Small Company Capital Formation Act of 2011

Mr. President, I ask unanimous consent that at the conclusion of the remarks of Senator Merkley and Senator Bennet, I be recognized.

I thank the Chair.

Mr. President, I commend Senator Merkley and Senator Bennet for their extraordinary work, indeed, in collaboration I believe with our colleague Senator Brown from Massachusetts to make significant improvements in the crowdfunding provisions

of the House bill. As Senator Bennet and Senator Merkley have indicated, this represents a potentially very productive way to raise capital, and they have provided protections that will ensure investors in this process are not disadvantaged, and I commend them for that.

It addresses one of the significant issues in the House bill but, frankly, not all the significant issues. There are some extremely glaring, I think, provisions in the House bill that we attempted to address in the Reed-Landrieu-Levin substitute. That substitute amendment, although it received a majority of votes, did not receive enough to achieve cloture to be the bill we are now considering. We are now considering the House bill.

I have an amendment to that House bill that addresses one of several difficulties with the House legislation. Investors, when they buy stock in public companies, expect routine disclosures. They expect to know on a quarterly basis, and in a very real sense on an annual basis, what is the company doing? What are the prospects of the company? All that goes hand in hand with the widely dispersed ownership of a public company. The House legislation would allow many companies with a substantial number of beneficial shareholders, the actual owners, the real owners of the stock, the ones who can vote the stock, the ones who get the dividends, the ones who vote on the proxies or directly for the leadership of the corporation--it would allow them to remain dark. This might be appropriate for some companies that have a relatively small base of real owners, but the way the House has drafted this legislation it could risk allowing a significant number of larger companies to go or remain dark.

The Securities Exchange Act of 1934 set up a system of public reporting. Beginning in 1964, the SEC required that companies with at least 500 holders of record--and at least $10 million in assets, to follow the routine reporting requirements under the securities laws. The decision was made that at that point a company does have a size that is adequate and necessary so that they should be disclosing.

The issue that is motivating the House is this 500-person requirement. It was adopted, as I said, in 1964. There is a sense that the limit is probably too low. The House version is 2,000. We make no attempt to change the House limit of 2,000 now, the new limit. But what we want to be sure of is that the individuals who are being counted are not the record holders, they are the real owners, the beneficial owners. In fact, many companies are very astute and assiduous in assuring that these record holders fall beneath this 500 level.

There are many large companies, well-known companies, as I mentioned in my previously remarks, that have thousands of beneficial owners but still have, on their own records, less than 500 holders of record. The SEC defines record holders as ``each person who is identified as the owner of such securities on records of the security holders maintained by or on behalf of the issuer.''

Holder of record is very direct. It is the shareholders who are recorded as such on the books of the company. This is where the term ``beneficial owner'' comes from. In such instances, the shares are held of record by a third party, usually a broker, on behalf of the shareholder. For example--and this is one of many examples--if you buy shares from Charles Schwab, that discount brokerage firm would likely serve as the record holder and you would be the beneficial owner. It is your money; you paid for it. It is your vote because you are a beneficial owner. It is your right to sell the shares. But as far as the company is concerned, the holder of record is the broker, Charles Schwab.

I think we have all been familiar and all received in the mail a big package of proxy materials from our broker. It is not, in many cases, directly from the company. It is from the Wells Fargo Advisors, it is from Schwab Advisors, et cetera, because they are on the records of the company as the ones who are the record holders. They distribute the material to beneficial owners.

The consequence is that for companies that may have a very few or relatively few record holders, they have thousands and thousands of beneficial owners. Those are the individuals who will lose out if the company decides, under the House bill, to suddenly go or remain dark, to avoid public reporting.

As I have indicated before, most investors today do so through intermediaries--through brokers, through others. As a result, they would not necessarily be counted as a record holder. Record holders-- the brokers, the large entities--are increasingly purely passthroughs. They are agents with no economic interest in the company, no voting rights. Those are held by the beneficial owners. That is why I believe that beneficial ownership should be the test for whether companies have to report under the Securities Exchange Act. It should encompass those who have the power to sell and/or the power to vote the shares. They are the actual shareholders. They are the individuals who management is committed by fiduciary duties to work for. So I think it is appropriate that when we raise this level to 2,000 we also ensure that it is not simply record holders, it is the beneficial owners--the real owners, for want of another term.

There also could be, for example, two identical companies with identical numbers of beneficial owners but they might have different numbers of record holders because of the way the shares are held--in trust or by a broker, et cetera. And one company reporting and one not reporting does not seem to be to be a fair or efficient way to do business.

Companies already have to obtain numbers of beneficial owners from brokers and banks in order to know how many copies of annual reports and proxy materials they have to print, so every company knows about how many beneficial numbers they have. They have to provide the proxy material through the brokerage or bank to the beneficial owners, so they know very well--in fact, quite precisely--their beneficial ownership, their real shareholders.

But using record level as the trigger to remain private, to avoid public reporting, to me again is the wrong approach. My amendment would clarify the definition in this new shareholder threshold section of the underlying bill, and ensure that companies are not avoiding these public reporting requirements by using a threshold of 2,000 record holders if they have 2,000 or fewer beneficial owners. If this is a truly small business that has 1,500 individual shareholders, beneficial owners, and they want to remain dark--that seems to be something that we certainly would countenance, and with my language it would be possible to do so.

I think this approach makes it fair for everyone. It also doesn't frustrate the expectations of a person who buys a share of nationally known stock that is publicly reported and gets a 10 Q and every year the 10 K, and suddenly they don't get anything. They wonder what is going on at the company. Maybe the company merges with another company, creates a new company, and now has less than 2000 holders of record. I think that is not an approach we should countenance. I think transparency and accurate information are critical to the success of our capital markets, and I think this legislation will do that. Requiring quarterly reporting of firms with a large number of shareholders--real shareholders, beneficial shareholders--protects investors while at the same time improving overall market transparency and efficiency. From this information, those individual analysts and brokers who follow companies are able to determine their recommendations, are able to advise clients that you should buy this company, it is a good company.

When the company goes dark, that information source dries up and it is harder for individuals, brokers, investment advisors to give advice. I think this would not be helpful to the market. In fact, I think it might, ironically, impede capital formation, not facilitate capital formation.

There is one important point that has to be stressed, and that is my amendment does not affect the employee exemption in the underlying bill. The House bill has a blanket exemption for counting owners of the company for employees. We have reviewed this exemption in our legislation with eminent experts, including Prof. John Coates at Harvard Law School, and he concurs that employees would not be swept up into being

counted because they happen to receive compensation through stock in their company.

There are many companies--WaWa, Wegmans--that want to have active employee participation in the company through stock plans but are private companies and want to remain private. This should allow them to do so.

Again, my legislation makes no attempt to change the underlying House bill, which gives a very broad blanket exemption for employees, who are exempted from the shareholder threshold.

There is another aspect here, too, and that is ESOPs, employee stock option plans, because they do acquire stock on behalf of employees. We specifically asked Professor Coates, one of the preeminent experts in securities law, whether this would inadvertently trigger or inadvertently complicate the beneficial ownership rule. His opinion is that ESOPs typically count as one record holder and one beneficial owner because they do not pass through the votes or the right to direct sales. They do not have the characteristics which are typical of the beneficial owner: the right to vote and the right to sell the stock. They maintain those rights. They do not delegate those to the individual employees who might be part of the pool. So Professor Coates' view is that ESOPs also would be exempt from being counted, if you will, as more than one entity.

We have also reached out to the Securities and Exchange Commission and we have received some assurances, from talking to Meredith Cross of the SEC, that, given their rulemaking power, they have within the ambit of their power in implementing this legislation the ability to clarify any of these points. So that not just employees who receive stock through an employee plan, but an ESOP and other entities that hold stock--not on behalf of their investors but have the right as an entity such as a venture capital fund or a private equity fund--have the right at that fund level to vote and to direct the sale of the shares and receive the dividends--that they, too, would be counted as one entity.

Professor Coates, as I said, believes this will not affect the venture capital/private equity firm structures, which would typically count as one shareholder, whether of record or beneficially. The VC firm or PE firm does not pass through votes or the right to direct sales to its own investors, and the same might be said with mutual funds, pension funds, et cetera--the primary passthrough which would be counted as brokers and banks, who hold on behalf of beneficial owners.

What we have, I think, is legislation that recognizes the need to increase the number adopted in 1964, but also to recognize that the real owners of companies far exceed, in many cases, the holders or record, and that these real owners depend upon the routine reporting that is required under the Securities Exchange Act so they can be informed, so they can follow their stock. Indeed, the analysts who look closely at these companies, who make recommendations to buy and sell, also need this type of information. For this reason I have proposed this amendment. I think it is something that improves the bill. It was included in our substitute which did not receive 60 votes to pass cloture but did receive the majority of votes in this body. I think it is something, again, that will improve this legislation. I would not hesitate to add that many more improvements are necessary, but certainly this would be an improvement.

I would note the absence of a quorum.

Mr. President, I rise, along with so many colleagues, to pay tribute to Senator Barbara Mikulski, an extraordinary woman and Senator, someone who has become the longest serving woman in the history of the

Senate, indeed, in the history of the Congress. She surpassed, on January 5, 2011, the record of Republican Senator Margaret Chase Smith as the longest serving Senator. Just this Saturday, she became the longest serving woman in the history of the Congress, surpassing the tenure of Edith Nourse Rogers, a Republican Congresswoman from Massachusetts, who served in the House from 1925 to 1960.

Senator Mikulski is the first female Democrat to be elected to the Senate in her own right in 1986. She is a woman of many firsts. She is indeed the dean of the Senate women--I would actually say a dean of the Senate, with her great energy, her great eloquence, and her great passion, particularly for those who are often overlooked in our society. She comes at it honestly. She was a social worker in Baltimore, helping at-risk children and educating seniors about Medicare before being elected to the House of Representatives.

She has taken that concern for the vulnerable and a particular passion for the State of Maryland forward every day she has served in the House and Senate. She has served on numerous committees. She is a subcommittee chairperson on the Appropriations Committee--Commerce- Justice-Science. She has devoted herself to those issues, and many more. She serves on the Select Committee on Intelligence and has been a key member of the Senate Health, Education, Labor, and Pensions Committee. She has left her mark on a broad range of programs that touch each and every American family. She has been particularly active in women's health, ensuring that women were included in NIH clinical trials, where in the past they were ignored.

Since one cannot ignore Barbara Mikulski--which is virtually impossible--she made it a reality that they cannot ignore women in NIH clinical trials, requiring Federal standards for mammographies, ensuring uninsured women have access to screenings and treatment for breast and cervical cancer. She increased research dollars for Alzheimer's and enhanced the Older Americans Act.

She has been, since her first days in the House of Representatives, at the forefront in advocating for better health care and education particularly for the most vulnerable among us. She has been a champion of national service, understanding that in a great country one has to contribute as well as benefit.

She said one of the things she is most proud of--in her words-- ``strengthening the safety net for seniors by passing the Spousal Anti- Impoverishment Act. This important legislation helps keep seniors from going bankrupt while paying for a spouse's nursing home care.''

That is a fitting and representative example of her service. Throughout her service, she has maintained national priorities but has never taken her eye off Maryland. She commutes every evening back to Baltimore. She works hard to ensure that the people in Maryland benefit because of her activities.

I also thank her for the kindness and help she has given me personally--her concern, for example, with the fishing community in Rhode Island, which is under her jurisdiction on the Appropriations Committee, and in other ways. She has been terribly important and kind to us. She was instrumental in helping us to secure funding for the HOPE VI project in Newport, RI, which has created extraordinary beneficial housing for a mix of incomes in Newport. It is one of the most attractive as well as one of the most stable communities I think anyplace in the Nation. She has been there to help us constantly.

I could go on and on, as my colleagues have said. I simply want to say at this special moment in Senator Mikulski's career, we thank her, admire her, respect her, and she has set a great example for us. In the days ahead, she will not only continue to inspire and sustain us, she will continue to sustain and lead in her State.

I yield the floor.

Mr. President, this Friday the Nation observes an anniversary that most Americans would prefer to see removed from its calendar. I am talking about the second anniversary of the passage of the President's health care law. Rather than celebrate this day, it is one that citizens and taxpayers have come to rue and regret. The process by which Obamacare became law was an affront to republican principles of democratic self-government. The substance of this law is an historic threat to the liberties our Constitution was designed to secure.

A decent respect for the opinions of the American people cautioned against passing this law on a purely partisan basis. Yet in spite of the clear opposition of the American people to this massive expansion of government power, and to its historic spending and tax increases, the President and his congressional allies were determined to jam this bill through the Congress.

The architects of this strategy, if not the party loyalists who carried it out against the wishes of their constituents, sleep easy at night having done so, because they knew that this was a once-in-a- generation opportunity, the crowning achievement of the liberal bureaucratic state. A takeover of the Nation's health care sector and its top-down regulation by Washington had eluded Democrats for over 70 years.

The economic downturn of 2008 changed that. With the election of President Obama and significant majorities in the Congress, the left was not going to, in the words of the President's Chief of Staff, ``let a crisis go to waste.'' What this strategy meant in practice was that Democrats would advance a radical liberal agenda whether the American people supported it or not. That is the anniversary we are observing this week, and it is a dark spot on our Nation's history, in my opinion.

The Obamacare episode showed a fundamental disrespect for the opinions and constitutional common sense of the American people. Faced with growing unrest and real concerns about the impact of this law on families, the economy, and access to health care, the law's proponents assumed that the American people were too dumb to get it; that once Obamacare became law, the American people would come to love it, as well as the benefactors who gave it to them. That is what they thought. As Speaker Pelosi explained: We have to pass the bill so you can find out what is in it.

The great liberal conceit was on full display in the process that led to this bill becoming law. We know better than you, they said. We can plan one-sixth of the American economy, and you will eventually come to like it.

Well, as we all know, the American people had something else in mind. They reminded Congress and the President that in this country the people are sovereign. They stood up as free men and women rejecting Obamacare before it became law and refused to embrace it afterwards. And as their understanding of the law has deepened, they have remained constant in their commitment to full repeal. According to a Rasmussen poll this week, over half of Americans support the full repeal of Obamacare.

Next week, the Supreme Court will hear oral argument on the constitutionality of this misguided law. In arriving at their decision later this year, they will consider Obamacare through the prism of past precedents and the

Constitution's original historic meaning. But the Justices of the Supreme Court are not the only ones evaluating the constitutionality of this law. The American people and citizens of this Nation have their own obligation to consider whether this law comports with our Constitution and principles of limited government, and on that the verdict is already in. According to a recent Gallup poll, 72 percent of American adults, including 56 percent of self-professed Democrats, believe that the law's individual mandate is unconstitutional.

The average American who opposes this law on constitutional grounds might not be a law professor or an appellate advocate, but those citizens and taxpayers understand our Constitution was designed to guarantee liberty and that it did so, in part, by limiting the powers of the Federal Government and maintaining the sovereign powers of the States.

They know the unconstitutionality of ObamaCare runs far deeper than the onerous individual mandate. The law is, at its core, a violation of our most deeply held constitutional principles.

It undermines personal liberty and puts more power in the hands of the Federal Government. In the interest of advancing what the left views as a constitutional right to health care, they undermine actual constitutional rights to life, liberty, and property.

The law's mandate for abortion-inducing drugs undermines sacred rights of personal conscience and religious liberty.

Its expansion of Medicaid fundamentally transforms the relationship of the States to the Federal Government, undercutting the ability of those sovereign communities to make basic decisions about the welfare of their citizens by crowding out spending for police, infrastructure, and education.

The American people might not have submitted complex legal briefs in the Supreme Court litigation, but their conclusions about ObamaCare possess a unique and powerful wisdom. The people of Utah and the rest of this country understand the very DNA of ObamaCare--a commitment to more government control, the empowering of an already unaccountable administrative state, and an assault on free markets--is unconstitutional.

This was not what President Obama promised the American people. The President couched this government takeover of the Nation's health care sector as a modest reform designed to reduce costs.

When he spoke before a joint session of Congress in September of 2009 to push for his plan, the President promised it would ``slow the growth of health care costs for our families, our businesses, and our government.''

The President swung and missed on all three. According to the President's own Actuary at CMS, national health expenditures would increase by $311 billion over the law's first 10 years. This comes as no surprise to the American people. The President's health care law promised all sorts of new free care. But we all know, contrary to the repeated assertions of President Obama and his administration, nothing in life is free.

The bill will eventually come due for all this so-called ``free care,'' and it is taxpayers who will pay that bill.

According to the Congressional Budget Office, ``Rising costs for health care will push Federal spending up considerably as a percentage of GDP.''

This is not what the President and his allies promised. We were promised lower costs. What we got were higher costs, more Federal spending on health care and, with it, more taxes and more debt.

When fully implemented, ObamaCare authorizes $2.6 trillion in new Federal spending over 10 years. It will increase premiums by $2,100 for families forced by ObamaCare to purchase their own insurance. Its Medicaid expansions will impose $118 billion in new costs on the States.

It will increase spending on prescription drugs, physician and clinical services, and hospital spending. It will increase the deficit by $701 billion over its first 10 years.

How does the President propose to pay for this? Here is how: He will pay for it by selling more Treasurys to China. He will pay for it by increasing taxes and penalties by over $500 billion, and American workers will ultimately pay for it with 800,000 fewer jobs than would have otherwise existed.

This is not the story the President or the Democrats in Congress responsible for this law want the American people to hear. So they will attempt to spin their way out of it.

In a memo obtained by the press last week, the advocates of ObamaCare laid out their strategy to sell the merits of this misguided law prior to oral arguments at the Supreme Court.

This week was designed to lay out all the great things provided by ObamaCare. But, naturally, that memo mentions absolutely none of the costs. It doesn't mention the cost of these benefits for Federal taxpayers. It doesn't mention the costs for employers and workers. It doesn't mention that the law could lead to as many as 20 million Americans losing employer-sponsored health benefits by 2019. It doesn't mention the impact the $\1/2\ trillion in tax increases and penalties will have on the economy, and it doesn't mention the harm this law does to our Constitution and its principles of republicanism, personal liberty, and limited government.

I wish I could say I was surprised, but I am not. ObamaCare is merely the capstone to a generations-long liberal project that has attempted to convince citizens that they can have their cake and eat it too. They can have all the benefits of an ever-expanding welfare state, and nobody--or only the very rich--would have to pay for it. ObamaCare exploded this myth. It is the culmination of generations of government expansion, and it shows once and for all that we are all going to be paying for the liberal welfare state.

Taxing Warren Buffet is not going to cut it. All American families will pay for this $2.6 trillion spending law one way or the other. After centralizing control of the Nation's health care system in Washington, DC, and putting health care decisions into the hands of government bureaucrats, we will all pay for it through higher taxes, less opportunity, and diminished access to care.

Our children are going to have to pay for it, as a nation conceived in liberty is increasingly burdened by an unsustainable national indebtedness; that is, unless the American people get the final word on this. They certainly should.

I believe in the American people. I know what my fellow Utahans think about the President's health care law. No less than legislators or Justices, they take the Constitution seriously. They know this law is unconstitutional. They know what it does to free markets and to free men and women. They know that if this law is constitutional, then there are effectively no limits on what the Federal Government can do. They know this law has to go. I look forward to showing it the door.

Mr. President, I came here to talk on another matter, but I wish to take a few minutes to talk about my friend Barbara Mikulski. We have served a long time together. When she came to this body, I think I may have been chairman of what was then called the Labor and Human Resources Committee, now the Health, Education, Labor and Pensions Committee.

From the day she got on that committee, she made a difference in every way, not just for women but for every single American in this country. I have a tremendous amount of profound respect for Senator Mikulski and what she has been able to accomplish.

Let me mention one thing. Back in the early 1990s, she and I worked together on what was called the FDA Revitalization Act. That act was a very important one, because we had the FDA spread out all over the Greater Washington, DC, area, probably 30, 35 different offices, some of which were in converted chicken coops. It was ridiculous to have these top scientists in anything but a centralized location with top computerization and all of the other scientific instruments they need to do this work for the American people. I have to say that Barbara Mikulski played a pivotal role in helping to

develop that tremendous facility. I want you to know that I do not think it would have been developed without her effort and her dogged work to make sure that we now have a centralized--and it still needs improvement but centralized FDA campus that literally is saving the lives of millions of people and making the lives of millions of people better.

I could go on and on. But I have a lot of respect for my distinguished colleague from Maryland. I would feel badly if I did not get up and tell people how much I do respect her. She believes in what she does. She loves this body, most of the time, I think. And she cares for her follow Senators. We care for her. I want her to know that.

Mr. President, today I wish to pay tribute to our dear friend and colleague, the senior Senator from Maryland, Barbara Mikulski. This week, Senator Mikulski became the longest-serving woman in the history of the United States Congress. That is quite a milestone and I want to congratulate her on her many years of devoted service to the people of her home State.

Senator Mikulski is a Maryland native. Descended from Polish immigrants, she was born and raised in Baltimore. She attended college at both St. Agnes College in Baltimore and the University of Maryland.

After several years of working as a social worker in the Baltimore area, Senator Mikulski began her political career in 1971 when she was elected to the Baltimore City Council. She served there for 5 years before running for Congress in 1976. For 10 years, she represented the Third Congressional District of Maryland. Then, in 1986, she was elected to serve here in the Senate.

Although the milestone we are recognizing today is a significant one, it is not the first for Senator Mikulski. Indeed, throughout her time in the Senate she has been a pioneer for women in public service.

For example, Senator Mikulski was the first woman elected to statewide office in Maryland. She was also the first Democratic woman elected to a Senate seat that was not previously held by her husband. And, she was the first woman to serve in both the Senate and the House of Representatives.

I have known Senator Mikulski a long time, having served with her in the Senate for over 25 years now. While she and I have often found ourselves on opposite sides of many issues, I have long admired her commitment to her principles and, most importantly, her devotion to the people of her home State. Indeed, she has been a stalwart and often times fierce advocate for the interests of Marylanders.

I want to congratulate Senator Mikulski on this important milestone and I am grateful for this opportunity to pay tribute to her and to her many years of public service.

Mr. President, I am pleased to stand and add my experiences with and admiration for Senator Barbara Mikulski. It is fitting that she is now the longest serving woman in the U.S. Congress.

When I first got here--I was elected in 1993--Barbara Mikulski, as the dean of the women in the Senate, had a workshop the previous year for the newly elected Democratic women Senators. When I arrived in 1993, she expanded it to include all new women Senators, and her sort of opening comment was, civility starts with us.

Surely, she has carried through as the dean of the women of the Senate to ensure that all the new women get their bearings in the Senate, that they get the advice of the ones who have been here before. It has been a huge help and really a fun opportunity for us to get to know each other on a personal level as we have our women Senators' dinners.

From this came a book Senator Mikulski and I worked on together. The genesis of the book--which became ``Nine and Counting,'' the nine women Senators who were here in the year 2000--came from a meeting called by Senator Mikulski to meet with the women of Northern Ireland, along with the women of Ireland, when there was so much strife in that country. Barbara Mikulski called all of the women Senators together, our nine, to give encouragement and advice to the women who were trying to bring the people of Ireland and Northern Ireland together so that there could be a peaceful conclusion to the conflicts in Northern Ireland. From that, as we were sharing our stories to show the women of Northern Ireland how much they could do, from our experiences and our overcoming of obstacles, Barbara Mikulski and I sat down and said:

You know, I think we have a book here. If each of the nine

women Senators could write a chapter about our obstacles and

our beginnings in politics and help encourage other young

women and girls to aspire to and be able to succeed in

politics, then we ought to do it.

So we worked with a publisher. We got together and decided how we would lay it out. We then decided as a group that we would give all of the proceeds to the Girl Scouts of America because almost each of us had been a Girl Scout at one point.

From so from that we put a book out, which is still being sold here in the Senate bookshop called ``Nine and Counting.'' It has given a lot of money to the Girl Scouts of America, to a leadership fund so that they can continue to create girls who will be leaders in our country. But that started with the meeting Barbara put together for those of us who could maybe give advice and help these women of Northern Ireland.

When I came into the Senate in 1993, the first thing I wanted to do was give equal treatment to women who work at home in their ability to save for retirement as those who workout outside the home. I had the experience, as a single working woman, of putting aside some money for my IRA, and then when I married my husband Ray, I found out I could put aside only $250 in an IRA. I said: Wait a minute. Why would someone working inside the home--a woman

who is probably going to need retirement security more than any of us-- not be able to save for her own retirement security if she is a married woman? So I authored the Homemaker IRA, and of course I wanted to have a Democrat lead because we had a Democratic Congress. So I asked Senator Mikulski, and she said she would absolutely sign on--as she always does--when it is something that is going to benefit women. So it became the Hutchison-Mikulski bill. I said to Barbara: I want this bill to pass. I don't care if my name is first. I would love to put your name first if you think that will help us get it through. She said: Absolutely not. I would not take your name off that bill for anything because it was your idea. There are not very many people in this body who would make that gesture and also put her weight behind the passage of the bill.

Of all the things I have done and that we have done together, Barbara, and of all the things that bill is going to affect the most people in our country because now we have the Homemaker IRA that passed in 1996 that allows women--whether they are married and working at home or outside the home and single or married--they will be able to set aside the same amount. Fortunately, that amount has grown, and so it is not $2,000, but it can be $2,500 or $3,000 or $5,000, depending on their age. It is a wonderful thing we were able to do together.

Senator Mikulski and I also worked on behalf of Afghan women. When we started hearing the atrocities that were happening to the women of Afghanistan that were brought back by great women's organizations, such as Vital Voices, that told stories of not only unequal treatment of women in Afghanistan but inhumane treatment of women in Afghanistan. Senator Mikulski, Senator Clinton, and I introduced the Afghan Women and Children Relief Act, which was signed into law in December of 2001, which authorized funding for women in Afghanistan and Afghan refugee women. Political participation was supported for Afghan women, and we followed up with appropriations. I have to say our Republican President, President Bush, and our Democratic President, President Obama, have always said American money will go into Afghanistan or Iraq or anywhere else to support equally the education of girls and boys; that we would support women where they are not being treated as equals on a human rights basis. So our Presidents have stood and, of course, our bipartisanship in Congress has done the right thing. Again, Senator Mikulski is a leader in that area.

I cannot think of a stronger supporter in this Senate than Barbara Mikulski in the area of NASA. I wish to say Senator Bill Nelson also has been such a strong supporter, as well as Senator Lamar Alexander, but Senator Mikulski and I now are the--she is the chairman and I am the ranking Republican on the committee that is appropriating for NASA. We are also fortunate to have Chairman Jay Rockefeller on the authorizing and oversight committee for NASA. He, too, has been such a strong leader in assuring that we continue America's preeminence in space.

When the rubber hits the road in appropriations, Senator Mikulski has been there to say: We are going to have the science in the Hubble telescope, which has given us so much information, as well the James Webb telescope. Now, of course, we have the human space flight issues and Barbara Mikulski has been right there saying, of course we are going to utilize the International Space Station, of course we are going to keep America's priorities in space because it has done so much for our economy and our jobs and our technology and our health care improvements, but it has also been a national security issue that Barbara Mikulski recognizes, first and foremost.

I cannot match a lot of the stories about Barbara Mikulski and her personality, but I can tell you I took Barbara Mikulski to tour the Johnson Space Center in 2001, and we did a wonderful event at Baylor College of Medicine to talk about the research that is being done in the biomedical sciences and on the space station. I thought, I am going to bring Barbara where we can show her a little bit of Texas.

We know Texas has a lot of personality and sometimes we are thought to have a little too much fun, but I will tell you what, Barbara is one of us. I brought her to the Houston rodeo. During the month of the Houston rodeo, everybody is ``Go Texas,'' and everybody dresses Texan, which means cowboy, and we have a great time. So I took Barbara Mikulski into the steer auction, where just this past Saturday a steer was sold for $460,000.

It is a grand champion steer, I might say. All of that money goes for scholarships for our young people to go to college.

Barbara came into the steer auction, and she looked around. There were 2,000 people at the breakfast before all these people are going to go and bid on the steers so we can fund scholarships. We were all dressed appropriately for Texas, and she reached over to my ear and she whispered: Now, Kay, if we were here on Monday morning and we went to a chamber of commerce meeting, do these people look like this? I love to tell that story in Houston because it gets huge laughs. She won over everybody in Houston. They adored her from the beginning. She put on her cowboy hat, she rode in the grand entry on a buckboard and she became an honorary Texan in our hearts. So Barbara Mikulski knows how to win over others.

Let me mention one of my early experiences when I first came into the Senate. There was an effort to have health care reform. A program was put forward and this particular program had some things that were good, but one of the things in it was that no health insurance coverage would be required for women to have mammograms if they were 40 or below. I will tell you something, the biggest eruption in the Senate was Barbara Mikulski saying: Are you kidding? I will not let this go by me in the Senate. We are not going to say that a woman who is 40 or under is not going to be eligible for insurance coverage for a mammogram. It is not going to happen. Barbara Mikulski took the lead, and I am going to tell you, the first thing that came out of that plan was that provision, and it will never be in a plan as long as Barbara Mikulski is in the Senate. So I am just going to tell anybody who is looking at health care reform, take a little advice, don't mess with Barbara Mikulski because we are going to have mammograms.

Not only that, Barbara Mikulski came forward in the next month and passed unanimously in the Senate a mammogram standards bill. During this process she learned that there were varying degrees of standards of mammography. She was going to make sure there were standards that every clinic would have, that every piece of equipment would have and she led the effort. It is law today.

I will end with yet another accomplishment; that is, single-sex education in public schools. Senator Jack Danforth of Missouri started looking at the issue and said: We need to allow our public schools to offer single-sex education--meaning girl schools and boy schools-- because so many of us have seen that we have to adapt education for the needs of each individual child to the best of our ability. We know there are so many wonderful private schools for boys and girls, but we could hardly have a public school that would be single sex in this country in the 1990s.

So Jack Danforth started the effort, and when he left the Senate, I picked it up. The more I looked at it, the more I saw the benefits to boys and to girls--particularly in the middle and high school grades-- were palpable. Senators Clinton, Barbara Mikulski, Susan Collins, the three of them, had gone to an all-girls school. I had not, but they knew the benefits firsthand of single-sex education. Barbara was the product of single-sex education, having gone to a parochial school.

I first introduced the amendment in 1998, but it was in 2001--when the four of us came together--that we actually got the bill passed through an amendment and that amendment then not only made public single-sex education an option and legal, it also made it eligible for Federal funding grants similar to all our public schools.

I wish to say it has been one of the joys of my time in the Senate to work with Senator Barbara Mikulski, and I think this 4-foot-11-inch mighty-might has 10 times the impact. She has made an impact on Congress and an impact

on America because she is relentless, she is reasonable, she understands an issue, and she understands the importance of listening as well as talking. She is effective and she is respected. If there is anyone in the Senate who doesn't like her, respect her, and work well with her, I have not met them. When one is the longest serving woman in the Senate and Congress, they have worked with a lot of people. She is unanimously so well regarded, I have never met an enemy of hers.

I will close by saying the people who know her best love her most, and I cannot think of a finer thing to say about any person.

Thank you.

I yield the floor.

Madam President, it has now been 2 months since the President came before Congress and outlined his plan for tackling the jobs crisis--a plan that can best be described as a rehash of the same failed policies of the past few years disguised as a bipartisan overture, a political strategy masquerading as a serious legislative proposal. The President put this plan together knowing the Republicans would oppose it. In other words, it was actually designed to fail, as the White House aides have readily admitted to reporters for weeks. This was not, I repeat, a serious effort to do something about jobs and the economy. It was a serious effort to help the President's reelection campaign by making Republicans in Congress look intransigent.

So what I have been saying for the past few weeks is let's put the political games aside. We will have time for the election next year. The American people want us to do something about jobs right now.

Well, it appears the message may be finally breaking through. I was just listening to my friend the majority leader talking about the measure before us--something we support and look forward to passing. It has been championed by Senator Scott Brown of Massachusetts as something that would help contractors who do business with the government. I was also glad to see that the Veterans bill, which contains many provisions supported by Republicans, will be the first amendment. So maybe we are making some progress. This is just the kind of thing we have been calling for, just the kind of thing we should be doing a lot more of around here because there is a lot we can agree on when it comes to jobs legislation, and that is where the focus should actually be.

While the President has been out on bus tours, Republicans in the House have been debating and passing bipartisan legislation aimed at making it easier for businesses across the country to grow and to create jobs. Over the past 2 weeks, I have highlighted some of their good work.

Yesterday, I mentioned in particular a bill the House passed just last week called the Small Company Capital Formation Act, H.R. 1070, a bill that received 421 votes, including 183 Democratic votes. Only 1 person of the entire 435-Member House of Representatives voted against the bill--just 1. And President Obama endorsed the idea contained in this bill in his jobs speech a couple of months ago. The question is, Why in the world wouldn't the Democratic majority take it up and pass it right here in the Senate? If Democrats are more interested in passing legislation that helps put Americans back to work than they are in raising taxes, they should at least work with us to pass the bills the President himself has endorsed.

This morning, I want to say again how pleased I am we will be taking up Senator Brown's 3 percent withholding bill to help ease the burden on government contractors and that we will have a vote on and hopefully debate the Veterans bill. I would like to call on the Democratic majority in the Senate to keep it up by taking up H.R. 1070 or its bipartisan Senate companion bill, S. 1544, sponsored by Senators Toomey and Tester.

Take up this legislation that has already passed the House with the support of almost everybody over there and show the American people that you care more about creating jobs than creating campaign slogans. Let's not make the bills we will be voting on today the exception but the rule around here. Why don't we just keep it up?

Right now, small, growing businesses aren't expanding their businesses through a public offering because they simply can't afford the high cost of the government paperwork they are required to manage. Instead of going out there and raising money to grow and hire, they are holding back. They are not expanding. And if they are not expanding, they are not hiring. This bill would remove some of that burden from smaller businesses and help them gain access to new capital that they can invest in their businesses and their employees.

Yesterday, I mentioned the CEO of a pharmaceutical company in Pennsylvania who says that he has a promising new drug for treating chronic kidney disease actually in the pipeline but that he can't take it to the next level because of all the regulatory costs his company is too small to afford right

now. We should be removing barriers for smaller companies such as his. Nearly 200 House Democrats agree with that, and so does President Obama. As I said yesterday, this bill is about as bipartisan as it gets. The only thing standing in the way of passing it in the Senate is the Democrats who schedule legislation around here, and the only reason they could have for blocking it is that it steps on their campaign strategy.

I think that is a mistake. I think the American people can see Republicans in the House passing all these bipartisan bills aimed at spurring job creation, and they wonder why Senate Democrats won't actually take them up.

This should be easy. They have already done the hard work of finding jobs bills that we know can pass both Chambers and that the President would probably sign. Let's take up the bipartisan companion bill of Senators Toomey and Tester to the House bill--their bill is S. 1544-- and let's pass it, and then let's send it to the President for his signature so it can become law.

If you are for creating jobs, you should be for this bill. As the AP put it last month:

Companies use the cash they raise to grow--and that means

hiring people . . . and at a time when 14 million Americans

are looking for work and the unemployment rate has been stuck

near 9 percent for two years, the last thing the economy

needs is for one engine of hiring to stall.

A recent report by NASDAQ of companies that went public from 2001 to 2009 found that those companies increased their collective workforce by 70 percent after making the initial public offering--a 70-percent increase in employment after making an initial public offering.

What this bill does is enable more companies to take that leap and start hiring once they have. This is the kind of thing we should be doing more of in the Senate. Let's put the partisan bills aside and let's focus on bipartisan legislation. Instead, why don't we shoot for success.

Detaining Enemy Combatants

Last week, the White House announced that Prime Minister Nouri al- Maliki of Iraq will be meeting with the President here on December 12. This meeting comes at an important time, as our own military forces will be drawing down their presence within Iraq, and the future of our bilateral security relationship remains very uncertain. But our withdrawal from Iraq raises another important matter I hope the President will raise with Prime Minister Maliki and which highlights some of the difficulties that will result from the military drawdown there, and eventually in Afghanistan, as well, both of these drawdowns the President has ordered. What I am referring to is the law of war detention.

In July of this year, Senate Republicans wrote to Secretary of Defense Panetta concerning the custody of Ali Mussa Daqduq, the senior Hezbollah operative currently in our joint custody in Iraq. Daqduq is in joint custody in Iraq between the United States and the Iraqi Government.

In 2005, Daqduq was directed by senior Hezbollah leaders to travel to Iran, where he trained Iraqi extremists in the use of explosively formed penetrators, mortars, and other terrorist tactics. Among other things, Daqduq is suspected of orchestrating a kidnapping in Karbala, Iraq, 4 years ago that resulted in the murder of five U.S. military personnel. It is a safe bet that if Daqduq is transferred to Iraqi control, he will return to the fight against the United States. President Obama should insist in his meeting with Prime Minister Maliki that U.S. forces retain custody of Daqduq and transport him to the detention facility at Guantanamo Bay.

The detention of Daqduq touches on three important issues in the ongoing war on terror. First, with the withdrawal of our military presence from Iraq, the United States will lose the ability to detain enemy combatants such as Daqduq in Iraq. Current plans are for the U.S. military to have completed our transition to the security forces of Afghanistan by the end of 2014, and we should expect that we will lose the ability to detain enemy combatants there as well. Our military commanders in Afghanistan should therefore anticipate losing the ability to detain enemy combatants by that date. As we saw in the capture of Abdul Warsame, the Somali terrorist accused of providing materiel support to al-Qaida in the Arabian Peninsula and Al Shaabab and detained on a U.S. Navy ship at sea, there remains a strong likelihood that our military and intelligence community will need a secure detention facility to house these foreign fighters. The issue is, what are you going to do with them.

Rather than being kept in military custody overseas, Warsame was flown to the United States and placed in the civilian system. But the logical place for long-term or indefinite detention of foreign fighters such as Warsame is not on a ship at sea or in our private prison system but rather, as I have said many times before, at the secure detention facility at Guantanamo.

Second, it is worth noting that the Obama administration has tied its own hands in the matter of indefinite detention of enemy combatants. The administration's plan to buy a prison in Illinois for conversion to a military detention facility makes clear that the President does not oppose law of war detention. He is fine with bringing foreign fighters into the United States and indefinitely detaining them in military facilities inside our borders, and yet he opposes detaining them indefinitely at the military facility in Guantanamo, where they will benefit from humane treatment but they won't enjoy the legal rights of detainees who are brought here, including the possibility of release into the United States.

Third, the Executive orders signed by the President in January in 2009 were issued with an eye toward fulfilling candidate Obama's campaign promises, rather than after conducting a serious review of sound counterterrorism policy. Now, 3 years after taking office, the President has had enough firsthand experience dealing with terrorism to know that many of the terrorists held at Guantanamo can't be sent back to places such as Yemen, where they are likely to return to the fight. But the President's own Executive orders have denied our military commanders and our intelligence community the certainty they need when they capture, detain, and interrogate terrorist suspects. His early Executive orders, for instance, ended the CIA's detention program and directed the closing of Guantanamo. The order to close Guantanamo makes little sense.

It is not Republicans who are tying the President's hands in prosecuting the war on terror. He did that himself with the shortsighted Executive orders he signed during his first days in office. As our country withdraws from Iraq and transitions further responsibilities to the Afghan security forces in Afghanistan, we will need a place to send foreign fighters such as Warsame and Daqduq. That place is the military detention facility at Guantanamo Bay in Cuba.

In his discussions with Prime Minister Maliki, the President should, of course, discuss the role the U.S. military will play in Iraq after the end of this year and how our two countries can work together to preserve the gains made through the sacrifice of so many brave Americans, and to combat Iranian influence. But in addition to these important matters, the President should also insist that the Prime Minister retain custody of Daqduq and send him to Guantanamo as soon as possible.

Madam President, I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent to enter into a colloquy with my Republican colleagues for 30 minutes.

Mr. President, on the Senate floor this morning Senator Durbin called on Republican Members to offer to give up what he called their Federal health care. I heard his comments, and he makes an interesting argument. But, once again, Democrats in the Senate are ignoring history, as the Senator did today. They are ignoring the facts and ignoring the Democrats' record on this issue.

The truth is, Republicans in this body have already offered to give up their health insurance coverage. In fact, here is the rest of the story:

During the debate on the health care law--almost 2 years ago today-- Republicans offered to forego their private coverage and instead enroll all Members of Congress in Medicaid, the government's safety-net program for low-income individuals. The Democrats in this body unanimously rejected this idea. Every Democrat voted no. This was on an amendment by former Senator LeMieux from Florida, an amendment that asked to enroll all Members of Congress in the Medicaid Program. Yet at least 50 percent of the newly covered individuals under the Democrats' new law are going to get coverage, and they will get their coverage through Medicaid.

So the President's solution for health care in this country is to put 50 percent of the newly covered individuals under Medicaid. Yet the Democratic Members of the Senate unanimously voted no. If Democrats believe Medicaid is good enough for the 24 million people they will soon force onto the rolls, my question is, Why isn't it good enough for the Democratic Members of Congress?

So I am joined today by my colleagues on the Senate floor who continue to raise questions about the health care law and so many broken promises made by this President. I am fortunate to be joined by a senior member of the Senate Finance Committee, Senator Grassley.

I would ask my colleague from Iowa, as a senior member of the Senate Finance Committee, who spent a lot of time studying and debating President Obama's health care law, my question to the Senator is, Do you think the President's promises match the reality?

Well, I say to my colleague from Iowa, it is interesting that we take a look at this and so many promises that reflect one specific promise, ``if you like what you have, you can keep it.''

I practiced orthopedic surgery for 25 years, taking care of families in Wyoming. Many of those families included family members who were on Medicare, the program for our seniors. Senator Grassley has made some reference in his earlier comments about seniors, people who are on Medicare, people who are having a harder time finding a doctor. This health care law clearly had an impact on seniors as well.

So I would ask my colleague from Iowa, are there specific things the Senator has been hearing as he travels around the State and visits with folks at home in terms of perhaps promises made specifically to seniors and those broken promises related to Medicare?

That clearly points out to the people around the country what they know, and if they are on Medicare that it is that much more challenging for them to even find a doctor because of the $500 billion of cuts to Medicare--and not to save Medicare, not to strengthen Medicare, but to start a whole new government program for other people. So those are several of the promises the President made.

We just heard from my colleague from Iowa, ``if you like what you have, you can keep it.'' We know that promise has been broken, and now the promises by the President--I will protect Medicare--which is clearly not the case, as the American people have seen, which is why this health care law is even more unpopular today than it was when it was passed.

But thinking back to the time it was passed, the Senator from Missouri Mr. Blunt, who is joining us on the floor, was very actively involved in the debate and the discussions in pointing out the concerns people in his home State had with regard to the health care law and the objections he heard. My recollection is that there was even an issue on the ballot about the health care law and mandates and related issues.

So I ask my friend and colleague from Missouri if there are comments he would like to add to help with this discussion of the broken promises of the Obama health care law.

Well, it does seem that way to me, to the point that now, 2 years out, Senator Coburn and I put together a report on what we are finding. It is a checkup on the Federal health law, and the title is ``Warning: Side Effects.'' That is because there are huge side effects from this health care law. The four that we have written out on the prescription pad, as we see it, on the prescription pad handed out by President Obama, No. 1 is fewer choices; No. 2, we have higher taxes; No. 3, more government; and No. 4 is less innovation. That is what the American people are seeing as the side effects of this health care law. People don't want few choices, they want more choices. People don't want higher taxes, they want lower taxes. They don't want more government, they want less government. They don't want less innovation, they want more innovation. That is what the American people asked for.

There was a reason to do health care reform--because people wanted the care they need from a doctor they want at a cost they can afford. I know that is what my colleague from Iowa sees when he goes home every weekend and talks to people in his home communities.

My understanding of the accountable care organization component is that the very health programs the accountable care organizations were modeled after, the ones the President held up as the models across the country--one was in Utah, one was Geisinger in Pennsylvania, and I believe the Mayo Clinic may have been a third--once those 350 pages of regulations came out, the programs the President said were the models we want to follow, they all said: We can't comply with these regulations. They are too stringent. They are too confining. They will not work in our program.

So if it is not going to work in the places where the President said they are doing it well, to me that means they are not going to work anywhere in Wyoming and very likely not anywhere in Iowa or anywhere in Missouri as we try to make sure patients get the care they need from the doctor they want at a cost they can afford.

That is why I continue to look at this health care law and go home every weekend and talk to people, and I continue to hear that this bill is bad for patients, bad for providers--the nurses and the doctors who take care of the patients--and bad for taxpayers.

When we take a look at Medicare--and Senator Blunt made a comment about Medicare and some of the changes--who is going to make these decisions? It looks to me as though, from reading through this law, it is about 15 unelected bureaucrats with this so-called Independent Payment Advisory Board who will decide what hospitals will get paid for providing various services. So in small communities, the hospital may say: Well, we can no longer offer that service. I have heard my colleagues talk about the specific loss of the ability of hospitals to even stay profitable with some of the cuts, from taking $500 billion away from Medicare, again, not to save and strengthen Medicare but to start a whole new government program for others.

Those are the things we are dealing with and why, at townhall meeting after townhall meeting, people continue to tell me they want this repealed and they want it replaced with patient-centered health care-- not government-centered, not insurance company-centered, but patient- centered health care. That is what people are asking for, and they get tired of all these broken promises the President has made.

I remember the President said he was going to bring down the price of premiums by $2,500 per family per year. What family wouldn't want that? The whole purpose of the health care law initially was to get the costs of health care under control. This didn't do it.

If I go to a townhall meeting, as I did not too long ago in Wyoming, and say: How many of you under the new health care law are finding that you are paying more for health insurance, not the $2,500 less a year the President promised, but how many are paying more, every hand goes up. Then we ask the question: How many of you believe the quality and the availability of your own care is going to go down as a result of this health care law, and every hand goes up. I know that in the Show Me State of Missouri, that is not what people want. They don't want to pay more and get less. I don't know if my colleague has been hearing things similar to that at home.

It is interesting--because I know the Senator goes home, as I do, very often to talk to many of the small business owners in the State of Missouri, as I do in Wyoming, and as Senator Grassley does in Iowa--one of the promises the President made is, he said 4 million small businesses may be eligible for tax credits. Well, it turns out that the key word there by the President is ``may''--may be eligible.

Even the fact that the White House has sent out postcards to all these small business--the IRS spent over $1 million of taxpayers' money to send out millions of postcards promoting the tax credit--the Treasury Department's inspector general recently testified that ``the volume of credit claims has been lower than expected''--as a matter of fact, only 7 percent of the 4 million firms the administration claimed.

Why? Well, because of the complexity and the whole way the system was set up, the President was able to talk big and deliver very small. That is why so many people are very unhappy with the claims in the health care law because they know these promises have been broken.

With regard to Nancy Pelosi's famous quote--that first you have to pass it before you get to find out what is in it--that is why I come to the floor every week with a doctor's second opinion because it does seem just about every week we do learn some new unintended consequence, something new about the health care law and another reason why Americans are unhappy with it, why it remains as unpopular, if not more unpopular, today as when it was passed, and why so many people believe the Supreme Court should find this bill unconstitutional, for the reasons that do have Americans at home in an uproar, and very unhappy that the government can come into their homes and mandate that they buy a government-approved product and pay for it or pay a fine. Nothing like this has happened before, and people are, frankly, offended.

We do not know what the Supreme Court is going to do, but I know what this body ought to do. This body ought to vote to repeal and replace this broken health care law and get a health care law in place which is what the American people wanted, which is, the care they need, from the doctor they want, at a price they can afford.

We have not seen that yet. But that is why we are here on the second anniversary of the President's health care law, to continue to point out the flaws of this legislation. Quite interestingly, when you take a look at some of the national poll numbers, for people who have talked to a health care provider--whether that be a nurse, a doctor, a physician's assistant, a physical therapist, a nurse practitioner, no matter who--they are even less supportive of it than the general public.

Thank you very much, Mr. President.

I yield the floor.

Mr. President, I ask to speak for up to 10 minutes, with Senator Merkley following me.

Mr. President, I rise to speak in strong support of the capital formation bill that we received cloture on a few minutes ago.

In a place where we too often get bogged down by politics, this legislation reflects a strong, bipartisan commitment to creating jobs by ensuring that small businesses have access to critical capital that they need. This legislation has tremendous potential to create jobs and spur economic growth and innovation. The key component to achieving all of these goals is ensuring that small businesses have access to the capital they need to grow their businesses and create jobs.

This legislation is a rare instance in Congress where both Chambers in both parties come together to focus on this Nation's most urgent priority, and that is jobs. The President has already expressed his support for it. So let's get this bill done and off to him for his signature.

Over the past few years, I have held 12 small business opportunity workshops all over the State of Montana. Without a doubt, access to capital is always one of the most critical issues that I hear from small business owners. Access to capital makes all the difference for a small business. If the money is there, so is the expansion; so is the capacity to do more research and development; so is the next great idea. Without capital, though, there is no growth, no risk-taking, and there are no jobs.

Montana is a State of entrepreneurs. It is a frontier State. It has a tradition of self-reliance, which is clearly reflected in the entrepreneurs and the successful and innovative small businesses they have created and grown in this great State. They clearly reflect America's entrepreneurial spirit, which helps keep rural America strong and makes our economy the most innovative in the world.

Our small businesses in Montana vary from family farms, ranches, and one-man manufacturing shops, to innovative biotech companies and cutting-edge information analytics firms. Many of these newer firms have the opportunity to change the landscape when it comes to diversifying Montana's economy.

According to research from the Kauffman Foundation, nearly all net jobs created since 1980 have come from firms 5 years or younger. The role of startups in creating jobs and driving innovation has been well documented, but that ability to create jobs is limited if these firms do not have access to financing to scale and to grow their companies. So central to job creation is making sure investors and capital markets are accessible for startups.

Because of this potential for growth, we need to do all we can to empower these businesses with the tools they need to survive and thrive at every stage of their development. These young companies must be able to access the capital they need to bring innovative ideas and products to the marketplace.

Back in July I held the first of a series of hearings in the Banking Committee to examine the challenges and opportunities facing innovative small businesses as they try to access capital. A major take-away from the hearing was the need to ensure that capital markets remain within reach of startups at various stages of their development, particularly in the stages before they may be ready to go public.

A key recommendation offered at the hearing came from Rob Bargatze of Ligocyte Pharmaceuticals in Bozeman, MT. He said we should take a closer look at updating SEC regulation A to better enable small businesses to raise capital through these public offerings. The regulation A exemption was created in the Securities Act of 1933 to provide small companies with an opportunity to raise capital without being subject to full registration with the SEC.

Ligocyte is developing a new norovirus vaccine with the potential to prevent hospitalization and save significant health care costs--and to create those jobs of the future. Working through the FDA approval process is not easy. It requires years of hard work and tens of millions of dollars. It can be tough for any company to stick it out for that long or for that much money, but for a small firm in Bozeman, MT, it can be especially difficult. Access to capital to fund their clinical trials will be the determining factor in their ability to gain FDA approval.

Back in September, Senator Toomey and I introduced the Small Company Capital Formation Act to update regulation A by increasing the total amount of capital that can be raised through these offerings to $50 million, while protecting new investors. Currently, the businesses can only raise $5 million under regulation A--a limit that has not been updated in nearly 20 years and one that many view as too low to be a valuable tool in raising capital.

The bill maintains the most attractive elements of regulation A, including the ability for issuers to test the waters before registering with the SEC. It also preserves the nonrestricted status of securities sold through a reg A offering so that these securities can be resold to investors after the initial offering.

New investor protections include a requirement that issuers file an audited financial statement with the SEC--a requirement that has been included in the legislation that I introduced as well as the House bill before us today. The bill also directs the SEC to establish additional disclosure requirements and requires issuers to electronically file offering statements with the Commission.

Additionally, the bill subjects those offering or selling securities under regulation A to negligence-based liability under section 12(a)(2), and it includes disqualification provisions to prevent bad actors from making these offerings in a way that is consistent with Dodd-Frank.

From what I have heard said about the House version of regulation A, you would presume none of these investor protections are included. Let me clarify that the bill I introduced with Senator Toomey, S. 1544, is identical to the language included in the House bill, H.R. 3606, that is before us today.

The truth is that the substitute amendment that was voted on yesterday made very minor changes to this portion of the House bill, such as changing a ``may'' to a ``shall'' and adding a study by the SEC 5 years after implementation of these changes.

We should have been able to pass this bill by a voice vote here in the Senate since this bill has enjoyed strong bipartisan support in the Senate, with six bipartisan cosponsors. Regardless of that, I am pleased that this balanced bill also enjoyed a 420-to-1 vote in the House--420 for, 1 against. Imagine that--all but one voting Member of the House of Representatives agree on this bill.

I would also note the SEC's recently released recommendation from its Forum on Small Business Capital Formation increasing the regulation A exemption to $50 million was one of the top recommendations at this forum.

By the way, this is an idea which has been in the SEC's Forum on Small Business Capital Formation recommendations almost every year since 1993, the year after the limit was last raised to $5 million. So the idea that this is some risky new idea is not correct. In fact, at a briefing with the SEC a few weeks ago, SEC lawyers suggested that there was absolutely nothing scary about S. 1544 and that they felt very comfortable with the existing investor protections included in that bill.

The bottom line is that I am thrilled we will finally have an opportunity to pass this legislation--hopefully very soon--and get it to the President's desk.

What does this legislation mean for Montana entrepreneurs? Let me cite a few examples.

For Brett Baker, president and CEO of Microbion Corporation in Bozeman, lifting the cap on regulation A offerings will provide him with broader opportunities to raise capital. Instead of worrying about where the next phase of financing will come from, he can focus on discovery and research, working with the Department of Defense to use compounds Microbion discovered to treat antibiotic-resistant wounds. These changes will also allow a company such as Microbion to access capital at an earlier stage without diluting its earlier investors who believed in them from the earliest days of that company. And raising capital publicly through regulation A would also give folks in Bozeman who know about the company an opportunity to share in its success, something that is not possible now unless they are an accredited investor.

More broadly, this legislation is going to provide small businesses in Montana's emerging data and biotech industries with new tools and options to access capital at different stages of development, and it will also provide necessary updates to existing regulations. For example, changes to the SEC's 500 shareholder rule would ensure companies, such as investment brokerage D.A. Davidson in Great Falls, can continue to provide their employees with stock in the company without having to go through a costly and time-consuming registration process with the SEC. This Montana-grown company dates back over 75 years and has always believed in rewarding its employees so they can have a stake in the success of the firm, which now operates in 16 States. Without these changes, a company such as D.A. Davidson would be faced with the choice of costly public registration or potentially eliminating existing employee shareholders.

For companies such as Rivertop Renewables in Missoula, this legislation will provide them with an onramp to going public if that is an option they choose to take one day. Rivertop has begun full-scale production of their groundbreaking green biochemical products used in commercial products such as dishwashing detergents and de-icer. These changes will ensure that Rivertop will have multiple strategies at their disposal so they can go public at a time that is right for them and take advantage of the public markets as they continue commercialization of their products.

For Lance Trebesch of ticketprinting.com and Ticket River, this legislation will enable him to grow his ticket printing, event management, and online ticket printing firm. Since 1997 this company has expanded its reach internationally, with over 25 employees in Bozeman and Harlowton, MT.

This bill will ensure that entrepreneurs across the State of Montana will have a whole new set of tools at their disposal so they can make smart decisions about their future to develop and expand their businesses. They will have more choices and better access to capital markets, which should also give them more leeway to create and innovate.

We have seen ecosystems of support for small businesses such as these as they spring up in virtually every county in Montana. Obviously, the success of these companies has implications for job creation and growth, but there are also tremendous opportunities for innovation.

It is not surprising that in Montana so many startups have located near universities in Missoula and Bozeman. In fact, many of these firms got their start with discoveries in the labs at Montana State and the University of Montana. With this legislation, the possibilities are endless for Montana and for entrepreneurs and innovators across Montana and this Nation.

Mr. President, I look forward to voting on this legislation and getting it to the President for his signature.

With that, I yield the floor.

Mr. President, I ask unanimous consent to speak as in morning business.

Mr. President, it is probably clear to all of us that the American people have a very high level of frustration with the lack of productivity of this Congress. The fact is, when we go home to our respective States, I am sure we are all hearing what I heard last week as I traveled across Pennsylvania. People ask me: Why can't you guys work together? Why can't you get something done? Why does it seem there is so much partisan bickering that you can't come together even on simple things that could help grow this economy, help make progress in these very difficult times?

Well, on this front I think we have some good news, and I am delighted to talk about this tonight. I hope this early sign of good news reaches fruition and we actually have a meaningful accomplishment soon in this body as well as the other body.

Specifically, I am referring to the work that has been coming together of late on a series of capital formation bills that will help small and growing companies raise the capital they need to expand, to hire new workers, to help improve our economy and give us a healthier economy with the job growth we badly need.

In particular, I want to thank House majority leader Eric Cantor. Congressman Cantor took the step of pulling together a series of separate bills and putting them together in a package--a capital formation package. There is very broad support for this package in the House. I think under his leadership it is very likely to pass the House and will present a tremendous opportunity for us because there is broad bipartisan support for these commonsense reforms that will help companies raise capital and grow.

The bipartisan support includes the President of the United States. Much to his credit, the President--I believe just yesterday--issued a formal Statement of Administrative Policy indicating his full support for the passage of the measure that Leader Cantor is proposing in the House. Many of these proposals come from the work that the President initiated. Some of them are included in the startup America jobs plan that the President proposed. Some of them were recommended by commissions that the President assembled. The President spoke about the need for enhancing small- and medium-sized companies' access to capital in his State of the Union Address. So I think the President has been very clear and very strong in his support as the House Republican leadership has been.

In this body I think the leadership on both sides of the aisle has indicated support. The majority leader and the minority leader have both indicated their support for moving in this direction. The chairman and the ranking member of the Banking Committee have expressed a desire to move forward with the capital formation package, and there is wide support among outside groups. In fact, there is very broad support and very little opposition. The support includes support of entrepreneurs, whether they be from convenience stores, financial services firms, or high-tech firms.

In Pennsylvania, the life science companies feel very strongly about this because for them access to capital is a huge challenge. It is the absolutely essential precondition for their growth, and they are not alone. Manufacturers generally, supermarkets, all kinds of trade associations, the support for these kinds of capital foundation bills is very broad.

I want to touch specifically on three of the bills that I have been working on for quite some time now, and I am very hopeful and optimistic. First of all, these three bills are among six bills. The House companion version of these bills is in the package that Leader Cantor has proposed, and I believe there is broad support in this body for these bills as well.

The first I want to refer to is a bill that I have introduced with Senator Tester. It is S. 1544, and it is called the Small Company Capital Formation Act. It is more commonly known as the reg A bill. What it does is lift the current ceiling on the amount of money that a business can raise under the regulation provision of the securities law. That is a provision that allows a small

company to issue a modest amount of debt or equity without being subject to the full range of very costly regulations. The limit has been at $5 million for many years, and the bill that Senator Tester and I have proposed would raise that limit to $50 million. It has not been updated in almost two decades, and there is no question that raising the ceiling would allow a lot of companies that need to raise substantially more than $5 million the ability to do so and to thereby grow.

This is something the President has supported as well, and it passed the House by a pretty stunning margin of 421 to 1. It was not very controversial. I don't think it is controversial here, so I am glad this bill is included in this package in the House.

The second bill I would like to mention is S. 1824, the Toomey-Carper bill. It has to do with the limit on the number of shareholders a closely held company can have without triggering the full SEC compliance. Currently, that limit is at 500 shareholders. If you reach 500 or go above 500, then you are treated as a public company such as ExxonMobile for reporting purposes. That might have been appropriate many years ago, but in the modern era where communication is so much easier, access to information is so much greater and so much faster, the necessary information for shareholders can be distributed more broadly, more quickly, more easily, it is high time we raised that limit from 500 to 2,000 as this bill would do.

I appreciate Senator Carper's support for this legislation.

This is a bill that has a companion measure in the House that was raised at the House Financial Services Committee. They voted on it. They voted by voice vote and approved it. By voice vote that means, generally speaking, there is no opposition and nobody bothered with the rollcall vote because everybody supported it. That is a big, broad committee that represents virtually every constituency in the House of Representatives, and it was passed by a voice vote. This has very strong and broad support.

The third bill I want to mention is S. 1933, the Schumer-Toomey bill. The technical name is Reopening American Capital Markets to Emerging Growth Companies Act. We call this more colloquially the on-ramp bill. The reason we call it that is because we think of it as an on-ramp to becoming a publicly traded company, a path to launching an IPO that will facilitate this.

There has been a big reduction in the number of IPOs that occur in the United States. The IPO, initial public offering, is the process by which a private company becomes a public company. It can be a very substantial opportunity to raise capital. As I mentioned earlier, when companies raise capital, they put that money to work by expanding and hiring new workers. An IPO is a hugely important step in a company's progress and almost invariably follows a substantial increase in hiring, and that is why this is so important.

One of the reasons companies are slower to go public now than they were in the past is because we in Congress created a much more expensive set of regulations when a company does go public. Part of that is the Sarbanes-Oxley bill, and certain features within Sarbanes- Oxley are enormously complex and expensive to comply with.

Our bill says if you are a relatively small company--specifically, less than $1 billion in revenues or less than $700 million in public float, the amount of stock that is traded, then you can do an IPO without having to comply with all of the Sarbanes-Oxley regulations immediately. Over time you will have to comply if you exceed those thresholds that I mentioned, or within 5 years. In any case, you have to comply as everybody else does, but at least you have the opportunity to grow and the ability to afford the expense that is associated with it.

A companion measure to this bill--an identical version in the House was considered by the House Financial Services Committee, and that passed just a week ago. It passed the Financial Services Committee by a vote of 54 to 1. This is not very controversial. This has very broad bipartisan support, and this is the kind of legislation that is going to help businesses grow. I cannot stress enough the link between raising capital and growing one's company and hiring new workers. Capital and jobs are completely linked. What these bills will do, together with the other bills that make the broader package, is they will encourage a wealthier economy, stronger job growth, and more people working.

Let me stress one other aspect about this that I think is important to note. This came out at a hearing we had earlier this week on this very topic; that is, for many small companies, young companies, growing companies, there are a number of steps along the way to becoming a larger and more successful company, employing more people.

There are a number of steps along the way in raising capital that can start with an angel investor, followed by venture capital, followed by private equity, followed by maybe a securities issuance, followed by an IPO. This sequence of capital-raising is very important. If you facilitate any one step along the way, as these bills would, the experts who came and testified before our committee confirmed that by facilitating one step along the way, you facilitate the capital-raising at the earlier steps because what happens is the investors are more confident they will have the opportunity to liquidate their investment at a later stage if they see that the regulations have been made more amenable to that liquidation further down the road. So even if a company is not yet necessarily poised, for instance, to do the IPO, the fact that the IPO is easier to achieve when that company gets there increases their chance of raising money now through other vehicles, through other sources, and therefore increases their ability to grow.

I am very enthusiastic, as my colleagues can tell, about this legislation--certainly the three bills I have been working on and the other bills as well, which are a perfect complement to this and really constitute a portfolio of bills that will facilitate portfolio-raising across the board.

I thank my Democratic cosponsors of these particular bills, including Senators Tester, Carper, and Schumer, for working with me. I also wish to commend Leader McConnell for his leadership and Senator Reid for his, as well as Ranking Member Shelby and Chairman Johnson. I think what our constituents have been telling us for a long time is they want to see us working together and doing what is right for our country, for our economy, for job growth. This is a wonderful opportunity to do that.

I think it is quite likely that a package of these bills is going to pass the House very soon. I hope some comparable measure will pass in the Senate. The President has already indicated he supports it and wants to sign it. I don't think we should waste any time at all in passing the legislation that will be good for small and medium-sized businesses and good for their ability to grow and hire more workers.

With that, Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. President, I rise to speak to amendment No. 1884. Specifically, this is the crowdfunding amendment. That might be a term that is new to many, so let me explain.

The Internet provides new opportunities for capital to reach small businesses and startup entrepreneurs, and what this crowdfunding amendment does is to say that when the crowd; that is, all of those who are surfing the Internet, goes to a funding portal on the Internet, a Web site, to support a company, to invest in a company, there is an orderly process that adequately facilitates this type of opportunity while providing fundamental investor protections. So this will be an effective instrument of capital formation because, indeed, if crowdfunding becomes a situation where inaccurate information is put forward, where there is no

accountability, where there are pump-and-dump schemes, then the reputation of crowdfunding will be deeply damaged and the opportunity for capital formation will be equally affected.

This follows on a model that is already on the Internet in some other contexts. For example, you can visit a Web site called kickstarter.com, and you as an individual can look at a host of concepts that are being put forward for social and artistic activities across this country. You can say: Yes, I want to help that artist build that sculpture or so on and so forth. They may say how much money they want to raise, and you would decide what you want to donate. That is a donation model. You also can go to Web sites such as prosper.com or kiva.com, and these are peer-to-peer lending Web sites. If you go to prosper.com, you will see a whole list of folks who are saying: Yes, I want to consolidate my credit cards, I would like to borrow X amount and I am offering an interest rate of such-and-such, and here is a little bit of background, and you can decide if you want to lend to that individual or not. That is peer-to-peer lending.

Well, what crowdfunding does is to create an equal opportunity for folks to invest in early-stage businesses, startup businesses, small businesses. Imagine, for example, you run into someone at a cafe who says: I have this new idea for a coffee shop called Starbucks. I am going to call it Starbucks. Would you like to help me launch this?

And you say: Well, another coffee shop--I don't know if the world needs another coffee shop.

Maybe you jump in and maybe you don't. Then years later, you say: Oh, I should have seized that opportunity.

Well, through a crowdfunding portal, you get to hear those stories. You get to read those stories being presented by folks from across the country about their efforts, and you can decide if you want to participate.

Now, crowdfunding is in the larger capital formation bill that comes to us from the House, but that particular formulation is deeply flawed, and I am going to walk through a series of differences between the House bill and the Senate bill for my colleagues so they can understand why we need to pass amendment 1884.

The first factor is that the House bill does not require someone listing themselves or asking for startup money to provide any financial information. Well, that is a huge mistake. If there is no information, there is nothing to guide, if you will, the wisdom of the crowd.

What we do in this Senate amendment is to create a simplified format. If you are seeking less than $100,000, then your CEO simply certifies what the financials are for the company. If you are seeking from $100,000 to $500,000, then you need to have a CPA review the financial statements. If you are seeking more than $500,000, then you need to have audited financial statements. So, as the amount of money you are asking for increases, the degree to which you need to do due diligence financially and present the details increases as well.

There is certainly nothing that would prevent a particular Web site from establishing its own standards above and beyond these particular levels.

A second thing is it is critical there be accountability for the accuracy of the information. The House bill not only doesn't even require information, but they put out information and there is no accountability. Basically, it is an invitation to spin any story one likes.

What the Senate bill says is, in order for this capital market to work well one has to stand behind the accuracy of their information. It has basic liability accountability; that is, as a director or officer of this organization, they are standing behind the accuracy of what they put out. It has a due diligence protection so this is very balanced. It has a requirement that the information be relevant or germane to the conduct of the company. So that is another protection for the business itself. So it is balanced between the two. But this can give investors a basic belief that what is being set up are reasonable amounts of information proportional to the request and that the officers and directors are standing behind this information. That creates the foundation for an effective marketplace.

A third distinction between the House bill and our amendment No. 1884 is the House bill does not require companies to go through an intermediary. In other words, under the House bill, if someone wants to promote their company, they can simply put out an e-mail. An e-mail can say anything they want because they are not responsible for the accuracy, and they can send it to everyone in the world. They can proceed to put up popup ads that simply promote their company--again, with no accuracy required. But by creating an Internet intermediary and that intermediary has to register, we create a streamlined formulation so they have a funding portal registration much simpler than a broker dealer. But in doing so, they agree they are not going to take any position on the various investment opportunities they are listing. So you truly are the marketplace. They are not saying, by the way, that particular offering by that company is a sweet deal. They can't pump it; they can't favor it. So you are a neutral marketplace, again, enabling the investor to know they are getting straightforward information, not something that is spun.

Another distinction is the House bill has no aggregate caps. The result of that is that a person could lose their entire life savings in one fell swoop. The Senate bill puts on very reasonable proportional caps that say if one's income is $40,000 or less, their cap is $2,000; if they are between $40,000 and $100,000, their cap is 5 percent of their annual income; if they are over $100,000, it is 10 percent. So it allows for larger amounts of money from those who have much higher incomes but provides basic aggregate cap protections so we don't end up with folks who are on public services because they were swindled out of everything they had.

Another key distinction is that under the House bill one can list their offering and close their offering within a single day, which provides absolutely no feedback loop for any type of detected deception. Under the Senate bill, we create a 3-week period from one's listing to their closing. So one lists their idea. If enough people sign up to reach one's funding request level--say one has requested to raise $600,000. If enough people sign up and they are investing $100,000 here, $1,000 there that one reaches their goal, as soon as the 21-day period expires, then they close. So that does give time for some sort of feedback loops regarding any sort of fraudulent activity.

Another distinction is that the House bill allows a company to pay promoters and not disclose it. That is called pumping. If one has ever seen the movie ``Boiler Room,'' one can see a basic classic pump-and- dump scheme, where a roomful of folks on the phone are calling people, cold-calling them, and they are saying: Hey, I am calling because I am giving you this incredible investment opportunity and here is the story. They can say anything they want and they can talk people into buying that stock and then the stock is actually being purchased from the folks who own the boiler room. Then, as soon as they sell all the stock they have, they quit making phone calls, the value of the stock drops, and everybody who invested loses out. That is a classic boiler room. That is a classic pump and dump. The House bill allows paid promotion with no disclosure.

The Senate bill says if they are going to get on the blog's site within a Web site portal and say favorable things about a stock and if they are paid by the company to do it, they have to disclose that. They simply say: Hey, I am employed by such and such, but I want to bring to your attention some merits of this. But at least the public knows where they are coming from.

Another essential issue is the issue of dilution. Dilution is not a solution in this world; it is a problem. Those are folks who get in on the front end and think: I got in on this idea early. I am going to benefit from having made this effort, and find out later a bigger investor came in and the stock was diluted in a fashion in which they are basically written out of their share of the ownership. So the Senate bill directs the SEC to provide investor protections in this area.

These are key distinctions. These are the distinctions between a solid foundation for capital formation in this incredibly exciting new opportunity, new

market, and simply a path to predatory schemes that the House is providing. That is why I am encouraging my colleagues to support the amendment Senator Bennet, who will be speaking next, and I have put together and a number of our colleagues have joined us, including Senator Landrieu and Senator Scott Brown. This is a credible foundation for an exciting idea.

Let me close with this notion; that is, that across America, Americans have $17 trillion invested in their retirement accounts. If they were to put 1 percent of those funds into this type of crowdfunding startup, they would be providing $170 billion of investment potential for small companies and startup companies. That is an incredibly powerful potential form of capital to put America forward. It is small businesses that create most of the jobs, and this capital formation idea will help in that. Let's get it done.

I certainly deeply appreciate the contributions of my colleague from Colorado, Senator Bennet, who will make his points.