Jeb Hensarling

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of H.R. 1343, the Encouraging Employee Ownership Act. I also want to commend the Republican and Democrat sponsors of this important bill: Mr. Hultgren of Illinois, Mr. Delaney of Maryland, Mr. Higgins of New York, Mr. MacArthur of New Jersey, Ms. Sinema of Arizona, and Mr. Stivers of Ohio. Their bipartisan efforts resulted in a bipartisan bill that will help small businesses, including startups, to successfully reward their hardworking employees; and, while doing so, this bill will allow small businesses to effectively deploy their capital to grow and to create jobs on Main Streets all across our country. We all know, Mr. Speaker, that small businesses are the heart and soul of the American economy. In fact, they helped create more than 60 percent of the Nation's net new jobs over the past two decades. So if our Nation is to have a healthier economy that offers more opportunity to more Americans, then we must encourage small-business growth and small-business startups, and this starts with ensuring they have access to the capital and credit they need to grow. Yet as we have heard from countless witnesses who have appeared before the House Financial Services Committee, community banks and credit unions in particular--the primary source of our small-business loans--are simply drowning, Mr. Speaker, in a sea of complicated and costly regulations. The same occurs with the maze of burdensome securities regulations that are written with the largest public companies in mind but end up hurting smaller companies. Although small companies are at the forefront of innovation and job creation, they often face significant obstacles in obtaining funding in our capital markets. These obstacles often result from the proportionately larger burden that securities regulations place on small companies when they seek to access capital both in the public and private markets. These small companies also face difficult challenges on how best they can deploy their limited resources and capital--to grow and thrive or to be able to sufficiently compensate their workforce, which is a critical component of their success. Currently, the SEC allows private companies to offer their own securities to employees as part of written compensation agreements without having to comply with burdensome Federal securities registration requirements under what is called SEC rule 701. Now, unfortunately, one of the rule's thresholds has not been adjusted in two decades. What the bipartisan supporters of this bill are proposing is simply to modernize this SEC rule with a modest increase in that threshold. Increasing the rule 701 threshold gives private companies more flexibility to reward and retain employees and permits private companies to keep valuable, skilled employees without having to use other methods such as borrowing money or selling securities. Updating this rule can encourage more companies to offer more incentives to more employees. As one witness who testified before Congress said, this bill ``would support a valuable compensation practice that allows small businesses to hire the most highly skilled workers'' and better enable small, emerging growth companies that are at a competitive disadvantage with bigger businesses to attract and retain employees. Allowing employees to become owners in the company also benefits those employees. As startups and small companies reach success, we all want their employees to also reap the benefits of that success. That is what is happening with companies that are able to offer stock options as part of their employee compensation plans. For example, when Google was in its early stages, it hired someone to be an in-house, part-time masseuse and compensated her with both cash and stock options. That masseuse is now worth millions today. Another example is from an ad-tech company, MoPub. Thirty-six of its 100 employees became millionaires when the company was acquired by Twitter because MoPub's CEO set his employees up for success by offering them performance-based stock-option grants. So, Mr. Speaker, shouldn't we want more American workers to have the opportunities like at Google and MoPub? Don't we want more Americans to have an opportunity to obtain an ownership stake in the places that they work? That way the workers can earn the large financial upside that comes when the company performs well, and the company benefits by being able to attract talented workers. Unfortunately, again, Mr. Speaker, too many companies right now shy away from offering employees greater ownership opportunities because an expensive, bureaucratic, burdensome, top-down regulation in Washington hasn't been updated in nearly 20 years. Mr. Speaker, we can fix that today. We can fix that by passing this commonsense, bipartisan bill, the Encouraging Employee Ownership Act. We can provide American workers with more opportunities to share in the successes and profits of companies they work for. We can help to foster capital formation so more Americans can go back to work, have good careers, pay their mortgages, plan for a secure retirement, and ultimately give their families a better life. Mr. Speaker, I urge all my colleagues to join me in supporting this commonsense bipartisan legislation, and I reserve the balance of my time.

Mr. HENSARLING. Mr. Speaker, I yield the balance of my time to the gentleman from Michigan (Mr. Huizenga), and I ask unanimous consent that he may control that time.

Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 240, I call up the bill (H.R. 1343) to direct the Securities and Exchange Commission to revise its rules so as to increase the threshold amount for requiring issuers to provide certain disclosures relating to compensatory benefit plans, and ask for its immediate consideration in the House.

Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and submit extraneous materials on the bill under consideration.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, tragically, I receive correspondence every week like this. I heard from Rita in east Texas, who writes me: Since ObamaCare took effect, my insurance no longer covers my colonoscopies as preventative care. I now pay $1,000 and more out of pocket versus $100 outpatient fee. I heard from Frances in the Dallas area near where I live. A few years ago she was tragically diagnosed with tonsil cancer. The good news is she had a good policy; $600-a-month premium and a maximum out of pocket of $3,500. But thanks to ObamaCare, her insurance company dropped her twice, and she wrote: They dropped me again because they are leaving the Dallas market. Her premiums and deductibles doubled. She lost her oncologist, and she writes that this is all because of ObamaCare, the Affordable Care Act. I heard from Tonya in Van Zandt County, in my district: We had five family members covered by insurance at around $800 a month until ObamaCare. Our insurance premiums skyrocketed to $1,500 a month, equivalent to a house payment, with a $15,000 deductible, and we cannot see the doctors that know our medical history. Repeal it. I should not be forced to pay for something I cannot use. This has been a nightmare. Mr. Speaker, ObamaCare has been a nightmare. It is collapsing as we speak. People are losing their coverages. Insurance plans are pulling out of States and counties. Tens of millions of our fellow countrymen have been forced to buy health insurance plans they cannot afford, they do not want, and that do not work for them. Right here, right now, we have a choice: failed ObamaCare or the American Health Care Act that begins the process of providing Americans with guaranteed access to quality, affordable, patient-centered health care. It clearly advances the cause of freedom, and all Members should support it and end the nightmare of ObamaCare.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Williams).

Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from Michigan (Mr. Trott).

Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from North Carolina (Mr. Budd).

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentlewoman from Missouri (Mrs. Wagner), the sub-chairman of our Oversight and Investigations Subcommittee.

Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from Kentucky (Mr. Barr), the chairman of our Monetary Policy and Trade Subcommittee.

Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in strong support of H.J. Res. 41, introduced by the gentleman from Michigan, (Mr. Huizenga), the chairman of the Subcommittee on Capital Markets and Government Sponsored Enterprises of the Committee on Financial Services. This resolution disapproves a burdensome and controversial Securities and Exchange Commission rule that places an unfair burden on American public companies that is not applied to many of their foreign competitors. Virtually every day we hear from many Americans about how this economy is just not working for them. It is just not working for working Americans like Keith from Dallas in my district who wrote me: ``I am 53. I have a grown son who lives with me. It seems like the cost of everything keeps going up, yet wages do not keep pace.'' The economic opportunities of Keith and millions of Americans like him are not helped by top-down, politically driven regulations that give many foreign companies an advantage over American public companies. That is exactly what this Securities and Exchange Commission regulation that we are talking about today does. It forces American public companies to disclose inexpensive proprietary information that can actually be obtained by their foreign competitors, including state- owned companies in China and Russia. This is just one regulation out of thousands and thousands that are burdening our companies, our job creators, and are costing our households, by one estimate, over $14,000 a year, Mr. Speaker. Even though this is a Securities and Exchange rule, section 1504 of Dodd-Frank has nothing to do with investor protection nor anything else we were told the Dodd-Frank Act was supposed to do. As the acting chairman of the Securities and Exchange Commission has said, this rule ``neither reforms Wall Street nor provides consumer protection and it is wholly unrelated, and largely contrary, to the Commission's core mission.'' In addition, Mr. Speaker, the SEC estimates that ongoing compliance costs for this rule could reach as high as $591 million per year. It is just an outrage, Mr. Speaker. That is $591 million every year that could better be used to hire thousands more Americans in an industry where the average pay is 50 percent higher than the U.S. average. Literally we could be talking about 10,000 jobs on the line for this ill-advised rule. This is significant, given that millions of Americans, like Keith from my district, have not seen their wages increase while our economy has been stymied under the Obama administration. Now, for those who claim that somehow by rolling back this rule, that this undermines anticorruption efforts, let me remind everyone that Mr. Huizenga's resolution, that the Foreign Corrupt Practices Act, which the SEC and the Department of Justice administer, already makes it illegal to pay former government officials when it comes to winning or maintaining business opportunities. To further prove the point, Mr. Speaker, just this year the SEC has brought enforcement actions or settled four separate cases for violations of this anticorruption law. So even without this SEC rule, fraud will still be fraud, corruption will still be corruption, and both will still be illegal. The SEC and the Department of Justice will still have the authority to vigorously pursue those who break the law and hold them accountable, as they well should. So no one, Mr. Speaker, should fall for this false argument of our opponents. Let's also remember that this joint resolution does not repeal section 1504 of Dodd-Frank. I wish it did, but it doesn't. Rather, it vacates a flawed SEC rule that mimics a previous rule that was already struck down by a U.S. District Court. It is a rule that by the SEC's own estimates has taken 51 employees over 20,000 hours to promulgate, defend, and repromulgate. Fifty-one employees, 20,000 hours that could have been directed at rooting out Ponzi schemes, that could have been used to promote capital formation or make our capital markets more efficient. Furthermore, this rule still goes far beyond the statute passed by Congress and mandates public specialized disclosures that cost more and more, and is more burdensome than the law requires. So, Mr. Speaker, for those who religiously defend the Dodd-Frank law, they should be in vigorous support of what Mr. Huizenga brings to the floor today because the rule flies in the face of the Dodd-Frank Act. So when an agency exceeds its statutory authority, it is no longer regulating, Mr. Speaker, it is legislating. And all of us, Republicans and Democrats alike, should be able to agree that when the executive branch acts in such a manner, Congress has a duty, a duty under article I of the Constitution, to check this executive overreach. As such, this House should wholeheartedly support Mr. Huizenga's resolution. It simply tells the SEC to go back to the drawing board, comply with the Dodd-Frank Act, and come up with a better role that will not put American public companies at an unfair disadvantage and cost us jobs. I reserve the balance of my time.

Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from Michigan (Mr. Huizenga), the chairman of our Capital Markets Subcommittee and the author of H.J. Res. 41.

Mr. HENSARLING. I yield the gentleman an additional 30 seconds.

Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and submit extraneous materials on the joint resolution under consideration.

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. Rothfus).

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Arkansas (Mr. Hill).

Mr. HENSARLING. Mr. Speaker, I am prepared to close. I have no other speakers at this time. I reserve the balance of my time.

Mr. HENSARLING. Mr. Speaker, may I inquire how much time I have remaining?

Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, I certainly hope that the American people are watching this debate because it will certainly confirm their decision to deny Democrats control of the House, to deny them control of the Senate, and to deny them control of the White House. Now, Mr. Speaker, their words may claim they care about jobs, but their policies don't. That is what we are here to talk about, Mr. Speaker, is jobs, and we are talking about a rule promulgated by the Securities and Exchange Commission that can cost $591 million a year and can cost us 10,000 jobs. My friends on the other side of the aisle have been clearly tone deaf to the pleas of the American people. They want to go back to work. They are tired of part-time jobs. They are tired of stagnant paychecks. They are tired of decimated savings. That is why they have turned to the Republican Party, and that is why we are going to help give them a healthy economy with policies, including rolling back this foolish rule from the Securities and Exchange Commission, a rule that in a previous iteration has already been struck down by courts. Now, you listen to the other side of the aisle, Mr. Speaker, and you hear all this talk about corruption. It appears that some of my friends on the other side of the aisle are ignorant that the Foreign Corrupt Practices Act is already in the Federal code. For those who do not know, I have done the homework for you: 15 U.S.C. 78dd-1. Look it up yourself. So, Mr. Speaker, this has nothing to do with corruption. Rarely has more of a red herring come across the House floor. Let me tell you what this is really about, Mr. Speaker. It is about a radical, leftist, and elitist agenda that promotes narrow special interests and has declared war on carbon-based industry and energy and the industry and jobs that are represented by it. That is what this is really about. By the way, why is the Securities and Exchange Commission involved in this? Why isn't this--listening to them--part of the Homeland Security Department or maybe part of the Department of Defense? What will they have the SEC do next, deliver the mail? Will they become our air traffic controllers? Meanwhile, there are Ponzi schemes taking place in America. Meanwhile, we have markets that are not efficient creating the jobs that the American people demand. Let's vote for jobs. Let's vote to get America back to work. Let's vote down this leftist, elitist agenda declaring war on carbon-based jobs. Let's vote for H.J. Res. 41. Mr. Speaker, I yield back the balance of my time.

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Colorado (Mr. Tipton).

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentlewoman from New York (Ms. Tenney).

Mr. HENSARLING. I yield the gentlewoman an additional 30 seconds.

Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 71, I call up the joint resolution (H.J. Res. 41) providing for congressional disapproval under chapter 8 of title 5, United States Code, of a rule submitted by the Securities and Exchange Commission relating to ``Disclosure of Payments by Resource Extraction Issuers'', and ask for its immediate consideration in the House.

Mr. HENSARLING

Mr. HENSARLING. Mr. Chairman, I yield 3 minutes to the gentleman from Michigan (Mr. Huizenga), the chairman of our Subcommittee on Capital Markets and Government Sponsored Enterprises.

Mr. HENSARLING. Mr. Chairman, I am very pleased now to yield 4 minutes to the gentlewoman from Missouri (Mrs. Wagner), the author of the SEC Regulatory Accountability Act and the chairman of our Oversight and Investigations Subcommittee.