I thank Chairman Rogers for the time. I've enjoyed working with him and Ranking Member Dicks, and also the ranking member of our Subcommittee on Agriculture, FDA, and Commodity Futures Trading Commission, the gentleman from California, Mr.…
I thank Chairman Rogers for the time. I've enjoyed working with him and Ranking Member Dicks, and also the ranking member of our Subcommittee on Agriculture, FDA, and Commodity Futures Trading Commission, the gentleman from California, Mr. Sam Farr. We've held 11 hearings, and we've had probably about 25 hours worth of debate on the floor in which over 50 amendments were offered. This bill is a prime example of what can happen when we get back to regular order.
It was an open process, passed by the subcommittee, full committee, and then finally by the House floor. The bill is $350 million below FY11 in the discretionary portion, and $2.5 billion lower than the President's request for FY12. It is compliant with the Budget Control Act, and a step to show both regular order, compromise and moving us towards a balanced budget.
I also wanted to point out something, Mr. Speaker, that the mandatory portion of this bill is tremendous. Our discretionary total on agriculture is $19.77 billion, but the mandatory is $116.9 billion. School lunch and breakfast and the SNAP program are $98.5 billion alone. If we do not get control of the mandatory spending, we will never be able to balance the budget.
So I urge all Members of Congress to be cognizant of that and work in the important authorizing committees to do some of the reform.
This bill was successful in eliminating a Federal program that goes back to World War I, the mohair subsidy; and that actually was a program designed to get more wool for the World War I soldiers' uniforms. And Ronald Reagan famously said, if you don't believe in resurrection, try killing a government program. And yet, today, the mohair program does get eliminated.
We also reduced the BCAP program, which was something that our committee has been very concerned about the out-of-control spending on it. We've restrained the CFTC with some important bipartisan language regarding user exemptions and cost-benefit
analysis. And we have urged the FDA to stay on its core missions, and we hope that the authorizing committees will look at medical device and drug approval time and transparency so that the FDA can work closer with the providers and the manufacturers rather than in an antagonistic point of view.
We've balanced school safety, inspection, ag research with the many demands that are out there. We have worked with Secretary Vilsack, Dr. Hamburg at FDA, and Mr. Gensler at the CFTC; and we've had an open process throughout the year.
So I urge my colleagues to vote for this and pass this bill. But I also wanted to say thank you to the great staff on both sides. Martin Delgado, head clerk on the majority side; along with Tom O'Brien, Betsy Bina, Andrew Cooper and Allie Thigpen and Mike Donal; and then on the minority side, working for Mr. Farr, Martha Foley, Matt Smith, Troy Phillips and Rochelle Dornatt.
Congress of the United States,
Washington, DC, October 4, 2011.
Hon. Gary Gensler,
Chairman, U.S. Commodity Futures Trading Commission,
Washington, DC.
Hon. Ben S. Bernanke,
Chairman of the Board of Governors, Federal Reserve System,
Washington, DC.
Hon. Mary L. Schapiro,
Chairman, U.S. Securities and Exchange Commission,
Washington, DC.
Hon. Martin J. Gruenberg,
Acting Chairman, Federal Deposit Insurance Corporation,
Washington, DC.
Dear Chairmen Gensler, Schapiro, Bernanke and Acting
Chairman Gruenberg: As authors of the Wall Street Reform and
Consumer Protection Act (P.L. 111-203) (Wall Street Reform
Act), we commend your work implementing Title VII of this
important new law. We have an enormous opportunity to set a
new global standard for the operation of an efficient,
transparent and well-regulated derivatives market. It is in a
spirit of support for your efforts that we write with
suggestions for how to avoid some unintended consequences
that could undermine this objective.
As you know, the existing $600 trillion derivatives market
operates as an integrated global market, despite the
jurisdictional determinations made in Title VII between the
Commodity Futures Trading Commission (CFTC) and the
Securities and Exchange Commission (SEC). It is our hope that
the two agencies will work closely and collaboratively
together and that the new swap regulations can be sequenced
and implemented in a logical, coordinated manner that
encourages compliance and market competition.
Given the global nature of this market, U.S. regulators
should avoid creating opportunities for international
regulatory arbitrage that could increase systemic risk and
reduce the competitiveness of U.S. firms abroad. Congress
generally limited the territorial scope of Title VII to
activities within the United States. This general rule should
not be swallowed by the law's exceptions, which call for
extraterritorial application only when particular
international activities of U.S. firms have a direct and
significant connection with or effect on U.S. commerce, or
are designed to evade U.S. rules. We are concerned that the
proposed imposition of margin requirements, in addition to
provisions related to clearing, trading, registration, and
the treatment of foreign subsidiaries of U.S. institutions,
all raise questions consistent with Congressional intent
regarding Title VII.
Moreover, U.S. regulators should work with other
international regulators to seek broad harmonization of
appropriately tough and effective standards. This can be
accomplished by an appropriate staging of the adoption or
implementation of our rules abroad. Should current
harmonization efforts ultimately fail or prove a race to the
bottom that would undermine effective regulation, the U.S.
would of course reserve the right to proceed to extend the
application of its standards to overseas operations.
In addition, as you proceed through the rule-making
process, we urge you to respect Congress' intent to protect
the ability of end users and pension plans to use swaps in a
cost-effective manner. In particular, Congress recognized the
need to allow pension funds, states, municipalities and other
``special entities'' to continue to use swaps by expressly
rejecting the imposition of a fiduciary duty for swap dealers
that is legally incompatible with their legitimate role as
market-makers. The withdrawal of the Department of Labor's
rules on a fiduciary duty under ERISA gives the agencies an
opportunity to work together to prevent such adverse results.
We urge you to work to revise the proposed rules in a way
that avoids unintended consequences.
As one of the first countries to propose new financial
rules following the 2008 crisis, the world is closely
watching what we do. As you revise and finalize the proposed
rules, we look forward to working together to support your
important work in a way that keeps our financial markets the
envy of the world.
Sincerely,
Senator Tim Johnson,
Chairman, U.S. Senate Committee on Banking, Housing, and
Urban Affairs.
Congressman Barney Frank,
Ranking Member, U.S. House Committee on Financial Services.