial columnist in Newsweek magazine, says they might as well give their money to an Olympic ice-skating judge as give it to this conflicted advice. These are the very same people who just agreed to pay a $1.4 billion fine for their activity. They did not admit that they did anything wrong, but they put up $1.4 billion. We have got to understand that we cannot turn the pension assets, the retirement assets of those workers over to those individuals. The workers in this country and their families and their future and their children and their retirement plans deserve better. They deserve the Democratic substitute.

Mr. Speaker, the suggestion again has been made on the other side of the aisle that somehow this would be a burden or somehow this would be complex if we required that workers be treated the same as executives.

They do very complex things in the corporate suites. They create various accounts to pay for the pension benefit of executives. They go out and buy various insurance schemes to pay for the benefit of executives. They create special tax treatment. They come to Congress and get special tax treatment for the pension plans of executives. All very complex. But at the end of the day, it means that that executive will know, no matter what happens to that company, that they and their family and their children will be protected forever into the future because it will be outside of the bankruptcy, it will be outside of the corporate failure.

So complexity is not a problem when the executives want to protect their income. They have been doing it for years. But somehow now to say that we ought to send notice, send an e-mail to your employees and tell them that the president is selling 100,000 shares, that the President is doing an inside deal on a stock option, send an e-mail, you send them all day long, there is nothing complex about it, you type it out and push send; it is not complex. But they do not want the employees to know this. That is why so many people have been trapped in the financial collapse of these companies.

In the middle of the negotiations with the flight attendants, the pilots, the machinists, the ramp workers, when American Airlines was asking those people for $2.3 billion in givebacks from their vacation time, from their pay, from their health benefits, give it back to help the company fly, they were secretly, quietly and in a very complex fashion protecting and guaranteeing hundreds of millions of dollars in compensation for the executives; and they got caught. Once the light was shined on them, they scrambled like rats for the door, because they knew they could not sustain it; and the CEO resigned and they had to give back the compensation package, and then the flight attendants and others agreed to try to help the company stay out of bankruptcy.

That is all this bill does. It says that you ought to know about that when they are negotiating your union contract, what they are doing for the executives. That is why the pension story today is no longer a back-page story. That is why it is on the cover of Fortune Magazine, not exactly a left-wing journal. But Fortune Magazine captured the context when it said oink, the pigs in the suits are jeopardizing your corporation, your compensation and your pension plans. Oink.

Earlier, Fortune Magazine asked America, is your retirement at risk, and why? Because of what is going on in terms of corporate financial gimmickry. It is why millions and millions of Americans have left the stock market and why the stock market laments that they have not returned. They do not have confidence in this system. They do not have confidence in this system any longer. They understand it is rigged on Wall Street against them and it is rigged in the Congress of the United States against them.

Where do these families go to get justice? Where do these families go to get equity? Where do these families go to get fairness, if they cannot come to the Congress of the United States?

So now what we say in the Republican bill is we are going to give them additional advice about what to do with their savings, and we are going to give that advice from the very same people that just had an out-of-court settlement of $1.4 billion because they lied to their clients. They had financial arrangements that prevented them from being independent. They had financial arrangements, so they misrepresented how a stock was doing, how a company was doing, because they were getting fees, they were getting commissions, they were getting percentages of deals. Those are the very same people the Republicans say now that Mr. and Mrs. Jones and Mr. and Mrs. Smith ought to go to and trust that they are going to give them independent advice.

The Democratic bill says you can go to those people, you can make them available, but you also must make an independent adviser available to these people as they plan for their retirements.

When things go wrong for people in their retirement plans, as they did over the last couple of years, and you are 50 or 55 years old, you do not have much chance to make it up.

Again, we have all heard from our constituents about people who thought they were going to retire a year ago, a year and a half ago. From Pacific Gas and Electric, the Portland company, not the California one, a person came before our committee, the Committee on Education and the Workforce, who had $650,000 in Enron stock. He and his wife bought a small farm that they were going to use to run a care center for retarded children. By the time they got to our committee, he had $6,000 in stock. He is 60 years old. Where does he go to get back his money? Where does he go to get made whole?

Well, unless we want that to happen to another generation of workers planning for their retirement, planning for their families, unless we want that to happen again, we have got to support the Democratic substitute, because it is about justice, it is about fairness and it is about getting away from the conflicted advice, from the manipulation, from the dishonesty, from the criminal activity of the financial markets.

Mr. Speaker, $7 trillion was lost in the markets, $7 trillion. These are the people who want to take you out of Social Security and put you into that market. Social Security did not lose a dime. Wall Street lost $7 trillion, and hundreds and thousands and millions of Americans had their entire retirement future changed overnight.

We thought, well, that is the free enterprise system. That is the market system. But what we find out now every day is, no, like the California energy crisis, that was a manipulated system, that was a dishonest system, that was a criminal system.

All the Democratic bill says is give people some notice, give people some rights, give people control over their money so they can escape the ship. The CEOs, the board presidents, the presidents of companies, they are heading for the lifeboats. They do not even have the decency to hit the alarm bell to tell you the ship is going down.

We say at least you have to sound the alarm and tell the workers that they may want to jump too. That is the decent thing to do if you care about your workers, if you respect them, if you appreciate what they have done for the corporations. But that is not what is going on in America today, and that is not what will go on in America under the Republican bill.

Mr. Speaker, you must vote for the Democratic substitute if you believe that workers and their families are entitled to the decent protections for their retirement funds. I urge Members to vote for the Democratic substitute.

Mr. Speaker, I offer a motion to recommit.

I am, Mr. Speaker.

Mr. Speaker, this motion to recommit provides that workers with 10 years of service with a company would have the choice of whether or not to accept a cash balance retirement plan or a defined benefit plan when a corporation decides that they want to switch from a defined benefit plan to a cash balance plan.

We do nothing about the corporation's right to do so. That is simply up to the corporations. Many corporations are doing this in an attempt to save money. The question that my colleagues must answer is should they be able to save that money by dramatically jeopardizing the retirement nest egg and the retirement benefits of older workers in that corporation.

The last time corporations did this before the moratorium, workers lost somewhere up to 50 percent. Last time, according to the GAO, older workers lost up to 50 percent of their retirement benefits. Individuals that were 50, 55, 60 years old, they had no ability to recapture those benefits. They could not work long enough. They could not make enough money. They could not save enough in those jobs.

The question is whether we will allow them the election. Secretary Treasurer Snow said that when he was chairman of the board at CSX Corporation, he recommended and the corporation did this because it was fair. He reminded us that when Congress switched its retirement plan, we allowed every Member in Congress at that time to have an election. He said that was the fair thing to do.

He said when he was on the board of Verizon, that he insisted that they allow workers to have a choice in that plan to see which one they would do better under. The company could save the money for all new workers, and older workers would be made whole.

The gentleman from Ohio will tell my colleagues that some 500 corporations have converted, and they have made workers whole. That is because that is the law. They are changing the law. They will no longer be required to do that under the law.

When Jesse James and Billy the Kid and Bonnie and Clyde stole the life savings of people in this country, we hunted them down like dogs. Right now there are 300 corporations that have filed notice all over the country, all different sizes, affecting thousands of workers, that they are going to convert immediately upon the new Treasury ruling to a cash balance system. The question is whether or not we will protect these people against having their retirement benefits looted.

After a person gives this kind of service to a company, and they are too old to recoup it, they ought to make sure that they do not lose that benefit. That is what this amendment does, and I am going to tell my colleagues, for those who do not think this will affect them, several years ago we had this operation before the moratorium, IBM, Kodak and others, and it blew up. On a bipartisan vote of over 300 Members of Congress, we sought to end that practice.

The Clinton administration put on a moratorium. Those companies ended up giving their workers an election. It is the just and fair thing to do. There is no other remedy other than this amendment for those workers if the Treasury Department decides, as their original proposal did, that it did not matter whether we gave workers a choice or not.

Mr. Speaker, I yield to the gentleman from Illinois (Mr. Emanuel).

(Mr. EMANUEL asked and was given permission to revise and extend his remarks.)

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, pursuant to House Resolution 230, I call up the bill (H.R. 1000) to amend title I of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 to provide additional protections to participants and beneficiaries in individual account plans from excessive investment in employer securities and to promote the provision of retirement investment advice to workers managing their retirement income assets, and ask for its immediate consideration in the House.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 1000.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, last year the Congress responded to the Enron and Global Crossing financial collapses by passing bipartisan legislation to strengthen worker retirement security and enhance corporate responsibility. And thanks largely to the work of the gentleman from Ohio (Mr. Oxley) and a bipartisan team of legislators, President Bush signed into law corporate accountability legislation that holds companies to the highest standards of auditor independence and ethics for America's investors.

But on the issue of pension security, as the chart shows, we have got some unfinished business yet to complete. Last year the House responded quickly to these corporate failures by passing the Pension Security Act, the comprehensive pension protection bill backed by President Bush that would give millions of Americans new tools to help them better manage and expand their retirement security. We passed the bill with significant bipartisan support, with 46 Democrats joining 209 Republicans in supporting the bill. Unfortunately, the Senate did not act on any pension reform legislation last year.

Before I talk about the protections included in the bill, I am proud to say that two key Pension Security Act provisions were signed into law last summer as part of the Sarbanes-Oxley corporate accountability law. These provisions bar company insiders from selling their own stock during blackout periods when workers cannot make changes to their own accounts and to require companies to give 30 days' advanced notice before a blackout period would begin.

These provisions give workers parity with corporate executives and should provide workers with additional security of knowing that Congress is acting to better protect them. But we have more work to do.

Let us be very clear. Worker retirement savings remain vulnerable to corporate meltdowns today, and it should not take another Enron or WorldCom for Congress to act on bipartisan pension protections. That is why we are here today. The gentleman from Texas (Mr. Sam Johnson) and I introduced the Pension Protection Act because workers desperately need access to professional investment advice and the ability to diversify their 401(k) savings and other safeguards to help them enhance their retirement security, as this chart shows us.

Enron barred workers from selling company stock until age 50; and as a result, thousands of Enron employees watched helplessly as their retirement savings were lost. The Pension Security Act gives workers new freedoms to sell their company stock within 3 years. This is a dramatic change that gives workers unprecedented control over their retirement accounts and personal savings.

Today, the vast majority of American workers receive no investment advice on how best to structure their 401(k) retirement plans, and most cannot afford to pay for it on their own, like company executives can. Not surprisingly, Enron, WorldCom, Global Crossing, and others did not provide their workers with access to professional investment advice. This type of investment guidance would have alerted these workers to the need to diversify their accounts and enabled many of them to have preserved their retirement savings.

An Enron executive acknowledged before our committee that she diversified out of Enron stock before it collapsed and saved hundreds of thousands of dollars. Why are we denying rank-and-file employees the same opportunity to receive access to high-quality investment advice? And the answer to that is quite obvious. We should not be.

The Pension Security Act changes outdated Federal rules and encourages employers to provide their workers with access to this type of advice. With the 30-day blackout protection now the law of the land, investment advice becomes even more critical for employees who cannot make changes to their 401(k) accounts during a company-imposed blackout period. Importantly, the bill includes new fiduciary and disclosure protections to ensure that workers receive quality advice that is solely in their best interests. The average investor will have much more protection under our bill than under current law.

The bill also requires companies to give workers quarterly benefits statements that include information about accounts, including the value of their assets, their right to diversify, and the importance of maintaining a diverse portfolio. And lastly, the bill empowers workers to hold company insiders accountable for abuses by clarifying that companies are responsible for workers' savings during blackout periods.

Congress should take action to protect Americans' retirement benefits, not endanger them. On a bipartisan basis, Congress has rejected extreme proposals, such as efforts to place arbitrary caps on company stock, that could jeopardize Americans' retirement security or spell the death of 401(k) accounts altogether. The bill before us is a balanced one that protects workers, but does not jeopardize the willingness of employers to offer retirement plans to their employees.

American workers deserve the security of knowing that their savings will be there when they retire. This bill could have made a real difference for the workers at WorldCom or Global Crossing or Enron. Current pension laws are simply outdated, and we have a responsibility to change that.

I want to thank the gentleman from Texas (Mr. Sam Johnson), my colleague and friend, who has once again

proven instrumental in moving this issue forward here in the House, and I would also like to thank the gentleman from California (Chairman Thomas) on the Committee on Ways and Means for their cooperation in helping us bring this bill to the floor today.

Mr. Speaker, I include the following letters for the Record:

House of Representatives, Committee on Education and the

Workforce,

Washington, DC, May 7, 2003.

Hon. William M. Thomas,

Chairman, Committee on Ways and Means, Longworth House Office

Building, Washington, DC.

Dear Chairman Thomas: Thank you for your May 6, 2003 letter

regarding H.R. 1000, the ``Pension Security Act of 2003,''

which was referred to the Committee on Education and the

Workforce and in addition the Committee on Ways and Means.

The Education and the Workforce Committee ordered the bill

favorably reported on March 6, 2003 and I filed the report on

March 18, 2003, House Report 108-43. I thank you for working

with me, specifically regarding the provisions amending the

Internal Revenue Code. While these provisions are within the

sole jurisdiction of the Committee on Ways and Means, I

appreciate your willingness to work with me in moving H.R.

1000 forward without the need for additional legislative

consideration by your Committee.

I agree that this procedural route should not be construed

to prejudice the jurisdictional interest and prerogatives of

the Committee on Ways and Means on these provisions or any

other similar legislation and will not be considered as

precedent for consideration of matters of jurisdictional

interest to your Committee in the future.

I thank you for working with me regarding this matter and

look forward to continuing our work and cooperation on this

bill and similar legislation. This letter and your response

will be included in the Congressional Record during the floor

consideration of this bill. If you have questions regarding

this matter, please do not hesitate to call me.

Sincerely,

John Boehner,

Chairman.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I am pleased to yield 2 minutes to the gentlewoman from Tennessee (Mrs. Blackburn), a member of our committee.

Mr. Speaker, I yield 5 minutes to the gentleman from Texas (Mr. Sam Johnson), chairman of the Subcommittee on Employer- Employee Relations.

(Mr. SAM JOHNSON of Texas asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from California (Mr. McKeon), the chairman of the Subcommittee on 21st Century Competitiveness.

Mr. Speaker, I yield myself the balance of the time.

There has been a lot said today about the fact that this bill may not go far enough, and the substitute that we are about to debate in the coming hours goes much, much further.

The issue here that Members need to understand is that our pension system is a voluntary system on behalf of employers for their employees. And while we will have much more debate on this when we get into the substitute, we walk a very fine line when we bring pension issues to this floor.

The retirement security for American workers in most cases is one of their largest assets. It has to be treated with great respect. And all of us who have served in a legislative body, and especially here in Congress, know that we always have to deal with the law of unintended consequences. If we make one mistake, we could cost millions of Americans the right to their own retirement. So we have to be very careful.

That is why, if we look at the bill that we have before us, we make modest reforms to correct problems that we found in the wake of Enron and WorldCom, and others. We do not do a wholesale overhaul of our pension security laws, because, in honesty, it is not needed.

Now, the most substantive part of this bill would allow employers to offer to their employees real investment advice. We have over 60 million Americans who have self-directed accounts today, and most of whom have no access to real investment advice. The substitute that we are about to consider, given all of the rules they have around advice, will mean exactly what we see in the marketplace today: no advice.

Yes, we do allow those who sell products to offer advice. We do require them to provide notice to the employees of potential conflicts. We hold them to the highest fiduciary duty. If there is any difference in fees, they have to let the employee know. But our goal here is to get real investment advice into the hands of everyday, working people who want and need this advice, and they need it now. With these new self-directed accounts, if they are going to really have the kind of retirement security that they expect and that we want, they need real investment advice.

Current law, written in 1974, before the birth of the current financial services firms, barred those who sell product from giving advice. Now, if you are not in a retirement plan, and you are going to spend your money, you can get all the advice you want from all of the people in the world who sell products. But, oh, no, we cannot do that if you are in a qualified retirement plan. That is wrong. We should not lock out those firms that are the most successful firms in the country from offering their advice and their expertise to American workers. Workers do not have to take it.

Secondly, in the bill we have an above-the-line tax deduction for employees in order to go out and seek their own investment advice if they do not want what the employer offers.

Now, I think between both of these issues employees need to have options to go get the kind of advice that will benefit their own retirement security. The underlying bill is a very good bill. It had passed this House with broad bipartisan support about a year ago, and I expect that it will have broad bipartisan support today.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield 10 minutes to the gentleman from Texas (Mr. Sam Johnson) and ask unanimous consent that he be permitted to control that time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, today we have before us a pension security bill that passed the House last year with broad bipartisan support. That is the underlying bill, with two exceptions, two issues that were contained in last year's Sarbanes-Oxley bill, the 30-day notice of a blackout period and the prohibition on company insiders selling stock during a blackout period. Those issues have been signed into law. But the balance of that bill is what we have before us today. It is a reasonable and responsible approach to address the problems that were identified during our investigation of Enron, WorldCom and others. More specifically and more importantly, it does not overreach and begin to delve into areas where there are likely to be very serious unintended consequences.

The substitute that is being offered by my friends on the other side is well-meaning, well-intentioned, and we have worked closely on these issues for many years, but the fact is that if Members look at the substitute that we have before us, it will cause serious concern in the employer community, and I would suggest many employees across the country will no longer have pensions because of the onerous regulations and excessive litigation that would result if the substitute that is offered were, in fact, adopted and signed into law.

Specifically, it does, in fact, increase liability for employers under ERISA, new rights to sue, additional penalties that I think are unnecessary. The current protections within ERISA provide a solid framework for addressing grievances from employees.

Secondly, it would require every plan fiduciary to have insurance to meet whatever the size of the pension plan is. It would be expensive, costly, and would create a situation where no one will want to serve as the fiduciary; and if, in fact, they can find someone, the cost of providing the insurance will drive up the cost of providing pensions.

We have worked for years in this body to try to make it easier for businesses to set up pensions. We have tried to encourage businesses to cover more employees with pensions. The last thing we want to do is to dump cold water on this movement by again increasing cost and increasing regulation. We could talk about the regulatory bombardment in here when it comes to company insiders selling stock, regardless of what the reason is. Under this bill they would have to report it within 1 day. Employees would be getting these notices on an ongoing basis, and to what purpose? I do not know.

But, more importantly, the substitute tries to regulate corporate salaries and corporate governance issues, but through the pension system. The Congress passed the Sarbanes-Oxley bill last year that dealt with large corporate governance issues. Most all Members of this body on both sides of the aisle supported it. It was a very good bill. One could argue it might be overreaching in some areas, but by and large addressing the serious issues that were uncovered during Enron and WorldCom. I do not think that we need to readdress corporate governance issues and executive pay issues in a pension bill.

But most importantly, the substitute that we have before us guts the serious investment advice language that we have in the underlying bill. We have heard a lot today about the need for investment advice for the 61, 62 million Americans who have self-directed accounts who have been so protected by this law passed in 1974 that their ability to get investment advice is almost nil. As I have said before, the only place they can really get investment advice is from Bob at the coffee shop. What we seek to do in the underlying bill is to provide a framework and safeguards for them to get investment advice from the real experts in the industry. If they do not want to take employer-provided investment advice, the Committee on Ways and Means as part of this bill provides a tax deduction, an above-the-line tax deduction for them to go out and get their own investment advice. But I think all of us agree that having real investment advice in the marketplace for those with self- directed accounts has to happen, and the sooner it happens, the better.

But under the bill that we have before us, it says you can only get third-party independent investment advice. There is no reason to even have it in the bill because that is what you can get today. And you do not get real investment advice because, one, employees do not want to have to pay for it; and, secondly, the so-called independent advice that is out there today is generic, very generic, whatever your

age is, whatever your income is, whatever the assets in your plan are.

I would suggest to my colleagues that if we are serious about having real investment advice in the marketplace today for America's employees, that this will not get there. I would ask my colleagues and urge them to look at the substitute and vote against it.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Sacramento, California (Mr. Ose).

(Mr. OSE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to the gentleman from Nebraska (Mr. Osborne).

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, there is a lot that has been said here today about the need for pension reform. Certainly, in the wake of the Enron and WorldCom scandals and the collapse of the stock market, Congress had a duty and a responsibility to look at our pension system, and we did. That was over a year ago. Out of that we learned that there were some deficiencies in our current pension system, such as the fact that company insiders could sell the company stock during a blackout period, while employees could not sell stock in their 401(k) plan. That has been fixed and signed into law. We found that there was no notice of a potential blackout period, not enough notice to employees of these blackout periods. Again, that has been fixed, both issues signed into law in the Sarbanes-Oxley bill.

But there are other issues out there that need to be addressed, and I think the underlying bill addresses them in a fair and expansive way. With all due respect to my friends on the other side, the substitute that we have before us is nothing more than overkill.

Now, if we are worried about people's pensions in America, then people who have pensions in America ought to be really worried about the substitute that we have before us, because if the substitute were to become law, virtually no employer in America could offer their employees pensions. And that is not an exaggeration at all.

Pension plans are voluntary plans offered by employers to their employees, and the fact that they are voluntary means that we have to walk a delicate line. All one has to do is look at the regulatory impact, the legislative impact, well-meaning, well-intentioned during the 1980s that Congress and the agencies imposed on defined benefit plans. We nearly are making them extinct because of the cost, the litigation, and the regulatory nightmare that is involved with offering a traditional defined benefit plan. That is why we see this huge conversion from defined benefit plans, the traditional plan, to defined contribution plans like 401(k) plans. And nothing that we do here today, in my view, is going to slow that conversion down.

And for many of us who are concerned about defined benefit plans, the traditional benefit plans, we ought not take up the issue that is contained in the substitute that would defy the conversion to a cash balance plan. A cash balance pension plan is a defined benefit plan. Those employers and those employees are covered under the Pension Benefit Guaranty Corporation. They pay premiums to the employer, and the employee's pension is protected, and the cash balance plan is protected there. And there has been no convergence of these over the last 2 years, as there is a moratorium in effect as the Treasury Department and others try to determine what the appropriate rules should be for conversions.

Well, let us be honest. There have been over 500 conversions over the last 15 years. In virtually every single one of them, the employer made every employee whole. And it is almost impossible to find a case where an employer did not keep an employee whole. And, as we have heard before from the gentleman from Texas (Mr. Johnson), 80 percent of workers do better under cash balance plans than under traditional plans. Let us not forget, under a traditional plan, if you are a younger worker and you leave, you take nothing with you, zero. Under a cash balance plan, if you are a younger worker and you change jobs, you can take the net benefits that you have got vested and move them just like you can with a 401(k) account.

So we can sit here and castigate one or two examples of companies who tried to do it the wrong way, who fixed it, but let us not castigate the other 500 plus employers across the country who made these conversions and did them successfully, working with their employees.

When it is all said and done, Mr. Speaker, we want to encourage more employers to cover more of their employees with pension plans. We will not accomplish that goal, and that is a bipartisan goal, if we overregulate and drive up the cost of operating these plans. The substitute offered by my friends across the aisle will do just that. It is overkill. It should be defeated, and we should pass the underlying bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I am opposed to the motion.

Mr. Speaker, I appreciate the indulgence of the Members.

We all know that pension plans are voluntarily offered by employers to their employees. For those of us that have worked in the pension area for some time, we know that we have to walk a very delicate line in terms of the regulations that we put around these plans so that we do not drive employers and their employees out of the system.

We spend a lot of time on a bipartisan basis here trying to find ways to encourage more companies to offer plans to their employees. Most of those plans today would be defined contribution plans, like 401(k) plans.

The traditional defined benefit plan that we would have and all Federal employees would have is in serious trouble in America today. In 1986, we had

176,000 defined benefit plans in America. Today, we have less than 50,000, and the conversion from traditional pension plans to 401(k)- type plans is going to continue. Why? We have so overregulated and driven up the cost of offering defined benefit plans that these conversions continue.

The whole issue of cash balance plans boils down to this: Cash balance plans are a way to save defined benefit plans. Cash balance plans are those where employers pay premiums into the Pension Benefit Guaranty Corporation. Employees who have cash balance plans are protected by the Pension Benefit Guaranty Corporation. So for those of us who have tried to find ways to help save the traditional defined benefit plan, the cash balance conversions are a way to save them.

There have been over 500 conversions over the last 15 years. Virtually every single one of them have been successful, where employers have found ways to make sure that all employees are made whole. But do not be misunderstood. Eighty percent of employees benefit greater under a cash balance plan than they would under a defined benefit plan, and for younger workers who change jobs under a defined benefit plan, a traditional plan, they do not get to move anything with them, zero, but if they are vested in their cash balance plan, they can move that, and it is much more portable than a traditional plan.

What the gentleman from California (Mr. George Miller) seeks to do is to require employers to offer two plans, the traditional plan and the cash balance plan. What this means is that the employer has to continue offering both plans, which will mean we will not have conversions, and if we do not have conversions, here is what will happen: The defined benefit plans will continue to be scrapped. Let us watch when the market begins to recover and the plans are healthier, companies will eliminate their defined benefit plan and move to a defined contribution plan, like a 401(k) plan. I do not think that is what most employees in America want.

I would ask all of my colleagues, because on a bipartisan basis we have worked to make sure that these cash balance plans worked, and they worked fairly, my colleagues should also know there have been no conversions the last 2 years, and that is because there is a moratorium in effect. The Treasury Department had regulations out for comment. They got lots of comments. They withdrew them. They are continuing to work to find the right set of regulations to regulate these conversions to cash balance plans. Let us let them do the technical work.

For Members on both sides of the aisle who have worked on these pension issues in a bipartisan way, we understand that these conversions will help save these plans. The underlying bill passed this House with 209 Republican votes and 46 Democrat votes a year ago. The underlying bill is a good bill that would help protect the pensions of American workers. Let us stand up for American workers today.

Defeat the motion to recommit and vote for the underlying bill.

Mr. Speaker, I thank the chairman for yielding me time.

Mr. Speaker, I am glad you all asked us to look at this, because I want to help Americans who are working hard and saving for their retirement. They deserve more information about what is happening to their retirement plans. They deserve help in making financial decisions that can often be overwhelming. They deserve the right to diversify their money in their retirement accounts.

The Pension Security Act that we are debating today lets all Americans do all this. Unfortunately, we have been here and done this before. We passed this bill in the last Congress, but it went to the other side of the Capitol, where nothing happened. Hopefully it will be enacted this year.

The Pension Security Act gives employees the freedom to diversify their retirement savings, but does not force them to do so. Free enterprise works best when individuals have the freedom to put their money where their mouths are.

It gives employees information on the importance of diversification, but, ultimately, the individual knows their own situation better than some arbitrary rule that Congress might have imposed.

I have heard from many constituents about the fact that they do not want the government imposing caps on how much company stock they can hold. The Pension Security Act not only gives employees the freedom to diversify, but it also gives them a new tool to help them, and, more importantly, to help them understand their investments. Employees will be able to receive professional advice so they can turn to a fiduciary adviser who can help them decide what the right investments are for their individual situation.

During the drafting of this bill about 1 year ago, we worked very hard to be sure that the employee-owned companies would not be required to set aside reserves to buy back company stock that might have been subject to the diversification requirements. The diversification requirements for privately held ESOP companies would have been a direct call on capital, requiring these companies to set aside cash or obligate lines of credit for the possible repurchase of shares, rather than for building the business. I am glad we dealt with this issue fairly and quickly.

As chairman of the Subcommittee on Employer-Employee Relations, I want to add that the bill is simply reiterating current law regarding fiduciary liability during a blackout. The concept of a blackout was written into ERISA last year as part of the Corporate Accountability Act. The provision in this bill is meant as a tag-along with those changes. Employers are still not liable for market swings during a blackout period, as long as they provide advance notice of a blackout, they have a legitimate reason for doing it, and generally acting as a good fiduciary during these periods.

This bill also contains several ERISA provisions that have been blocked by arcane Senate rules from moving forward in a tax bill. This bill will expand the missing participants program at the Pension Benefits Guaranty Corporation so that 401(k) plan participants can be reunited with their money if their company ceases to exist.

The bill also simplifies the annual reports that pension plans are required to file with the Department of Labor. The new form should be only one page long, and is a step in the right direction to cutting red tape that has caused so many small businesses to simply terminate their retirement plans. Small business owners have told me that this change could go a long way to reducing the cost of maintaining a retirement plan.

There are several other good changes in this bill, but I just want to mention two more small business provisions that are long overdue.

One of them would reduce the PBGC insurance premium for the new defined benefit plan and for small plans in order to reduce costs associated with setting up pension plans. Also, current law prohibits small business owners who pay insurance premiums to PBGC from receiving retirement benefits if the business fails. We reversed that.

So this bill, in effect, is going to help Americans prepare for their financial security in retirement. It must pass. It needs to be signed into law.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, PBGC, substantial owner. This important provision was approved by the Committee on Ways and Means last week, and I am glad that we are also including it in this bill today.

This provision could help breathe life into defined benefit plans in small businesses. Right now the owners of small businesses have several disincentives to offering traditional pension plans. Aside from the fact that these plans are too expensive to maintain because of too much red tape, owners of small businesses are prohibited from receiving guaranteed benefits from PBGC should their businesses fail. It is crazy to think that small businessmen would offer traditional defined benefit plans, pay the expensive insurance premiums to the PBGC, and then be prohibited from receiving the same insurance benefit that all their employees receive if the company fails. This provision fixes that and allows owners to get some benefits from PBGC.

This bill also reduces PBGC premiums for new pension plans and for small pension plans. Those premiums are an expensive barrier to those few employers who are willing to set up traditional defined benefit pension plans. Reducing premiums could help

bring back this type of pension plan. This bill is long overdue. It should have been approved in our other body during the last session, but this time it looks like it can be and should be, for the benefit of all Americans.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania (Mr. English).

Mr. Speaker, I yield 2 minutes to the gentleman from Delaware (Mr. Castle).

(Mr. Castle asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. Isakson).

Mr. Speaker, could I inquire as to how many more speakers the gentleman has?

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 4\1/2\ minutes to the gentleman from Ohio (Mr. Portman).

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I just would like to make the statement that my friend on the other side voted for H.R. 2269, which was the original Investment Advice Act, in November of 2001.

The minority is comparing the investment advice that this bill would allow with the recently concluded Global settlement involving several Wall Street firms, the SEC, and the New York Attorney General. It is a bad comparison. It suggests they do not understand the bill or the Global settlement.

The so-called Global settlement involved claims about individual company stocks which analysts were allegedly recommending while their firms were seeking investment banking business from the same companies without telling them, individual investors, about the relationship.

H.R. 1000, which we are discussing today, is about 401(k) allocations, which mostly involve mutual funds. Mutual funds and the advisers who provide guidance about mutual funds are in no way implicated in the Global settlement. But because they also provide investment advice, the minority is tarring them with the same brush.

In addition, the Global settlement was about potential conflict of interests which were not disclosed to investors. This bill requires clear disclosure of any such relationship so that investors can make the decision themselves about whether to accept or reject the advice.

Finally, the Global settlement was just a settlement in exchange for a number of reforms aimed at making sure investment analysis is without conflict of interest. The investigators who police Wall Street have dropped their lawsuit and settled their disagreement.

I would like to also include at this time the statement from the administration on their policy: ``The administration strongly supports passage of H.R. 1000, which encompasses important principles outlined in the President's pension retirement security plan. Like the President's plan, this bill strengthens workers' ability to manage their retirement funds by giving them more freedom to diversify their investments and by providing better information to workers through improved 401(k) and pension plan statements. The bill will also permit employers to provide their employees with access to professional investment advice. H.R. 1000 would give American workers access to information through expert advisers.''

The White House strongly supports this bill. I believe it requires a ``yes'' vote.

The statement of administration policy follows:

Executive Office of the President, Office of Management

and Budget,

Washington, DC, May 14, 2003.

Statement of Administration Policy

H.R. 1000--Pension Security Act of 2003

(Boehner (R) Ohio and 54 cosponsors)

The Administration strongly supports House passage of H.R.

1000, which encompasses important principles outlined in the

President's Pension Retirement Security Plan. These

principles were included in last year's pension reform bill

that passed the House with significant bipartisan support.

The Administration looks forward to working with Congress to

ensure the legislation moves quickly through the process and

is consistent with the President's budget.

Like the President's plan, this bill would strengthen

workers' ability to manage their retirement funds by giving

them more freedom to diversify their investments and by

providing better information to workers through improved 401k

and pension plan statements. This bill will also permit

employers to provide their employees with access to

professional investment advice. H.R. 1000 would give American

workers access to information through expert advisers, who

assume full fiduciary responsibility for their counsel and

disclose relationships and fees associated with investment

alternatives, so that they can make better retirement

decisions. The bill also contains other important provisions

that will help strengthen America's private retirement

system.

The Administration will oppose legislation that discourages

employers from sponsoring and making contributions to

retirement plans for American workers and their families.

Pay-As-You-Go Scoring

The Budget Enforcement Act's pay-as-you-go requirements and

discretionary spending caps expired on September 30, 2002.

The Administration supports the extension of these budget

enforcement mechanisms in a manner that ensures fiscal

discipline and is consistent with the President's budget.

OMB's cost estimate of this bill currently is under

development.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, we just heard about IBM and some of the other large companies. But guess what? They fixed the problem; so there is no longer a problem. Why are we talking about it? Because all of this stuff is voluntary anyway.

The Democrat substitute proposes to limit the types of defined benefit plans that companies can offer. Specifically, the substitute limits companies in converting to cash balance plans even though there is substantial evidence that 80 percent of workers fare better under a cash balance plan. The Democrats are attempting to force companies to stay with an outdated, arcane pension system that does not really work in today's market.

We need to allow companies the freedom to provide the best possible benefits to their employees with advice.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I am glad that was brought out. All of the reasons to not vote for this substitute, we just heard them. The Democrat substitute unwisely expands remedies available under ERISA. Under the Democrat substitute, employers, administrators and service providers can expect a wave of new litigation from participants alleging economic and noneconomic losses stemming from ERISA violations. It can only lead to higher costs. Employers will become more reluctant to offer retirement savings plans to their workers. ERISA already provides for comprehensive penalties and enforcement mechanisms in the case of wrongdoing.

The Democrat substitute also tries to reform salaries and corporate governance through the guise of pension reform. These provisions regarding corporate compensation are not really about pensions; they are about punishment for corporations.

The Democrat punitive corporate provision will not enhance pension coverage or protection for one rank-and-file member. Instead, it will only make it likely that corporations will be discouraged from offering pensions because of the complex and heavy-handed pension rules.

Mr. Speaker, I urge a vote against the Democrat substitute.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I thank my friend for yielding me this time.

My colleagues, how does one get on the agenda of the United States House of Representatives? If you are in the financial industry and you are interested in changing the rules for giving pension advice, you can get on the agenda. If you are one of a plethora of special interests that is interested in changing the Internal Revenue Code, you can get on the agenda. But if you are one of the millions of people suffering unemployment in this country and you want this House to take up the question of whether your unemployment benefits ought to be extended, you cannot seem to get on the agenda.

Now, I know that there are people who believe that some of the people who are on unemployment are not trying hard to find a job, and I am sure there are some for whom that description is accurate; but I know this is true: for every three Americans looking for a job today, there is one job. One. And there are hundreds of thousands of people who at the end of this month are going to lose their ability to pay their bills because they are one of the two people who cannot get that one job out of every three people who is unemployed.

It is the business of this country, and it should be the business of this House, to debate whether or not an extension of unemployment benefits is justifiable for those people. I feel strongly that it is. I know there are Members who believe that it is not. I respect their views. The majority ought to respect our right to bring to this floor, before this House and before this country, the question as to whether those benefits ought to be extended.

In many households, Mr. Speaker, this is not some theoretical debate. It is a question of whether you will be able to pay your rent on the first of June, whether you will be able to pay your other bills on the first of June. Let us do the people's business. Let us put on the agenda of this House the question of whether to extend unemployment benefits.

Oppose the previous question.

Mr. Speaker, I thank the gentleman from California for yielding me this time. I rise in strong opposition to the bill that is on the floor.

There have been two trends taking place in American life in recent months and years. The first is an outbreak of conflict of interest in the financial world of America. A few days ago, the attorney general of New York State, together with other law enforcement officials, announced a global settlement against a large number of investment firms because those firms were rather routinely giving advice that was conflicted and, therefore, not in the best interests of investors. The common practice was that the investment banking side of the firm was out hawking certain securities and trying to sell certain deals. And then the advice side of the firm was telling the retail clients of the firm to buy into those very same deals. It became obvious that the advice being given by these financial houses was not in the best interests of the investor; it was in the best interests of the financial house.

It was a scandal that has rocked Wall Street to its foundations. It has caused some significant problems in the market. It caused this Congress to take significant steps in the Sarbanes-Oxley legislation of last year. It was an unwelcome intrusion into the marketplace of American finance.

The second trend is that more and more Americans have become their own board of trustees for their own pension fund. Twenty-five years ago, the way most people's pensions were is that they worked for an employer, the employer put money into a pension fund, there was a board of directors or board of trustees for that pension fund that invested the money, and, when you retired, every month you got a check based upon how much money you were entitled to under that plan.

In recent years many employers have shifted to self-directed accounts. Commonly these are known as 401(k)s, where instead of the employer deciding how the money is invested, the constituent, the individual, decides how the money is invested, and, in effect, our constituents become their own board of trustees for their own pension plans. There is today $1.8 trillion of American pension money invested in these 401(k)s.

Now, one would think that when we have a trend of tremendous conflict of interest problems in the financial industry and a huge jump in the number of pension dollars in self-directed accounts that the House would be about the business of trying to find ways to assure that we eliminated any possibility for conflict of interest when people give advice to pensioners and workers as to how to invest their pension funds. In fact, since 1974, that has been

the law. It is illegal under present law for a conflicted adviser to give advice.

The bill before the House today lifts that prohibition and makes it legal. In other words, what the attorney general of New York and the securities agencies of the Federal Government labored so hard to make unlawful in the rest of the economy, the House is now trying to make lawful with respect to people's pension funds.

Common sense tells us we want to go in the other direction. We want to reduce or eliminate conflicts of interest in investment advice. This bill authorizes and legalizes those conflicts of interest. It makes no sense. If one liked the Enron scandal, one will love what will happen if conflicted, unfettered investment advice visits the $1.8 trillion of America's pensions held in these funds.

Mr. Speaker, this bill should be rejected, and the Democratic substitute that we will debate later should be adopted.

Mr. Speaker, as the designee of the ranking member, I offer an amendment in the nature of a substitute.

Mr. Speaker, I yield myself 2 minutes.

I would urge our colleagues to support this well-reasoned and well- thought-out Democratic substitute. It differs in many ways, and it is an improvement in many ways from the underlying bill. I would like to highlight a few of those improvements, first in the area of investment advice.

This substitute does provide for investment advice for workers and pensioners, but it clearly favors independent investment advice. It provides that workers and pensioners will receive advice from qualified individuals who do not have an interest in the outcome of the advice that they are giving.

Second, this substitute, unlike the underlying bill, deals with the problem of cash balance plans. Cash balance plans, which I believe have been improperly used in many cases, have become a nightmare for pensioners, where people who thought that they had a guaranteed income at a set level for the rest of their lives have confronted the nightmare scenario where they, in fact, have much less, sometimes as much as 50 percent less than they thought they had in their pensions.

This substitute contains a very simple provision that empowers each employee to choose between conversion of his or her pension to a cash balance plan or retention of his or her pension in its more traditional form. This bill puts a stop to the secret transactions involving executive pension compensation and pension provisions. This substitute also requires that in collective bargaining negotiations, that companies be candid and comprehensive in their disclosures to bargaining units with whom they are negotiating.

Very recently in the problems regarding American Airlines, we saw the situation where unions received significant misrepresentations as to the financial provisions of their employers and agreed to massive cutbacks in their compensation packages based upon those misrepresentations. This substitute would outlaw such a provision.

In summary, the substitute addresses the underlying problems and causes of the Enron scandal. I would urge its adoption.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the distinguished gentleman from California (Mr. George Miller), the author of the substitute.

(Mr. GEORGE MILLER of California asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 3 minutes to the gentleman from Vermont (Mr. Sanders), who is the author of a key provision of the substitute regarding the prevention of the abuse of cash balance plans.

(Mr. SANDERS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, may I inquire how much time we have left on our side.

Mr. Speaker, I yield 30 seconds to the gentleman from Vermont (Mr. Sanders).

Mr. Speaker, I yield 2 minutes to the gentlewoman from California (Ms. Solis), who speaks with passion and conviction for people struggling to get ahead around our country.

(Ms. SOLIS asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield 2 minutes to the gentleman from Oregon (Mr. Blumenauer).

Mr. Speaker, I yield such time as he may consume to the

gentleman from California (Mr. George Miller), the author of the substitute.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I would urge our colleagues to vote in favor of the Miller substitute. If there is one asset that should be sacrosanct, if there is one asset that should be solid as a rock, it is our pensions. Prior to 1974, there were numerous problems with pensions as corrupt or incompetent boards of trustees mismanaged workers' funds.

Twenty-nine years ago this Congress did something about that by passing the ERISA law. Since then, scandals and misappropriation of pension funds have been few and far between. They have been rare, and pensions have been largely safe.

But there is a new kind of pension. It is a self-directed pension account, commonly called a 401(k). The problem with the 401(k) has admittedly been that workers who do not have sound advice have sometimes made unsound decisions and lost their money.

There is no dispute that there is a need to provide solid and sound investment advice, but there is a strong dispute about how to do so. The substitute provides for advice; but frankly, it favors independent advice so the advice given is not given from the point of view of self- interest. The substitute provides a remedy.

When someone entrusted with fiduciary responsibility under the ERISA law does wrong by the pensioner or by the worker, there are consequences. My friend from Texas a few minutes ago said that there would be an expansion of remedies under ERISA. He is absolutely correct, because as the workers at Enron can tell us, the remedies that the present law contains do not do them very much good at all when they see their future security evaporate in the new pension scandals of our time.

The Miller substitute provides for sound investment advice, it ceases the practice of fraudulent misrepresentation during collective bargaining, it stops secret pension deals on behalf of highly compensated employees and executives, and it provides for meaningful remedies for those who have been wronged. It stops the abuse of cash balance plans and makes sure that every American pensioner is made whole. It is a realistic and meaningful response to the scandals of the last 24 to 36 months.

Mr. Speaker, I would urge all of my colleagues to vote ``yes'' in favor of the Miller substitute.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. Speaker, I yield myself 5 minutes.

Mr. Speaker, it is kind of astonishing 2 years after Enron and WorldCom we are finally, again, taking up a bill that presumably is supposed to deal with the particular issues that Enron and WorldCom raise. Unfortunately, I do not think the bill does, which is really tragic in America today.

Almost every study I have seen and many people have seen over the last 5 years has indicated that the baby boom population, which is now retiring, does not have adequate retirement benefits for their future. And as a result of that, many Americans are going to be working longer, even though the unemployment rate is going up.

This legislation on the floor presented by my Republican colleagues unfortunately does not address the issue of pension benefits and retirement security for Americans that are about to retire. Let me just give you some examples of that.

The gentleman from Ohio (Mr. Boehner) talked about, well, we are going to allow independent investment advice for some of these companies for their employees. The only problem is it is kind of a ruse, because, in fact, this legislation will allow a conflict of interest for those investment advisers that they will then be able to make misleading information and statements to their employees.

Secondly, which is probably even more difficult to understand, is that this legislation, believe it or not, holds harmless from liability the employer when these advisers give misleading advice or fraudulent advice. So the worker is basically left without any remedy or resources and at the same time probably will be able to get advice that is misleading and full of conflicts of interest.

It allows cash balance plans. The only problem is if you are 50 or older, you can end up losing your retirement benefits because, as all of us know when you are in the workforce, the closer you get to retirement the greater benefit you get; but if you move to a cash balance, that is eliminated. And it does not give the employee the option to say, I want to go into a new plan or stay in my old plan. So automatically the employee is going to be damaged.

Our substitute, which will come up later, will address that issue, just like it will address the issue of independent advice.

In addition to that, which is somewhat surprising, is the whole issue of executive compensation, the whole issue of executive compensation which was the issue of Enron and WorldCom. It states that in terms of the 401(k) plan that the Enron employees had, they had to hold that Enron stock in there for an indefinite period of time.

The gentleman from Ohio's (Mr. Boehner) bill says you can take it out after 3 years. The problem is it is discretionary with the employer. So Enron could have made them keep the money in beyond 3 years, and that would have resulted in the same problem. So this bill does not do anything to overcome the Enron problem. In fact, the Attorney General of the State of New York, Eliot Spitzer, said, ``This legislation opens a loophole that will sharply erode, rather than enhance, safeguard for employees seeking independent and untainted advice how to invest in their retirement savings.''

The Attorney General of New York has said this; this legislation will actually do more harm than good.

Let me just conclude by making a couple other observations in my time, Mr. Speaker. This bill also would currently allow Ken Lay, the CEO of Enron Corporation, to keep his retirement benefits even though the company had filed bankruptcy and even though almost every Enron employee ended up losing their entire retirement benefits because most of their stock was held in Enron company stock in their 401(k) plans. This bill would have allowed that to continue on.

In addition, this bill would do nothing to help the American Airline employees, and all of us know the American Airline executives attempted to preserve a golden parachute for themselves and at the same time ask their employees, which is somewhat ironic, to cut their benefits.

So this bill does not address some of the major issues that I think the American public are concerned about in terms of its own income security.

Let me just say this, in terms of coming up with legislation to protect income security and fraud, we need to reexamine this legislation. Our Democratic substitute to be offered by the gentleman from California (Mr. George Miller) will address these issues, but this bill does not.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the distinguished gentlewoman from the State of Connecticut (Ms. DeLauro).

Mr. Speaker, I yield myself 30 seconds.

I would just like to say to the gentleman from Delaware, I know he read the bill, but the problem with the bill that the Republicans have offered us is it actually makes the situation worse. Instead of giving independent advice, as the gentleman stated, it actually cloaks it in independent advice, it really does not.

What it basically does is allow conflicts of interest and hold harmless to the employer, and at the same time I think the whole issue of diversification, no, only subject to the whims of the employer will that be allowed. Enron would have not allowed it. So nothing would change. That is the problem.

The Democratic substitute, I am sure the gentleman has read that, will take care of these problems that the gentleman has raised and talked about, but not the Republican bill.

Mr. Speaker, I yield 2\1/2\ minutes to the distinguished gentleman from Massachusetts (Mr. Delahunt).

Mr. Speaker, will the gentleman yield?

Mr. Speaker, it allows them to do this, but with a potential conflict of interest, obviously the disclosure conflict of interest, but the problem is that the employer is held harmless from liability. That is what the problem with the bill is.

Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Cardin), a distinguished member of the House Committee on Ways and Means, ranking member of the committee, who will actually address this issue.

Mr. Speaker, I yield 2\1/2\ minutes to the distinguished gentleman from California (Mr. Becerra), a member of the House Committee on Ways and Means.

I have an additional speaker here.

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Massachusetts (Mr. Frank), the ranking member of the Committee on Financial Services.

Mr. Speaker, I yield 2\1/2\ minutes to the distinguished gentleman from Washington (Mr. McDermott), a member of the House Committee on Ways and Means.

(Mr. McDERMOTT asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself the balance of my time, 1 minute, to close.

If I may, Mr. Speaker, because a lot has been said to address the issue of the independent advice that my colleagues seem to be really hung up on, it is a question of definition. The way they say independent advice is that if the independent adviser says I may have a conflict of interest, one time, then after that it is Katy, bar the door. They can say whatever they want.

Most employees do not just work 3 days a week, on Tuesday, Wednesday, and Thursday, like we in the House of Representatives do. They have kids to take to school. They have a lot of obligations. They do not remember when people say I may have a conflict of interest. And as a result of that, it is meaningless what my colleagues on the other side of the aisle are doing. There will be conflicts of interest; but the real problem is, obviously, that the employer will be held harmless from liability when the conflict of interest actually does damage to the employee.

I am just going to conclude by saying this. This bill will not help the average American, this will not help individuals who have 401(k) plans, and it definitely will not help the baby boom population that is about to retire now and who has inadequate funds for their income security. We need to address this in a much larger context and actually not do the kinds of damage that this bill will do under the so-called ruse of being good government.

This is not a good government bill. It will do more damage than the status quo.