Floor Statements

Mr. Speaker, I thank the gentlelady from California for her leadership on this bill. She has been a tiger on this issue, trying to get this right.

I also want to thank the gentleman from Virginia (Mr. Cantor) and the Republican leadership, as well as Mr. Grimm from New York and Mr. Richmond from Louisiana who really, I think, without their work collectively, this would not be happening.

I rise in strong support of H.R. 3370, the Homeowner Flood Insurance Affordability Act. Over the past several months, I have had the honor of working with my colleagues, both Republican and Democrat, to roll back the harmful and unintended consequences of the original Biggert- Waters Act.

This legislation that we take up today is a culmination of a lot of efforts by a lot of individuals, as well as the activism on the part of our constituents.

I have had an opportunity to attend some rallies and meetings in my district with over 1,000 people attending, where the concerns and the fears of my constituents were brought forward in great volume.

H.R. 3370, the Homeowner Flood Insurance Affordability Act, will do a number of things. One, it reinstitutes or expands the grandfathering provisions in section 4 from what they were in the previous bill.

A very important provision here, section 18 allows reimbursements for successful appeals. Now, what that will do is, if FEMA incorrectly--as they have in many cases--if they put homes in a flood zone incorrectly and a homeowner appeals that, they get the money that they expended for that appeal, for the surveying and technical assistance they need.

In addition, section 24 provides for a flood insurance advocate to actually work on behalf of homeowners to make sure that they get the full and meaningful appeal that they deserve and also that they understand what the flood mapping process requires.

More fundamentally, this bill is an example of what we can achieve when Congress works together, and I honestly hope that we will build on this spirit of bipartisan cooperation. I urge my colleagues to vote in favor of this critical bill.

I thank the gentlelady for yielding and for her work on behalf of American consumers.

Mr. Chairman, I rise today in opposition to H.R. 3193, the so-called Consumer Financial Protection and Soundness Improvement Act.

Let's be clear about what my friends on the other side of the aisle are trying to do here today.

They would really like to completely repeal the Consumer Financial Protection Bureau. Many of the sponsors of this act are the ones who tried to defeat the creation and empowerment of the CFPB to begin with. To be mindful, this is the only financial regulator solely responsible for protecting American consumers from unfair, deceptive, and abusive financial products. My friends on the other side of the aisle would like to destroy it, so they are trying to pass off this ``death by a thousand cuts'' approach as improvements to the Bureau's structure.

This bill will bog down the consumer bureau in bureaucratic and congressional red tape. It will make it more difficult for the Bureau to seek out and retain qualified employees. It will also allow the companies that the Consumer Financial Protection Bureau is supposed to be regulating to have more information, better information--more accurate information, more extensive information--about consumers than the CFPB that is responsible for protecting them will have.

In sum, it will make the Consumer Financial Protection Bureau a second-class and ineffective regulator, sending the signal to bad actors in our financial markets that we are not really serious about consumer protections, and this bill will do nothing to make consumers safer.

I urge all of my colleagues to join me in voting ``no'' on H.R. 3193.

Madam Speaker, I thank the gentleman for yielding.

I rise today to urge a ``no'' vote on the previous question so this House can bring the Homeowner Flood Insurance Affordability Act up for a vote.

This bipartisan legislation will provide critical relief for families who have been devastated by outrageous flood insurance increases required by recent changes to the Flood Insurance Program.

FEMA's insistence on moving forward with these extreme rate hikes, without first completing an affordability study and certifying that their mapping techniques are accurate, as required by Congress in the Biggert-Waters Act, has created a crisis for working families who can't afford to pay 5 or 10 times more for flood insurance.

Before we ask the American taxpayer to pay 1 cent more in premiums, we need to ensure that FEMA is implementing the Flood Insurance Program in a fair and lawful way.

Now, we are not asking to repeal that law. We are just asking for a timeout while we figure this out, and we are asking that we do an affordability study so that we don't force people out of their homes. There is no sense doing it after the people are gone. We need this done in the right way.

We can help middle class homeowners across the country by voting ``no'' on the previous question and bringing up the Homeowner Protection Act.

Mr. Speaker, I thank the ranking member for yielding.

First of all, I want to say that as the ranking Democrat on the Subcommittee on Federal Workforce, I rise in strong support of Mr. Farenthold's measure here, H.R. 2860, the OPM Inspector General Act, legislation that will enhance oversight of the background check process for the issuance of government security clearances.

At the outset as well, I would like to thank the subcommittee chairman, Mr. Farenthold, for working in a bipartisan manner to sponsor H.R. 2860. I would also like to thank our full committee chairman, Mr. Issa, and ranking member, Mr. Cummings, the gentleman from Maryland, for their hard work and their leadership on this legislation as well.

Recent events involving Edward Snowden and his leaking of classified information and as well Aaron Alexis and the tragic shooting at the Washington Navy Yard have called attention to the need to reexamine and improve the Federal Government's background investigation and security clearance process.

H.R. 2860 is a key component of our examinations. This legislation provides the Inspector General of the Office of Personnel Management with the resources that he needs to assist Congress in our review and oversight of a process that is critical within our national security framework.

We rely heavily on our Inspectors General. They are at the front lines of investigating fraud, waste, and abuse in government programs. We as Members of the legislature rely heavily on them in getting accurate information.

In particular, H.R. 2860 would give the Office of Personnel Management the authority to access a portion of OPM's revolving fund to pay for audits, investigations, and oversight of the agency's revolving fund program, which includes the Federal Government's background investigations process, their leadership training, and personnel management solutions.

I think OPM Inspector General Patrick McFarland did a great job on this in making us aware of the necessity for this legislation. During a June 2013 Federal Workforce Subcommittee hearing, as has been noted, Mr. McFarland stated that his office was handicapped in its ability to conduct proper oversight of the OPM's revolving fund activities.

Under existing law, the Inspector General's oversight costs cannot be charged to the revolving fund. As a result, for fiscal year 2013, the Inspector General had only available $3 million to conduct oversight of OPM's program involving $2 billion.

Because of these limited resources, the OPM Inspector General was not able to thoroughly investigate issues regarding falsification of background investigations, conduct audits of the revolving fund, or examine the fund's high-risk areas.

However, H.R. 2860, if enacted, would allow the OPM Inspector General's oversight costs to be paid from the revolving fund up to a maximum of one-third of 1 percent of OPM's revolving fund budget. Assuming a revolving budget of $2 billion, the Inspector General may be authorized to receive up to a maximum of $6.6 million to fund oversight costs.

Common sense indicates that giving the OPM Inspector General authority for this funding is a sensible and prudent investment. Moreover, if national security is implicated, the importance of preventing or mitigating national security threats is, of course, immeasurable.

Let me also add that this proposal was included in the President's fiscal year 2014 budget request, and the Senate passed, by unanimous consent, substantially similar legislation last October. In addition, a provision granting the OPM Inspector General access to the revolving fund was included in the omnibus appropriation bill released just last night. I would note, however, that that provision expires after 1 year.

So Mr. Farenthold's legislation, which I have cosponsored, is incredibly important and should be adopted. I urge my colleagues on both sides of the aisle to join with myself and Mr. Cummings and Mr. Farenthold.

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

I rise today in opposition to H.R. 1105, which will create a gaping loophole for private equity fund advisers and deprive investors and regulators of important information about the risk these funds pose.

The Dodd-Frank Act wisely required that advisers to all hedge funds, private equity funds, and other private funds register and file regular reports with the SEC. It did this for two reasons: one, to help regulators better understand the systemic risks that these funds pose to the overall financial system, and to provide investors in these funds with meaningful information about the funds' governance.

This bill would exempt nearly every private equity fund adviser from these important disclosure requirements. Some of my colleagues who support this bill will argue that because private equity funds were not the cause of the last crisis, we should not subject them to these modest transparency and accountability requirements.

But one of the most important lessons we did learn during the financial crisis is that systemic threats seem to always bubble up from the opaque and unregulated sectors of the market. Giving this exemption will allow threats to once again grow in the dark corners of our financial system, only showing themselves when it is too late to prevent serious harm to the American taxpayer.

Supporters of this bill, while well-intended, will point to the provision that ensures advisers to private equity funds with leverage ratios over 2:1 will still have to register. This may sound attractive on its surface until you realize that every private equity fund is basically within that parameter. Private equity funds invest in companies, and it is these portfolio companies that

load up on leverage and that have the potential to take on outside risk, piling on the leverage while the private equity fund itself appears on its surface to be modestly leveraged. A private equity fund could have a leverage ratio well below 2:1, while its portfolio companies are leveraged in excess of 30:1 masking the actual risk that these funds pose. Nearly every private equity fund in existence today would come in below the 2:1 leverage cap. This is a hollow limitation that provides no protection to the funds' investors or to the American taxpayer.

Mr. Speaker, we learned the hard way after the recent financial crisis that systemic risks grow in the dark corners of our financial markets and that the more information we can gather about how the markets work, the safer we will be. The registration and reporting requirements for private equity advisers are modest and narrowly tailored, but they provide investors and regulators with important information. Rolling back these reforms now moves us in the wrong direction. I urge my colleagues to oppose H.R. 1105.

I reserve the balance of my time.

Mr. Speaker, I yield myself 1 minute.

I do want to respond to the gentleman's invoking of the SEC chair, Mary Jo White. Judging from the gentleman's remarks, you would think she might be in favor of this bill. Well, let me talk about what she says about this bill in particular:

Our markets would not be well served by narrowing the scope

of the commission's jurisdiction in oversight of these

advisers.

That is with respect to this bill. She also said:

Private equity investors are in need of the same

protections as other private fund investors.

Lastly, she has also said that the commission has brought enforcement actions, talking about the advisability of having oversight over advisers and having these disclosures made:

The commission has brought enforcement actions against

private equity funds and their advisory personnel involving

unlawful pay-to-play schemes, insider trading, conflicts of

interest, valuation, and misappropriation of assets.

I yield myself another 30 seconds.

Now, when you think about the protections that are necessary for pension funds, especially where these workers have invested their whole lives in these pension funds, you understand the need for this disclosure.

At this time I yield 3 minutes to the gentleman from Minnesota (Mr. Ellison).

I yield the gentleman an additional 1 minute.

I yield the gentleman an additional 20 seconds.

Mr. Speaker, I yield myself 1 minute to respond to some of these allegations.

In respect to sophisticated investors, the Council of Institutional Investors, which is an association representing corporate, union, and public pensions, foundations and endowments, largely very sophisticated investors with combined assets of $3 trillion, opposes this bill. They oppose this bill because of the record of enforcement actions of the SEC to go after risks that do actually exist.

I now yield 3 minutes to the gentleman from Connecticut (Mr. Himes), a cosponsor of the bill.

Mr. Speaker, I yield the gentleman an additional 1 minute.

Mr. Speaker, may I ask how much time is remaining for each side.

Mr. Speaker, at this time I yield 3 minutes to the gentleman from Tennessee (Mr. Cooper).

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

I do want to point out, in response to the gentleman from Tennessee's remarks about this bill going on voice vote in committee, I just want to remind the Members and the public that during that debate there was a need for further work on this bill.

I think, in a moment of bipartisanship, we agreed, both Democrat and Republican, to allow the bill to go by voice vote with the promise to work on some of those issues going forward. So it was an agreement to try to continue to agree and to work on the bill. It was

not a vote in favor of any particular provisions within this bill.

There has been a lot of talk here about the risks that don't exist, and I do want to just point out some of those. As a result of this bill, funds investing more than $300 billion a year, much of which is the retirement savings of workers like teachers, firefighters, police officers, they would no longer be required to provide basic investor protections.

Specifically, H.R. 1105 would deprive investors of basic disclosures about an employee of a fund adviser who, for instance, violated securities law, or the adviser's businesses practices, its fees, any conflict of interest on the part of that adviser.

It would also eliminate a compliance program and code of ethics within the bill, within Dodd-Frank, and would eliminate the need for a chief compliance officer for each fund manager.

H.R. 1105, the bill under consideration here, would also prevent the SEC from conducting compliance exams of private equity fund adviser, even though SEC Chairman Mary Jo White notes that the Commission has already uncovered issues such as unlawful pay-to-play schemes, insider trading that we have all read about recently, conflicts of interest, valuation issues, and misappropriation of assets.

I want to talk about some of these since there has been a complete dismissal of any risk here. I think the record speaks to the risk.

The SEC has brought several enforcement actions against private equity firms. While the defendants do not necessarily represent all private equity firms, they do highlight the need for a strong police officer with the authority to examine all private equity advisers.

Capital formation relies on investor confidence in the underlying assets; and without registration with the SEC, investors will no longer have a cop on the beat that can enforce the rule of law, reducing investor demand.

In Knelman, for example here, there have been broad violations related to fraud, custody, compliance, and reporting. In Knelman Asset Management Group, the SEC found that registered private equity fund-of- funds adviser Knelman Asset Management Group, LLC, and Irving P. Knelman, KAMG's managing director, chief executive officer, and former CCO, violated the Advisers Act's custody, antifraud, compliance, reporting, and books-and-records provisions.

In insider trading enforcement, the Gowrish insider trading case involved an individual who allegedly stole confidential acquisition information, TPG Capital, and sold that information to two friends who made $500,000 in illicit trading profits.

Valuation related enforcement actions, the Oppenheimer/Brian Williamson matters concern an investment adviser and portfolio manager who misrepresented material details about his valuation methodology to his investors.

Recently, the Commission filed a case against Yorkville Advisors, where Yorkville allegedly inflated the values of certain liquid assets. While Yorkville managed hedge funds, the valuation issues are very similar to ones we see in private equity.

Finally, the KCAP valuation case involved alleged overstatements of the value of certain debt securities and CLOs held in the investment portfolio, highlighting the division and AMU's emphasis on pursuing valuation cases.

And in the Ranieri Partners case, the SEC also found that an investment manager knowingly used a sanctioned, unregistered broker- dealer to solicit capital for a pooled investment vehicle.

So all of these illegal activities would be made unavailable to private equity investors under this bill. That is what the risk is. That is not fiction. Those are actual cases that the SEC has introduced enforcement actions on. So there is real risk here for investors and for the markets themselves.

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

Mr. Speaker, I yield myself 2 minutes.

We need not worry about small firms in this. They are already exempt under this bill. They are already exempt. So the concerns about small firms being covered by this, they are already exempt, number one.

Number two, the other scenario that has been posited here is that somehow, by allowing private equity firms the right to keep secret--or to refuse to disclose that their employees have been prosecuted for violating securities laws, by allowing that to remain undisclosed, that somehow that is going to help some single mom go to work, I don't think that is a rational assumption.

Mr. Speaker, I will now enter into the Record letters from the following organizations who are all opposed to this bill: Americans for Financial Reform, the Council of Institutional Investors, the North American Securities Administrators Association, and a Statement of Administration Policy from the Obama administration.

I reserve the balance of my time.

Americans for

Financial Reform,

Washington, DC.

Dear Representative: On behalf of Americans for Financial

Reform, we are writing to express our opposition to HR 1105.

Contrary to its title, this bill is not designed to benefit

small business. Instead, it would exempt private equity fund

advisers--who include some of the wealthiest and most

significant entities on Wall Street--from basic reporting

requirements designed to help regulators

monitor systemic risk in the financial system and protect

investors and the public.

Prior to the Dodd-Frank Act, hedge and private equity funds

received almost no regulatory monitoring, despite the fact

that combined they manage some $3 trillion in assets and

played a significant intermediary role in the financial

crisis. Section 404 of the Dodd-Frank Act created more

transparency for this previously dark portion of the markets,

by requiring advisers to hedge and private equity funds to

report basic financial information relevant to systemic risk

to the Securities and Exchange Commission (SEC). The

experience of the 2008 crisis--where risks emerged from parts

of the markets not being monitored by regulators--clearly

demonstrates the importance of ensuring that regulators can

track financial risks wherever they originate.

The Section 404 reporting requirements as implemented by

the SEC are far from onerous. All advisers with below $150

million in assets under management are completely exempted,

and advisers with up to $1.5 billion in assets under

management must report only limited and basic information

once per year. Advisers to large private equity funds are

required to respond only once per year (advisers to other

large funds report quarterly).

HR 1105 would exempt almost all private equity fund

advisers from reporting requirements to the Securities and

Exchange Commission. The sole requirement for the exemption

is that the fund must not have outstanding borrowings that

exceed twice the fund's invested capital. But this

requirement places little if any real limitation on the

exemption, since the great majority of borrowing connected

with private equity activity is conducted through portfolio

companies, not at the fund level. (That is, companies owned

by private equity funds borrow large amounts as the direction

of the fund, but the fund itself rarely borrows a great

deal).

It is particularly distressing that Congress would consider

granting this exemption at a time when concern is growing

among regulators and market observers about risks created by

a possible bubble in the leveraged loan market, which is

dominated by loans sponsored by private equity firms. Several

warnings have been issued recently by regulators concerning

the risks being created in these markets. As Moody's

investor's service has stated:

``Private equity firms have been exploiting investors''

willingness to lend to speculative-grade companies . . .

Higher yields are drawing investors to riskier structures at

a time when interest rates remain at historical lows.''

Since leveraged loans are also being sold to small retail

investors, a bubble could impact both the stability of the

broader financial system and the retirement savings of retail

investors. The situation in the leveraged loan market clearly

demonstrates the connection between private equity activity

and important risks to financial stability and to investors.

An additional source of concern is the danger that the

exemption granted in HR 1105 could too easily be exploited to

reach beyond private equity firms alone. The distinction

between a hedge fund and a private equity fund is not a

formal legal distinction, it is simply a differentiation

between general investment strategies. While HR 1105 grants

the SEC the ability to define more precisely what a private

equity fund is, if that definition is at all overbroad then

it could be taken advantage of by a wide range of hedge funds

in order to avoid oversight.

Private equity funds already receive significant subsidies

through the tax system, as they are major beneficiaries of

the favorable treatment for `carried interest', as well as

the general tax subsidy to debt costs. It is totally

inappropriate to also grant such funds a blanket exemption

from even the limited and basic Dodd-Frank regulatory

reporting requirements. Such a blanket exemption would make

it more difficult for regulators to monitor systemic risk and

risks to investors, solely in order to exempt wealthy

managers of large private equity funds from a minor

administrative task. HR 1105 should be rejected.

Thank you for your consideration. For more information

please contact AFR's Policy Director, Marcus Stanley.

Sincerely,

Americans for Financial Reform.

Following Are the Partners of Americans for Financial Reform

All the organizations support the overall principles of AFR

and are working for an accountable, fair and secure financial

system. Not all of these organizations work on all of the

issues covered by the coalition or have signed on to every

statement.;

A New Way Forward; AFL-CIO; AFSCME; Alliance For Justice;

American Income Life Insurance; American Sustainable Business

Council; Americans for Democratic Action, Inc; Americans

United for Change; Campaign for America's Future; Campaign

Money; Center for Digital Democracy; Center for Economic and

Policy Research; Center for Economic Progress; Center for

Media and Democracy; Center for Responsible Lending; Center

for Justice and Democracy.

Center of Concern; Center for Effective Government; Change

to Win; Clean Yield Asset Management; Coastal Enterprises

Inc.; Color of Change; Common Cause; Communications Workers

of America; Community Development Transportation Lending

Services; Consumer Action; Consumer Association Council;

Consumers for Auto Safety and Reliability; Consumer

Federation of America; Consumer Watchdog; Consumers Union.

Corporation for Enterprise Development; CREDO Mobile; CTW

Investment Group; Demos; Economic Policy Institute; Essential

Action; Greenlining Institute; Good Business International;

HNMA Funding Company; Home Actions; Housing Counseling

Services; Home Defender's League; Information Press;

Institute for Global Communications; Institute for Policy

Studies: Global Economy Project.

International Brotherhood of Teamsters; Institute of

Women's Policy Research; Krull & Company; Laborers'

International Union of North America; Lawyers' Committee for

Civil Rights Under Law; Main Street Alliance; Move On; NAACP;

NASCAT; National Association of Consumer Advocates; National

Association of Neighborhoods; National Community Reinvestment

Coalition; National Consumer Law Center (on behalf of its

low-income clients); National Consumers League; National

Council of La Raza.

National Council of Women's Organizations; National Fair

Housing Alliance; National Federation of Community

Development Credit Unions; National Housing Resource Center;

National Housing Trust; National Housing Trust Community

Development Fund; National NeighborWorks Association;

National Nurses United; National People's Action; National

Urban League; Next Step; OpenTheGovernment.org; Opportunity

Finance Network; Partners for the Common Good; PICO National

Network.

Progress Now Action; Progressive States Network; Poverty

and Race Research Action Council; Public Citizen; Sargent

Shriver Center on Poverty Law; SEIU; State Voices; Taxpayer's

for Common Sense; The Association for Housing and

Neighborhood Development; The Fuel Savers Club; The

Leadership Conference on Civil and Human Rights; The Seminal;

TICAS; U.S. Public Interest Research Group; UNITE HERE.

United Food and Commercial Workers; United States Student

Association; USAction; Veris Wealth Partners; Western States

Center; We the People Now; Woodstock Institute; World Privacy

Forum; UNET; Union Plus; Unitarian Universalist for a Just

Economic Community.

List of State and Local Affiliates

Alaska PIRG; Arizona PIRG; Arizona Advocacy Network;

Arizonans For Responsible Lending; Association for

Neighborhood and Housing Development NY; Audubon Partnership

for Economic Development LDC, New York NY; BAC Funding

Consortium Inc., Miami FL; Beech Capital Venture Corporation,

Philadelphia PA; California PIRG; California Reinvestment

Coalition; Century Housing Corporation, Culver City CA;

CHANGER NY; Chautauqua Home Rehabilitation and Improvement

Corporation (NY); Chicago Community Loan Fund, Chicago IL.

Chicago Community Ventures, Chicago IL; Chicago Consumer

Coalition; Citizen Potawatomi CDC, Shawnee OK; Colorado PIRG;

Coalition on Homeless Housing in Ohio; Community Capital

Fund, Bridgeport CT; Community Capital of Maryland, Baltimore

MD; Community Development Financial Institution of the Tohono

O'odham Nation, Sells AZ; Community Redevelopment Loan and

Investment Fund, Atlanta GA; Community Reinvestment

Association of North Carolina; Community Resource Group,

Fayetteville A; Connecticut PIRG; Consumer Assistance

Council; Cooper Square Committee (NYC).

Cooperative Fund of New England, Wilmington NC; Corporacion

de Desarrollo Economico de Ceiba, Ceiba PR; Delta Foundation,

Inc., Greenville MS; Economic Opportunity Fund (EOF),

Philadelphia PA; Empire Justice Center NY; Empowering and

Strengthening Ohio's People (ESOP), Cleveland OH;

Enterprises, Inc., Berea KY; Fair Housing Contact Service OH;

Federation of Appalachian Housing; Fitness and Praise Youth

Development, Inc., Baton Rouge LA; Florida Consumer Action

Network; Florida PIRG; Funding Partners for Housing

Solutions, Ft. Collins CO; Georgia PIRG.

Grow Iowa Foundation, Greenfield IA; Homewise, Inc., Santa

Fe NM; Idaho Nevada CDFI, Pocatello ID; Idaho Chapter,

National Association of Social Workers; Illinois PIRG; Impact

Capital, Seattle WA; Indiana PIRG; Iowa PIRG; Iowa Citizens

for Community Improvement; JobStart Chautauqua, Inc.,

Mayville NY; La Casa Federal Credit Union, Newark NJ; Low

Income Investment Fund, San Francisco CA; Long Island Housing

Services NY; MaineStream Finance, Bangor ME.

Maryland PIRG; Massachusetts Consumers' Coalition;

MASSPIRG; Massachusetts Fair Housing Center; Michigan PIRG;

Midland Community Development Corporation, Midland TX;

Midwest Minnesota Community Development Corporation, Detroit

Lakes MN; Mile High Community Loan Fund, Denver CO; Missouri

PIRG; Mortgage Recovery Service Center of L.A.; Montana

Community Development Corporation, Missoula MT; Montana PIRG;

Neighborhood Economic Development Advocacy Project; New

Hampshire PIRG.

New Jersey Community Capital, Trenton NJ; New Jersey

Citizen Action; New Jersey PIRG; New Mexico PIRG; New York

PIRG; New York City Aids Housing Network; New Yorkers for

Responsible Lending; NOAH Community Development Fund, Inc.,

Boston MA; Nonprofit Finance Fund, New York NY; Nonprofits

Assistance Fund, Minneapolis M;

North Carolina PIRG; Northside Community Development Fund,

Pittsburgh PA; Ohio Capital Corporation for Housing, Columbus

OH; Ohio PIRG.

OligarchyUSA; Oregon State PIRG; Our Oregon; PennPIRG;

Piedmont Housing Alliance, Charlottesville VA; Michigan PIRG;

Rocky Mountain Peace and Justice Center, CO; Rhode Island

PIRG; Rural Community Assistance Corporation, West Sacramento

CA; Rural Organizing Project OR; San Francisco Municipal

Transportation Authority; Seattle Economic Development Fund;

Community Capital Development; TexPIRG.

The Fair Housing Council of Central New York; The Loan

Fund, Albuquerque NM; Third Reconstruction Institute NC;

Vermont PIRG; Village Capital Corporation, Cleveland OH;

Virginia Citizens Consumer Council; Virginia Poverty Law

Center; War on Poverty--Florida; WashPIRG; Westchester

Residential Opportunities Inc.; Wigamig Owners Loan Fund,

Inc., Lac du Flambeau WI; WISPIRG.

Small Businesses

Blu; Bowden-Gill Environmental; Community MedPAC;

Diversified Environmental Planning; Hayden & Craig, PLLC; Mid

City Animal Hospital, Pheonix AZ; The Holographic Repatteming

Institute at Austin; UNETO.

Mr. Speaker, could I ask how much time remains on each side.

I yield 2 minutes to the gentlelady from New York (Mrs. Maloney).

I yield the gentlewoman an additional 1 minute.

I yield myself 2 minutes.

Mr. Speaker, I would now like to enter into the Record statements from the following organizations which all oppose H.R. 1105: the AFL- CIO, California Public Employees' Retirement System, and North American Securities Administrators Association.

And regarding reading the bill, I certainly did read the bill, and my point is that the bill does not require public disclosure of those matters, as the gentleman points out. It just goes to the Commission. So it doesn't go to the public. The public doesn't get the information. It stays within the custody of the Commission.

I yield to the gentleman from Texas.

Reclaiming my time, that is right. But those are public investors. They are the ones that need the information.

Mr. Speaker, I yield the balance of my time to the gentlelady from California (Ms. Waters), our ranking member and a real champion of America's working families.

Legislative Proposals to Relieve the Red Tape Burden on Investors and

Job Creators

United States House of Representatives Committee on Financial Services

Subcommittee on Capital Markets and Government Sponsored Enterprises

(Statement of Anne Simpson Senior Portfolio Manager, Investments Director of Global Governance California Public Employees' Retirement

System, May 23, 2013)

Chairman Garrett, Ranking Member Maloney, and Members of

the Committee, on behalf of the California Public Employees'

Retirement System (CalPERS), we thank you for convening this

hearing. CalPERS is pleased to submit testimony for the

record to reassert our strong support for efficient and

effective financial regulation, as enacted by the Dodd-Frank

Wall Street Reform and Consumer Protection Act (``Dodd-

Frank'').

This statement includes a brief overview of CalPERS,

including how we benefit from effective financial markets

regulation and the role that shareowner rights and corporate

governance play in building investor confidence. It also

includes a discussion of our views on HR 1135, HR 1105, and

I want to thank my friend, Mr. Capuano, for reserving this time on our behalf to recognize our great friend.

Mr. Speaker, Barry Sullivan has been here a long time.

I know that the title ``cloakroom manager'' has a rather antiquated sound to it. As a matter of fact, there is a rumor around here that Barry Sullivan actually was the manager of the cloakroom back when they still wore cloaks.

I am not sure he has been here that long, but I do know the beginning of his service started with marching in the St. Patrick's Day parade in South Boston with Joe Moakley, our dear departed friend. Now, after 33 years, our friend has decided to retire from his position. I think it is a truly bittersweet moment for a lot of us.

Barry has been an extension of our staffs. I will miss the daily contact that I have with Barry, because most of the time he is reminding me to make all the votes. But he is also an extension of our families, in many ways. So many of us travel back and forth from our home districts--mine, in South Boston, and around the city of Boston-- back here to Washington. And Barry is an extension of that.

I have had the good fortune to call Barry my friend since I arrived here in Washington, D.C., shortly after the attacks on September 11. I came in in a special election. I was the only Democrat elected at that time. I was given one bit of advice by my friends. They said, Make sure you get to know Barry Sullivan in the cloakroom. That is some of the best advice that I have ever received in coming here.

Barry may not know it, but to a new Member of Congress, his assistance is immeasurable, especially when you are first getting used to understanding the rhythm here in Washington, D.C., and the importance of the whole process here.

Barry has been in D.C. all these years now--at least 33 years--but he has never lost his connection to his hometown of South Boston. As a matter of fact, Barry may not know this, but he is actually still voting in South Boston each and every election. There is an old South Boston rule that if someone moves away or even if they pass away, as long as you know how that person would have voted, you are allowed to vote on their behalf.

I am actually kidding on that.

Barry has never lost his connection to his local community in South Boston, as well as his love for Cape Cod. A true son of South Boston, Barry and his family still make their annual trip to Falmouth, Massachusetts. Of course, they always stop at Sullivan's at Castle Island for a couple of hot dogs.

While there is no doubt that Barry loves to get back to the Cape, there was always the rumor that Barry traveled back home simply to work on his Boston accent. While I may have had trouble when I first got here in talking to some of our colleagues from the Deep South, I never needed an interpreter to talk to my friend Barry.

I still remember how proud we were back in 2007, standing right in this Chamber, in this aisle, at the State of the Union address. It was Barry Sullivan who made the announcement: Mr. Speaker, the President of the United States. While most of the country didn't know what he was saying, a lot of people back in South Boston in our district were very, very proud of that moment. The phone was ringing off the hook.

Mr. Speaker, there are a lot of Members here who are the face of the Congress. We are up here at the microphone on a continual basis, sometimes much to the chagrin of the people we represent, but behind the scenes it is people like Barry Sullivan who make things work. His manner and respectful way of dealing with everyone, whether it was a page, the Speaker of the House, or whether it is a Democrat--he's even nice to the Republicans. I think it helps the camaraderie and the way this body works, and I think it goes beyond what people would rightfully expect. Barry conducted his job with that level of respect and dignity and efficiency in guiding us in our jobs and in our responsibilities.

On a personal level, I am proud to call Barry a friend. I have also come to know his wife, Barbara--Saint Barbara, we call her--and his sons Barry, Brendan, and Brian.

We do regret that he has decided to move on to other endeavors.

I just want to say that the job that you have done here, Barry, and the dignity and professionalism that you have lent to this Congress and to your country is something that we are enormously proud of. I cannot think of a better compliment and recognition of a job well done. You have been a blessing to this Congress--both sides of the aisle--and to your country.

Barry, we all wish you well in your future endeavors. We wish the best for Barbara, your sons, and your family. I thank you for all the kindness you have shown towards me and towards all the other Members and their families during our times in this Congress.

God bless you and thank you. Godspeed.

I thank the gentlelady for yielding, and I want to associate myself with her earlier remarks on this bill, as well as the remarks of Mr. Peterson of Minnesota.

Mr. Speaker, I rise today in strong opposition to H.R. 992, the misleadingly named Swaps Regulatory Improvement Act. If you need to know one thing about this bill, it is that a vote for this bill is a vote to provide taxpayer funding and backing for the kind of reckless derivative trading that brought our economy to the brink of catastrophic collapse. It is as simple as that.

The bill before us today would repeal the provision in the Dodd-Frank reform law that requires too-big-to-fail banks to push their risky derivative dealings out of banks that receive taxpayer support and into separately capitalized subsidiaries.

This bill is not a regulatory improvement. It is a giveaway to Wall Street, and it is an abdication of the duty of this body to protect taxpayers from Wall Street speculators.

I want to point out a couple of things that have been, I think, misleading here. Dodd-Frank already allows banks to keep derivatives that they use for bona fide hedging purposes or for traditional banking activities within the insured bank. Interest rate and foreign exchange swaps, which make up 90 percent of swaps volume, are the most likely to be used by end-users to manage their risk; and those are already exempt from the push-out under section 716. So end-users can already benefit from 90 percent of the swaps that are out there.

Moving risky derivatives activity outside of the insured banks will ensure that the risks to the banks--those that are traditional and measurable--and the speculative derivative risks, which are totally unmeasured and unexpected, those are not commingled, which make bank risks easy to understand for regulators and actually leads to better regulation.

Finally, I want to call my colleagues' attention to an article about this very bill that appeared yesterday in The New York Times on the front page of the Business section.

I appreciate that.

Go read yesterday's New York Times. It says on the front page of the Business section, To Wall Street, Washington, D.C., ``might seem like enemy territory. But even as Federal regulators and prosecutors extract multibillion-dollar penalties from the Nation's biggest banks, Wall Street can rely on at least one ally here'' in Washington. And that ally is the House of Representatives.

We ought to change our position, stand with the taxpayers, stand with the investors, stand with the people that we were elected here to represent and tell Wall Street where to go on this. They get enough breaks as it is. We ought to stand up for the American people and protect them for a change.

I thank the gentlewoman for yielding.

Mr. Speaker, I rise today in opposition to H.R. 2374, the so-called Retail Investor Protection Act. Despite its innocuous-sounding title, the intent of this bill is not to protect investors, but to protect an outdated system that systematically weakens the average American's retirement savings protections.

When Americans sit down across the table from a financial adviser and entrust their retirement nest egg, they expect the advice they receive to be

the best financial advice for them. That is why when Congress created the Employee Retirement Income Security Act in 1974, it did so with the express purpose of protecting employees and their dependents through robust disclosure requirements and fiduciary standards of care.

But the quality of advice they receive is often dependent on whether their adviser is an investment adviser or a broker-dealer, a distinction which is really a reflection of an accident of chance that retail investors typically are not aware of and do not fully understand.

Moreover, as employers have come to back away from defined benefit pension plans to defined contribution plans like 401(k)s, average workers more often are on their own to weigh advice received directly from their financial adviser about how best to invest their retirement. The result is a retirement savings system in which many workers often are unaware that they are turning over their savings to advisers who may have no legal requirement whatever to act in the worker's best interest.

This bill before us today will make it harder for the Department of Labor and the Securities and Exchange Commission to protect workers' retirement savings at a time when expanding and strengthening those retirement savings and protections has never been more important.

The average Social Security beneficiary receives about $1,200 per month, or just under $15,000 per year, representing just 41 percent of required pre-retirement income. With the cost of services for retirees--such as health care, food, and other essentials--continuing to go up, it is more important than ever that Americans have robust retirement savings to supplement the modest benefit that Social Security now guarantees.

Unfortunately, this bill before the House today takes us in the opposite direction in order to protect its status quo. That is why AARP opposes this bill. That is why the AFL-CIO opposes this bill. That is why the Consumer Federation of America opposes this bill. That is why Americans for Financial Reform opposes this bill. That is why I will vote ``no'' on this bill, and I urge my colleagues to do the same.

Mr. Speaker, I want to thank the ranking member for yielding me time, and I also want to thank Chairman Miller for his hard work on this bill.

Mr. Speaker, I rise in support of H.R. 2189. This legislation takes important steps to address the deplorable disability claims backlog at the Veterans Affairs Administration.

It does so by establishing a special task force to evaluate the full extent of the backlog and, more importantly, to determine solutions to eliminate the backlog. We all agree our veterans deserve better.

It is in this same spirit that I introduced H.R. 2185, Veterans Day Moment of Silence Act. This bill brings together all Americans to observe 2 minutes of silence each Veterans Day. It is a time when we all, regardless of ideology, can stop and reflect on the brave service of generations of U.S. veterans.

I want to thank Chairman Miller and Ranking Member Michaud for including the text of my bill into the text of H.R. 2189. Particularly, I want to thank Daniel and Michael Bendetson and their father, Dr. Peter Bendetson. As a family, they have worked relentlessly to bring the moment-of-silence provision to fruition, and I am honored to present this proposal today on their behalf in this 113th Congress.

Again, I am thankful to Mr. Michaud and to Chairman Miller for enabling this provision to come to a vote today, and I urge my colleagues to support H.R. 2189. It is a very timely bill. With hundreds of thousands of returning veterans from Iraq and Afghanistan and with over 700,000 veterans waiting for disability determinations, it is a very important bill.

Mr. Chair, I rise in support of H.R. 3080, the Water Resources Reform and Development Act of 2013, and to commend committee Chairman Shuster and ranking member Rahall, as well as subcommittee chairman Gibbs and ranking member Tim Bishop, for their efforts in crafting and bringing to the floor this very important water infrastructure bill.

Mr. Chair, according to the American Association of Port Authorities, U.S. seaports move 99.4% of the country's overseas cargo by volume. Every one of the 50 states relies on seaports for imports and exports, totaling some $3.8 billion worth of goods moving through U.S. seaports each day. And our ports support the employment of more than 13 million Americans.

As the Representative from the 8th Congressional District of Massachusetts, I represent the Port of Boston. In fact, my District Office is actually located on a pier within the industrial port.

Observing the day to day operations of the Port, and also being a Member of the Congressional Ports Caucus, I know firsthand that ports and waterways are vital to our economic prosperity.

For instance, the Port of Boston generates $2.4 billion in economic benefits annually and 34,000 jobs are connected to port activities. With the expected 2015 completion of the Panama Canal expansion project, those numbers should only increase as larger container ships utilize our ports on both coasts.

Mr. Chair, the Boston Harbor Navigation Improvement Project, recently recommended and approved by the U.S. Army Corps of Engineers, will allow the Port of Boston to keep pace with what lies ahead and with our global competitors.

I look forward to working with the authors of this bill to move this important project forward.

Mr. Chair, we all have a stake in the success of our ports and waterways and need to more frequently address our critical water infrastructure and flood control projects. That is why I also applaud the authors for including in the bill a Sense of Congress that we consider a water resources bill no less than every two years.

Getting this bill to the floor required making difficult choices. I Want to again thank its authors for their efforts.

Mr. Speaker, I thank the gentleman for yielding.

I also want to thank Mr. Moran for his leadership and Mr. Wolf, as the lead sponsor of this bill, along with Mr. Cummings, Mr. Connolly, Mr. Turner, Mr. Rogers, and Mr. Wittman. I know there are a lot of staff as well who have been working hard on this bill.

Mr. Speaker, as ranking member of the Federal Workforce Subcommittee, I rise in strong support of H.R. 3223, the Federal Employee Retroactive Pay Fairness Act. This bipartisan legislation will ensure that our more than 800,000 Federal workers who have been placed on furlough since October 1 will receive full backpay for the duration of the government shutdown. This legislation recognizes that our middle-income

Federal employees are totally committed to serving the American people. And to their great credit, our public servants have remained ready, willing, and able to perform their duties, even in the face of mandatory increases in their retirement costs, sequestration, related furloughs, and as they face the likelihood of their fourth consecutive year of pay freeze imposed by this Congress.

Given that these furloughed employees have already carried a major part of the burden working towards deficit reduction, it would be unjust to expect them to bear the additional cost and uncertainty of a shutdown engineered by one extreme faction within the Republican Party--not all, but one extreme faction within that group--who are intent on destroying government operations for the sake of political brinkmanship.

I would also note that these furloughed Federal employees, nevertheless, perform mission-critical agency functions. Among the employees who have been sent home by the shutdown are Federal aviation safety monitors, Department of Defense military technicians, disease surveillance personnel at the Centers for Disease Control, and also food safety inspectors at the FDA, as well as NIH researchers who are engaged in experimental clinical trials that are life-and-death matters for some.

So it's, therefore, imperative that we also pass a clean continuing resolution so that these Federal workers can immediately return to their post.

Again, I thank Mr. Moran, Mr. Wolf, and Mr. Cummings for their great work on this important legislation and urge my colleagues on both sides of the aisle to support H.R. 3223.

Mr. Speaker, I thank the gentlelady for yielding.

I had a chance earlier today--because we are not doing a whole lot other than arguing for the last few days--to run up The Mall and go for a little jog. I went by the Washington Monument, the World War II Memorial, ran all the way out to Arlington where the Iwo Jima Memorial is.

I got to thinking about all the great people in this country who have built this government and invested so much, sacrificing their very lives to preserve this government and to elevate it to a point where it is respected around the world. I thought about the debate that's going on here today. We should not be disgracing their memory, all of those people from Jefferson to FDR and others, by dissolving this government, by defunding it and allowing it to fail. We owe the American people better than that. There's a solution here.

Hey, look, I didn't vote for the Affordable Care Act either. I thought it was a flawed bill. But that's a different argument about how to make that work best for the American people. We are failing the American people by allowing this government to shut down. It's a terrible precedent to set. It's disgraceful, and the American people deserve better.

I thank the gentleman from Maryland for yielding.

I rise in strong opposition to H.R. 2879, the so-called ``Stop Government Abuse Act.'' This legislation is simply a rehash of the three attacks on Federal workers that were incorporated in the bills that the Republican leadership abruptly pulled from the suspension calendar yesterday due to a lack of support from the required two- thirds majority of this House.

The fact that these anti-Federal worker suspension bills have now been reconstituted into a single anti-Federal worker bill does not make this legislation any less misguided or any less harmful to our Federal workers than it was yesterday. After all, H.R. 2879 is based on the same message that has been continually reflected in a series of Republican legislative attacks on our Federal workers throughout this Congress. That message from the Republican leadership has been that our hardworking Federal employees cannot be trusted, and they are the primary source of our deficit burden.

On the heels of repeated attempts to freeze Federal employee pay beyond the current 3 years, efforts to increase Federal pension contributions and slash our Federal workforce across the board, we are now considering legislation that would only add insult to injure by depriving Federal employees of their constitutional rights to due process of law.

In particular, I'm deeply concerned about the expedited termination provisions in H.R. 2879. These provisions would give agency heads broad discretion, without limitation, to immediately fire senior executives accused of misconduct without notifying the employees of the charges against them and without giving them a reasonable opportunity to defend themselves. Instead, it places the burden on the employee, after they fire them, to prove that their reinstatement is required. This ``ready, fire, aim'' approach by my Republican colleagues, where they fire the employee first and ask questions later, flies in the face of the rights guaranteed to all Americans under our Constitution.

The ``guilty until proven innocent'' framework violates the due process protections envisioned by James Madison and guaranteed under the Constitution. In 1985, in Loudermill v. Cleveland Board of Education, the United States Supreme Court held that public employees, Federal employees, who are facing discipline are entitled to certain due process rights. The U.S. Supreme Court held that public servants had a property right in the jobs that they held and in continued employment, and that such employment could not be denied to employees unless they were given a meaningful opportunity to have notice of the allegations against them, to have a fair hearing and an opportunity to respond against the charges against them. Notably, that must occur prior to being deprived of their right to employment. The court stated:

An essential principle of due process is that a deprivation

of life, liberty, or property be preceded by notice and

opportunity for hearing appropriate to the nature of the

case.

The court goes on further and it says:

This principle requires some kind of a hearing prior to

discharge of an employee

who has a constitutionally protected property interest in his

employment.

Now, this is unconstitutional. This provision is flatly unconstitutional, and there's a long line of Federal cases under the Supreme Court that declares it so. The one saving grace, in my opinion, in this bill is that there's no severability clause, and that after this provision is struck down by the Supreme Court, these employees will all be reinstated with back pay. And the whole bill that they're offering will be struck down because of the lack of a severability clause in the bill.

I thank the gentleman.

Look, this Nation was founded on the principle that every person, every man and woman is entitled to due process before he or she is deprived of life, liberty, or property. Our Supreme Court in the Loudermill case understood the injustice of depriving a person of their livelihood, and I hope that my colleagues understand that H.R. 2879 unfortunately would do just that.

Due process demands that we oppose H.R. 2879. I urge my colleagues to join me in voting ``no'' on this legislation.

I thank the ranking member for his advocacy and his courtesy.

I thank the ranking member for yielding me this time.

I rise in strong opposition to H.R. 2711, the so-called Citizen Empowerment Act, that has been brought to this floor without a hearing.

While I do understand that the legislation purports to address accountability and transparency in the Federal Government, I am greatly concerned that H.R. 2711, in its current form, will actually have quite the opposite effect.

In particular, this bill would allow the recording of any telephonic or in-person conversation with a Federal employee that is conducted in an official capacity. Regrettably, however, the bill does not include critical exemptions pertaining to the discussion of classified information or conversations relating to sensitive Federal law enforcement or public safety investigations.

In light of this significant flaw in the bill, our Federal Law Enforcement Officers Association has underscored that, rather than enhance accountability in government, this bill would actually have a chilling effect on the ability of Federal law enforcement officers to perform their duties.

According to the association--and I'll quote them:

Put simply, this legislation does not work in the context

of Federal law enforcement and does a disservice to the brave

men and women who are asked to put their lives on the line to

protect us from terrorists and criminals.

For this same reason, the bill is also opposed by the National Association of Assistant United States Attorneys. Moreover, this legislation actually is evidence of a shift away from a greater transparency by failing to include a requirement that Federal employees receive fair notice that their official conversations are being recorded.

Importantly, 12 States, including my home State of Massachusetts, have enacted State laws requiring the consent of both parties to a conversation to give their consent. These States' efforts have been undertaken in the interest of government transparency. Regrettably, this legislation would unfortunately serve to undermine them and preempt them.

In addition, I would note that this bill would also serve to promulgate the severely misguided notion that our Federal workforce is not to be trusted.

I thank the gentleman.

Let us remember that our Federal employees are dedicated public personnel who work at our veterans hospitals. I have three hospitals in my district. I know how hard they work. They protect our borders. They research cures for deadly diseases and provide key services in support of our Departments of Defense, State, and Treasury. They deserve better than this, Mr. Speaker. They deserve better than this legislation. I hope my colleagues vote against it.

Will the gentleman yield?

The gentleman misunderstands. The Federal employee doesn't know what is going to come out of the caller's mouth next, so classified information can come without notice.

I thank the gentleman for yielding.

Mr. Speaker, first of all, I want to say that I have the utmost affection and respect for the gentleman from Pennsylvania. He and I are friends. But I must say that he's wrong on this case.

It's ironic that you choose James Madison as the one person that you rely upon in your argument, because it was James Madison that actually drafted the due process clause. He was the one that took the recommendations from the delegates from New York and actually drafted the text. He made his own amendments to the due process clause that we today rely upon to protect constitutional rights.

Let me also talk about the Senior Executive Service in our Federal government. Those are the employees that rise to the top. They do after years of serving in many cases because of their expertise in protecting our veterans at

the VA hospitals. But the Senior Executive Service is an experienced corps of dedicated Federal employees who provide institutional stability and continuity across administrations, and they serve as a vital link between political appointees, frontline managers, and the Federal workforce. We don't want each administration coming in and saying for no reason, Well, I'm a Republican. I'm going to fire all the Democratic executives in the Senior Executive Service. We don't want a Democrat coming in and saying, I'm going to fire all these Republicans who are in senior positions.

One of the protections we provide is due process of law. Despite the important role that Senior Executive Service employees play in the Federal Government, this bill that's on the floor today would deprive these employees of the basic due process rights available to them under existing law. The legislation would give agency heads the broad discretion to just fire people, fire senior executives that are suspected of misconduct, and employees would bear the burden of proving their reinstatement. This is called ``ready, fire, aim.'' It would allow firing employees for basically any reason that in the discretion of the senior management is required. As the gentleman from Maryland and I--and I congratulate him on his advocacy here--it presumes guilt before we get all the facts. That is completely inconsistent with the principles of our Constitution.

I am deeply concerned that this legislation may cause irreparable reputational damage if an individual is wrongly accused and forced to seek reinstatement. The person may eventually be vindicated, but the damage to the individual's reputation, their financial stability, and their career may be beyond repair. Moreover, there are effective tools already existing to hold senior executives accountable for performance and conduct issues. These disciplinary procedures provide very simply, 30 days' notice. You have to have notice why you're fired in writing. That's not a lot to ask, 30 days' notice of why you're being fired. This is what you're eliminating from the law right now. It gives that person 30 days to scramble to get a representative to put a case together to say, No, these aren't the facts. It allows them, if they are able, to get an attorney or a representative, which includes the right to that written decision and the right to appeal to the Merit Systems Protection Board.

Those are the basic due process rights that James Madison has supported. You're right, James Madison is still here today. He's on this side. He's on the side of due process. He doesn't want a kangaroo court. He wanted protections for constitutional rights, and he thought it was so important that he incorporated those in the text of the Constitution.

During committee consideration of H.R. 2579, I offered an amendment to apply these existing due process protections to the expedited removal provisions in the bill, but my amendment was rejected. For these reasons--and I say again I have great respect for the gentleman from Pennsylvania--I urge my colleagues to vote against this measure in support of due process, in support of the principles that James Madison advocated. Also, I want to say the previous bill that the gentleman talked about earlier that we voted on, 410 votes, that had the ``ready, aim, then fire'' provision.

It gave the due process rights. The bill that we supported in the previous session, it wasn't exactly the same, as the gentleman acknowledged; it had due process rights. It allowed employees to have 30 days to have a written decision to know what the charges were against them and to respond. So this is a very, very different bill than passed the House overwhelmingly in the previous session.

This bill does not allow the employee the 30 days' notice of what they did wrong. It does not allow them to defend themselves against the charges. It does not allow them to have a representative. It does not allow them the ability to protect their reputation in real-time. This bill fires them first and then asks questions later. For those reasons, it should be rejected.

Will the gentleman yield?

I thank the gentleman, and I appreciate his advocacy.

Mr. Speaker, I do want to point out some inconsistencies in the argument

by my friend from Pennsylvania. In the case of Mr. Neely and in the case of Lois Lerner, under existing law, all that was required before they fired either of those individuals is to give them 30 days' notice, 30 days' written notice of the charges against them, give them the 30 days to put together a defense or to offer their version of the facts.

That's all that was required, and then we could have fired them or put them on administrative leave without pay. That was within the discretion of GSA.

So when GSA tells Mr. Kelly they can't do anything, there's plenty they could do. They could have taken both those employees, put them on administrative leave without pay--talk about protecting the taxpayer. I'm for that. They had the power to do that in these cases.

They could have taken both those employees, under current law, with due process in place, put them both on administrative leave without pay, and we could have protected the taxpayer. That was the discretion on the part of the administration and the folks that made the decision in that place. It was not a fault of the law.

But interestingly enough, it also protected us to have the second version of the facts put forward to bring more light to this.

Think about this. That due process right would allow an employee who might be the fall guy, it might be a person that they're trying to fire to shut them up, it gives them an opportunity to come before the public and say, while they're still in their job, to say, no, that's not the way it went down.

Now, it might be to the benefit of the Republican, it might be to the benefit of the Democrat, whatever position you have, whoever that individual might be. But it brings truth, it brings facts, and it brings the ability of that individual employee to protect themselves.

That's what we're asking for here, that 30 days' opportunity. And it can be without pay. We can protect the taxpayer and still give due process rights to our employees. This bill should be opposed for all those reasons.

I thank the gentleman from Maryland (Mr. Cummings) for yielding.