Floor Statements

Mr. Speaker, I rise today to congratulate my good friend, Chris Carney, on taking the oath of office to the State Senate in North Carolina.

Chris has served as a town commissioner for the last number of years. I was able to work with him on that board. He developed a reputation as a thoughtful leader, someone who listened to his constituents and actually tried to craft solutions. He'll take that same mentality to the State Senate in North Carolina. So today I rise to congratulate Chris Carney. His community is proud of him, and I'm proud to call him a friend.

I know his wife and his three children are very excited about the role he is about to undertake. Congratulations, Chris.

I thank my colleague for yielding, and I am in favor of the underlying bill and the rule.

When I talk to small business owners in my district in western North Carolina, I hear very clearly that regulations and regulatory uncertainty is in fact costing jobs. It's costing our economy, and it's making sure that unemployment remains high, which is an absurd policy coming out of Washington.

Well, I know from my small business owners that regulations cost jobs. Even the Small Business Administration here in Washington, D.C., says that Federal regulations cost $1.75 trillion per year. That costs our economy, and that is a major impact on our job creators. We know that regulations cost jobs.

Now, some politicians in Washington that don't understand business think that their regulations create jobs. Well, they're right; they create Federal jobs. They create more government employees. They create more people creating more paperwork for those who are trying to move our economy forward. We need to relieve our small businesses of this regulatory hurdle and the challenges that they face.

The Obama administration admitted 1 year ago at this time that they had over 4,000 regulations that they were trying to put in place actively. Over 200 of these regulations cost $100 million or more on the economy, seven of which will cost $1 billion, a negative impact of $1 billion. These regulations, even the Obama administration admits, cost the economy money. And if they cost the economy money, they're costing jobs.

This is the wrong approach, this regulatory approach. What we need to say is, if politicians in Washington think these regulations are in fact good, they need to proactively vote on them.

When I go home and talk to small business owners, they wonder how these regulations actually go into place. It's faceless bureaucrats working behind desks in Washington that put them in place. Their elected officials here in Washington may be able to go home and say they're against them, but they've never had to cast a vote.

What the REINS Act does is say that the elected officials that come to Washington to represent their folks at home need to proactively put their stamp of approval or disapproval on these regulations. That way we can get this economy going again. That's what we need to be about.

I hope that we can have bipartisan support on this very important piece of legislation, the REINS Act. I urge my colleagues to vote for it.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks on H.R. 2930 and to insert extraneous material thereon.

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

When I'm at home in western North Carolina, I hear frequently from my constituents, from small businesses, that they have a very difficult time raising capital in these very challenging times that we're in. And over 2 years into an economic recovery that is struggling, America's labor and capital markets continue to face unprecedented challenges. Nearly 14 million Americans remain officially unemployed, with an additional 11 million underemployed. And small businesses continue to struggle to access capital despite an endless number of government initiatives.

The origin of these barriers to capital formation rests in two Federal securities laws--the Securities Act of 1933 and the Securities Exchange Act of 1934--that have not been substantially updated since a gallon of gasoline cost 10 cents and only 31 percent of households owned a telephone. Today, a gallon of gas, as we know, costs about 35 times more per gallon than it did then, and nearly every American owns a telephone. In fact, most people have the Internet in their pocket.

So while the comparison of then and now is nostalgic, the ramifications of not modernizing our securities regulations have led to registration and reporting requirements so onerous and costly that small companies have great difficulty raising capital.

For instance, if a startup company offers an equity stake to investors through a medium like Facebook or Twitter, it is presumably in violation of SEC regulations for that communication and offering. However, soliciting money for one's favorite charity or even a political candidate through the same Internet medium is perfectly legal. So, clearly, something is not right.

Furthermore, high net worth individuals can invest in businesses before the average family can. And that small business is limited on the amount of equity stakes they can provide investors and limited in the number of investors they can get. So, clearly, something has to be done to open these capital markets to the average investor, and that's what the Entrepreneur Access to Capital Act is all about.

It removes the SEC restrictions on crowdfunding to allow entrepreneurs and small businesses to raise capital from everyday investors. Already prevalent in Europe and Asia, crowdfunding has proven that broadening the communication investment capabilities between investors and entrepreneurs can have a positive impact and a positive effect on capital formation which is the lifeblood of a strong and growing economy.

Specifically, my bill will allow companies to pool up to $1 million without the expense of registering with the SEC or up to $2 million if the company provides investors with audited financial statements. Individual contributors are limited to $10,000 or 10 percent of the investor's annual income, whichever is less.

In addition, H.R. 2930 creates a regulatory structure of investor protection

around this new, innovative form of financing with substantial intermediary requirements or issue requirements if there is no intermediary. This key mandate for investor protection is why the bill has received broad bipartisan support both in the Financial Services Committee and from President Obama.

This has been crafted both with Republican and Democrat staffers, getting input from my colleagues from across the aisle at a subcommittee markup, multiple hearings we've had on the idea of crowdfunding, as well as a full committee markup. And we worked together and passed it with a bipartisan vote coming out of committee. This was a collaborative operation, and I appreciate my colleagues and I appreciate the staff of the Financial Services Committee as well as the staff on the Oversight and Government Reform Committee and my subcommittee where we had a number of hearings on capital formation, and out of that came this idea.

This is the culmination of months of work. The process began for crafting this piece of legislation over the summer. When the President stood in this Hall, in this room just a couple months ago for his jobs bill, and when he included in the proposal this idea of crowdfunding, it was a very positive thing--not just to have a good idea that we can pass here in the House, but to have a good idea that has the possibility of getting through the Senate, where it's a very challenging time for them to pass legislation at all. And that way it can make it to the President's desk and really give entrepreneurs the opportunity to raise this capital, to actually create and grow jobs. That's why they need the capital, so we can grow jobs, create jobs and provide more opportunity for our constituents and folks across this country.

We can protect and inspire confidence in the investor community as well as allow small businesses, those companies most critical to our economy, to gain the capital needed to expand, compete, and thrive.

I urge my colleagues to support this bill that combines both the best of microfinance with the power of crowdsourcing and give folks the opportunity--the average, everyday investor--the opportunity to have an equity stake in their favorite company, not just accredited investors and not just so-called high net worth individuals. That's the purpose of this legislation. I ask my colleagues to support this legislation, and I reserve the balance of my time.

Executive Office of The President, Office of Management

and Budget,

Washington, DC, November 2, 2011.

Statement of Administration Policy

H.R. 2930--Entrepreneur Access to Capital Act

(Rep. McHenry, R-North Carolina, and 5 cosponsors)

The Administration supports House passage of H.R. 2930. In

the President's September 8th Address to a Joint Session of

Congress on jobs and the economy, he called for cutting away

the red tape that prevents many rapidly growing startup

companies from raising needed capital, including through a

``crowdfunding'' exemption from the requirement to register

public securities offerings with the Securities and Exchange

Commission. This proposal, which would enable greater

flexibility in soliciting relatively small equity

investments, grew out of the President's Startup America

initiative and has been endorsed by the President's Council

on Jobs and Competitiveness. H.R. 2930 is broadly consistent

with the President's proposal. This bill will make it easier

for entrepreneurs to raise capital and create jobs. The

Administration looks forward to continuing to work with the

Congress to craft legislation that facilitates capital

formation and job growth, and provides appropriate investor

protections.

I thank my colleague from Colorado for working actively with me and with my staff to make this bill better, as well as my colleagues, Mrs. Maloney from New York, Ms. Waters of California, and Mr. Al Green. Thank you so much for your work in working in a bipartisan way to improve the bill.

With that, I would like to yield such time as he may consume to the chairman of the Financial Services Committee, the gentleman from Alabama (Mr. Bachus).

I thank my colleague for submitting that for the record, the definition.

Now, the intention is that you have an Internet portal of sorts, but this could be done on any mass basis. But the disclosures have to be very clear--which we specify in the legislation--and we've given the SEC the ability to specify additional pieces. I have a technical amendment to clarify what the Securities and Exchange Commission staff thinks is very important to add to this bill. But I do appreciate the gentleman offering the definition.

I appreciate the gentleman.

The intention would be that the intermediary is, in essence, the conduit of funds. There's the notion of the broker-dealer, which is well established in law. What this does is, it's similar to a broker- dealer; but it is a very low-regulatory, low-cost basis of doing it.

What this is, in essence, is an intermediary defined as Websters would define an intermediary. And I think that's probably the better way to describe it.

Madam Chair, I yield myself such time as I may consume.

I need to correct the record with regard to what my colleague from North Carolina said. What he said is simply not, in fact, what this bill does.

Furthermore, as we know, securities fraud is prosecuted not just at the Federal level, but by the States as well. That will continue to exist.

Furthermore, if my colleague from North Carolina would reach out to my colleague from Colorado, I'm supporting his amendment which preserves the States' rights of action.

I yield to the gentleman.

Reclaiming my time, to correct the record, in the State of North Carolina, there is no pre-filing requirement. In the State of New York, for instance, they actually have up-front filing requirements.

Additionally, in this legislation, how it is crafted is the SEC would provide notice of this offering to the States once that offering occurs. This is something that my colleague from New York (Mrs. Maloney) crafted in the subcommittee. My staff, as well as the Financial Services Committee Republican staff, worked diligently with the Democrat staff on the Financial Services Committee as well as Mrs. Maloney's staff and came up with a three-page amendment, which was adopted on a bipartisan basis at the committee--I appreciate my colleague from New York offering that--and it has improved the bill.

Reclaiming my time, I did not receive that letter. My two Democratic colleagues from North Carolina that are on the Financial Services Committee did in fact get that letter. My colleague Mel Watt-- a fantastic member--submitted it for the record in the Financial Services Committee. I had neither a letter nor a call from my Secretary of State raising concerns about that.

With that, I would be happy to yield such time as he may consume to my colleague from New Jersey, the chairman of the Subcommittee on Capital Markets in Financial Services, Mr. Garrett.

Will the gentleman yield?

I thank my colleague for yielding.

This is a very important point of distinction here. These intermediaries are not broker-dealers. That is neither the intent on either side of the aisle. That is not the description of it. These intermediaries are there to have a low-cost conduit for capital formation and a means to do that. That is the intention.

And all the protections outlined in the bill on these intermediaries, on how they are to operate, are there to enable it to be both low-cost but also preserve individuals' capital and make sure their investment's appropriately taken care of.

Absolutely. And I appreciate my colleague yielding.

The intent is, if you're going to raise $50,000 from 5,000 people, it has to be a low-cost basis of doing that; and the traditional broker- dealer model is not efficient at those lower cost basis fundraising opportunities or equity-raising opportunities.

Yes. The idea is that, with the traditional broker- dealers, they're not in this market. So our intent with these low- dollar issuances, that has not been a traditional part of the action on Wall Street, not in the modern era, and so we're trying to carve out this opportunity for small business folks.

Correct.

Madam Chair, I reserve the balance of my time.

I yield myself 20 seconds.

I thank my colleague from New York for improving this legislation and her staff for working so diligently with my staff and the staff on the committees as well. Very wonderful and constructive process.

I think this is a better bill, and I hope the Senate can take it up and pass it and send it to the President.

I reserve the balance of my time.

Madam Chair, I yield myself the balance of my time.

The Entrepreneur Access to Capital Act is about giving entrepreneurs the power to raise money, to raise equity stakes in their business or their business idea, to grow their business or create a new business. That's really what this is about.

The legislation we have here on the floor today--I know to some of my colleagues, as some people talk about, the Internet is just a series of tubes, or they refer to the Internet as the ``Internets'' or something like that. But we understand and my colleagues understand that the Internet can be used in a positive way, in an absolutely positive way.

With a Web site like eBay, you have individuals exchanging goods that don't know each other. But they can tell their reputation. And they can exchange these goods and get quality goods for a quality price. And you have a lot of choices. We want to take that idea and give investors that same idea.

We have crowdfunding Web sites in the United States today. They help raise money for musicians or artists. And what the artists do is say, ``You know, if you invest in my ability to go into the studio and record an album,'' or whatever they call it, ``I'll give you the first download, or I'll give you the first CD.''

So you have folks pony up $50 or $25 for their favorite banks. You have folks who are raising money--folks who have a bakery--and they say, If you contribute a few bucks, you'll get six whoopie pies.

People have innovative ways of doing this. We're giving them the power, the opportunity; and we're relieving this Federal restriction that currently prevents them from having equity stakes in their favorite businesses, in their favorite ideas--their local coffee shops or their bakeries, their favorite bands or even the next Facebook. These are the opportunities that we're going to be able to give investors.

We have fraud protection in this legislation, language which has been crafted in a bipartisan way. It's a strong improvement to the bill, and I look forward to a bipartisan vote. I am very hopeful it will make its way intact through the Senate and make its way to the President's desk where he can sign it. That way, we can allow entrepreneurs and innovators that opportunity.

We take the best of micro-finance and the best of crowdsourcing and combine them in this legislation, and it's a positive thing. We can work together on important matters of creating jobs--and we have--and this is a first step. I certainly appreciate my colleague's willingness to work to improve the bill and to bring us to this day.

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

Madam Chair, I have an amendment at the desk.

This is primarily a technical amendment based on post- markup feedback from the staff of the Securities and Exchange Commission. The final language has been negotiated between my staff and the majority and minority staffs of the Financial Services Committee.

The more substantive changes made to this amendment include: requiring the issuer to state a target offering amount and a deadline to reach the target offering amount; requiring the commission to provide a notice upon completion of the offering, which shall include the aggregate offering amount and the number of purchasers; clarifying the disqualification provision to ensure that both issuers and intermediaries, as well as their predecessors, affiliates, officers, directors or persons fulfilling similar roles, are disqualified from the exemption established in this bill should they have a history of committing securities fraud.

I appreciate the SEC staff lending their technical expertise to this amendment, and I appreciate the bipartisan effort from both the majority and minority committee staffs to further improve the final bill.

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

Will the gentleman yield?

I thank the gentleman from Tennessee for offering

this bipartisan amendment. This is a good-government amendment.

The old adage is ``a million bucks isn't what it used to be.'' Well, when reg D-504 of the Securities and Exchange Act of 1934 had a $1 million exemption that was put in place in 1982, that $1 million would be $2.4 million today. So, just in a short period of time, it can show you the impact of 30 years of inflation.

I appreciate my colleague for offering this amendment, as it's a very good amendment, and I certainly appreciate your representing the good folks of Tennessee.

I thank my colleague for bringing this up, and it is a great concern. I didn't have the opportunity to say, I do, in fact, support the gentleman's amendment. I appreciate him offering it. It's a very thoughtful amendment.

I believe, looking at this, when you have it on an annualized basis, that does actually allay some of those concerns. But I think you and I agree that when we don't address some of these securities laws as frequently as we should to update with technology and what happens in the market, we should have in place these measures to ensure that Congress' intent is followed even 20 years from now and can keep pace with what is reasonable in the marketplace.

I think that your concern is actually a very interesting one. And I would be happy to talk with the gentleman more about ways that we can update securities laws to deal with some of these struggles.

Madam Chair, I want to thank my colleague from Arizona (Mr. Quayle) for offering this amendment. It's a very sharp amendment, a very thoughtful approach to securities law, a very thoughtful approach to crowdfunding and the idea of allowing average, everyday investors the same opportunities that high-net-worth individuals enjoy in this country. I thank the gentleman for working on job creation and job growth.

Madam Chair, I claim time in opposition to the amendment.

Unfortunately, I have to oppose this amendment. In the course of a subcommittee legislative hearing, a subcommittee markup, and a full committee markup, this amendment was never offered. My colleague from New York serves on the Financial Services Committee. As my other colleagues have mentioned, I worked diligently across the aisle to incorporate every idea my colleagues from across the aisle had. They've incorporated them into this bill. It's a better piece of legislation because of it.

My colleague had the opportunity at the full committee markup to offer this amendment and didn't. We heard at the capital formation and crowdfunding hearing in the Capital Markets Subcommittee--I attended that, and all Members of the Financial Services Committee that were there that day were allowed to participate. None of the witnesses raised a compensation disclosure as a precondition to create successful crowdfunding securities offerings. My colleague did not participate in the hearing. And when the subject matter of the amendment could have been raised with a panel of capital formation experts, it was not raised.

This is an interesting amendment. What we have in this legislation is an enormous amount of investor protection. We want crowdfunding intermediaries to be able to compete with one another and to innovate and to offer the best platform and technology for both issuers and investors. Our belief is that businesses will be able to work with different intermediaries. If they don't see an intermediary that fits with their cost structure or the cost basis they see fit, they can be their own intermediary. That's how this bill is constructed. This amendment doesn't work technically with the construct of that. By forcing intermediaries to disclose the compensation structure to potential investors, we believe it will have a chilling effect on compensation in the market and the participation of potential intermediaries in this mode.

So unfortunately, I have got to oppose this amendment. Had the gentlelady brought this to me during the subcommittee or full committee markup, I would have been happy to work with my colleague on trying to craft workable language. But here on the floor today, I'm opposed to the amendment. I ask my colleagues to vote against this flawed amendment.

I reserve the balance of my time.

Madam Chair, I yield myself such time as I may consume.

I would ask my colleagues, do they disclose on their campaign Web sites how much it costs to process a credit card contribution?

Exactly. I don't know if my colleagues are making those disclosures when folks are contributing to their campaigns. So this restriction is actually a creation of Congress.

I understand the issue. It's a very powerful issue on compensation. This was never raised in the two subcommittee hearings I have had on capital formation on the TARP in the Financial Services Subcommittee of Oversight and Government Reform, nor in the legislative markup at the Subcommittee on Capital Markets, nor during the subcommittee markup nor the full committee markup in the Committee on Financial Services.

Furthermore, I would point my colleague to page 6 of the legislative text. We have investor protection requirements for intermediaries that go on for, really, three pages. This specifies a lot of investor protection. It has received a bipartisan vote. The time for this amendment is past. It is not best constructed here on the floor. I ask my colleagues to vote ``no.''

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

Madam Chair, I rise in opposition to the amendment.

Unfortunately, I have to oppose this amendment. I ask my colleague from Georgia if he consulted, in the construct of this language, with the SEC staff.

I yield to the gentleman.

Reclaiming my time, we did not see this legislative text until it was filed with the Rules Committee. We worked to try to accommodate the Member with text that could be acceptable. Unfortunately, the construct of this is simply not acceptable and we couldn't come to reasonable accommodation on language that would be workable.

Look, the SEC is certainly overburdened. We all know that. I mean, they're working very hard. They currently have two Web sites right now. What this amendment would do is force them to have a third Web site.

Furthermore, in the discussion of this amendment, my colleague describes this as a public offering. The crowdfunding legislation described here is an exempt offering, very different in nature than a public offering, and is exempt from the SEC regs.

On page 6 of the legislation, subsection (a)(1), it mandates that individuals, intermediaries in this process, would have to add a warning to investors, including the intermediary's Web site, of the speculative nature generally applicable to investments in startups, emerging businesses, and small issuers, including risks in the secondary market related to illiquidity.

(2) warns investors that they are subject to the restrictions on sales requirements described under subsection (e).

Additionally, (6) requires each potential investor to answer questions demonstrating competency in:

(A) recognition of the level of risk generally applicable to investments in startups, emerging businesses, and small issuers;

(B) risk of illiquidity; and

(C) such other areas as the Commission may determine appropriate.

This part of the legislation, my staff as well as the staff of the Financial Services Committee, Democrats and Republicans, as well as the staff of Mrs. Maloney and Ms. Waters crafted this language in a very balanced way. We've included those concerns.

Unfortunately, the language before us today is deeply flawed, and with the nature of securities laws as they are in this country--and in the world, for that matter--we want to make sure that it has the appropriate balance, that it has been thoroughly vetted through counsel and actually has agreement. That is why this amendment is deeply flawed and I oppose it.

I reserve the balance of my time.

Will the gentleman yield?

The legislative text on line 4 specifies, establish a Web site.

May I inquire of the Chair the remaining time on both sides.

Madam Chair, I yield myself the balance of my time.

I certainly appreciate my colleague's intent, but I'm simply uncomfortable with requiring facilitators or these intermediaries that we create in this legislation of what is an exempt offering under securities law to actually link to the SEC's Web site. It gives the stamp of approval of sorts, it seems to me, of this exempt offering. It actually might create more confusion, not necessarily by the gentleman's intent, but by the design of the legislation before us, by the legislative text that we have here in this amendment.

Unfortunately, that is not helpful. Actually, it would be hurtful to this matter, and that's why I have to oppose it.

Now, I am hopeful that when this legislation is signed into law by the President that the Securities and Exchange Commission Office of Education and Investor Advocacy would create an investor alert, which is their standard process, regarding crowdfunding investments like the SEC did with the microcap stock, a guide to investors, which is available on the SEC's existing Web site.

And that's the concern here. We want to make sure that this is done appropriately. We currently are operating in securities law that originated over 75 years ago, or roughly 75 years ago. So we want to make sure we get this right. Unfortunately, this amendment is ill- crafted, and that's why we have to oppose it.

I yield back the balance of my time.

Will the gentleman yield?

I thank my colleague from Colorado for offering this amendment, and I thank my colleague for working diligently across the aisle. This was an idea that he had in the full committee markup. We worked diligently to get that done at full committee markup. It was not able to be done, but the language we have here today is a very good amendment.

The amendment ensures that the States' securities regulators have the means to police fraud, deceit, misrepresentation, and other unlawful behavior to protect investors. Since States' securities regulators already have the resources and expertise, much more so than the SEC, to examine unlawful behavior at a micro-level, it is essential that this legislation recognize and authorize them to continue to fight unlawful conduct. The powers of State securities regulators for crowdfunding are no different from what that which they have for any covered security.

Madam Chair, I claim time in opposition.

I am not opposed to this legislation. I thank my colleague for offering it.

I'd be happy to yield to my colleague from North Carolina.

I'd be happy to let my colleague--

Will my colleague yield?

I thank my colleague Mr. Perlmutter for working diligently with us on this language. He raised significant concerns. The language that we have that the gentleman was integral in crafting actually is perhaps part of the reason why the President supports the legislation. And I appreciate Mr. Perlmutter's working diligently on this.

I would remind my colleagues that in our legislative hearing on this bill, the Democrat witness before the committee said that crowdfunding will not work but for this exemption from individual State registration. It is a very key part of this process. When it costs $150 to register a security in Connecticut, and all you're trying to do is raise $150 from Connecticut, you net zero. And beyond that, asking a lawyer to file the paperwork. What we want to do is preserve that anti- fraud bit that the States do very well at, and we have done that with this language.

I thank my colleague for yielding.

Mr. Speaker, I reserve a point of order.

Mr. Speaker, I withdraw my point of order.

I rise in opposition to the motion.

We have had two subcommittee hearings on capital formation. This issue was not raised. We had a subcommittee legislative hearing. This issue was not raised. We had a subcommittee markup. This issue was not raised. We had a full committee markup where we incorporated every Democrat idea into this legislation. It is outrageous for the minority party to stoop to this level of taking our important national security issues--

Through hours of debate and crafting a bipartisan bill, I thought they were better than that. I did. I thought we could get through this and pass this bill. The President announced his support. A statement of administrative policy says, Pass this bill. He says, We can't wait. And what does his party in Congress do? Offer an amendment that is already existing law. It is outrageous to play this political stunt with something so important as our national security.

I ask my colleague to withdraw this motion to recommit so we can get to final passage and get going.

Will my colleague withdraw?

Will the gentleman withdraw, yes or no?

Reclaiming my time, I ask my colleagues, do you want to allow small businesses that are starved for capital to raise capital? Do you want to allow that to happen? Then vote this down. Let's get to final passage. Let's get this economy moving. We can't wait.

I yield back the balance of my time.

Mr. Speaker, I demand a recorded vote.

Mr. Speaker, today I rise to pay tribute to an amazing young lady from my district that was taken from us far too soon and far too young. Jennifer Rose Cernuto was a resident of Mooresville, North Carolina, in Iredell County in my district, and had just graduated from high school in May.

She was looking forward to beginning college as part of the honors program at High Point University in the fall. Jennifer and her twin sister, Stephanie, served as interns in my district office in Hickory last year. My staff still talks about them and the great work that they did and their wonderful personalities and their real gift for service.

Both Jennifer and Stephanie's interest and passion for learning the inner workings of government and the district office and the political process were far beyond their years. But it was in dealing with constituents and helping people that both Jennifer and Stephanie truly blossomed.

In fact, the Cernutos had an ability to speak to constituents, many of

whom were upset about a problem that they were having or an encounter they had with a government agency or perhaps that their veterans benefits or a similar program weren't working for them. Calmly, they would document their issues and take good care with a thoroughness that most lifelong caseworkers would envy. It was as if they had been on the job for years.

It was no surprise that Jennifer excelled in this type of work. Whether at school, at church, in everyday life, helping people was a hallmark of Jennifer Cernuto's life. In fact, she and Stephanie had just returned from Peru with a group of their fellow graduates from Southlake Christian Academy, where they helped build classrooms and held Bible study classes for indigent children.

Jennifer and Stephanie, you know, they come from a great family. I have known their parents, Jeff and Lisa, for several years, and I am honored to count them as friends. They are some of Mooresville's most outgoing and most charitable people. And with fine parents like these, it's no wonder Jennifer, Stephanie, and their older sister, Samantha, turned out to be the fine young women that they did. Incredible, special, young ladies.

But tragedy struck this family and the entire Mooresville community over the July 4 weekend when Jennifer and Stephanie were involved in an automobile accident. Sadly, Jennifer was taken on that day and Stephanie was injured. But, thankfully, thank the Lord, she survived.

Thousands later turned out for Jennifer's memorial service and funeral. People asked, why did so many people, thousands of people, come out to this extraordinary 18-year-old young lady's funeral? It was, I think, put in the best words by the head of school at Southlake Christian Academy, Wayne Parker. He said, ``Jennifer was full of joy that easily drew others, as she allowed her love of the Lord to shine through her.''

Jennifer Rose Cernuto was a fine young lady, an impressive individual, and I was honored to know her. My staff still has the highest praise that they got to work with her. I say to Jeff and Lisa: You did a wonderful job raising that fine young lady. And I say to not just Jeff and Lisa but to Samantha and especially Stephanie, that the lives that Jennifer affected you can never count, but she had a wonderful and amazing impact in her brief time on this Earth. Her service will not be forgotten.

With that, I want to pay great honor and to remember Jennifer Rose Cernuto for the wonderful person and the wonderful individual she was in her brief time on this Earth. I want to say thank you for the opportunity to have known her.

I yield back the balance of my time.

Mr. Speaker, I move that the House do now adjourn.

The motion was agreed to; accordingly (at 4 o'clock and 53 minutes p.m.), under its previous order, the House adjourned until tomorrow, Wednesday, September 14, 2011, at 10 a.m. for morning-hour debate.

Mr. Speaker, I demand a recorded vote.

Mr. Chair, on rollcall No. 513, I was unavoidably detained. Had I been present, I would have voted ``aye.''

Amendment Offered by Mr. Amash

Mr. Chair, on rollcall No. 373, I was unavoidably detained. Had I been present, I would have voted ``no.''

Mr. Speaker, I ask unanimous consent that when the House adjourn today, it adjourn to meet at 9 a.m. tomorrow.

I move to strike the last word.

Madam Chair, I've heard my colleagues give volumes of words here today, but I've seen little action. In the 4 years they controlled the U.S. House, they proposed nothing in the way of meaningful entitlement reform: nothing to preserve Social Security, nothing to preserve Medicare, nothing to improve Medicaid and ensure that it's there.

Madam Chair, I ask, where is the plan of these House Democrats who are speaking today? Where is their plan for entitlement reform?

I yield to the gentleman from New Jersey.

Madam Chair, I would ask my colleague, where is his plan on entitlement reform?

In reclaiming my time, I would ask, does the gentleman favor the Medicare part D prescription drug benefit, which has a lower cost basis than what your colleagues proposed at the time of enactment?

I'm going to finish up here, my friend.

Madam Chair, in this discussion, there are lots of questions but little substantive action--no policy proposals--to make sure that Medicare is there for the next generation, much less for the end of the Greatest Generation.

I would ask my colleagues to come forward with a substantive plan, not just to take up time here on the U.S. House floor, not to take away time from these important amendments that we have under this open rule here on the House floor. I would ask my colleagues to do something real and substantive rather than to push us to a debt crisis, which their policies and their spending are pushing us towards.

I yield back the balance of my time.

Will the gentleman yield?

Why didn't the gentleman do it when he was in the majority? And I would be happy to yield back the balance of my time. Why is this not in ObamaCare? It's just everything else.

I'm sorry, I didn't hear the question.

Does the gentleman support the President's war on Libya?

Madam Speaker, I ask unanimous consent that when the House adjourns today, it adjourn to meet at 10 a.m. tomorrow for morning-hour debate and noon for legislative business.

I thank the gentlewoman for yielding the time.

The HAMP Termination Act, which is the legislation before us today, ends what I believe to be a failure of a government program. Not just a failure to help those 3 to 4 million homeowners that the Treasury originally set out to assist, and they've fallen well short of it--just over 500,000 mortgage modifications have taken place in the 2 years it's been in existence. Not only has it been a failure in terms of the metrics they set up to achieve the goal; it's been a failure for the very people who enter into the program and yet are pushed out.

Now, I want my colleagues to understand what this government program does. The HAMP program, the Home Affordable Mortgage Program, brings folks in who are having trouble making their mortgage payments. They bring folks in, and they will give them a verbal modification for their mortgage. And what has happened--and this is what my constituents tell me and this is what the hard facts and the data indicate as well--is that a majority of those folks that enter into this program are actively harmed by this Federal program. Actively harmed. They are left materially worse off.

And let me quote from the Special Inspector General for TARP, Mr. Neil Barofsky, who is a very independent-minded individual. He said that people who apply for modifications via HAMP sometimes ``end up unnecessarily depleting their dwindling savings in an ultimately futile effort to obtain the sustainable relief promised by the program guidelines. Others, who have somehow found ways to continue to make their mortgage payments, have been drawn into failed trial modifications that have left them with more principal outstanding on their loans, less home equity, or a position further underwater, and worse credit scores. Perhaps worst of all, even in circumstances where they never missed a payment, they may face back payments, penalties, and even late fees that suddenly become due on their modified mortgages that they are unable to pay, thus resulting in the very loss of their home that HAMP is meant to prevent.

``Treasury's claim that every single person who participates in HAMP gets a `significant benefit' is either hopelessly out of touch or a cynical attempt to define failure as success.''

Those are the words of the Special Inspector General designated to oversee this program and to report to Congress and the public on the success or failures of Federal programs and ways to fix them.

Now, sadly, in the 2 years of this program and over 1\1/2\ years of criticism of this program, the Treasury has refused to fix it. My colleagues on the other side of the aisle have not offered legislation to fix it when they were in the majority. So we're left with what is required today, which is to root out this Federal program that spends our taxpayer dollars, yet hurts more people than it helps.

One of my constituents from Hickory said, ``We've been in the HAMP program since February of 2010 and still have no answer. We're being charged

late fees and we were reported to the credit bureau. We've been underwater since April and on trial payments for 6 months, which was only supposed to be 3 months. We have not yet received an answer.''

This is a Federal program. If the private sector were doing this, there would be lawsuits. If the private sector were doing that, my friends on the other side of Congress in particular would be filing legislation to make sure they were unable to do that.

Instead, my colleagues on the other side of the aisle and this administration are defending a failed program. And they refused to reform it. They refused to change. They refused to improve it. They refused to do anything to it except defend it. And I believe, indeed, as the Special Inspector General said, it may be a cynical attempt to define failure as success.

So I ask my colleagues to vote for this legislation and remove this costly, ineffective, and painful government program.

I thank my colleague for yielding, and responding to my colleague from North Carolina, Mr. Chairman, I would say that we agree: The HAMP program is a failure. I think there is bipartisan agreement on that. Even the SIGTARP, Mr. Barofsky, says, ``The Treasury Department is so content with the wretched, shameful status quo, they refuse to even acknowledge the program is a failure.'' We agree. It's a failure. Although it sounds like, at the end of the day, he is going to vote to defend a failed program.

Secondly, I would remind my colleague that this program actually writes checks to those evil banks that he talks about, with those evil profits that he talks about, to the tune of about a billion dollars. So this program is actually cutting checks to banks.

Third and finally, that TARP money is actually the taxpayer, the American people's money, not the banks' money, and we owe it to the American people to give them back that money.

I will respond to my colleague, Mr. Chairman, that, if we can't eliminate this failed program, what program can we eliminate?

Will the gentleman yield?

Mr. Chairman, I didn't vote for the farm bill.

I thank the gentleman for yielding.

There are 800,000 people that are given temporary modifications, verbal modifications, that are kicked out of the program. Those are the people that have their credit dinged and----

I appreciate my colleague yielding, and I certainly appreciate the rhetoric used on the floor. I respect my colleagues. I respect their opinion.

I think people of good will created this program; I really do. The intent was to help homeowners. But 2 years after the fact, we're left with the cold, hard facts that this program has hurt more people than it's helped: a Federal Government program that brings people in, destroys their credit, takes their savings, and at the end of the day takes their home. It offers hope, but it isn't able to deliver it. It's false hope that this program delivers.

I would point to the Special Inspector General's report from January 26, 2011. On page 11: A combined total of more than 792,000 trial and permanent modifications have been canceled.

I would also point my colleague to the Treasury Department's monthly report on their housing programs.

Of the trial modifications that are canceled, those are the individuals who are brought in, given verbal modifications, and strung out for a period of months, some for 3, 6 months. I've had constituents tell me they've been in this trial modification period for up to a year. At the end of the day, these people are kicked out after their savings have been taken, and they're left with nothing, not even their homes, not their credit ratings, not their savings.

It's a Federal Government program that's doing this. This is so objectionable at its core, and I have my colleagues on the other side of the aisle saying that they're bleeding heart liberals--right?--and they're making their arguments. Well, let me see if this actually burns your bleeding hearts.

A constituent of mine from Kings Mountain says, ``They keep requesting the same information over and over again. They have supposedly been working with me to get approved under the Make Home Affordable Modification for over 14 months now. The person handling my case returned my call to tell me that they've declined my request for a modification because I was unemployed. I've never been unemployed. I've been with the same employer for over 5 years now, and that has not changed through this whole process. After sending her the proof of my income, she now says that I do not qualify because I am so behind on my payments. I would not be behind on my payments if they would have let me continue to pay them.''

Can you believe this is a Federal program? If that doesn't tear at your heart, if you don't see the tears of your constituents who have been put through the wringer of this Federal program--this Federal program--then I would say that every program must be acceptable then no matter how much harm it's doing.

I know that we're better than that. I think the folks on the left and the right who have analyzed this program, who have done a bipartisan, nonpartisan analysis of this and research, have shown that it has been a failure. It is this Congress' responsibility to end a failure of a program and to make sure that the Federal taxpayers, the American people, don't continue to write the check for a program that destroys people's lives and that has hurt more people than it has helped.

I encourage my colleagues to vote ``yes'' on this bill.

Will the gentleman yield?

Certainly, a multibillion-dollar Federal program doesn't create any real private sector jobs.

Will the gentleman yield?

If the gentleman would yield, I would be happy to explain.

When you cut Federal spending, you create private sector jobs. When you tax people more, you get less private sector growth.

Mr. Chairman, I rise in opposition to the amendment.

Well, let's talk about the substance of the amendment. If the sponsor will not, I intend to. The sponsor of the amendment and the amendment here says that it costs about $1,500 per mortgage modification. That is, in fact, not the case. The substance of this amendment is extremely deceptive and flawed. In fact, the statistics used within it are not even the dissenting views of the Democrats on the Financial Services Committee. They're not even the views of the Treasury Department. The Treasury Department testified in front of the Congressional Oversight Panel and said that the permanent modifications under HAMP would cost about $20,000. This amendment says $1,500. On its face it's false. I would encourage my colleagues to vote against it.

I reserve the balance of my time.

I would say that his dissenting views are dissenting from the ranking member of Financial Services, Mr. Frank and his staff. $7,500 is what they claim. The Treasury Department claims $20,000.

My colleague also said that this is a little program. That's absolutely absurd, Mr. Chairman. That's absurd. It's a $29.5 billion program of our taxpayer dollars. But you know, I think he needs to understand something, and my colleague needs to understand what this program is actually doing to people.

You ask my constituent from Hickory who is in the HAMP program: We've been in the HAMP program since February of 2010 and still have no answer. We're being charged late fees, and we've been reported to the credit bureau. We've been in underwater since April and on trial payments for 6 months, which is only supposed to have been 3 months. We've not received an answer.

Another constituent from Stanley said, We've paid payments every month, but now we're being told we're behind in payments because it was not the original monthly amount on our original loan, but it's the amount we were told to pay in 2010. How can we be behind?

I've heard from constituents that tell the same story. It is reduced monthly trial payments. They've been rejected due to eligibility issues or lost documentation. By payments being reduced in the trial payment period, they've ended up defaulting on their mortgage. This is a Federal program that's actively harmed them.

I would ask my colleague to look at the substance of the facts of this program and admit it's been a failure and vote to repeal and end this program.

I reserve the balance of my time.

I would say, Mr. Chairman, my colleague is right. It is easy to be a critic of this program because it is an epic failure.

I yield such time as she may consume to my colleague from Illinois (Mrs. Biggert).

In closing, Mr. Chair, I would encourage my colleagues to understand that when government taxes more and spends more, it crowds out private sector job creation and growth. We're about growing jobs in this Congress, and I urge my colleagues to get on board.

Mr. Chairman, I rise in opposition to the amendment.

I think this is a fundamentally flawed amendment.

What this amendment essentially does is say that the last agency in government that we had asked to conduct a review of this program would be in charge of the review of the program and would be in charge of designing a new program, even though the previous program they designed is flawed and harmful and a failure, and immediately report back to Congress a program that is basically the same.

Look, Ronald Reagan once said: The closest thing to eternal life is a Federal program. That quote is this amendment. I ask my colleagues to oppose it.

I reserve the balance of my time.

I would say that you read a quote from the Special Inspector General from TARP, Mr. Barofsky: ``The basic idea of a well- run government program is to have clear goals, have a plan to meet these goals, measure progress along the way against these goals, change your program when necessary so you can still achieve those goals.

``But this is how the TARP has been implemented and, in particular, this program within TARP: set goals. Ignore goals entirely. Hope for the best. When the best is different, change your goals and say you never really meant it when you had those goals. Pretend that the program is a success, even though it is not meeting these goals.''

That is Mr. Barofsky's analysis of Treasury's implementation. I would ask my colleague, if that is in keeping with his expectations for a new government program, then, I would submit, that is what they will come up with.

This Treasury has defended TARP and defended HAMP, and in particular HAMP, which has been roundly criticized even by La Raza, which has been a tried and true liberal activist for a long time. But Treasury has been defending it. Why? I'm not sure. But instead of reforming the program, instead of fixing the program, they refuse to do it; and so we must end it.

I yield back the balance of my time.

Mr. Chairman, I rise in opposition to the amendment.

Mr. Chairman, I am not sure what my colleague from Texas has heard at her town hall meetings, but what I have heard from my constituents, I have one resident of Stanley, North Carolina, who said, ``We have paid payments every month.'' Now, I say to my colleague, I have read this before, but I wasn't sure if you were on the floor for this. But one constituent of mine said, ``We have paid payments every month. But now we are being told we are behind in our payments because it is not the original monthly payment on our original loan, but it was an amount we were told to pay in 2010. How can we be behind?''

I would ask my colleagues to read the Special Inspector General's report, ``The Details of Failures of HAMP.'' I ask my colleagues to listen to their constituents. More people in America, I would remind my colleagues, more people in America, close to 800,000 Americans, have been actively harmed and left worse off under this Federal program than have actually been helped.

My colleague points to a laudable survey of the positives. The survey doesn't detail the destroyed lives that this HAMP program has pushed on people, has created.

So, this amendment, the reason why I rise in opposition is because this amendment is similar to ones we have had in committee that we rejected in committee. This directs the Treasury to conduct a study of HAMP and would be completely counterproductive. The reason why it would be completely counterproductive is over the last 6 months we have seen the Treasury Department engage in a frantic 6-month media campaign for this program. They won't admit it is a failure; although, the rest of the world is largely saying it is a failure. They even have offered a veto threat on this legislation.

The Special Inspector General, Mr. Barofsky, said just earlier this week, ``This Treasury Department is so content with the wretched, shameful status quo, they refuse to even acknowledge that the program is a failure.'' And that is why simply to offer the Treasury to study this really is beneath the House.

I yield back the balance of my time.

Mr. Chairman, I rise in opposition to the amendment.

I appreciate the gentlelady offering this amendment. Unfortunately, I must rise in opposition to it.

The requirements in this amendment are both cumbersome and unnecessary. It requires servicers and lenders to provide information regarding proprietary information on their entire portfolio of loans, not just HAMP. The reporting requirement for, quote, requests for modifications is undefined in the amendment and is, therefore, unworkable based on the research that we have done.

It's unclear why this new role is necessary in the contractual negotiations between private citizens and private companies. Furthermore, servicers already provide results of their modification efforts to the HOPE NOW Alliance as well as in their annual reports without disclosing proprietary information. In fact, the HOPE NOW Alliance reports servicers having completed 961,355 proprietary modifications in 2008; 1,172,490 proprietary modifications in 2009; and 1.2 million in 2010.

Now I might add, this is many multiples in the private sector in terms of mortgage modifications than have been provided under the HAMP government funded program that we're discussing here today and trying to eliminate here today, the program that has hurt just shy of 800,000 Americans, destroyed their credit, taken their savings and, at the end of the day, taken their homes. I would encourage my colleagues to vote against this amendment.

I reserve the balance of my time.

Mr. Chairman, in closing, I would encourage my colleagues to vote ``no'' on this amendment. The reporting requirements my colleague references are required by the servicers that are participating in HAMP, and they are required to disclose the information related to the Federal program, HAMP.

This amendment goes much further and requires these servicers to disclose hundreds of thousands of other modifications that are in the private sector. We know the aggregate number. What is being requested here is detailed information that is not correct for personal privacy and is not proper in keeping with the hundreds of thousands of private transactions going on across this country.

I urge my colleagues to vote ``no.''

I yield back the balance of my time.

Mr. Chair, I rise in opposition to the amendment.

Thank you, Mr. Chairman.

The amendment fails to highlight that there are more failed modifications than successful permanent modifications. In fact, in the dissenting views from the Financial Services Committee Democrats, of which my colleague from New York (Mrs. Maloney) signed, along with 14 of her Democrat colleagues, it states that, in their view, 570,000 homeowners would be assisted under HAMP if the program were allowed to continue. This amendment, however, states that that number is 2.8 million. This differs from the facts of her own party. And I think both numbers are much higher than what have been agreed upon by the Congressional Oversight Panel of TARP. Their numbers are much, much lower.

I think if you use my colleague's words and figures, it's fair to say that those are grossly inflated and go well beyond what is reasonable, what is serious, and what is agreed upon in the private sector, or by even most of her Democrat colleagues. So I would urge my colleagues to vote against that.

I reserve the balance of my time.

Mr. Chairman, in closing, I would quote from page 17 of the dissenting views of the Financial Services Committee Democrats, of which my colleague, Mrs. Maloney, signed on. Page 17, ``A reasonable estimate is that the program participation will double by the end of next year,'' which, I might add, is a bit ambitious. I'll just continue with the quote. ``A reasonable estimate is that the program participation will double by the end of next year, for a cumulative total of 1.1 million homeowners. Based on this estimate, the bill would deny modification for more than a half million homeowners at risk of foreclosure.'' I might add, the statistics also bear out that for every half a million that are helped in this program, you're actively hurting about 800,000 Americans.

So what the opposition on the other side of the aisle is doing is saying we should continue failure, we should endorse failure. In fact, we should continue to hurt people by keeping this program open. And that, under their view, it means that you'll have 800,000 Americans that will be left worse off because this program exists--worse off. Their credit depleted, their home taken, their credit rating destroyed. I think that is highly inappropriate, Mr. Chairman. That's why I oppose this amendment.

I yield the balance of my time to my colleague from Illinois (Mrs. Biggert).

I rise in opposition to the motion to recommit.

Mr. Speaker, first of all, Veterans' Administration loans are not permissible under the HAMP program. They cannot go through the HAMP program in order to get relief of their mortgage. Furthermore, veterans are already covered under an effective program which is assistance to veterans with VA guaranteed home loans. That program is actually working.

The program that my colleague has offered this cynical motion to recommit for is merely a roadblock for us eliminating a failed government program.

I want to tell you, the Special Inspector General for TARP has said that HAMP recipients sometimes end up unnecessarily depleting their dwindling savings in an ultimately futile effort to obtain the sustainable relief promised by the program guidelines. Others, who may have somehow found ways to continue to make their mortgage payments, have been drawn into failed trial modifications that have left them with more principal outstanding in their loans, less home equity, or a position further underwater and worse credit scores. Perhaps worst of all, even in circumstances where they never missed a payment, they may face back payments, penalties and even late fees that suddenly became due on their modified mortgages that they have been unable to pay. This Federal program that my colleagues on the other side of the aisle are standing up and defending leaves people with late fees, penalties under their modified mortgages, and oftentimes results in the loss of their very home.

Furthermore, I would tell my colleagues that some have been helped in this program. But for every one person that's been helped, there's more than one other person that has actively been harmed. They deplete their savings, they ruin their credit, and their house is taken from them.

And this is a government program. I ask my colleagues, do not subject our veterans, with this motion to recommit, to a failed program. We don't want our veterans to come home to a Federal program that is actively harming them. And that's what this recommit does.

Furthermore, I would say to my colleagues, if we can't vote to eliminate this Federal program, I ask you, what programs can we eliminate?

Vote against this recommit. Vote for final passage. Let's move on.

I yield back the balance of my time.

I thank the gentleman for yielding.

Mr. Speaker, the bill that I am sponsoring is the HAMP Termination Act, and it is a bill that will protect at-risk homeowners across the country from a government program that has proven to be an abysmal failure.

The Home Affordable Modification Program, or HAMP, was originally supposed to help as many as 3 million to 4 million struggling homeowners avoid foreclosure by modifying loans to a level that is affordable to borrowers now and sustainable over the long term. That was the intention. However, nearly 800,000 of the 1.4 million homeowners who enrolled in this program have subsequently been rejected or terminated.

In his most recent testimony to Congress, the Special Inspector General for TARP, Neil Barofsky, stated: ``It is just not working. The Home Affordable Modification Program has to date been a failure.'' ``A failure,'' in the words of the independent individual to oversee this program. A failure.

Now, there is no doubt that people of good will created this program. There is no doubt about that. The intention was to help those that are facing foreclosure. That was the intention.

Unfortunately, the design of this program has led to more people being harmed than actually helped. Understand that. We have a government program that harms more people than it was designed to help because it strings them along with a so-called verbally modified change to their payments, and so it drains their savings. At the end of the day, the majority of the people enrolled in this program are kicked out, and they are left not only with their savings depleted, which is bad enough that a government program strings people along for that, but it also ruins their credit rating, because this government program only verbally modifies their loan terms.

In the end, you have folks that have depleted their savings, ruined their credit, and lost their house. And this is a Federal Government program paid for by the American people's tax dollars. It is an abject failure. Worse than that, it is destroying people's lives.

I would ask my colleagues to vote for this rule. It allows for a number of amendments, some of which are wise, others that I think are very flawed from my colleagues across the aisle.

But this HAMP program, we have to come to a consensus on it. All the folks that oversee this, nonpartisan, bipartisan, have all looked at this and described it as a failure.

So if we can't eliminate this government program, then I ask my colleagues, What government programs can we eliminate? Vote for the rule; and, please, I ask my colleagues to vote for the HAMP Termination Act as well.