John Boehner

Mr. BOEHNER

Mr. BOEHNER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, today we have before us a pension security bill that passed the House last year with broad bipartisan support. That is the underlying bill, with two exceptions, two issues that were contained in last year's Sarbanes-Oxley bill, the 30-day notice of a blackout period and the prohibition on company insiders selling stock during a blackout period. Those issues have been signed into law. But the balance of that bill is what we have before us today. It is a reasonable and responsible approach to address the problems that were identified during our investigation of Enron, WorldCom and others. More specifically and more importantly, it does not overreach and begin to delve into areas where there are likely to be very serious unintended consequences. The substitute that is being offered by my friends on the other side is well-meaning, well-intentioned, and we have worked closely on these issues for many years, but the fact is that if Members look at the substitute that we have before us, it will cause serious concern in the employer community, and I would suggest many employees across the country will no longer have pensions because of the onerous regulations and excessive litigation that would result if the substitute that is offered were, in fact, adopted and signed into law. Specifically, it does, in fact, increase liability for employers under ERISA, new rights to sue, additional penalties that I think are unnecessary. The current protections within ERISA provide a solid framework for addressing grievances from employees. Secondly, it would require every plan fiduciary to have insurance to meet whatever the size of the pension plan is. It would be expensive, costly, and would create a situation where no one will want to serve as the fiduciary; and if, in fact, they can find someone, the cost of providing the insurance will drive up the cost of providing pensions. We have worked for years in this body to try to make it easier for businesses to set up pensions. We have tried to encourage businesses to cover more employees with pensions. The last thing we want to do is to dump cold water on this movement by again increasing cost and increasing regulation. We could talk about the regulatory bombardment in here when it comes to company insiders selling stock, regardless of what the reason is. Under this bill they would have to report it within 1 day. Employees would be getting these notices on an ongoing basis, and to what purpose? I do not know. But, more importantly, the substitute tries to regulate corporate salaries and corporate governance issues, but through the pension system. The Congress passed the Sarbanes-Oxley bill last year that dealt with large corporate governance issues. Most all Members of this body on both sides of the aisle supported it. It was a very good bill. One could argue it might be overreaching in some areas, but by and large addressing the serious issues that were uncovered during Enron and WorldCom. I do not think that we need to readdress corporate governance issues and executive pay issues in a pension bill. But most importantly, the substitute that we have before us guts the serious investment advice language that we have in the underlying bill. We have heard a lot today about the need for investment advice for the 61, 62 million Americans who have self-directed accounts who have been so protected by this law passed in 1974 that their ability to get investment advice is almost nil. As I have said before, the only place they can really get investment advice is from Bob at the coffee shop. What we seek to do in the underlying bill is to provide a framework and safeguards for them to get investment advice from the real experts in the industry. If they do not want to take employer-provided investment advice, the Committee on Ways and Means as part of this bill provides a tax deduction, an above-the-line tax deduction for them to go out and get their own investment advice. But I think all of us agree that having real investment advice in the marketplace for those with self- directed accounts has to happen, and the sooner it happens, the better. But under the bill that we have before us, it says you can only get third-party independent investment advice. There is no reason to even have it in the bill because that is what you can get today. And you do not get real investment advice because, one, employees do not want to have to pay for it; and, secondly, the so-called independent advice that is out there today is generic, very generic, whatever your age is, whatever your income is, whatever the assets in your plan are. I would suggest to my colleagues that if we are serious about having real investment advice in the marketplace today for America's employees, that this will not get there. I would ask my colleagues and urge them to look at the substitute and vote against it. Mr. Speaker, I reserve the balance of my time.

Mr. BOEHNER. Mr. Speaker, I yield 2 minutes to the gentleman from Nebraska (Mr. Osborne).

Mr. BOEHNER. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, there is a lot that has been said here today about the need for pension reform. Certainly, in the wake of the Enron and WorldCom scandals and the collapse of the stock market, Congress had a duty and a responsibility to look at our pension system, and we did. That was over a year ago. Out of that we learned that there were some deficiencies in our current pension system, such as the fact that company insiders could sell the company stock during a blackout period, while employees could not sell stock in their 401(k) plan. That has been fixed and signed into law. We found that there was no notice of a potential blackout period, not enough notice to employees of these blackout periods. Again, that has been fixed, both issues signed into law in the Sarbanes-Oxley bill. But there are other issues out there that need to be addressed, and I think the underlying bill addresses them in a fair and expansive way. With all due respect to my friends on the other side, the substitute that we have before us is nothing more than overkill. Now, if we are worried about people's pensions in America, then people who have pensions in America ought to be really worried about the substitute that we have before us, because if the substitute were to become law, virtually no employer in America could offer their employees pensions. And that is not an exaggeration at all. Pension plans are voluntary plans offered by employers to their employees, and the fact that they are voluntary means that we have to walk a delicate line. All one has to do is look at the regulatory impact, the legislative impact, well-meaning, well-intentioned during the 1980s that Congress and the agencies imposed on defined benefit plans. We nearly are making them extinct because of the cost, the litigation, and the regulatory nightmare that is involved with offering a traditional defined benefit plan. That is why we see this huge conversion from defined benefit plans, the traditional plan, to defined contribution plans like 401(k) plans. And nothing that we do here today, in my view, is going to slow that conversion down. And for many of us who are concerned about defined benefit plans, the traditional benefit plans, we ought not take up the issue that is contained in the substitute that would defy the conversion to a cash balance plan. A cash balance pension plan is a defined benefit plan. Those employers and those employees are covered under the Pension Benefit Guaranty Corporation. They pay premiums to the employer, and the employee's pension is protected, and the cash balance plan is protected there. And there has been no convergence of these over the last 2 years, as there is a moratorium in effect as the Treasury Department and others try to determine what the appropriate rules should be for conversions. Well, let us be honest. There have been over 500 conversions over the last 15 years. In virtually every single one of them, the employer made every employee whole. And it is almost impossible to find a case where an employer did not keep an employee whole. And, as we have heard before from the gentleman from Texas (Mr. Johnson), 80 percent of workers do better under cash balance plans than under traditional plans. Let us not forget, under a traditional plan, if you are a younger worker and you leave, you take nothing with you, zero. Under a cash balance plan, if you are a younger worker and you change jobs, you can take the net benefits that you have got vested and move them just like you can with a 401(k) account. So we can sit here and castigate one or two examples of companies who tried to do it the wrong way, who fixed it, but let us not castigate the other 500 plus employers across the country who made these conversions and did them successfully, working with their employees. When it is all said and done, Mr. Speaker, we want to encourage more employers to cover more of their employees with pension plans. We will not accomplish that goal, and that is a bipartisan goal, if we overregulate and drive up the cost of operating these plans. The substitute offered by my friends across the aisle will do just that. It is overkill. It should be defeated, and we should pass the underlying bill. Mr. Speaker, I yield back the balance of my time.

Mr. BOEHNER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, last year the Congress responded to the Enron and Global Crossing financial collapses by passing bipartisan legislation to strengthen worker retirement security and enhance corporate responsibility. And thanks largely to the work of the gentleman from Ohio (Mr. Oxley) and a bipartisan team of legislators, President Bush signed into law corporate accountability legislation that holds companies to the highest standards of auditor independence and ethics for America's investors. But on the issue of pension security, as the chart shows, we have got some unfinished business yet to complete. Last year the House responded quickly to these corporate failures by passing the Pension Security Act, the comprehensive pension protection bill backed by President Bush that would give millions of Americans new tools to help them better manage and expand their retirement security. We passed the bill with significant bipartisan support, with 46 Democrats joining 209 Republicans in supporting the bill. Unfortunately, the Senate did not act on any pension reform legislation last year. Before I talk about the protections included in the bill, I am proud to say that two key Pension Security Act provisions were signed into law last summer as part of the Sarbanes-Oxley corporate accountability law. These provisions bar company insiders from selling their own stock during blackout periods when workers cannot make changes to their own accounts and to require companies to give 30 days' advanced notice before a blackout period would begin. These provisions give workers parity with corporate executives and should provide workers with additional security of knowing that Congress is acting to better protect them. But we have more work to do. Let us be very clear. Worker retirement savings remain vulnerable to corporate meltdowns today, and it should not take another Enron or WorldCom for Congress to act on bipartisan pension protections. That is why we are here today. The gentleman from Texas (Mr. Sam Johnson) and I introduced the Pension Protection Act because workers desperately need access to professional investment advice and the ability to diversify their 401(k) savings and other safeguards to help them enhance their retirement security, as this chart shows us. Enron barred workers from selling company stock until age 50; and as a result, thousands of Enron employees watched helplessly as their retirement savings were lost. The Pension Security Act gives workers new freedoms to sell their company stock within 3 years. This is a dramatic change that gives workers unprecedented control over their retirement accounts and personal savings. Today, the vast majority of American workers receive no investment advice on how best to structure their 401(k) retirement plans, and most cannot afford to pay for it on their own, like company executives can. Not surprisingly, Enron, WorldCom, Global Crossing, and others did not provide their workers with access to professional investment advice. This type of investment guidance would have alerted these workers to the need to diversify their accounts and enabled many of them to have preserved their retirement savings. An Enron executive acknowledged before our committee that she diversified out of Enron stock before it collapsed and saved hundreds of thousands of dollars. Why are we denying rank-and-file employees the same opportunity to receive access to high-quality investment advice? And the answer to that is quite obvious. We should not be. The Pension Security Act changes outdated Federal rules and encourages employers to provide their workers with access to this type of advice. With the 30-day blackout protection now the law of the land, investment advice becomes even more critical for employees who cannot make changes to their 401(k) accounts during a company-imposed blackout period. Importantly, the bill includes new fiduciary and disclosure protections to ensure that workers receive quality advice that is solely in their best interests. The average investor will have much more protection under our bill than under current law. The bill also requires companies to give workers quarterly benefits statements that include information about accounts, including the value of their assets, their right to diversify, and the importance of maintaining a diverse portfolio. And lastly, the bill empowers workers to hold company insiders accountable for abuses by clarifying that companies are responsible for workers' savings during blackout periods. Congress should take action to protect Americans' retirement benefits, not endanger them. On a bipartisan basis, Congress has rejected extreme proposals, such as efforts to place arbitrary caps on company stock, that could jeopardize Americans' retirement security or spell the death of 401(k) accounts altogether. The bill before us is a balanced one that protects workers, but does not jeopardize the willingness of employers to offer retirement plans to their employees. American workers deserve the security of knowing that their savings will be there when they retire. This bill could have made a real difference for the workers at WorldCom or Global Crossing or Enron. Current pension laws are simply outdated, and we have a responsibility to change that. I want to thank the gentleman from Texas (Mr. Sam Johnson), my colleague and friend, who has once again proven instrumental in moving this issue forward here in the House, and I would also like to thank the gentleman from California (Chairman Thomas) on the Committee on Ways and Means for their cooperation in helping us bring this bill to the floor today. Mr. Speaker, I include the following letters for the Record: House of Representatives, Committee on Education and the Workforce, Washington, DC, May 7, 2003. Hon. William M. Thomas, Chairman, Committee on Ways and Means, Longworth House Office Building, Washington, DC. Dear Chairman Thomas: Thank you for your May 6, 2003 letter regarding H.R. 1000, the ``Pension Security Act of 2003,'' which was referred to the Committee on Education and the Workforce and in addition the Committee on Ways and Means. The Education and the Workforce Committee ordered the bill favorably reported on March 6, 2003 and I filed the report on March 18, 2003, House Report 108-43. I thank you for working with me, specifically regarding the provisions amending the Internal Revenue Code. While these provisions are within the sole jurisdiction of the Committee on Ways and Means, I appreciate your willingness to work with me in moving H.R. 1000 forward without the need for additional legislative consideration by your Committee. I agree that this procedural route should not be construed to prejudice the jurisdictional interest and prerogatives of the Committee on Ways and Means on these provisions or any other similar legislation and will not be considered as precedent for consideration of matters of jurisdictional interest to your Committee in the future. I thank you for working with me regarding this matter and look forward to continuing our work and cooperation on this bill and similar legislation. This letter and your response will be included in the Congressional Record during the floor consideration of this bill. If you have questions regarding this matter, please do not hesitate to call me. Sincerely, John Boehner, Chairman.

Mr. BOEHNER. Mr. Speaker, I am opposed to the motion.

Mr. BOEHNER. Mr. Speaker, I appreciate the indulgence of the Members. We all know that pension plans are voluntarily offered by employers to their employees. For those of us that have worked in the pension area for some time, we know that we have to walk a very delicate line in terms of the regulations that we put around these plans so that we do not drive employers and their employees out of the system. We spend a lot of time on a bipartisan basis here trying to find ways to encourage more companies to offer plans to their employees. Most of those plans today would be defined contribution plans, like 401(k) plans. The traditional defined benefit plan that we would have and all Federal employees would have is in serious trouble in America today. In 1986, we had 176,000 defined benefit plans in America. Today, we have less than 50,000, and the conversion from traditional pension plans to 401(k)- type plans is going to continue. Why? We have so overregulated and driven up the cost of offering defined benefit plans that these conversions continue. The whole issue of cash balance plans boils down to this: Cash balance plans are a way to save defined benefit plans. Cash balance plans are those where employers pay premiums into the Pension Benefit Guaranty Corporation. Employees who have cash balance plans are protected by the Pension Benefit Guaranty Corporation. So for those of us who have tried to find ways to help save the traditional defined benefit plan, the cash balance conversions are a way to save them. There have been over 500 conversions over the last 15 years. Virtually every single one of them have been successful, where employers have found ways to make sure that all employees are made whole. But do not be misunderstood. Eighty percent of employees benefit greater under a cash balance plan than they would under a defined benefit plan, and for younger workers who change jobs under a defined benefit plan, a traditional plan, they do not get to move anything with them, zero, but if they are vested in their cash balance plan, they can move that, and it is much more portable than a traditional plan. What the gentleman from California (Mr. George Miller) seeks to do is to require employers to offer two plans, the traditional plan and the cash balance plan. What this means is that the employer has to continue offering both plans, which will mean we will not have conversions, and if we do not have conversions, here is what will happen: The defined benefit plans will continue to be scrapped. Let us watch when the market begins to recover and the plans are healthier, companies will eliminate their defined benefit plan and move to a defined contribution plan, like a 401(k) plan. I do not think that is what most employees in America want. I would ask all of my colleagues, because on a bipartisan basis we have worked to make sure that these cash balance plans worked, and they worked fairly, my colleagues should also know there have been no conversions the last 2 years, and that is because there is a moratorium in effect. The Treasury Department had regulations out for comment. They got lots of comments. They withdrew them. They are continuing to work to find the right set of regulations to regulate these conversions to cash balance plans. Let us let them do the technical work. For Members on both sides of the aisle who have worked on these pension issues in a bipartisan way, we understand that these conversions will help save these plans. The underlying bill passed this House with 209 Republican votes and 46 Democrat votes a year ago. The underlying bill is a good bill that would help protect the pensions of American workers. Let us stand up for American workers today. Defeat the motion to recommit and vote for the underlying bill.

Mr. BOEHNER. Mr. Speaker, I am pleased to yield 2 minutes to the gentlewoman from Tennessee (Mrs. Blackburn), a member of our committee.

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

Mr. BOEHNER. Mr. Speaker, I yield 3 minutes to the gentleman from Sacramento, California (Mr. Ose). (Mr. OSE asked and was given permission to revise and extend his remarks.)

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

Mr. BOEHNER. Mr. Speaker, I yield myself the balance of the time. There has been a lot said today about the fact that this bill may not go far enough, and the substitute that we are about to debate in the coming hours goes much, much further. The issue here that Members need to understand is that our pension system is a voluntary system on behalf of employers for their employees. And while we will have much more debate on this when we get into the substitute, we walk a very fine line when we bring pension issues to this floor. The retirement security for American workers in most cases is one of their largest assets. It has to be treated with great respect. And all of us who have served in a legislative body, and especially here in Congress, know that we always have to deal with the law of unintended consequences. If we make one mistake, we could cost millions of Americans the right to their own retirement. So we have to be very careful. That is why, if we look at the bill that we have before us, we make modest reforms to correct problems that we found in the wake of Enron and WorldCom, and others. We do not do a wholesale overhaul of our pension security laws, because, in honesty, it is not needed. Now, the most substantive part of this bill would allow employers to offer to their employees real investment advice. We have over 60 million Americans who have self-directed accounts today, and most of whom have no access to real investment advice. The substitute that we are about to consider, given all of the rules they have around advice, will mean exactly what we see in the marketplace today: no advice. Yes, we do allow those who sell products to offer advice. We do require them to provide notice to the employees of potential conflicts. We hold them to the highest fiduciary duty. If there is any difference in fees, they have to let the employee know. But our goal here is to get real investment advice into the hands of everyday, working people who want and need this advice, and they need it now. With these new self-directed accounts, if they are going to really have the kind of retirement security that they expect and that we want, they need real investment advice. Current law, written in 1974, before the birth of the current financial services firms, barred those who sell product from giving advice. Now, if you are not in a retirement plan, and you are going to spend your money, you can get all the advice you want from all of the people in the world who sell products. But, oh, no, we cannot do that if you are in a qualified retirement plan. That is wrong. We should not lock out those firms that are the most successful firms in the country from offering their advice and their expertise to American workers. Workers do not have to take it. Secondly, in the bill we have an above-the-line tax deduction for employees in order to go out and seek their own investment advice if they do not want what the employer offers. Now, I think between both of these issues employees need to have options to go get the kind of advice that will benefit their own retirement security. The underlying bill is a very good bill. It had passed this House with broad bipartisan support about a year ago, and I expect that it will have broad bipartisan support today. Mr. Speaker, I yield back the balance of my time.

Mr. BOEHNER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 1000.

Mr. BOEHNER

Mr. BOEHNER. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. BOEHNER. Mr. Speaker, I move to suspend the rules and pass the Senate bill (S. 870) to amend the Richard B. Russell National School Lunch Act to extend the availability of funds to carry out the fruit and vegetable pilot program.

Mr. BOEHNER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks on S. 870.

Mr. BOEHNER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in strong support of S. 870, a bill to extend the period of time for which participating schools may provide free, fresh and dried fruits and fresh vegetables to children in schools. This pilot program, which was authorized as part of the Farm Security and Rural Investment Act of 2002, provides fruits and vegetables to children in an effort to increase their consumption of these healthful foods. I am proud that Ohio was selected to be one of the four States participating in this pilot program and that two of these schools are in Ohio's 8th district, which I represent, Nevin Coppock Elementary School in Tipp City, Ohio, and Stebbins High School in Riverside, Ohio. On April 10, the other body passed S. 870, which allows additional time for the current funds to be expended. It does not authorize new money to be spent on the pilot. S. 870 enjoyed broad bipartisan support in the other body and is supported in the House on both sides of the aisle. Mr. Speaker, a recent evaluation of the fruit and vegetable pilot program by the United States Department of Agriculture says that this pilot was popular amongst parents, teachers, and students, and successfully increased children's interest in making fruits and vegetables a regular part of their diet. Now, this is an encouraging finding at a time when rates of overweight and obesity amongst children are at an all-time high and that these rates are continuing to rise steadily without any sign of a reverse in this troubling trend. Growing scientific evidence demonstrates a strong link between nutrients found in fruits and vegetables and the reduced risk of several chronic diseases, including cancer, heart disease, type 2 diabetes, and others. According to the Office of the Surgeon General, diet-related diseases cost this country approximately $117 billion each year, and several other estimates are even larger. Nutrition experts strongly encourage Americans to consume a variety of fruits and vegetables on a daily basis, yet data from the national nutrition and the Centers for Disease Control and Prevention show that only one in four Americans, about 24 percent, eat five or more fruits and vegetables a day, and children tend to eat less fruits and vegetables than adults. This evidence makes clear the importance of our efforts to encourage children to develop an interest in fruits and vegetables at a young age. Today, I am pleased with the strong level of bipartisan support received by this pilot program and urge my colleagues to support S. 870 to extend this pilot into the next year. Mr. Speaker, I reserve the balance of my time.

Mr. BOEHNER. Mr. Speaker, I am pleased to yield such time as he may consume to the gentleman from Nebraska (Mr. Osborne).

Mr. BOEHNER

Mr. BOEHNER. Mr. Speaker, I ask unanimous consent that in the engrossment of the bill, H.R. 1261, the Clerk be authorized to make technical corrections and conforming changes to the bill.

Mr. BOEHNER

Mr. BOEHNER. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, let me ask my colleagues to support the gentlewoman from Ohio's amendment. I think for those States that do not provide the technical assistance to the local boards, they need that help, especially in terms of the financial integrity of the funds that they are dealing with. I do believe that the Department is in a position to do that. I would obviously think the sharing of best practices, that forum needs to occur, and somewhere at the Department of Labor is the most likely place for it to occur. I should note with regard to the other amendment that the gentlewoman had offered that was not made in order under the rule dealing with the financial integrity of the monies that move from here to the States, that we do clarify the issue of obligations versus expenditures, which we think is an important step in ensuring that there is a clear picture of what the drawdown numbers are, which today I do not think is as clear as it could be. We will continue to work with the gentlewoman as we get into conference at some point with the Senate in terms of ensuring that these Federal funds are used for their intended purpose. With that, I would urge my colleagues to support the gentlewoman's amendment. Mr. Chairman, I yield back the balance of my time.

Mr. BOEHNER. Mr. Chairman, I yield 1 minute to the gentleman from California (Mr. McKeon).

Mr. BOEHNER. Mr. Chairman, I think the gentlewoman does make an important contribution to the bill and clarifies that these out-of-work homemakers and single mothers do in fact play a role and do need services and should in fact be considered in a higher level as funds are being distributed to the local boards, and I ask Members to support the gentlewoman's amendment.

Mr. BOEHNER. Mr. Chairman, will the gentleman yield?

Mr. BOEHNER. Mr. Chairman, will the gentlewoman yield?

Mr. BOEHNER. Mr. Chairman, I thank the gentleman from Florida for yielding. Under the bill 80 percent of the funds are, under formula, to go to the local boards. This would bring that to 85 percent. I do think it gives the local boards more certainty over exactly the kind of funding that they should expect from year to year, would reduce the amount of dislocation or expectation as to what is coming in. I think he makes a valuable contribution, and we would be pleased to accept the amendment.

Mr. BOEHNER. Mr. Chairman, will the gentleman yield?