CREED Act of 2013

Mr. President, I rise today to talk about the farm bill and then specifically about reforming payment limits for farm programs.

As one looks back to the fall of 2011 and the failure of what was referred to as the ``supercommittee,'' we saw many committees continue on with business as usual afterwards. However, one committee's members took it upon themselves to continue efforts to tackle spending and propose meaningful cuts--the Senate Agriculture Committee.

For that matter, the House Agriculture Committee worked towards that end as well. I commend Chairman Stabenow and then Ranking Member Roberts for corralling the many ideas of the members of the committee to write a bill that cut $23 billion.

We were able to work in committee to get the bill done. We were able to work in a bipartisan manner to get the bill across the Senate floor. It is how legislation is supposed to be considered and debated in the Senate.

One of the measures in last year's farm bill was my proposal reforming payment limitations in the farm program.

Adopting reforms to payment limitations contributed to the $23 billion in savings. Beyond just being a part of saving money, these reforms help ensure farm payments go to those who they were originally intended--small and medium-size farmers.

In addition, the reforms include closing off loopholes so nonfarmers can't game the system. I will come back to my proposed reforms in a minute after I say just a few words about the overall farm bill picture.

As we all know, Congress was not able to complete work on the farm bill last year. But that is not for a lack of desire by either the Senate nor the House Agriculture Committees. There remains a desire to get a 5-year bill passed.

Supporters of the farm bill need to take a hard look at what challenges were presented last year to getting the bill done. We need to forge ahead knowing some tough decisions need to be made.

For the Senate, we need to consider whether it is realistic that we only reduce $4 billion out of the nearly $800 billion nutrition title. More can and should be done. The nutrition title comprised by far and away the largest expenditure in the bill.

There are more reforms we can make to programs such as food stamps, and they are reforms that cut down on waste, fraud, and abuse in the program but also safeguard assistance for people who need it.

There are other programs we need to take a fresh look at. Should we accept the status quo on the sugar program? How do we handle dairy policy? What policy can we implement in the commodity program that won't distort planting decisions but maintains an effective safety net?

These are some of the many issues we need to debate again and decide. I, for one, hope we are able to start soon and work together to get a 5-year bill completed this year. Our farmers and rural communities deserve to have certainty.

When we do move forward on drafting a new farm bill, I will again be pushing for the reforms to payment limitations. That is why today I am introducing the Farm Program Integrity Act of 2013 with Senators Johnson of South Dakota, Senator Enzi, and Senator Brown.

The proposed legislation strikes a needed balance of recognizing the need for a farm safety net while making sure we have a defensible and responsible safety net.

In case there is any doubt, we do need a farm program safety net. For those who argue we do not need a safety net for our farmers, I argue they do not understand the danger of a nation which does not produce its own food.

Take Germany and Japan during World War II, for instance. There came a point where their soldiers had difficulty fighting because they didn't have food to eat. So today their respective governments maintain vigorous support for their farmers.

It is a matter of social cohesion as well. Without a secure source of food, we jeopardize our very way of life. Look around the world where there is hunger and you see rioting, stealing, and other acts of violence. We need our farmers to keep producing our food.

For all the advances in modern agriculture, farmers are still subject to

conditions out of their control. Just look at the drought that still grips much of the U.S.

Without an adequate safety net, some farmers would be left with no ability to make it the following year. That would mean potentially less food being produced for an ever-increasing world population. That is a scary prospect.

While farmers need a safety net, there does come a point where a farmer gets big enough and financially secure so that he can weather tough times without much assistance from the government.

Somehow, though, over the years there has developed this perverse scenario where big farmers are receiving the lion's share of farm program payments. We now have the largest 10 percent of farmers receiving nearly 70 percent of farm payments.

There is nothing wrong with a farmer growing his operation, but the taxpayer should not be subsidizing large farming operations to grow even larger. By having reasonable caps on the amount of farm program payments any one farmer can receive, it helps ensure the program meets the intent of assisting small and medium-size farmers through tough times.

My proposed caps on payments will also help encourage the next generation of rural Americans to take up farming.

I am approached time and again about how to help young people get into farming. When large farmers are able to use farm program payments to drive up the cost of land and rental rates, our farm programs end up hurting those they are meant to help.

It is simply good policy to have a hard cap on the amount a farmer can receive in farm program payments. We will keep in place a much needed safety net for the farmers who need it most. And it will help reduce the negative impact farm payments have on land prices.

Our bill sets the overall cap at $250,000 for a married couple. In my State, many people would say this is still too high.

But I recognize that agriculture can look different around the country, and so this is a compromise.

Just as important to setting a hard cap on payments is closing off loopholes that have allowed nonfarmers to game the farm program.

The bill being introduced today will do this by cutting off the ability of these nonfarmers from abusing what is referred to as the ``actively engaged'' test.

In essence, the law says one has to be actively engaged in farming to qualify for farm payments. However, this has been exploited by people who have virtually nothing to do with the farming operation yet receive payments from the farm program.

Our Nation has over $16 trillion in debt. We cannot afford to simply look the other way and let people abuse the farm program.

The Farm Program Integrity Act of 2013 is the same in purpose as what it states in the name. This is about increasing the integrity of the program.

My colleagues here in the Senate agreed with me last year as we included these pivotal reforms in the farm bill. I am confident these reforms will garner similar approval in the 113th Congress.

I mentioned earlier how we need to assess some of the challenging areas of farm policy as we look to pass a 5-year farm bill, and some tough decisions need to be made.

However, my proposed reforms regarding payment limits do not pose a tough decision. They are common sense and necessary reforms.

Mr. President, I come to the floor today to discuss the importance of small businesses in the United States. It cannot be stated enough that small businesses are the economic engines of our country. Small businesses also represent the essence of the American Dream. They are creators of new jobs and innovative technologies. In fact, over the last 15 years, businesses employing less than 500 people have created 93 percent of all new jobs and employed 58.6 million workers. Businesses employing less than 20 people alone employed 21.3 million workers. In my home state of Louisiana, small businesses make up about 98 percent of businesses. As Chair of the Senate Committee on Small Business and Entrepreneurship, I remain focused on the needs of these small businesses. That is why I am here today to introduce a bill that I believe will help spur job creation among small businesses.

As you know, right now our country is only slowly recovering from the worst economic downturn since the Great Depression. This economic downturn disproportionately affected small businesses and, in turn, stifled their ability to generate growth for the country. Sadly, since November 2008, 80 percent of the job losses have come from small businesses. An estimated 2.16 million jobs were lost in the private sector from November 2008 through February 2009--nearly 40 percent from businesses with less than 50 employees. Ten jobs lost here and five jobs there add up. These are the job losses that hurt our economy, our communities and our families.

With this in mind, I was proud to lead Congressional efforts to enact the Small Business Jobs Act of 2010, Public Law 111-240. President Obama signed this legislation into law on September 27, 2010. This legislation focused on the three ``C's'' important to small businesses: Capital, Contracting, and Counseling. Today I would like to focus on Capital and more specifically, on the Small Business Administration's 504 Loan Refinancing Program, which unfortunately expired in September 2012.

The 504 loan program is a long-term financing tool for economic development that provides small businesses with long-term, fixed-rate loans to help them acquire major fixed assets and real estate for expansion or modernization. The Small Business Jobs Act of 2010 allowed small businesses to use the 504 loan program to refinance certain qualifying existing debt for 2 years. While loan volumes were relatively low in the program's first year, the SBA made a number of program modifications to encourage and allow more small businesses to take advantage of the long terms and low interest rates offered by the program. In fiscal year 2012, the program's second and final year, the SBA approved over 2,400 refinancings for over $2.2 billion to small businesses.

Unfortunately, on September 27, 2012, the program expired just as it was gaining traction in the small business community. Over the past year, in my conversations with small business owners and in testimonies given in roundtables and hearings before the Committee on Small Business and Entrepreneurship, I have consistently heard the need to extend this portion of the 504 loan program. The bill that I am introducing today would extend for 5 years the provision allowing small business owners to use Small Business Administration, SBA, 504 loans to refinance existing commercial mortgages. Extending the 504 refinancing program is a commonsense way to help small

businesses and create jobs. By allowing small businesses to refinance qualified commercial real estate debt, this program lowers their monthly mortgage payments at no cost to taxpayers. At a time when we are still facing high unemployment, this extension is one of many things that we should be doing to put more capital in the hands of America's job creators.

I would like to reiterate that this is not a new proposal, and it has consistently received bipartisan support. In total, last year I filed this extension either as a bill or an amendment four times. The 504 refinance provision extension was originally introduced as S. 2364 by Senators Snowe, Landrieu, Isakson, and Shaheen. Title II of the SUCCESS Act, which I introduced during the 112th Congress, also included the refinance provision. On July 12, 2012, the Senate voted on the SUCCESS Act as part of Senate Amendment 2521 to S. 2237, the Small Business Jobs and Tax Relief Act of 2012. Although the amendment came up short of the 60 votes needed to end debate, the SUCCESS Act amendment received a strong 57 bipartisan votes, including five of my Republican colleagues. Finally, I included the provision in a substitute amendment that I cosponsored to the JOBS Act of 2012 and offered the 504 refinancing language as an amendment to the Veterans Jobs Bill. I urge my colleagues on both sides of the aisle to come together in support of this common-sense, cost effective program.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I come to the floor today to discuss the importance of small businesses in the United States. It cannot be stated enough that small businesses are the economic engines of our country. Small businesses also represent the essence of the American Dream. They are creators of new jobs and innovative technologies. In fact, over the last 15 years, businesses employing less than 500 people have created 93 percent of all new jobs and employed 58.6 million workers. Businesses employing less than 20 people alone employed 21.3 million workers. In my home state of Louisiana, small businesses make up about 98 percent of businesses. As Chair of the Senate Committee on Small Business and Entrepreneurship, I remain focused on the needs of these small businesses. That is why I am here today to introduce a bill that I believe will help spur job creation among small businesses.

As you know, right now our country is only slowly recovering from the worst economic downturn since the Great Depression. This economic downturn disproportionately affected small businesses and, in turn, stifled their ability to generate growth for the country. Sadly, since November 2008, 80 percent of the job losses have come from small businesses. An estimated 2.16 million jobs were lost in the private sector from November 2008 through February 2009--nearly 40 percent from businesses with less than 50 employees. Ten jobs lost here and five jobs there add up. These are the job losses that hurt our economy, our communities and our families.

With this in mind, I was proud to lead Congressional efforts to enact the Small Business Jobs Act of 2010, Public Law 111-240. President Obama signed this legislation into law on September 27, 2010. This legislation focused on the three ``C's'' important to small businesses: Capital, Contracting, and Counseling. Today I would like to focus on Capital and more specifically, on the Small Business Administration's 504 Loan Refinancing Program, which unfortunately expired in September 2012.

The 504 loan program is a long-term financing tool for economic development that provides small businesses with long-term, fixed-rate loans to help them acquire major fixed assets and real estate for expansion or modernization. The Small Business Jobs Act of 2010 allowed small businesses to use the 504 loan program to refinance certain qualifying existing debt for 2 years. While loan volumes were relatively low in the program's first year, the SBA made a number of program modifications to encourage and allow more small businesses to take advantage of the long terms and low interest rates offered by the program. In fiscal year 2012, the program's second and final year, the SBA approved over 2,400 refinancings for over $2.2 billion to small businesses.

Unfortunately, on September 27, 2012, the program expired just as it was gaining traction in the small business community. Over the past year, in my conversations with small business owners and in testimonies given in roundtables and hearings before the Committee on Small Business and Entrepreneurship, I have consistently heard the need to extend this portion of the 504 loan program. The bill that I am introducing today would extend for 5 years the provision allowing small business owners to use Small Business Administration, SBA, 504 loans to refinance existing commercial mortgages. Extending the 504 refinancing program is a commonsense way to help small

businesses and create jobs. By allowing small businesses to refinance qualified commercial real estate debt, this program lowers their monthly mortgage payments at no cost to taxpayers. At a time when we are still facing high unemployment, this extension is one of many things that we should be doing to put more capital in the hands of America's job creators.

I would like to reiterate that this is not a new proposal, and it has consistently received bipartisan support. In total, last year I filed this extension either as a bill or an amendment four times. The 504 refinance provision extension was originally introduced as S. 2364 by Senators Snowe, Landrieu, Isakson, and Shaheen. Title II of the SUCCESS Act, which I introduced during the 112th Congress, also included the refinance provision. On July 12, 2012, the Senate voted on the SUCCESS Act as part of Senate Amendment 2521 to S. 2237, the Small Business Jobs and Tax Relief Act of 2012. Although the amendment came up short of the 60 votes needed to end debate, the SUCCESS Act amendment received a strong 57 bipartisan votes, including five of my Republican colleagues. Finally, I included the provision in a substitute amendment that I cosponsored to the JOBS Act of 2012 and offered the 504 refinancing language as an amendment to the Veterans Jobs Bill. I urge my colleagues on both sides of the aisle to come together in support of this common-sense, cost effective program.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today to join with my friend and colleague from Iowa, Chuck Grassley, in introducing the Farm Program Integrity Act of 2013, which would establish commonsense, meaningful farm program payment limitations. I am pleased that Senator Sherrod Brown and Senator Mike Enzi are also joining us in this effort. At a time when our country faces significant budgetary constraints, it is important that we look for bipartisan and commonsense approaches to restructuring programs in such a way that improves their effectiveness while also reducing the deficit. Our legislation will do that, and our approach has already garnered widespread support.

The current structure of our farm support program has, in a number of ways, failed rural America. In 2008, the largest 12.4 percent of farms received 62.4 percent of farm program payments, according to the United States Department of Agriculture's Economic Research Service, USDA ERS. With such a disproportionate share of the program going to the largest, most capitalized operations, the small and medium-sized family farmers are squeezed out of the business. The farm bill is intended to provide programs that function as a safety net for farmers, but it has instead become a cash cow for the few large producers. We must maintain a safety net for producers, but the system must be targeted to family farmers instead of large agribusinesses.

The 2008 farm bill took some important steps to strengthen the integrity of our farm support system. The bill established an income threshold for program eligibility in which payments are limited to producers with less than $500,000 in non-farm Adjusted Gross Income, AGI, and $750,000 in on-farm AGI, for a total limit of $1.25 million AGI. Additionally, the law eliminated the triple-entity loophole and required that payments go to a specific individual through direct attribution. These were important first steps. However, there is much more we must do to restore integrity to our farm programs.

Under the current law, we have a system of support for producers in the form of direct and counter-cyclical payments. Direct payments are capped at $40,000 and counter-cyclical payments are capped at $65,000; additionally, there is no cap on marketing loan gains and loan deficiency payments, and thus, there is effectively no total limitation. This is unacceptable. Without a cap on payments, the Federal Government is subsidizing producers to get bigger, which in turn makes it more difficult for the smaller family farmers, and particularly young and beginning producers, to survive.

Last June, we took some meaningful steps in the Senate to address the structure of our farm support system. Senators from both sides of the aisle came together to pass the Agriculture Reform, Food, and Jobs Act, S. 3240, commonly referred to as the farm bill, with broad support. The bill, as passed out of the Senate Agriculture Committee, contained a hard cap of $50,000 on payments under the new Agriculture Risk Coverage, ARC, program, a program developed to replace the antiquated direct and counter-cyclical programs.

The committee-reported bill also contained important language to close loopholes that have allowed ``paper-partners,'' or individuals not directly engaged in the farming operation, to receive farm program payments. The bill created an important new standard for determining who qualifies as a farm manager. In addition to the language incorporated into the underlying bill, Senator Grassley and I also offered an amendment during floor consideration to cap marketing loan gains and loan deficiency payments at $75,000. Our amendment passed overwhelmingly with 75 votes.

The House Agriculture Committee marked up and reported its own version of the farm bill reauthorization. Unfortunately, the House leadership refused to bring the bill to the floor before the end of 2012. As a result, Congress was left in the position of having to pass an extension of the 2008 farm bill, and push off work on a full reauthorization, including the important reforms we included in the Senate-passed bill, until the 113th Congress.

The legislation we are offering today combines the cap on farm program payments and language to close loopholes from the Senate-passed bill. As Congress proceeds with reauthorizing our farm programs, I will continue pushing to ensure that we finally provide for meaningful payment limitations and target assistance to small and medium-sized family farms.

As the most important industry in South Dakota, agriculture is the economic engine that drives our rural communities. Without viable family farmers and ranchers, our small towns and Main Street businesses would face significant financial hardships. I have worked with Senator Grassley on this issue for a number of years, and I'm proud to once again join with him today to continue this important fight.

Mr. President, today I am reintroducing the Strengthening Enforcement of Civil Penalties Act or the SEC Penalties Act with my colleague, Senator Grassley. I am pleased that Senator Leahy has joined us in introducing the bill this year.

The SEC Penalties Act will enhance the ability of securities regulators to protect investors and demand greater accountability from market players. Unfortunately, even after the financial crisis that crippled the economy, some on Wall Street continue to pursue profits at all costs, making the calculated decision to do wrong and move on. Without the consequence of meaningful penalties to impact decision- making, I fear we will continue to witness a disturbing culture of misconduct by some on Wall Street.

The current regime for securities law violations limits by statute the amount of penalties the Securities and Exchange Commission, SEC, can fine an institution or individual. During hearings I held in 2011 in the Securities, Insurance, and Investment Banking Subcommittee, I found out how this limitation significantly ties the hands of the SEC in performing its enforcement duties. At that time, the agency had been criticized by a Federal judge for not obtaining a larger settlement against Citigroup, a major player in the financial crisis that ended up settling with the SEC in an amount that was a fraction of the cost the bank had inflicted on investors and the profits the bank had ultimately pocketed. The SEC explained that the low settlement amount was because it was statutorily prohibited from levying a larger penalty.

The bill we are introducing seeks to substantially update and strengthen the SEC's civil penalties statute. This legislation should cause potential and current offenders to think twice before engaging in misconduct by increasing the statutory limits on civil monetary penalties, directly linking the size of these penalties to the scope of harm and associated investor losses, and substantially raising the financial stakes for repeat offenders of our nation's securities laws.

Specifically, our bill would increase the per violation cap for the most egregious securities laws violations to $1 million per offense for individuals and $10 million per offense for entities. This will help ensure that the SEC's most severe, or ``tier three,'' penalties will help deter people from engaging in the most serious offenses, rather than have such wrongdoing be viewed as just the cost of doing business. Under existing law, the SEC can only penalize individual securities law violators a maximum of $150,000 per offense and institutions $725,000 per offense.

Our bill also would allow penalties equal to three times the economic gain of the violator. It provides a new calculation method that includes the amount of associated investor losses as part of the penalty determination. This should allow the SEC to address situations where the actual economic gain to the violator is relatively small compared to the extent of the wrongdoing or the harm caused to investors.

The SEC Penalties Act also addresses the disconcerting trend of repeat offenders on Wall Street. Our bill includes two statutory changes to substantially improve the ability of the SEC's enforcement program to ratchet up penalties for recidivists.

One provision would allow the SEC to triple the applicable penalty cap for recidivists who, within the preceding five years, have been criminally convicted of securities fraud or been the subject of a judgment or order imposing monetary, equitable, or administrative relief in any action alleging SEC fraud.

The other provision would allow the SEC to seek a civil penalty if an individual or entity has violated an existing federal court injunction or bar imposed by the SEC. Many believe this approach would be more efficient, effective, and flexible than the current civil contempt remedy.

Finally, under the SEC Penalties Act, the penalty relief available in administrative proceedings would be the same as it is in district court.

The nearly one-half of all U.S. households that own securities deserve a strong cop on the beat that has the tools it needs to go after fraudsters and the difficult cases arising from our increasingly complex financial markets. The SEC Penalties Act will help by giving the SEC more tools to demand meaningful accountability from Wall Street and protect investors, which in turn will improve transparency and increase confidence in our financial system. I urge my colleagues to support this important bipartisan legislation.