John Campbell

Mr. CAMPBELL of California

Mr. CAMPBELL of California. Just a short clarification, that this amendment does not propose a cut in the funding, it proposes to very slightly reduce the rate of growth from what was proposed. That is my only clarification.

Mr. CAMPBELL of California. Mr. Chairman, my colleague from Washington mentioned that he didn't think this last amendment that I proposed was the correct way to save money, so perhaps this is the more correct way; maybe this is something that he would find more to his liking. H.R. 1867, this bill before us, would increase spending for the National Science Foundation by 9.9 percent in the first year, 7.4 percent in the second year and 7.3 percent in the third year, for an increase of over 25 percent over a 3-year period. Now, Mr. Chairman, that is an amount, and I, too, am someone who has sympathy for some of the things that the National Science Foundation does. However, even over the last few years where we have had very large percentage increases in our revenues to the Federal Government, they haven't been as large as this over the last 3-year period. In fact, in the next 3- year period, any of the prognosticators, whether it be the Office of Management and Budget or any of the other prognosticators, are not estimating that we will have a 25 percent increase in revenue over the next 3 years. So therefore, this proposes to increase spending at a rate greater than revenue is projected to increase over the next 3 years. This amendment would simply reduce the amount of this increase by 1 percent per year. So instead of increasing by 10 percent the first year, it would increase by only 9; instead of increasing by 7.4 percent, the second year would increase by 6.4 percent; and 7.3 percent, it would increase by 6.3 percent in the third year. These are still large annual increases, larger than most taxpayers at home are likely to see the increases in their incomes, in their salaries, in their wages. So this is just a small reduction. It does not deal with, as the gentleman from Washington mentioned, it does not specifically say what, it leaves that issue open. So, therefore, it does not interfere with the selection of these various proposals and research things that the gentleman from Washington just supported in the last amendment. So with that, Mr. Chairman, I would ask for an ``aye'' vote.

Mr. CAMPBELL of California. Mr. Chairman, I offer an amendment.

Mr. CAMPBELL of California. We are qualified by virtue of the fact that we have been elected by people in our districts to be stewards of their money. As I said, this is not a question of whether or not these things have academic merit within a field of academics. It is a question of whether they are worthy of spending taxpayer money in that area. I think they are not.

Mr. CAMPBELL of California. Mr. Chairman, will the gentleman yield?

Mr. CAMPBELL of California. Mr. Chairman, I thank the gentleman from Georgia for yielding. I appreciate the academic arguments, and I understand them. I am a history buff myself. I love this stuff. I might actually love this report, might enjoy reading it, might find it fascinating. That's not the point. The point is do we want to spend taxpayer funds on this? The United States taxpayer cannot fund every bit of academic research for every university, for everything that every professor wants to do across this country. We can't do that. The question before us is, are these the sorts of things we do want to spend taxpayer money on? I would suggest that they are not, and that is why I would suggest that to vote against this amendment is to say that you believe that taxpayer money should be spent on these specific items. That is the question before us. Not whether it is interesting. I am a Civil War buff. I love all kinds of interesting stuff about that, but I don't think the taxpayer ought to pay for research into it.

Mr. CAMPBELL of California. Mr. Chairman, we have a budget problem here in Washington, the Federal Government. The budget that was recently passed off of this floor has a deficit in it, continues that deficit for the next 4 years. It has a tax increase in it, the largest tax increase in American history, going forward. And it also continues to raid the Social Security funds, take the Social Security surplus that we have and spend it on things that are unrelated to Social Security. So we have a budget crisis going on. What this amendment does is it says that there are certain things upon which we should not be spending money through this bill during this time of budget deficits, stealing Social Security funds, and increasing taxes. What this amendment does, it says there's just a couple of things that we should not be increasing the deficit by spending money on, and I quote, ``The Archives of Andean Knotted-String Records,'' or to study ``The Accuracy in Cross-Cultural Understanding of Others' Emotions.'' This amendment also says that we don't want to increase spending and, therefore, increase taxes in order to pay for a study of ``Bison Hunting on the Late Prehistoric Great Plains'' or ``Team Versus Individual Play'' or ``The Sexual Politics of Waste in Dakar.'' And it also says that we don't want to increase spending and spend any of this money in this authorization and, thereby, be continuing to raid the Social Security Trust Funds in order to study ``The Social Relationships and Reproductive Strategies of Phayre's Leaf Monkeys'' or ``The Cognitive Model of Superstitious Belief.'' Now, Mr. Chairman, I understand that there is a process of peer review from which these studies come in the National Science Foundation, and that's all well and good. But our job here is we are the elected representatives and stewards of the taxpayers' money, not the academics in the National Science Foundation, and it is our decision whether or not we wish to spend taxpayers' funds on studies of the social relationships and reproductive strategies of Phayre's leaf monkeys or on bison hunting on the late prehistoric Great Plains. I think we should not do that. I am sure that some believe that these are very fine academic studies. That's excellent. Within the realms of academic halls, they may think a number of things are fine academic studies. That's not the question. The question before us is, do these things rise to the standard of requiring expenditures of taxpayer funds in a time of deficits, proposed tax increases and raiding Social Security funds? I think the answer is a resounding no. I think the answer should be a resounding no, which means that I would hope that the vote on this amendment would be an equally resounding yes.

Mr. CAMPBELL of California. Mr. Chairman, I offer an amendment.

Mr. CAMPBELL of California

Mr. CAMPBELL of California. Mr. Speaker, I thank the gentleman from Pennsylvania for yielding. The reason we have this bill and the reason we are having this debate is because the D.C. voting bill, which just passed this House, costs $2.5 million. So in order to have it be neutral, there needs to be $2.5 million found. Now, what this bill proposes to do is what I would argue is basically a tax gimmick because no one's final tax, no one's ultimate tax pay, will be changed as a result of this bill. What it, in fact, does is change how quickly some people must pay their tax. So they will have to pay it a little earlier. They won't pay any different amount over a year. They will simply pay it a little earlier. But that is what this bill does. But what was the alternative? Well, normally you would think that if you were interested in fiscal responsibility, if you were interested in keeping budgets balanced over time, that if you are going to spend $2.5 million extra, you would save $2.5 million somewhere else. That is what people at home do. That is what everyday, average American citizens do. If they are going to spend a little more money on something, they spend a little less money on something else. Let's talk about what you would need to have done. If the Democratic majority had wished to reduce spending, and reduce the growth in spending is all you would actually have to do, but if they had wished to reduce the growth in spending in order to offset this $2.5 million, we are talking about 0.0002 percent. That is the reduction in growth, not even a cut, but the reduction in growth of spending. That is all you would have to do to offset the $2.5 million in this bill. And then we wouldn't even be talking about taxes and tax gimmicks and all that. Point zero zero zero 2 percent. I ask you, if you can't find 0.0002 percent to reduce growth, not even to reduce entitlement spending, but to reduce growth of entitlement spending, where and when will you ever deal with the entitlement tidal wave that we have coming? By 2037 the entitlements will eat up 100 percent of the Federal budget as we currently know it. So you have a couple of choices. You can either reduce the growth in entitlement spending over time so we don't have that, or you can double taxes. Well, if you can't find today 0.0002 percent to reduce the growth in spending, I would have to presume, and I think people would have to presume, Mr. Speaker, that the doubling of taxes eventually is where you want to go. Now, we already saw a budget where you have had the largest tax increase in American history included in the budget, and now we can see why. You can't even find this amount of reduction in spending. I oppose the D.C. voting bill because I think it is not right and not constitutional. But I oppose this bill as well because if we are ever going to control this budget and we are not going to control it on the backs of the average working American person, then tinkering with the Tax Code to find $2.5 million is not the way to do it. The way to do it is to go find 0.0002 percent of the growth and reduce that amount.

Mr. CAMPBELL of California

Mr. CAMPBELL of California. It was ruled not germane.

Mr. CAMPBELL of California. The amendment I wished to offer would simply have required that there be a majority.

Mr. CAMPBELL of California. Will the gentleman yield?

Mr. CAMPBELL of California. I thank the chairman so much for that clarification. Mr. Chairman, this bill is a statement, it is not a solution. It deals with one thing which is annoying and can be bad, but is not a major, it is not that major an issue relative to all the other things that can deal with corporate governance and bringing corporations down.

Mr. CAMPBELL of California. Did I say New York? I am sorry. The gentleman from Massachusetts.

Mr. CAMPBELL of California. Reclaiming my time, Mr. Chairman. You saw an amendment in committee which you voted against and voted down. You will see that amendment again this evening that gives shareholders rights through the board, not just on executive compensation, if they are unhappy with the management for any reason, to work through the board and change the board, give them more rights to change the board rather than do this sort of thing. Mr. Chairman, you will have your own time shortly, the gentleman from New York.

Mr. CAMPBELL of California. I am happy to yield to the gentleman from New York.

Mr. CAMPBELL of California. Mr. Chairman, I thank the gentleman for yielding. Let's stipulate here that there are and have been instances, plenty of instances, in which executive compensation has been excessive for the return given to shareholders. I have spent my entire life investing, and there have been times when I have seen excessive executive compensation, and return for the company wasn't there. And it made me mad, and I wasn't happy about it. Let's stipulate to that. Let's also understand there is a difference between that and when an executive gets high pay for a very excellent result. Pay for executives has been increasing, as it has for sports stars, as it has for people in the music business, authors, actors and investors. Chairman Bernanke of the Federal Reserve, when he spoke before our committee and when he has spoken before other committees, has been quoted as saying this is, to a degree, because of the effective technology of being able to take the talents of these various people and make them more valuable because it spreads across the world much quicker. But let's take that aside and stipulate that there have been instances, plenty of instances, where executive compensation has not been commensurate with the results. But there are a lot of other things that are more injurious to shareholders. There are other highly compensated individuals as well who have been overpaid for their jobs or for whatever they have done. There have been union contracts that have been out of line. Let's take Ford Motor Company right now. People are objecting to the current compensation package of the new chairman of Ford Motor Company; but no one is suggesting that that pay package is going to bring Ford Motor Company under. People are not happy because they say Ford Motor Company isn't making money, and the chairman is getting too much pay, but no one is suggesting that is going to take the company under. But what most observers say will take the company under is all of the retiree pay that they have due to union contracts that were inadvisable that were done some time ago. That may take the company under. There could be acquisitions. There could be legal settlements. There could be just poor management. All of those things can actually take a company under, whereas executive compensation that is excessive, although maddening, won't drive a company down. This bill does absolutely nothing to deal with any of those other problems. Why not? If we are worried about shareholders and care about shareholders and their ability to influence a company, then why don't we give them the right to influence the company on something that actually might bring the company down. Some people on the other side mentioned several instances, and I can't recall them all right now, but where a company is doing poorly and an executive received very high pay. I agree with you; bad, I don't like it. I didn't like it. But what ought to upset the shareholders more is not the pay; it is the poor performance. And this doesn't do anything to help shareholders with that. We should give shareholders more rights. I agree with that, through the board. Otherwise, why not let shareholders vote on other highly compensated individuals, on union contracts, on acquisitions, on legal settlements, on the marketing budget, on all kinds of others things that might have something to do with affecting the company's pay? I believe this is a statement, not a solution.

Mr. CAMPBELL of California. Mr. Chairman, as has been mentioned in the debate tonight, we had a substantive hearing on this subject, and there were six witnesses at that hearing. The witnesses were split as to the substance of the bill that is before us. Four of them liked the bill, supported it, and two of them opposed the bill. However, there was one thing on which there was unanimity with the witnesses. All six witnesses agree that a better solution, a better proposal, would be to allow to have shareholders, or to require companies to require a majority vote before seating a shareholder on the board. All six witnesses preferred that to this very prescriptive executive compensation proposal. Because, as we discussed earlier, that would actually give shareholders more rights, through the board, to express their displeasure with a company for excessive executive compensation or simply executive operations that they don't like: for a poor performance, for a bad union contract, for whatever they wanted to express their displeasure more effectively by voting against people who were proposed to be on the board. Because if a majority vote is required to put anyone on the board, it's going to take a lot more votes to get people on there than would have happened under the current system. What this amendment does is, this amendment says that a company will not be required to have an advisory vote on executive compensation if they, instead, require a majority vote, a majority of those voting, to seat a director on the board. That is simply all this would do. Now, therefore, companies, if they didn't really like the executive compensation proposal, they could go for a majority vote instead, if they felt that was better for them. And as I stated before, I and people all over the spectrum believe that is a better solution. Interestingly enough, the Business Roundtable believes that is a better solution, and I have a letter here from the Teamsters Union from March 13, 2007, bragging about how FedEx recently adopted a majority vote by law and how important this was for the management of that company. So it is clear that on all sides of this the people believe that majority votes to seat someone on the board of directors is a more effective way to deal with this issue. Now, let me anticipate some things that my friend, I will get your State right this time, from Massachusetts will say. I have heard the argument that this proposal is too intrusive, that it is more intrusive than the basic bill that is before us. I would argue that it is not, because it actually gives the corporations a choice. They can either accept the vote on executive compensation that is before them, or if they wish to go the route of majority voting for directors, they can do that instead. I have also heard the gentleman argue that my proposal here is not intrusive enough because it does not require a majority vote of directors for all corporations at all times. I will tell you that if the author of this bill, the chairman of the committee, wished to amend this bill or pull this bill back, or whatever would be the correct parliamentary procedure, to replace this with a requirement for a majority vote of directors, I would support him on that. However, with the bill that is before us, this is the only germane solution that can be offered to give shareholders the opportunity to have a majority vote for directors, which will really give them more voice, instead of this silly advisory vote thing, which is so narrowly focused on just one thing that shareholders may have a problem with, rather than the greater issues of governance of corporations.

Mr. CAMPBELL of California. Thank you. I will assure the gentleman that I will do that. Mr. Chairman, I would like to suggest that the gentleman withdraw the bill that is before us. If you believe that it is a better solution, I believe you do, then let's withdraw the bill.

Mr. CAMPBELL of California. Mr. Chairman, will the gentleman yield?

Mr. CAMPBELL of California. I thank the gentleman from North Carolina. Just to respond to the gentleman from Massachusetts' comments, I will introduce such a bill, as we have discussed, and I am happy to work with the chairman on that. But what is before us right now is this amendment and this bill, which I wish you would withdraw so we could work on the other; but, apparently, you are not going to do that. And since you are not, what we have before us is this bill right now and this amendment right now. You said it is only half democracy. Well, what we have before us is zero democracy. This amendment is at least half democracy. Maybe it is not full democracy, as you say, but it is better than none. That is what this amendment is. I would caution Members on the other side, if you oppose this amendment, you are opposing majority voting for the opportunity to have in this bill a large incentive for companies to put majority voting for directors. If you vote ``no'' on this, you will be voting ``no'' on that opportunity in this bill. Let's understand that is where we are. In the future, I will be happy to work with the chairman on other things.

Mr. CAMPBELL of California. The gentleman from Massachusetts may have heard others say it is toothless and ineffective. I didn't say it was toothless and ineffective. In fact, I think it creates problems when companies have to hire somebody quickly and that sort of thing. I didn't say it was toothless and ineffective. I said it was silly. I did say it was silly because it only targets one element of shareholder displeasure with a company, which is an element, and although it can be very irritating, amongst many, many elements that are out there, is the least likely to actually destroy shareholder value, and that is what shareholders are interested in, is shareholder value. So I didn't say it was toothless and ineffective. I said that I think it is the wrong solution to the problem that is before us.

Mr. CAMPBELL of California. Mr. Chairman, I demand a recorded vote.

Mr. CAMPBELL of California. Mr. Chairman, I offer an amendment.

Mr. CAMPBELL of California

Mr. CAMPBELL of California. Madam Chairman, I thank the gentleman from Texas for yielding. You know, I would like to give some credit to my colleague from California, the author of this particular budget. It raises taxes; it raises taxes a whole, whole bunch. But the lady from California, my colleague, stood up here and admitted that. She said, yeah, we're raising taxes in this budget. That's what we're doing. Raising taxes is a legitimate policy decision. It is something, Madam Chair, that people can make a decision to do. And in all three Democratic budgets, the authors have made the decision to raise taxes. They have made the decision to raise taxes. But in this budget, the people behind this are standing up here and are proud about it. We admit it, we're proud of it, and that's what we're doing. They are standing behind that policy decision to raise taxes. They are raising taxes on almost everyone, and they are proud to do that. I think it is not a particularly good policy decision, but it is a legitimate one. They are raising taxes in all three of these budgets anywhere from $3,000 per taxpayer to $7,500 per taxpayer per year. It is a legitimate policy decision. I think it happens to be not a particularly good one, but at least they are standing up and saying, that's what we want to do, and that's what we're going to do, and that's how we're going to raise the budget. Democrats have put together these three budgets that are raising taxes. Be proud that you are raising taxes if that's what you want to do, because that's what you're doing. Be proud of it. Stand behind it. Don't pretend like you're not doing it.