H.Res. 256

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

I would like to try to clear up some of the misunderstandings of what this bill is about. The more we debate it, the better Members understand the impact of this bill on our economy.

The gentleman from Texas, the chairman, just talked about how generous they are in allowing this debate to take place. Members, let me tell you what really happened. The fact of the matter is there has been an attempt to hide H.R. 1256 in this DOD bill. What business does it have in this bill? Why is it the Rules Committee determined that it would be a closed rule?

The first reason is that they tried to get away without having amendments to the bill. I had an amendment that I offered in committee that was not accepted, an amendment that if there were an open rule, I would have been able to offer this amendment on the floor. But, no, they close-ruled this bill to keep any amendments from being heard, to be debated, to be voted on, because they know that if Members really discover what these derivatives are all about and how they could create such risk that we'll be put in the position of bailing out failed institutions all over again, that Members would not support this kind of bill.

This country has been through a terrible financial crisis. Part of the reason is that we allowed our banks and financial institutions to place unregulated bets on the mortgage markets. Remember AIG? What did AIG do? It made a really big bet that the mortgage market would go up, and it lost, and the taxpayer was put in the position of having to bail it out. The Dodd-Frank Act enabled us to put a stop to that kind of betting going on, hidden from the rest of us, finally dragging that activity out into the sunlight.

The CFTC and the SEC are finally putting in place rules of the road to

prevent any one institution from threatening our livelihood again, but this bill wants to drag some of that activity back into the shadows, allowing banks and others, once again, to enter into transactions without even our regulators being able to see them.

You may say that this bill just concerns the limits on how far U.S. law goes. So why is it so important that the CFTC and SEC have discretion over the rules on cross-border initiatives? Because the exposure that a foreign branch or subsidiary of a U.S. institution takes in foreign markets comes back home to the U.S. Moreover, U.S. banks and corporations may find that those they do business with have much more hidden exposure because of foreign transactions. This bill says that we will have to rely on the foreign regulators to protect us. We shouldn't have to rely on foreign regulators who don't even have regulatory regimes to protect us. We should protect ourselves by making sure that anybody our branches and our subsidiaries are doing business with have comparable rules. Those countries must have comparable rules to the U.S. rules in order to protect us.

To put it simply, this bill would delay the implementation of the Wall Street Reform Act's derivatives provisions by months, if not years, and would preserve the kind of opacity in our markets that led to taxpayers' bailing out AIG just 5 short years ago.

For example, while Europe has made considerable progress on its swaps' clearing and reporting rules, Europe's framework for implementing trading and internal business conduct standards have been caught up in delays. It is unclear at this point how strong those requirements ultimately will be. This bill increases the incentives for other jurisdictions to avoid making the tough decisions to put in a strong financial framework.

I reserve the balance of my time.

Announcement by the Speaker Pro Tempore

Mr. Speaker, at this time I enter into the Record three letters of opposition to this bill. One is from the Executive Office of the President of the United States Office of Management and Budget; Americans for Financial Reform; and American Federation of Labor and Congress of Industrial Organizations.

American Federation of Labor and Congress of Industrial

Organizations,

Washington, DC, June 11, 2013.

Dear Representative: The AFL-CIO opposes the ``Swaps

Jurisdiction Certainty Act'' (H.R. 1256) scheduled for floor

consideration this week. If passed, this bill would undermine

the framework Congress put in place in the Dodd-Frank Wall

Street Reform and Consumer Protection Act of 2010 to prevent

risky derivatives trading from contributing to another global

financial crisis. It would impose major new procedural

hurdles that would impede the Commodity Futures Trading

Commission's (CFTC) ability to move forward with effective

rules designed to prevent risks that arise from overseas

derivatives trading from impacting the U.S. economy.

The 2008 financial crisis provided vivid illustrations of

how derivatives transactions conducted by U.S. institutions

in overseas markets can wreak havoc on the U.S. economy--both

the AIG bailout and the Lehman Brothers failure were caused

to a large extent by offshore derivatives trades.

As we saw with AIG and Lehman Brothers, U.S. institutions

can easily conduct derivatives transactions outside U.S.

borders that put U.S. financial institutions at risk. With

this in mind, Congress granted the CFTC, which regulates

around 90 percent of U.S. derivatives markets, authority in

Section 722(d) of Dodd-Frank to oversee derivatives

transactions that ``have a direct and significant connection

with activities in, or effect on, commerce of the United

States.''

The CFTC has issued proposed guidance that strikes an

appropriate balance. It protects U.S. taxpayers and the U.S.

economy while allowing overseas subsidiaries of U.S. banks to

be regulated under `substituted compliance' by their local

regulator when the CFTC makes a specific determination that

the relevant foreign rules are as strong as the U.S. rules.

H.R. 1256 would seriously undermine the CFTC's ability to

protect U.S. taxpayers from risks that arise from overseas

derivatives trading by creating a presumption that these

transactions are exempt from U.S. regulation. To overcome

this presumption, the CFTC and the Securities and Exchange

Commission (SEC) would be required to determine that the

foreign country rules are not `broadly comparable' to U.S.

rules, issue joint rules, and make formal reports to

Congress.

The CFTC's ability to effectively oversee offshore

derivatives transactions that create risks to the U.S.

economy is central to whether Title VII is ultimately

successful in mitigating the risks in the derivatives markets

that nearly brought down the economy less than five years

ago.

Don't let another AIG or Lehman Brothers happen under your

watch. Vote against the ``Swaps Jurisdiction Certainty Act''

(H.R. 1256) and prevent a major loophole from undermining the

basic derivatives market protections that Congress so

sensibly put in place when it passed Dodd-Frank in 2010.

Sincerely,

William Samuel,

Director, Government Affairs Department.

Mr. Speaker, I will enter into the Record the amendment

that I would have offered had they not come up with a closed rule.

Page 5, strike line 1 and all that follows through page 7,

line 6, and insert the following:

(d) General Application to Foreign Jurisdictions.--

(1) General application.--In issuing rules under subsection

(b), the Commissions shall provide that persons in compliance

with the regulatory requirements of a country or

administrative region that has one of the nine largest

combined swap and security-based swap markets by notional

amount in the calendar year preceding issuance of such rules

or any other foreign jurisdiction as jointly determined by

the Commissions may satisfy the corresponding categories of

United States swaps requirements through such compliance upon

the making of a joint determination by the Commissions

pursuant to subsection (d)(2).

(2) Determinations.--The Commissions shall jointly

determine whether one or more categories of regulatory

requirements of a foreign jurisdiction as jointly determined

by the Commissions, are broadly equivalent to corresponding

United States swaps requirements, with such determinations

initially to be made as follows:

(A) Initial determinations regarding a country or

administrative region described under paragraph (1), or any

other foreign jurisdiction as jointly determined by the

Commissions, accounting for the five largest combined swap

and security-based swap markets by notional amount in the

calendar year preceding issuance of rules under subsection

(b) shall be made within 180 days after issuance of such

rules.

(B) Initial determinations regarding a country or

administrative region described under paragraph (1), or any

other foreign jurisdiction as jointly determined by the

Commissions, accounting for the next five largest combined

swap and security-based swap markets by notional amount in

the calendar year preceding issuance of rules under

subsection (b) shall be made within 360 days after issuance

of such rules.

(C) Initial determinations regarding a country or

administrative region described under paragraph (1), or any

other foreign jurisdiction as jointly determined by the

Commissions, shall be made within 540 days after issuance of

rules under subsection (b).

(3) Criteria.--In such rules, the Commissions shall jointly

establish criteria for determining that one or more

categories of regulatory requirements of a country or

administrative region described under paragraph (1) or other

foreign jurisdiction are broadly equivalent to corresponding

United States swaps requirements, and shall jointly determine

the appropriate application of certain United States swap

requirements to persons or transactions relating to or

involving such country or administrative region or other

foreign jurisdiction as jointly determined by the Commission

to the extent that the Commissions have determined that

certain regulatory requirements of such country or

administrative region or other foreign jurisdiction are

broadly equivalent to corresponding United States swaps

requirements.

(4) Right to petition.--A market participant or group of

market participants may request a determination with respect

to a particular category or categories of foreign regulatory

requirements with regard to a foreign jurisdiction or

jurisdictions. Any determination made regarding such a

request shall be available to all market participants.

Page 7, line 7, strike ``(4)'' and insert ``(5)''.

I yield 1\1/2\ minutes to the gentleman from Massachusetts (Mr. Capuano).

I yield 1\1/2\ minutes to the gentleman from Massachusetts (Mr. Lynch).

I yield 1\1/2\ minutes to the gentleman from Texas (Mr. Al Green).

I yield 1\1/2\ minutes to the gentleman from Minnesota (Mr. Ellison).

I yield 1\1/2\ minutes to the gentlewoman from Connecticut (Ms. DeLauro).

I yield an additional 1 minute to the gentleman from Massachusetts (Mr. Capuano).

I yield 1 minute to the gentleman from Massachusetts (Mr. Lynch.)

I yield myself as much time as I may consume to refute.

The gentleman from Texas keeps talking about we make the claim that we ended ``too big to fail.'' That's what we're trying to do. That's what we're standing up against, what you're attempting to do in this piece of legislation.

Derivatives are an important part of the reform of Dodd-Frank. It is important because we're trying to create transparency. The over-the- counter derivatives market that has been working for so long in the shadows we cannot continue to have.

I yield to the gentleman from Texas.

Reclaiming my time, the gentleman from Texas knows how it works. We have Dodd-Frank reform, and it has to be implemented. You know the living wills have to be done. You know that we have to put in place all that it takes to have the orderly liquidation procedure. And it is important that you understand, and that all of our Members understand, that derivatives are an important part of reform.

If we allow this bill that presumes that other countries are comparable to us in their regulatory regimes without even checking, without vetting, without asking any questions, without requiring anything, then we absolutely put our own country at risk, and we put at risk the American taxpayers who will have to bail out the major financial institutions if we allow you to pass a bill like this, presuming that they are okay, that these countries are okay.

The other thing is--I know and understand now. I understand very well that if we allow this presumption to take place, then you'll just go to court and you'll argue that you have the presumption, and you'll try and tie up the CFTC all over again.

I reserve the balance of my time.

I yield 1 minute to the gentleman from Texas (Mr. Al Green).

I yield myself the balance of my time.

Mr. Speaker and Members, I'm very disappointed and worried that this bill has been brought to the floor under a closed rule, as have more than one-third of the bills so far this Congress.

I believe there are important issues concerning the structure of this bill, particularly the bill's presumption that the rules of the nine largest foreign markets will be broadly equivalent to our own. The bill would require the SEC and the CFTC to act in order to allow U.S. rules to apply to transactions, even though the risk of the transactions will ultimately be imported back to the United States.

My amendment would have the reverse of this presumption, directing the SEC and CFTC to jointly consider the regulatory framework of these countries to provide appropriate exemptions when jurisdictions have derivatives rules that are truly broadly equivalent to our own.

A closed rule prevents us from considering these issues. Why do they have a closed rule? Why did they try to hide this bill inside the DOD?

They don't want this debate. They didn't want an opportunity for any amendments. They don't care that foreign countries would be determining our fate when they set up their regulatory regimes, which won't be comparable to ours.

We owe it to the American people to do better than we have done. We have had the subprime meltdown. We've had the economic crisis. Why throw us back into that simply because you're trying to protect Wall Street?

Our citizens don't deserve that. They deserve for us to stand up and protect them from having to bail out these big institutions that will fail.

We have gone through AIG. We have gone through JP Morgan, the London Whale, the $6 billion failure. Why should we do that again?

I yield back the balance of my time.

Mr. Speaker, I demand a recorded vote.

Madam Speaker, I want to thank the gentleman from Florida (Mr. Nugent) for yielding me the customary 30 minutes.

I yield myself such time as I may consume.

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

Madam Speaker, this should be a simple rule. Every year, this House considers the annual National Defense Authorization Act. It's a bill that reauthorizes our Nation's defense programs and a place where we should have the opportunity to debate some of the most important issues facing this country and the world.

The process is typically broken up into two parts: a rule providing for general debate on the National Defense Authorization Act and a rule providing for consideration of amendments to that bill. It's generally not a controversial process; although, the decisions made by the Rules Committee in allowing and preventing amendments from being considered can be controversial.

And that's where this rule goes wrong. This is not the normal rule providing for general debate for the defense authorization bill. No, Madam Speaker, this rule is much more than that.

Over the past 3 years, we've seen the Republican leadership in the House fixated on several things:

They want to take health care away from millions of Americans by repealing ObamaCare;

They want to destroy the social safety net through mindless budget cuts; and

They want to weaken our financial system by repealing the Dodd-Frank Act that came out of the greatest fiscal crisis since the Great Depression.

This rule, the rule that should be a simple general debate rule for the Defense Authorization Act, also makes in order H.R. 1256, the Swap Jurisdiction Certainty Act. Not only does this rule cram in this controversial bill, it does not allow one single amendment. That's right. This is a closed rule. That's not an open and transparent process, certainly not the one that Speaker Boehner promised.

H.R. 1256 would require the Commodity Futures Trading Commission and the Securities Exchange Commission to jointly issue rules on the regulations of swaps transactions between the United States and foreign entities.

H.R. 1256 automatically exempts transactions in countries with the nine largest swaps markets from U.S. regulations unless the CFTC and the SEC jointly determine that the regulations aren't broadly equivalent. Because many large U.S. financial institutions have subsidiaries outside of the United States, there are serious concerns that banks will seek to conduct swap transactions in countries with looser regulations to avoid U.S. oversight. And, Madam Speaker, it is important to note that many countries are far behind the United States in promulgating their rules on swaps.

Why are we looking to allow foreign regulations to govern transactions involving U.S. companies that could ultimately impact our economy?

During the markup in the Financial Services Committee, Ranking Member Maxine Waters offered an amendment to strike the presumption that foreign regulatory requirements satisfy U.S. swaps requirements, allowing the CFTC and the SEC to determine whether foreign regulatory requirements are comparable to U.S. requirements. Unfortunately, under this closed rule, the full House will not have the opportunity to consider a similar amendment to strengthen this legislation.

Madam Speaker, this is yet another attempt to slow down the Dodd- Frank rulemaking process, undermine the CFTC's work in regulating derivatives trading, and weaken the financial market regulations needed to protect our economy.

Madam Speaker, I urge all my colleagues to vote ``no'' on this rule.

This rule also allows, believe it or not, the Agriculture Committee to file a supplemental report to H.R. 1947, the

farm bill reauthorization. Madam Speaker, this is a bill that cuts $20.5 billion from SNAP, formerly known as food stamps. While this report is just technical, and fulfills the committee's responsibilities following the markup of H.R. 1947, this rule is not the place for this report. And, more importantly, I want to make it crystal clear that I do not support these egregious cuts. It's a rotten thing to do to poor people during this tough economic time.

Finally, Madam Speaker, let me discuss the least controversial part of this rule, the defense authorization bill. This rule allows the House to begin general debate on H.R. 1960, the FY 2014 National Defense Authorization Act.

There is much to admire and support in this bill, and I commend the chairman and ranking member for working together to ensure the programs that provide benefits and support to our veterans and military retirees are adequately funded and that there will be no increases in TRICARE fees. Regrettably, there's also a great deal in this bill that should make every Member of this Chamber pause and think about our national security priorities:

Should we be spending additional billions on Cold War nuclear weapons rather than on our troops, their families, and our veterans?

Should we really be cutting funds and putting obstacles in the way of implementing the New START Treaty with Russia, limiting both our nations' ability to further reduce and verify our nuclear arsenals?

Should we be committing hundreds of millions this year and billions of dollars in the future to an east coast missile defense site that the Pentagon says it doesn't want and doesn't need?

Should we continue to set up roadblocks and obstruct the President's efforts to resolve the issue of how to effectively and safely close the detention facilities at Guantanamo Naval Station, appropriately release and return to their families those prisoners who have been cleared of all charges, and bring to justice once and for all those few remaining prisoners who were indeed engaged in heinous acts of terrorism?

And once again, Madam Speaker, the committee provides $85.8 billion for the war in Afghanistan through the Overseas Contingency Operations account. That's $5 billion more than what the President and the Pentagon asked for.

Now let me just say a couple of words about the OCO account. It is an off-budget account. It is another $85 billion on the Nation's credit card--deficit spending, pure and simple. It is the lingo of ``emergency spending,'' as if it were an unexpected surprise that we will still be in Afghanistan throughout all of FY 2014.

I have always been concerned that the wars in Iraq and Afghanistan, and the ever more amorphous and hard-to-define global war on terror, have not been included in the Pentagon's base budget but always outside that budget, with an ``emergency'' designation so that we don't have to figure out how to pay for it now. We'll just pay for it later and later and later. I'm increasingly concerned that, even after we transition all combat military and security operations over to the Afghan Government by the end of 2014, the OCO will still go on.

It is time to phase out the OCO, put this spending back into the base spending bill, and if we want to make war, then we ought to figure out a way to pay for it or make the appropriate cuts in other Pentagon programs to make room for the funding of these operations.

Finally, Mr. Speaker, let me say a few words about the strong concerns this Congress has, on both sides of the aisle, about the epidemic of sexual assault in all branches of our military. This bill includes several measures that will strengthen the investigation and prosecution of these heinous crimes inside our military. It also provides new protections for victims of military sexual assault. It reflects the bipartisan work of Representative Turner, my Massachusetts colleague, Representative Tsongas, as well as Representatives Walorski, Noem, Castro, and Loretta Sanchez. However, Mr. Speaker, there is still much more that should and can be done to ensure these brutal rapes and assaults are fully investigated and prosecuted, the victims treated with respect, and to advance education in our military academies and among our ranks and our officer corps.

Several amendments were submitted to the Rules Committee, and I hope that they will be made in order so that we can more fully debate this critical issue and how to end rape and sexual assault within our Armed Forces.

Let me just add, Mr. Speaker, that while the NDAA looks to strengthen protections and prosecutions inside our military, we here in Congress are also to blame for having failed in our oversight responsibilities. Congress has not given the attention to military sexual assault that it deserves. So I think that we do need to clean up our own House and ensure that Congress does a far better job of oversight to ensure that the Pentagon and all our military members are held accountable for preventing, reducing, and prosecuting cases of sexual assault and abuse in our Armed Forces and providing victims with the services and support that they deserve.

Mr. Speaker, I'm always ambivalent about the annual defense authorization bill. I support the programs for our veterans and our retirees, and I support providing for the genuine needs of our servicemen and -women, whether they are based here at home or abroad. But I cannot support the amount of waste, the spending on unnecessary and often ridiculous programs, on more nukes, on outdated weapons, and on wars that never end.

As we begin general debate on the defense bill later today, I ask my colleagues to keep these questions in mind.

Once again, Mr. Speaker, this rule is unnecessarily complicated and misguided. There is no reason to include yet another bill gutting Dodd- Frank in this rule, and there's no reason to cram into this rule a report from the Agriculture Committee about a bill that will make hunger worse in America.

For these reasons, I oppose this rule, and I urge my colleagues to vote ``no'' on the rule for these three measures, and I reserve the balance of my time.

Mr. Speaker, I'm happy to yield 2 minutes to the gentlewoman from New York, the ranking member of the Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, Mrs. Maloney.

Mr. Speaker, I'm happy to yield 1 minute to the gentlewoman from New York, the distinguished ranking member of the Committee on Appropriations, Mrs. Lowey.

Mr. Speaker, I'm happy to yield 3 minutes to the gentleman from Rhode Island (Mr. Langevin), the ranking member of the Armed Services Subcommittee on Intelligence, Emerging Threats and Capabilities.

Mr. Speaker, I'm happy to yield 2 minutes to the gentleman from Texas (Mr. Castro).

Mr. Speaker, I'm happy to yield 2 minutes to the gentlewoman from Maryland (Ms. Edwards).

I yield the gentlelady 1 additional minute.

Mr. Speaker, I am happy to yield 1 minute to the gentlewoman from California (Mrs. Capps).

Mr. Speaker, I am happy to yield 2 minutes to the gentlewoman from California (Ms. Speier).

Mr. Speaker, I yield 1 minute to the gentlewoman from New York, the distinguished ranking member of the Committee on Small Business, Ms. Velazquez.

I yield the gentlelady an additional 30 seconds.

Mr. Speaker, I am happy to yield 1 minute to the gentlewoman from California (Ms. Brownley).

Mr. Speaker, I am happy to yield 1 minute to the gentleman from Minnesota (Mr. Ellison).

I yield the gentleman an additional 30 seconds.

Mr. Speaker, I yield 1 minute to the distinguished ranking member of the Committee on Financial Services, the gentlewoman from California (Ms. Waters).

I would like to inquire of the gentleman from Florida how many additional speakers he may have.

How much time do I have left, Mr. Speaker?

I yield 1 additional minute to the ranking member of the Committee on Financial Services, the gentlewoman from California (Ms. Waters).

I yield myself the remaining time.

Mr. Speaker, I get it. The Republican majority wants to repeal Dodd- Frank, and they're using every possible vehicle they can to undermine Dodd-Frank, which puts consumers at risk by their constant attack on protections that, I think, most people in this country think are reasonable.

As you heard from Ms. Waters, the ranking member on the Committee on Financial Services, and from Mr. Ellison, there is controversy around this bill. The thought that you would bring a bill like this to the floor that would weaken Dodd-Frank under a closed rule is really unforgivable, quite frankly. We ought to debate this. This is important stuff. There ought to be debates, and there ought to be amendments.

On the defense authorization bill, I just want to say this for the record: while I have no opposition to your bringing the DOD bill up for general debate, I do want to express my concern that when the Rules Committee considers the amendments that they be fair-minded about it and that all major issues, including the issues raised by a number of my colleagues on sexual assault, are addressed.

I also want to say that the war in Afghanistan ought to be debated on this floor. A central part of our defense budget right now is going to this war, and last year, we were shut out. I'm hoping that this year we will at least have the opportunity to bring an amendment to the floor, debate what our policy should be, and will let Members on both sides vote up or down.

I urge my colleagues to vote ``no'' because this does allow H.R. 1256 to come to the floor under a closed rule. That is wrong. This should be a more open and transparent process, especially when it comes to an issue that is so important.

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

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

Madam Speaker, by direction of the Committee on Rules, I call up House Resolution 256 and ask for its immediate consideration.

Madam Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Massachusetts (Mr. McGovern), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

General Leave

Madam Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks.

House Resolution 256 provides for House consideration of two separate pieces of legislation. The first of these bills is H.R. 1256, the Swap Jurisdiction Certainty Act, which will be considered for 1 hour, with time divided between the Committees on Financial Services and Agriculture, under a closed rule.

Secondly, and the reason why I am so proud to be the sponsor of this rule, H. Res. 256 provides for 1 hour of general debate for this year's National Defense Authorization Act.

The Rules Committee traditionally receives hundreds of amendments to the NDAA; and with just under 300 submitted by the end of the day yesterday, this year is no different. Therefore, as is the tradition for this bill, this first rule in the NDAA consideration process provides for general debate while a second will provide for consideration of the plethora of amendments we have before us.

As a member of the House Armed Services Committee, I have had the

honor of helping craft this legislation for the past few months. As I think anybody can imagine, when you're talking about a bill that authorizes the Department of Defense, there is a lot to discuss and consider. That point was illustrated by our full committee markup in the Armed Services Committee last week, which started first thing Wednesday morning and went through to almost 3 a.m. on Thursday, 16 hours. We worked long and hard, and I'm proud of the product we've presented to this House for consideration.

But for as much time and effort that we on the Committee on Armed Services put into the Defense Authorization Act, I know that other Members who don't serve on our committee will want to make their mark on this bill, too. To ensure that the House has an opportunity to really have a comprehensive, free-flowing debate on such an important topic, we've decided to break the rule for the Defense Authorization Act into two parts.

That's why today's rule provides us with 1 hour of general debate time. It gets us started on the path to consideration. It also allows Members from both sides of the aisle to have a full discussion about the broader themes running through this base legislation. There are important debates, and the sooner we get them started, the better. But with nearly 300 amendments submitted to the National Defense Authorization Act, the truth is we on the Rules Committee couldn't give each and every amendment the full weight and consideration it deserves and produce a comprehensive rule that starts debate on the full bill and all amendments today.

If something's worth doing, it's worth doing it right. Therefore, while the House works on the Swap Jurisdiction Certainty Act and starts general debate on the NDAA, we, on the Rules Committee, will return to the committee room and we'll continue to sift through all the amendments that Members have offered on this bill.

We want to make sure the House has the opportunity to weigh in on each and every important issue in the NDAA. That's why we need to take our time. And once we have a full understanding of the amendments submitted to the committee, we'll come back with a second rule setting the universe of amendments for this legislation.

I know that we all share the same commitment to making this a fair and collaborative process. Quite frankly, it's the spirit of cooperation and the knowledge that we're serving a common purpose that has been one of the most gratifying parts of serving on HASC to date. As Chairman McKeon said to the Rules Committee yesterday, we may disagree sometimes, but it doesn't mean we have to be disagreeable. We're able to put partisanship aside, and we know that our work directly impacts the life of each and every servicemember and his or her family in a personal and direct way.

We're providing for the common defense, which is part of the Federal Government's most fundamental roles, part of our core mission, as I like to say. And if you want proof of how collaboratively we worked on this bill as a committee, you only need to look at the fact that we passed this bill out of committee 59-2. And as the father of three sons serving in the Army, I'm heartened to know that politics can be set aside when it comes down to making sure our troops are equipped with the tools that are required, funded at the levels they need, and trained for the mission at hand.

This is an important time for our country and an important time for those members of the military who serve us every day. These young men and women put their lives on the line for us so we could be here today and debate the issues of the day. So they deserve our undivided attention and support when it comes to making sure that they have everything that they need, and there's no more essential role for our Federal Government, in my opinion, as to what we are doing today.

H.R. 1960 fulfills the promise to our warfighters and to their loved ones. I'm proud of this rule, which gets us on the road towards considering and passing this essential bill. For that reason, I support the rule. I support the underlying pieces of legislation and look forward to coming back here tomorrow in the next step of getting the National Defense Authorization Act for Fiscal Year 2014 passed.

I encourage all my colleagues to vote ``yes'' on the rule, and I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Turner).

I yield the gentleman an additional 2 minutes.

Mr. Speaker, I just want to make sure that everybody knows that there were almost 300 amendments that have been submitted, and they'll be discussed later today, and Mr. McGovern is a part of that process and will be discussing those amendments today.

But I agree with both of my colleagues as it relates to sexual assault in the military. Having only been on Armed Services now for 6 months, I will tell you that I agree with Mr. McGovern, particularly as it relates to oversight. And I believe that this Congress should exhibit and utilize its oversight capacity to the fullest, especially as it relates to sexual assault within the military.

I reserve the balance of my time.

I continue to reserve the balance of my time.

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

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

I have none.

Mr. Speaker, in closing, I support this rule and encourage my colleagues to support it as well. It allows the House to take action on two different but very important pieces of legislation.

It provides us with an opportunity to force the SEC and the CFTC to finally and jointly promulgate rules governing the U.S. institutions' use of swaps and other financial derivatives while accessing international markets. This action will help ensure that we have a vibrant financial system and that American companies can manage the risks while remaining competitive in an international market. Additionally, it begins our consideration on the National Defense Authorization Act, providing the House with an hour of general debate on programs that make up our Department of Defense.

As a Member of Congress, as a three Blue Star parent, and as an American, I can think of nothing more important than providing our military the tools that they need to carry out their missions. These brave men and women put their lives on the line for our Nation each and every day. This legislation isn't a thank-you to the troops, it's our duty as citizens to acknowledge that we live in the land of the free only because of the service of the brave.

Mr. Speaker, we've heard a lot of discussion here on the floor, particularly as it relates to Dodd-Frank. First of all, this does not repeal Dodd-Frank. If it were a vote for a repeal of Dodd-Frank, I'd vote for it, but it's not a repeal of Dodd-Frank. As a matter of fact, this piece of legislation, the Swap Act, was actually voice voted out of the Agriculture Committee, which has joint jurisdiction over this piece of legislation. It was voice voted. In the Committee on Financial Services, 100 percent of the Republicans and two-thirds of the Democrats voted for its passage, so it isn't exactly as one would hear the other side say.

When we talk about open rules, I think one of the things that distinguishes this Congress versus the 111th Congress is that this is one of the most open Congresses in the 112th Congress versus the 111th, which had absolutely zero open rules. I will remind my colleagues of that just because, as we talk about this and move forward on both of these issues, it's important to know that we have an open rule coming up in which we have almost 300 amendments that we are going to be considering in the Rules Committee in just a short period of time with the NDAA.

Lastly, I hear my colleagues talk about how for 25 years they have allowed sexual assault to go unabated. I can hardly stomach the fact that this body would allow that to happen over the last 25 years. As a former law enforcement officer, as one who vigorously prosecuted cases of sexual assault and rape, it should be no different for our armed services.

That is where my good friend Mr. McGovern had mentioned the oversight of armed services and of this House to make sure that we hold people accountable; to make sure, as other Members have talked about, that members of our military are kept safe, and that those who would prey upon members of their own military unit will find swift justice so that nobody can say there is not justice in regards to the fact, if you commit a rape or a sexual assault in the military, that you will be prosecuted to the fullest extent of the law; that we make sure that we have victim advocates for those who are assaulted, and that we have good investigators who focus on those types of crimes and have the forensics to back it up so you have a strong prosecution. I think that's what this NDAA bill is an attempt to do.

I strongly support the bill and the underlying legislation.

With that, I yield back the balance of my time, and I move the previous question on the resolution.

The previous question was ordered.

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

Mr. Speaker, I rise today to urge my colleagues to pass H.R. 1256, the Swap Jurisdiction Certainty Act. Swaps are important tools that our farmers, ranchers, and businesses rely on to hedge the risks of competing in a global marketplace. Yet later this month, guidance the CFTC issued could fundamentally disrupt these markets here at home and around the world unless Congress acts today.

Last summer, the CFTC issued its proposed crossborder guidance to the marketplace for review and comment, explaining how it would regulate swaps entered into by foreign companies. What was produced was startling in its reach--the guidance declares that almost any swap entered into by anyone with any interest related to the United States falls under the jurisdiction of the CFTC and the Dodd-Frank Act.

As chairman of the General Farm Commodities and Risk Management Subcommittee, I held a hearing on this issue last December with Commissioners Sommers and Chilton from the CFTC and regulators from the European Union and Japan. Each witness agreed that it was imperative that we get the crossborder application of Dodd-Frank correct and that the U.S. not try to police swap markets around the world.

Respect for equivalent, but not necessarily identical, regulatory standards has been a cornerstone of international banking regulations for decades. The CFTC as rewritten the principles of international cooperation with this guidance, insisting that it alone can and should manage the global swaps markets. Predictably, this was met with universal outcry from foreign governments and international regulators.

But today's bill is about far more than just the pride of international regulators. If the CFTC's guidance stands and equivalence is no longer recognized, the global derivatives market can become regionalized as institutions and customers transact a majority of their business within their home jurisdictions. Such an outcome would concentrate specific risks in various economies and sectors of the world.

Here at home, American end users who use swaps to manage everyday business risks may have fewer counterparties to work with. Fewer counterparties means that there will be less competition and liquidity in the market, leading to higher costs for end users and a concentration of higher risk in the United States.

Not only has the CFTC failed to cooperate with international regulators, it's failed to do so at home, as well, leading the SEC to propose a separate rule governing the small slice of swaps

markets that it regulates. Today, there are two different sets of rules for when market participants are subject to U.S. law, depending on what instrument is being traded.

The Swap Jurisdiction Certainty Act will end this mess. It first requires that the CFTC and the SEC cooperate on a single, joint rule for the extraterritorial application of Dodd-Frank regulations. Second, it requires the CFTC and the SEC to recognize the competence of certain sophisticated foreign regulators, unless they can both agree that the regulators have failed to produce equivalent requirements.

For all the back and forth today, this is a simple, straightforward bill. In a nutshell, it requires the CFTC and the SEC to cooperate, both with each other and with the rest of the world--exactly what they should have been doing all along.

I'd like to thank my counterpart on the Financial Services Committee, Mr. Garrett, for his work on bringing this legislation to the floor today. I would, as well, like to thank Ranking Member David Scott, who continues to be a thoughtful and productive partner on issues in the Agriculture Committee. And, finally, I'd like to thank Chairman Frank Lucas who never lets us forget that our constituents depend on these markets to manage their businesses and protect themselves in an uncertain world.

With that, I urge swift passage of the legislation and reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to a former member of the Agriculture Committee and the subcommittee, the gentleman from North Carolina (Mr. Hudson).

Mr. Speaker, may I inquire as to how much time remains on each side?

Mr. Speaker, I yield 2 minutes of my time to the gentleman from Georgia (Mr. Scott) for his use.

I reserve the balance of my time.

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

We have heard from a number of foreign governments around the world on their entities' regulatory schemes and--let me just say--strong disagreement with the cross-border guidance that Chairman Gensler and the CFTC proposed.

We have heard from Ministers of Finance from the United Kingdom, the European Commission, France, Brazil, Germany, South Africa, Russia, and Switzerland. We've heard from the European Securities and Markets Authority. In Australia, we've heard from the Reserve Bank of Australia and the Australian Securities and Investments Commission. The Hong Kong Secretary for Financial Services and the Treasury. Japan has weighed in with the Japan Financial Services Agency and the Bank of Japan. The Monetary Authority of Singapore, the Swiss Financial Market Supervisory Authority, and from the UK we've heard from the Chancellor of the Exchequer and the Financial Services Authority.

I would like to submit for the Record two of those letters; one to Secretary Lew from a number of folks, and the other is to Chairman Gensler from England, the European Union, Japan, as well as France. Mr. Speaker, all of these letters are posted on the Agriculture Committee's Web site for constituents and others to read and get a flavor of what our fellow regulators around the world are saying about this. None of them have any interest in an unregulated market. They all see the risks that we see.

This bill simply asks the SEC and the CFTC to get along, come to a conclusion, whatever that might be, and then deal equitably with their fellow regulators around the world. These are bright, smart people, just like we are. For us to argue that we have the only perfect scheme to regulate derivatives is a bit wrongheaded. This bill goes a long way to fixing that.

I would urge my colleagues to support the bill, vote in favor of it, and I yield back the balance of my time.

18 April 2013.

Cross-Border OTC Derivatives Regulation

Dear Secretary Lew: We, the undersigned, are writing to

express our concern at the lack of progress in developing

workable cross-border rules as part of reforms of the OTC

derivatives market.

We are already starting to see evidence of fragmentation in

this vitally important financial market, as a result of lack

of regulatory coordination. We are concerned that, without

clear direction from global policymakers and regulators,

derivatives markets will recede into localised and less

efficient structures, impairing the ability of business

across the globe to manage risk. This will in turn dampen

liquidity, investment and growth.

We share a common commitment with respect to OTC

derivatives reform, and are implementing rules across very

different markets with different characteristics and

different risk profiles, to support this global initiative.

We believe the basic principles on which cross-border rules

should be based are clear and widely shared, and we summarise

them in the annex to this letter. An approach in which

jurisdictions require that their own domestic regulatory

rules be applied to their firms' derivatives transactions

taking place in broadly equivalent regulatory regimes abroad

is not sustainable. Market places where firms from all our

respective jurisdictions can come together and do business

will not be able to function under such burdensome regulatory

conditions.

A coherent collective solution is therefore needed for

cross-border derivatives, and regulators must work together

to avoid outright conflicts in regulation and minimise

overlaps as far as possible. In this regard, mutual

recognition, substituted compliance, exemptions, or a

combination of these would all be a valid approach, and

careful consideration should be given with respect to

registration requirements for firms operating across borders.

Recent experience shows that these discussions can only

proceed if they are based on a shared understanding of the

overall outcome being sought. For this reason, we are writing

to urge that jurisdictions consider carefully the attached

principles to avoid cross-border conflicts and support the

Pittsburgh G20 reforms. We hope that these principles might

provide a useful foundation for regulatory discussions to

make progress.

We urge all authorities to work with us to achieve an

outcome that meets the principles outlined in this letter and

we, in turn, commit to continue to work to address the areas

of concern which are most fundamental to others. To this end,

this letter is copied to the Chairman of the FSB; the

Chairman of the CFTC; the Chairman of the SEC; the Chairman

of the U.S. Senate Committee on Agriculture, Nutrition and

Forestry; and the Chairman of the US House of Representatives

Committee on Agriculture.

Yours sincerely

Guido Mantega,

Minister of Finance, Government of Brazil.

Pierre Moscovici,

Minister of Finance, Government of France.

Taro Aso,

Deputy Prime Minister, Minister of Finance, Minister of

State for Financial Services, Government of Japan.

Pravin Gordhan,

Minister of Finance, Government of South Africa.

George Osborne,

Chancellor of the Exchequer, UK Government.

Michel Barnier,

Commissioner for Internal Market and Services, European

Commission.

Wolfgang Schauble,

Minister of Finance, Government of Germany.

Anton Siluanov,

Minister of Finance, Government of Russia.

Eveline Widmer-Schlumpf,

Finance Minister, Government of Switzerland.

Mr. Speaker, pursuant to House Resolution 256, I call up the bill (H.R. 1256) to direct the Securities and Exchange Commission and the Commodity Futures Trading Commission to jointly adopt rules setting forth the application to cross-border swaps transactions of certain provisions relating to swaps that were enacted as

part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and ask for its immediate consideration in the House.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and submit extraneous material for the Record on H.R. 1256, currently under consideration.

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

Mr. Speaker, the legislation before the House this afternoon, H.R. 1256, the

Swap Jurisdiction Certainty Act, is a bipartisanship response to what many view to be, frankly, regulatory red tape overreach and the adverse consequences that it can have on the millions of our fellow countrymen who are either unemployed or underemployed--the impact that it could have on the competitiveness of our U.S. employers and job creators.

Mr. Speaker, I need not tell anyone in this body that we regrettably continue to be in the middle of a nonrecovery recovery. If it weren't for the fact that so many people have actually left the job force--the working participation rate--our unemployment rate would be even higher. Many have just given up.

We know that for many, even though America has, in the past, produced 3\1/2\ percent economic growth and is probably capable of 4 or 5 percent economic growth with the right economic policies, regrettably, we find ourselves mired in 1\1/2\ to 2 percent GDP growth, which means, Mr. Speaker, a lot of American dreams go unfulfilled and a lot of our constituents lay awake at night wondering how are they going to pay the bills.

So, Mr. Speaker, jobs continue to be job number one, I believe, of the United States House of Representatives. But, regrettably, those who create jobs, those who employ our constituents, are drowning in a sea of red tape. There's been an over 50 percent increase in regulations under the Obama administration. We know that it is directly correlated to the lackluster economic growth that we see in the Nation today.

I still vividly remember that one small business person in east Texas came up to me--he had a small cabinetry shop. Even though it was still profitable, he shut it down. He shut it down because of the red tape burden that crushed him and the jobs of 17 people who worked in east Texas. And he said, Congressman, it got to the point I just thought my Federal Government didn't want me to succeed.

Mr. Speaker, we always have to be vigilant in ensuring that the red tape burden doesn't strangle the jobs and hopes and aspirations of the American people. So that brings us to H.R. 1256, the Swap Jurisdiction Certainty Act.

Now, many of you who may be tuning in to this debate may not be quite familiar with the world of derivatives, but it's a way that many farmers, ranchers, manufacturers hedge risk in order to become successful companies and employ people and sell their goods and services at competitive prices. An outfit like John Deere will use a derivative. They may do an interest rate swap as they finance a tractor for some farmer in rural east Texas that I may represent. That derivative is directly linked to the cost and the availability of that tractor.

What we are trying to do with H.R. 1256 is make sure that those who are trying to access derivatives, to hedge risk, to create and sustain jobs, don't automatically overnight have huge swaps of the global market pulled out from under them because, if they do, all of a sudden it could be that somebody can't finance that tractor anymore.

Companies like Southwest Airlines that operate in my hometown of Dallas, Texas, they hedge their fuel cost; and if they can't access global markets, who knows about the success of their hedges. Then, all of a sudden, the price of a trip for grandparents to fly in from Kansas City to see their grandkids in Dallas, Texas, just became more prohibitive, it just became more expensive.

An outfit like Coors, they'll hedge their aluminum cost through swaps, maybe their wheat costs through swaps. And I don't know about other Members, but I represent a lot of hardworking people in the Fifth District of Texas; and let me tell you, sometimes on a hot August afternoon after working, putting in 40 hours at the Pepsi bottling plant or maybe putting it in at some of the other factories that we may have in Mesquite, somebody might just want to go to the 7-Eleven and buy a six-pack. In America that ought to be their right. And the inability--the inability--to access global markets for swaps ultimately can actually inflate that cost. That's not something I care to deny to hardworking Americans who want that.

This is a very simple and bipartisan bill. Mr. Speaker, this passed. We had a hearing in the Financial Services Committee and we had a markup in the Financial Services Committee. It passed with 100 percent of the Republican vote. It passed with almost two-thirds of the Democratic vote. You would think that we might be under the suspension calendar for this one, but in order to respect the wishes of the ranking member, we are having a more prolonged debate in addition to the one that we've already had in the committee.

But, Mr. Speaker, ultimately, this bill will do two things. It will tell the Securities and Exchange Commission and the Commodity Futures Trading Commission, You need to issue one joint rule when it comes really to American end users being able to access global markets, not one suggestion and one rule, two different rules--one rule. One rule. Let's take down a little complexity here.

Mr. Speaker, after Dodd-Frank, we're about to celebrate its 3rd anniversary next month. After 3 years of deliberating, maybe it's time to actually come out with a rule and create a little certainty for the people at Coors and at Southwest Airlines and at all the other employers and John Deere. Maybe it's time to create a little certainty. So the bill says, Okay, let's get this done in 9 months. You've had almost 3 years. It's time to get it done.

And last but not least, in order not to pull the rug out from under these people on day one, it says, Do you know what? The nine largest markets, we are going to have a presumption that their regimes are broadly equivalent to the U.S. and not immediately deny access.

Now, at any given time, if the CFTC and SEC come to the conclusion that these regimes are not broadly equivalent, that somehow they present risk to our economy, with the stroke of a pen they can change that presumption. But not on day one, not on day one, Mr. Speaker.

So, for the sake of economic growth, for the sake of jobs, to provide some certainty in a struggling economy, I would urge all--all--of my colleagues to support this bipartisan legislation that was voice voted in the Ag Committee, voice voted, and had unanimous--unanimous--consent of all Republicans and almost two-thirds of the Democrats on the Financial Services Committee, urge all my colleagues to support H.R. 1256.

I reserve the balance of my time.

I yield myself 30 seconds just to say to the gentlelady that she had the opportunity to offer her amendment in committee, and her amendment was defeated. Second of all, as she raises the specter of bailout, she has also said before that Dodd-Frank ended bailouts, so I don't know which it is. I would also say nothing in the bill changes the rulemaking authority of the CFTC or the SEC, and it delays nothing, but it was just 6 months ago that the ranking member sent a letter to the chairman of the CFTC:

I request that you provide for phased-in compliance and

appropriate short-term relief from relevant title VII

provisions.

So she, herself, was asking for a delay.

I now yield 5 minutes to the chairman of the Subcommittee on Capital Markets and Government Sponsored Enterprises, the author of this legislation, the gentleman from New Jersey (Mr. Garrett).

I yield the gentleman an additional 45 seconds.

Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Neugebauer), chairman of the Housing and Insurance Subcommittee.

Mr. Speaker, may I inquire as to how much time remains on both sides.

At this time, Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Crenshaw).

I continue to reserve the balance of my time.

I yield myself 15 seconds, Mr. Speaker, to say, one, if this is a disgrace, you need to inform almost two-thirds of your Members who voted for it in committee. Second of all, nothing in this amends Dodd-Frank. Third of all, you all tell us Dodd-Frank ended ``too big to fail,'' so the specter of bailout I simply do not understand. You need to make up your mind.

I reserve the balance of my time.

Will the gentlewoman yield?

If I misquoted the gentlelady, I apologize, but I thought I had seen earlier quotes where the gentlelady posited that Dodd-Frank ended ``too big to fail.'' If I was incorrect, I apologize to the gentlelady, but I thought you had said that on more than one occasion.

Mr. Speaker, how much time do we have?

Mr. Speaker, in order to close for the bipartisan majority, I will yield the remainder of our time to the author of the bill, the gentleman from New Jersey (Mr. Garrett).