Small Cap Liquidity Reform Act of 2014

Mr. Speaker, pursuant to House Resolution 478, I call up the bill (S. 540) to designate the Air Route Traffic Control Center located in Nashua, New Hampshire, as the ``Patricia Clark Boston Air Route Traffic Control Center,'' and ask for its immediate consideration.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and to include extraneous material on S. 540.

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

The last time I stood on the floor to talk about a ``clean'' debt limit increase, I did so to prove that we could do better. It was an effort to implore my Democrat colleagues in the House and the Senate to heed the warnings of the President's own fiscal commission, also known as the Simpson-Bowles Commission, which clearly noted how our economy and hardworking taxpayers would suffer under the mountain of debt Washington was racking up.

My position is unchanged. I remain as committed as ever to grappling with our debt; to making the tough decisions to reform, improve, strengthen, and protect our entitlement programs; and, most importantly, to getting this economy back on track so hardworking taxpayers start seeing their pay go up and those in need of a job can find one. In fact, that work is underway at the Ways and Means Committee where we posted for public comment bipartisan proposals to reform Medicare and Social Security so that they are viable for seniors and taxpayers, not only today but well into the future.

Regrettably, over the last 3 years, Democrats have hardened their position. The President, Senate Democrats, and House Democrats will not even entertain a discussion--let alone a negotiation--over what reforms we can make along with a debt limit increase. They have become unyielding. Democrats are totally adamant: extend the debt limit or default. That is the position of today's Democrat Party: don't negotiate, don't reach out across the aisle, ignore the past, which clearly shows the debt limit typically passes with other reforms.

Mr. Speaker, I remember serving when Bill Clinton was President. Those were different times. Despite our different opinions, we were able to find common solutions for the American people. We balanced the budget, reformed our Nation's welfare laws, and helped break the cycle of dependency by placing an emphasis on work. Today, Democrats openly cheer that their health care law will lead to less work.

Well, Mr. Speaker, I am disappointed the Democrats have walked away from the table, and I am disappointed we are not engaged in a more serious debate today. But as disappointed as I am, I cannot, in good conscience, let the Democrats' refusal to engage lead to a default. For that reason, and that reason alone, I will vote ``yes'' today.

But today's legislation is hardly a solution to our looming debt crisis. That is why the Ways and Means Committee will continue to carefully review and advance policies that not only reform our entitlement programs, providing greater protection for seniors and greater savings for hardworking taxpayers, but also policies that will create a stronger economy with more jobs and higher wages for workers. It is only through a combination of such policies that we can truly solve this problem.

I reserve the balance of my time.

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

The Budget Control Act was signed into law on August 2. On August 5, Standard & Poor's downgraded the United States credit rating and did so because:

The downgrade reflects our opinion that the fiscal

consolidation plan that Congress and the President recently

agreed to falls short of what, in our view, would be

necessary to stabilize the government's medium-term debt

dynamics.

There have been some speakers who have come to this floor who said we were downgraded because of brinksmanship. We were downgraded because there were those of us who wanted to see some approach to fiscal responsibility in our debt limit negotiations.

Clearly, that is revisionist history, and the facts bear out. Standard &

Poor's own quote was it was because we didn't go far enough, not because we tried to address our medium term and long-term debt.

So this reinforces my point. We can't be satisfied with just increasing the debt limit. I realize that is where we are today, and as I have said, I will vote for this legislation, but as another speaker has said, they have viewed this as nonnegotiable, and what we really need to do is reach across the aisle and work together to find long- term solutions to both our medium term and long-term debt obligations so that these programs, like Medicare and Social Security, these valuable programs that serve many of our citizens, are not only viable and there today, but there well into the future.

I reserve the balance of my time.

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

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

I point out to my friends on the other side that, in recent memory, there have been seven instances where debt limits were part of other major pieces

of legislation. For example, in the first Bush administration, there was a Balanced Budget and Emergency Deficit Act; in the Clinton administration, there was the Reconciliations Act, as well as the Contract with America Advancement Act; in the Obama administration, there was stimulus, Pay-As-You-Go, Budget Control Act. This has happened seven times in recent history.

What is different? Why can't it happen now? Well, the difference is that you had both parties willing to come together and negotiate major pieces of legislation that would help to address the short-term, medium-term, and long-term drivers of our debt. What we have now is a very open admission that it is absolutely nonnegotiable. There is a straight increase in the debt limit without any legislation, even though this happened seven times in the past.

So I would just say that debt limit increases are often parts of larger pieces of legislation and it would not be unusual. And it is, I think, a sad day when the other side has a take-it-or-leave-it approach and is unwilling to come together with the Republicans to find a way to bring other legislation to the floor that will help address the drivers of our debt.

I reserve the balance of my time.

I have no further speakers. I am prepared to close.

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

We have heard a lot of talk about how our Nation must pay its bills. But one major reason we are in this position is an unpaid for trillion- dollar stimulus bill that did not increase economic growth, did not create jobs, and simply added to our debt.

I know there are some on the other side who want to keep on spending no matter what the impact is on our credit rating. While I believe that we must increase our debt limit, I am clearly not satisfied that there are no provisions that would help us address the long-term drivers of this debt.

But I will say that it is disappointing the Democrats have walked away from the table. It is disappointing that we are not engaged in a more serious debate today, a debate about policy and how we reign in what really has become runaway debt.

But as I have said, as disappointed as I am in that, I cannot in good conscience let the Democrats' refusal to engage lead to a default. I will vote ``yes'' on this legislation today. But it is hardly a solution to our looming debt crisis. That is why the Ways and Means Committee will continue to move forward on reforming Medicare and Social Security, as we have, with bipartisan proposals that are in legislative form, published for the public to view on our Web site.

We will move forward on tax reform, one that will help grow our economy, create jobs, and help address our debt crisis by a stronger, more vibrant economy that will provide opportunities for individuals to get work, increase their wages, and provide for themselves and their families.

I hope that Democrats will join me in these efforts. I believe it is only through a combination of those policies can we really get to the true solutions to this very significant problem facing our country. While this is a short-term solution to prevent what I think is essential that we do prevent, a default, it is not enough. As I have said, there is so much more to do.

With that, I yield back the balance of my time.

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

I thank the gentleman from Michigan, the chairman of the Ways and Means Committee, for his responsible commitment to vote for this bill today. I wish I could say that a majority of his party was going to be responsible and vote for this bill today, but I cannot.

First, I am pleased that the Republican Party seems to be shedding at least part of its extremist Tea Party ideology in the prevailing belief of holding the Nation hostage to meet the whims of a select few.

Now, I would just like to take a moment to explain what the House is and is not voting on today. We are voting today to ensure that our country can pay the bills we have already incurred--not new bills, old bills, so that Social Security checks can continue to be mailed, so that doctors serving Medicare patients will be reimbursed for their services, so that veterans' pensions and compensation will be paid out, and so income tax refund checks will continue to be processed and paid out.

What we are not voting for--what we are not voting for--we are not voting for a bill to spend money. Our Republican colleagues will argue that this bill allows the Federal Government to continue to borrow and, therefore, spend more money. They say tax revenues come in and even more goes out in spending for government services and programs, services and programs that we all agree benefit our mutual constituents.

So what is the alternative the Republicans would offer instead? My Republican colleagues would offer default, because not supporting this bill would mean you support default and defaulting on our Nation's debt. Default would mean taxpayer dollars would still come into the government. We would still collect. The IRS would still collect taxes, but no money would go out. There would be no services or programs that benefit our constituents; they would be shut down.

Do you all remember how angry the country was during the Republican shutdown of our government when military death benefits were not paid? That would only be magnified under a default led by the Republican side of the aisle. Not only would there be no death benefits, there would be no veterans' benefits at all, and no money for VA hospitals, doctors, and nurses. And a default wouldn't just affect our military and our veterans. There would be no funds for food inspectors, no Pell grants, no air traffic controllers or any other government service because of the default.

Let's be clear. If you liked the Republican-engineered shutdown of our government, you will love the default the Republicans who would vote ``no'' today would perpetuate on the American public.

This is a debt that the Republican caucus helped create. You own a portion of this debt. The American people are watching this vote. They are confounded, once again, that the majority of the majority will vote to default. The overwhelming majority of the minority will vote not to default. I ask the American people, which party is the responsible party? The answer is clear. The Democratic Party will be responsible today. We will vote overwhelmingly for this bill not to default on our Nation's debt, not to raise interest rates on our constituents, and not to raise the cost of money for the government to borrow, either.

I yield as much time as the gentleman from Massachusetts (Mr. Neal) may consume.

I am pleased to yield 1 minute to the gentlelady from California, Nancy Pelosi, the leader of the Democratic Caucus in the House.

Mr. Speaker, I would inquire as to the time remaining on both sides.

Mr. Speaker, I yield 2 minutes to the gentleman from Michigan (Mr. Levin), the ranking member of the Ways and Means Committee.

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

Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Hoyer), the minority whip.

I yield an additional 3 minutes to the gentleman.

I yield an additional 30 seconds to the gentleman.

Mr. Speaker, I yield 2 minutes to the gentlewoman from California (Ms. Waters), ranking member of the Financial Services Committee

Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. Honda).

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

Does the gentleman from Michigan have any additional speakers?

Mr. Speaker, I am prepared to close as well, and I yield myself such time as I may consume.

In closing, I appreciate all of my colleagues coming down to the floor this afternoon to speak in favor of this proposed bill.

I do think it is noteworthy to point out that only the gentleman from Michigan has come down to speak on behalf of the majority today and ably, I should say, he is voting for this bill, and I appreciate his support. But I notice that no one took time in opposition on the other side of the aisle. Maybe they just don't really care as much about this issue as we thought they did.

But the reality is, as I have said before, every vote against this bill is a vote for default. The Republican colleagues have an answer for that. They have a plan. They intend to default some day so they have a plan. They

have a bill they call the Full Faith and Credit Act. We call it the ``Pay China First Act'' because what it does is it says, in the event of a default, we will pay those people who own our bonds, we will pay foreign governments first, and everyone else gets put down to the bottom of the barrel. But they have a plan; the Republicans have a plan in the case that we default.

Let me say, Mr. Speaker, I think it is totally irresponsible to even have had a debate on this floor on a bill that would determine the payments of our debt in lieu of default. I think it is irresponsible. The fact that we have had this man-made brinkmanship is irresponsible. Once again, the Republican Party and their caucus is showing that they are not responsible enough to be ruling and to be governing here in the House of Representatives.

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

Mr. Speaker, I thank the gentleman for yielding. I thank him for his leadership on this important issue to him. To Mr. Levin and members of the Ways and Means Committee, thank you for making clear what the stakes are in this vote on the floor today.

Mr. Speaker, the 14th Amendment of our Constitution declares:

The validity of the public debt of the United States, authorized by law, shall not be questioned.

That has always been the standard upheld and advocated by House Democrats.

In each of my conversations with Speaker Boehner, I have conveyed the unwavering support of the House Democratic Caucus for a clean bill to lift the debt ceiling. That means no goodies for one side or the other. There is nothing you could add to it that would say, Okay, since it is something I like, then I don't mind if it isn't clean. I said to the Speaker, Even if you added something that I cared about a great deal, that our Caucus cared about a great deal, that does not make it right because the full faith and credit should be unquestioned, and it is not negotiable.

I thank the Speaker for giving us this opportunity. This is really important to bring legislation to the floor that is consistent with the intent of the Constitution and with the best interests of the American people. Well, I tell you this, we have heard from all kinds of leaders of finance, from the boardroom to the kitchen table. The boardroom tells us, the conference table then writes to us and says, We urge you to again take the necessary steps to preserve our Nation's financial standing in the world and help ensure that the American recovery continues in its current path toward restored prosperity by the uncertainty as to whether or not we will incur an historic default in raising the debt ceiling.

I wish to submit the full letter to the Record with the signatories who represent the captains of industry and finance in our country.

More important than that, as important as that is, our global standing in the world, more important to each and every person in our country is what Mr. Neal spelled out: what this means to you. If you are a consumer with a credit card, if we did not take this action today, interest rates could skyrocket, making it harder for families to get loans, and for small businesses to invest, spend and hire. Again, on your kitchen table as you pay the bills each month, you would have higher interest rates for your mortgage, your car payments, your student loans, and your credit card bills. Higher interest rates once again on small business loans that are used to pay employees or expand business. Significant blows would come to 401(k)s as a result of the stock market reaction to our not lifting the debt ceiling. Credit markets could freeze. The value of the dollar would be negatively impacted.

So there is a great deal at stake in this vote today. Again, at the time when we have to lift the debt ceiling, it is appropriate to have a discussion of spending priorities, of budgets that should be a statement of our values; but there should be no question that those debates would be something that would not just be a debate, but be a barrier to lifting the debt ceiling. That is why I am grateful to the Speaker and the Republican leadership for giving this House this opportunity to act in a way that is consistent with the Constitution.

When this measure passes today, Congress will state unequivocally that the full faith and credit of the United States of America is not in doubt. I thank my Democratic colleagues for never wavering from this position and standing firm on behalf of all Americans. I thank once again the Speaker for giving us this opportunity to associate ourselves and support the Constitution and the American people.

January 30, 2014.

Dear Members of Congress, The undersigned associations

representing a broad swath of the nation's business community

and sectors serving tens of millions customers, businesses

and investors, respectfully urge you to raise the federal

debt limit without delay.

While we firmly believe that the time is long overdue for

the Administration and the Congress to come together and

develop long-term solutions to our very real fiscal

challenges, defaulting on the nation's debt obligations

should not be an option for policymakers to consider. Should

the President and Congress fail to work together and raise

the debt limit in a timely fashion, the Treasury will be

unable to meet government obligations coming due which would

trigger a series of events that would inevitably lead to

American taxpayers paying more to finance our debt. Even a

short-term failure to fulfill our obligations would seriously

impair market operations and could have significant

consequences to our fragile economic recovery. When Congress

last debated this matter in the fall of 2013, markets clearly

signaled the potential negative affects through increased

interest rates and weakened investor demand for U.S. assets.

We urge you to again take the necessary steps to preserve

our nation's financial standing in the world and help ensure

that the American economy continues on its current path

toward restored prosperity by eliminating the uncertainty as

to whether or not we will incur an historic default and

raising the debt ceiling.

Thank you for considering our urgent request. We look

forward to working with you to advance this and other

critical legislation.

Signed,

American Bankers Association, American Insurance

Association, U S Chamber of Commerce, Consumer Bankers

Association, Financial Services Forum, Financial Services

Roundtable, Independent Community Bankers of America,

Investment Company Institute, Securities Industry and

Financial Markets Association.

Mr. Speaker, I thank the gentleman from New York and I thank the gentleman from Michigan.

Let me start by saying this issue ought not to be subject to debate. America, the greatest land on the face of the Earth, and one of the most successful economic countries in history, ought to pay its bills. I can't believe there is any American who thinks that America should or would welch on that which it owes. That is not a very sophisticated argument. I can make a more sophisticated argument, but when it comes down to it, that is the issue: will America pay its bills? Will it give confidence to the investor community? Will it give confidence to the business community? Will it give confidence to our own citizens? Indeed, will we give confidence to the world that the world's leader can manage its own affairs responsibly?

I want to join Leader Pelosi in congratulating the Speaker for bringing this bill to the floor. He brings it to the floor because he knows, as I have just said, there is no alternative for America but to pay its bills. He brings it to the floor because he knows that if he doesn't, the business community is going to think that the majority party in this House cannot manage the affairs of the United States of America in a responsible fashion. Lamentably, he brings it to the floor, apparently, with some doubts as to whether or not those who have elected him Speaker will follow him in taking a responsible path.

My presumption is, although I don't know, is that the gentleman who chairs the Ways and Means Committee will vote for this. My presumption is Mr. Cantor, the majority leader, will vote for this. My presumption is that Speaker Boehner will vote for this. My presumption is based upon the fact that they have represented that there is not an alternative that is a responsible one.

I doubt that there are many people on this floor who have urged us to pursue a big deal more than I have. I voted against the last budget agreement, otherwise known as Ryan-Murray, because I thought it was too small and did not move us toward fiscal responsibility and sustainability in the magnitude that it should have.

Having said that, however, there is no alternative to pay the bills that we have incurred, that the House, the Senate, and the President on behalf of the American people have incurred, and because we are a great Nation, we will certainly not welch on our debts.

So we come to this time with not many people on the floor, although we have demagogued this issue in the past. We, both sides. Let's be clear. On our side, we said that the Republicans cut revenues; therefore, they were responsible for the debt. On their side, they say Democrats spent money and invested money; and, therefore, they are responsible for the debt.

The fact of the matter is we were all responsible for the debt. The fact of the matter is under the Reagan administration, when I came to Congress, we substantially increased the national debt, and we could only do so with Ronald Reagan's signature. Then under George Bush the first, we substantially increased the debt. We could only do so with George Bush's signature. Under Bill Clinton, we brought the debt down for 4 years running, and we ran surpluses for the next 4. Of course, Republicans were in the House and in charge for 6 years. So it was a team effort, if you will, and we had a budget surplus.

Then in the second Bush administration, we substantially increased the budget deficit. We had two wars, and we paid for none; trillion dollar-plus in additional deficit, many trillions over time.

So, my friends, we come to the floor today to do the only responsible alternative available to us, but that does not mean that anybody who votes for this believes that it is not critically important for us to have America on a fiscally sustainable path.

The Business Roundtable has urged us to pass this bill. As Leader Pelosi quoted, the Chamber of Commerce said not to do so will put our country and our economy at risk. Yet, I fear there are going to be apparently a significant number of people who will come and vote ``no,'' vote ``no'' on paying America's bills; vote ``no'' on giving confidence to the international community that America is in fact able to manage its affairs.

There ought to be no debate, as I said, when it comes to making sure that we pay our bills on time, the bills Congress has incurred. As I said, the Business Roundtable was quoted as saying:

Urgent action is required on the part of Congress in order

to prevent a default.

In fact, they said if we defaulted, every American, all 315-plus million, would feel the negative effects. Why would anybody vote against such a bill?

I will conclude because my friend is running out of time. This is not a partisan vote and should not be viewed as such. Republicans and Democrats have voted to protect the American people, provide for the national defense, and provide for the general welfare of our country pursuant to our constitutional responsibilities. Having done so, there is no responsible alternative but to pay our bills. That is what this vote is about. Let's show the courage, the wisdom, the common sense to do just that. Vote ``yes.''

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3448) to amend the Securities Exchange Act of 1934 to provide for an optional pilot program allowing certain emerging growth companies to increase the tick sizes of their stocks, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and submit extraneous materials for the Record on H.R. 3448, as amended, currently under consideration.

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

I rise in support of H.R. 3448, the Small Cap Liquidity Reform Act of 2013. This bill, approved by a vote of 57-0 in the Financial Services Committee last year, represents yet again another bipartisan and commonsense effort by the House to promote small business capital formation.

I want to thank the gentleman from Wisconsin (Mr. Duffy) for all of his hard work and leadership in bringing this very important piece of legislation to the floor. I also would like to thank Mr. Carney from Delaware for all of his hard work and support for this legislation as well.

What are we talking about here?

Today, many small, publicly traded companies are finding it more and more difficult to attract investor demand and trading liquidity for their stocks. As a result, these companies may have trouble obtaining the investor capital they need for their companies to grow and create jobs.

H.R. 3448 would begin to address this liquidity crunch by testing, through a pilot program, whether increasing the minimum trading increment, also called the ``tick'' size, for certain emerging growth company stocks, or EGCs, from a penny to 5 cents or 10 cents would promote liquidity by incentivizing market makers and others investors to trade these stocks, and by concentrating this trading interest around fewer price points.

All of this may sound like a lot of Wall Street and stock market jargon, but at its core this bill is a simple bill aimed at helping small American companies obtain the capital that they need from investors so that they can grow their businesses.

What the bill does is leave most of the details of designing and administering the tick size pilot program to the experts at the SEC. As a result, the SEC should have the discretion it needs to devise a pilot program that reflects the views of all market participants and interested parties, and that generates the maximum amount of deep and useful data on how different tick sizes impact trading liquidity in small-cap stocks.

By first establishing a temporary pilot program, this bill will ensure that any potential and permanent changes to tick sizes that may be done sometime in the future will be done only in a thoughtful, incremental, and data-driven manner.

The data generated from this pilot program may also be useful into how other aspects of the stock market work, but on this point, let me be clear. This bill is focused on improving small business capital formation. This is not a bill to reform the fundamental structure of U.S. equity markets, nor is it intended to be a substitute for a more detailed, holistic review by the SEC of how these markets work.

Ultimately, there are no guarantees that a tick size pilot program will achieve the desired results and that the benefits of any future action on tick sizes will outweigh the cost, but we should all be agreed that this commonsense approach will help small businesses grow. It is worth trying, and we need many more like it.

Again, I will conclude by saying that this bill was approved by the Financial Services Committee 57-0. In addition, many market participants, as well as SEC Chair White; at least two of her colleagues, Commissioners Gallagher and Piwowar; and the SEC's Advisory Committee on Small and Emerging Companies, have all vocally supported the concept of a tick size pilot program.

So I hope that this legislation will serve as a final push forward getting this tick size program forward and moving off the ground. I urge my colleagues to, again, promote small business capital formation by passing H.R. 3448, and I urge my friends over in the Senate to take up this bill immediately as well.

With that, I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from Wisconsin (Mr. Duffy), the prime sponsor of this legislation and the gentleman who has been the driving force behind this idea.

Mr. Speaker, I believe the gentleman from Delaware has already yielded back. So, at this point, I would just like to again thank the gentleman from Delaware for his work, the gentleman from Wisconsin for his leadership on this issue.

And, also on his page, I saw written in a large number was the magic number 57-0. I hope that does send a resounding message over to the other body, to the Senate, to do as they have not been doing for the last 14 months, which is to take up some of these good job-creation bills, a bill that helps promote jobs and small businesses in this country.

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