Mike Johanns

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise to discuss a bill I have introduced because I see a very unfair battle unfolding right in front of us. The battle I foresee is this: In one corner we have the enormous resources of the Federal Government; in the other corner, cities and States with very limited resources, especially in these economic times, but with a good-faith desire to protect their communities. What I am speaking of today and what my legislation goes to is the Federal Government's use of litigation to insert itself into State and potentially local immigration laws. I rise with a great deal of knowledge about this. As a former mayor and county commissioner, city council member and Governor, I know what it is like when the Federal Government swoops in and brings its power to bear on an issue. I have seen it from both sides, having also served as a member of the President's Cabinet. I know that when the resources of the Federal Government are used to weigh in with litigation, it is crushing. The administration can send in a team of lawyers and overwhelm the resources of a community or a State. Litigation brings with it a huge financial burden for cities and States. In fact, litigation can and does have a chilling effect on the local decisionmaking process, even if local leaders believe their action in good faith is appropriate and necessary. I believe that is the exact reaction this administration is hoping to cause among communities and States across the Nation that are considering action on immigration issues. In this case, I believe litigation is being used to send a warning to other communities, other States that might be considering taking action in this arena. The administration's claim that the Federal Government has sole authority to enforce immigration laws because of the supremacy clause of the Constitution is, in fact, inconsistent with the President's own internal policies. Just last year, President Obama authored a memo, sent it out to all Federal departments and agencies, requiring serious and careful consideration when using Federal preemption of State laws. In this memo, dated May 20, 2009, with the subject ``Preemption,'' the President stated: The purpose of this memorandum is to state the general policy of my Administration that preemption of State law by executive departments and agencies should be taken only with full consideration of legitimate prerogatives of the States and with sufficient legal basis for preemption. That seems clear. But the memo went on further to say: Executive departments and agencies should be mindful that in our Federal system, the citizens of the several States have distinctive circumstances and values, and that in many instances it is appropriate for them to apply to themselves rules and principles that reflect those circumstances and values. Then, finally, the President goes on to say: It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social experimental experiments without risk to the rest of the country. Mr. President, I ask unanimous consent that a copy of this memo be printed in the Record.

Mr. JOHANNS. So if the use of Federal power to preempt a State requires such an extremely high threshold, how can one reconcile that with the administration's decision to file a lawsuit? My bill sends a message to the administration that it cannot use the crushing force and threat and reality of litigation to intimidate local officials or to scare them into inaction. It would allow a State or a municipal government the ability, the right, to recover attorney's fees and other court costs associated with defending a Federal challenge of their immigration laws. In other words, this straightforward legislation just simply levels the playing field between the huge power of the Federal Government in one corner, as I said, and the right of local communities in States to pass laws to protect their citizens. It carries this simple message to any administration: If you file a lawsuit and lose, cities and States will not face depleted resources as a result. My bill ensures that when the Federal Government takes on communities in court, the reasons are pure and based in law or else the impact on our communities will be neutralized. The administration should focus time and resources on what is the crux of this issue; that is, securing our borders and doing the job and enforcing existing immigration laws and not using litigation as a tool to send a message. I encourage my colleagues to sign on and cosponsor this commonsense measure and level the playing field for communities when they are forced to defend themselves against the enormous, nearly unlimited power of the Federal Government.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I ask unanimous consent to speak for 10 minutes as in morning business.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise to discuss a bill I have introduced because I see a very unfair battle unfolding right in front of us. The battle I foresee is this: In one corner we have the enormous resources of the Federal Government; in the other corner, cities and States with very limited resources, especially in these economic times, but with a good-faith desire to protect their communities. What I am speaking of today and what my legislation goes to is the Federal Government's use of litigation to insert itself into State and potentially local immigration laws. I rise with a great deal of knowledge about this. As a former mayor and county commissioner, city council member and Governor, I know what it is like when the Federal Government swoops in and brings its power to bear on an issue. I have seen it from both sides, having also served as a member of the President's Cabinet. I know that when the resources of the Federal Government are used to weigh in with litigation, it is crushing. The administration can send in a team of lawyers and overwhelm the resources of a community or a State. Litigation brings with it a huge financial burden for cities and States. In fact, litigation can and does have a chilling effect on the local decisionmaking process, even if local leaders believe their action in good faith is appropriate and necessary. I believe that is the exact reaction this administration is hoping to cause among communities and States across the Nation that are considering action on immigration issues. In this case, I believe litigation is being used to send a warning to other communities, other States that might be considering taking action in this arena. The administration's claim that the Federal Government has sole authority to enforce immigration laws because of the supremacy clause of the Constitution is, in fact, inconsistent with the President's own internal policies. Just last year, President Obama authored a memo, sent it out to all Federal departments and agencies, requiring serious and careful consideration when using Federal preemption of State laws. In this memo, dated May 20, 2009, with the subject ``Preemption,'' the President stated: The purpose of this memorandum is to state the general policy of my Administration that preemption of State law by executive departments and agencies should be taken only with full consideration of legitimate prerogatives of the States and with sufficient legal basis for preemption. That seems clear. But the memo went on further to say: Executive departments and agencies should be mindful that in our Federal system, the citizens of the several States have distinctive circumstances and values, and that in many instances it is appropriate for them to apply to themselves rules and principles that reflect those circumstances and values. Then, finally, the President goes on to say: It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social experimental experiments without risk to the rest of the country. Mr. President, I ask unanimous consent that a copy of this memo be printed in the Record.

Mr. JOHANNS. So if the use of Federal power to preempt a State requires such an extremely high threshold, how can one reconcile that with the administration's decision to file a lawsuit? My bill sends a message to the administration that it cannot use the crushing force and threat and reality of litigation to intimidate local officials or to scare them into inaction. It would allow a State or a municipal government the ability, the right, to recover attorney's fees and other court costs associated with defending a Federal challenge of their immigration laws. In other words, this straightforward legislation just simply levels the playing field between the huge power of the Federal Government in one corner, as I said, and the right of local communities in States to pass laws to protect their citizens. It carries this simple message to any administration: If you file a lawsuit and lose, cities and States will not face depleted resources as a result. My bill ensures that when the Federal Government takes on communities in court, the reasons are pure and based in law or else the impact on our communities will be neutralized. The administration should focus time and resources on what is the crux of this issue; that is, securing our borders and doing the job and enforcing existing immigration laws and not using litigation as a tool to send a message. I encourage my colleagues to sign on and cosponsor this commonsense measure and level the playing field for communities when they are forced to defend themselves against the enormous, nearly unlimited power of the Federal Government.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise today to remember and to pay tribute to a fallen hero, U.S. Army SPC Edwin C.L. Wood of Omaha, NE. Edwin was a proud member of B Troop, 1st Squadron, 71st Armored Regiment of the 10th Mountain Division operating in Kandahar. As many have heard, this area is a Taliban stronghold and one of the most dangerous areas in Afghanistan. On July 5, only a few weeks after arriving there, Specialist Wood was killed when an improvised explosive device detonated near his vehicle. His death is a great loss to our Nation and to Nebraska, his home State. People in his home community of Omaha recall Eddie's big heart, his willingness to jump right in to help out, and his longstanding love for the military. He was a leader of the North High School Junior ROTC Program. He served as a counselor and a mentor at the YMCA Camp in Crescent, IA, and from an early age participated in military reenactments with his father. Also from an early age he loved wearing uniforms. His nickname was ``Freckles,'' which also fit his cheerful, helpful personality. After graduating from North High School in 2009, it did not take long to decide that the U.S. Army was the place for him. Specialist Wood's Army career was short yet very intense. After entering the Army in October 2009, he breezed through basic and advanced training before arriving at Fort Drum. Fort Drum is the home of the elite 10th Mountain Division which specializes in fighting under harsh terrain and weather conditions. Specialist Wood wanted to serve with the best, and his wish came true. Within a month, he deployed to the Kandahar region of Afghanistan. Shortly thereafter he first encountered the enemy that attacked with an improvised explosive device. Despite lingering effects from his injuries, he chose to stay in the fight with his B Troop buddies. The decorations and badges earned during a far too brief Army career speak to his dedication and they speak to his bravery: the Army Service Medal, the Army Good Conduct Medal, the National Defense Service Medal, the Afghanistan Campaign Medal with Bronze Service Star, the Global War on Terrorism Service Medal, the Overseas Service Ribbon, NATO Medal, Bronze Star Medal, and the Purple Heart. He proudly wore the Combat Action Badge, the Expert Marksmanship Badge with Rifle Bar, and the Overseas Service Bar. Today, I join Specialist Wood's mother and father, siblings and friends in mourning the death of their beloved son, their brother, their friend. Specialist Wood made the ultimate sacrifice in defense of our great Nation, and we owe him and his family an immeasurable debt of gratitude. May God be with the Wood family and all those who mourn his death and celebrate his life and his accomplishments. We will remember Specialist Wood when recalling the Nation's warriors who gave their lives so we might live in peace. Their names are etched on the conscience of this Nation. I offer my prayers to all those serving in uniform today and especially those serving in peril overseas. May God bless them and their families and see them through these difficult times. Mr. President, I yield the floor. I note the absence of a quorum.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise today to speak about something I think is enormously important in terms of our businesses and job creation. There are many unintended consequences contained in the health care bill that was recently passed, but I think one of the most egregious is the effect on small businesses that are, by all agreement, the engine of our economic growth. In fact, various analyses have been done, and they conclude that 65 percent of the new jobs created come from the small business engine in our Nation. Section 9006 of the new health care law will have a profound impact on small businesses in Nebraska--but not just Nebraska, across this great Nation. Beginning in 2012, if a business purchases more than $600 of goods from another business, it will be required to provide the business and the Internal Revenue Service a 1099 tax form. Previously, such disclosures were only required for the purchase of services. Now routine business expenses will be subject to an increased paperwork burden at tax time. Let me give some examples of the impact that is going to have. Think about the phone costs for that small business, Internet, simple office products, even the cost of shipping goods from point A to point B now are going to generate this requirement of a 1099 tax form. Back in my State what that means is, if a rancher buys $100 worth of feed every month, then that rancher is going to have to submit a 1099 to the feed store and then file it with the IRS. If the restaurant owner up the street buys $600 worth of napkins or ketchup or menus or garbage bags over the course of a year, guess what. They start building that stack of 1099s. Think about how that paperwork is going to burden that small business. This includes transactions with corporate as well as noncorporate entities. It also applies to government entities at the local, State, and Federal levels. Businesses in my State, but I am confident across the country, are absolutely up in arms about this provision, and they should be. Last week, the National Taxpayer Advocate, an Internal Revenue Service ombudsman, issued a report with some very startling admissions. This provision, they say, will affect 40 million businesses, including about 26 million sole proprietorships not counting farms. That is 10 times the number of job creators than the administration asserts will benefit from the small business tax credits. We need to look for ways to help small businesses, not hammer them. A Nebraska small business owner wrote to me recently. This business owner pointed out that he owns three small town lumber yards and wanted to weigh in on this provision. I am quoting from that letter: As you know, it is difficult to survive as a small business in rural communities. . . . Putting on additional burdens involving time, paperwork and money does not help. That small business owner went on to say this: The building supply industry is struggling to survive the housing and economic crisis and employers like myself would be severely impacted by the additional costs and paperwork burdens of the 1099 proposal. I could not agree with this businessman more. This new provision is a one-two punch for our small businesses. It will require them to spend more money and time on paperwork and reporting. It does nothing to create jobs other than maybe at the Internal Revenue Service. This increases the overhead costs of staying in business. It will require them to spend more time and more money on paperwork and, no doubt about it, it is going to be tough for them to comply with the standards set so low at $600. Expenses to comply with Federal tax compliance regulations are already astounding. According to the Small Business Administration, small businesses that employ fewer than 20 people spend on average $1,304 per year per employee. In contrast large companies spend on average $780 average per year per employee. So we can see the IRS tax compliance regulations already disproportionately disadvantage small businesses compared to large companies. Why are we adding insult to injury with this new requirement? We should be doing all we can to reduce overhead costs, help them to be more competitive not increasing their burdens. Why on Earth are we slapping Americans with more mandates that are counterproductive? Congress should be reducing businesses' overhead, helping them stay competitive. Section 9006 creates a perverse incentive for companies to consolidate suppliers. Think about that. Guess who loses in those circumstances. Our small businesses, the same small businesses that we are counting on to create the new jobs and lift us out of this recession. Larger, more diversified suppliers will be more attractive as a way for the purchaser to reduce the paperwork. The fewer different transactions that total $600 or more, the less paperwork. So the little guy loses. The National Taxpayer Advocate said recently they are ``concerned that the new reporting burden, particularly as it falls on small businesses, may turn out to be disproportionate as compared with any resulting improvement in tax compliance.'' The Advocate report lays out several reasons this new provision of the law is causing so much concern. The report questions whether the new data will lead to better tax compliance. ``The IRS will face challenges making productive use of this new volume of information reports.'' For example, the new 1099's will not match tax returns due to returned goods or other technical reasons. The report predicts the IRS will improperly assess penalties for not filing forms. Again, I am quoting: It must abate later, after great expenditure of taxpayer and IRS time and effort. Finally, a chilling prediction in the report says: Small businesses that lack the capacity to track customer purchases . . . may lose customers, leaving the economy with more large national vendors and less local competition. It is clear that section 9006 attacks small businesses across this country. That is why I am introducing legislation to eliminate this barrier. My effort, which I call the Small Business Paperwork Mandate Elimination Act, would fully repeal section 9006 of the health care law and eliminate this ridiculous paperwork burden. I urge my colleagues to support me in this effort. Overburdening our job creators is not good policy, especially in this time in our economic recovery. I yield the floor and suggest the absence of a quorum.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise today to say at the outset how much I appreciate the very thoughtful advice that has been given by Dr. Barrasso during this debate. He comes to the floor, he is carefully prepared, he has done his homework, he has done the analysis, but most importantly as a doctor, he understands what the health care system is about. We would all benefit if we listened to his advice. The problems with this health care legislation just continue and continue. Each week this 2,000-plus page health care bill just produces more bad news, and it produces more unwelcome revelations. Not surprising. Not that long ago, the President, at every opportunity he had, would allay public concerns by saying to people and promising them: If you like your health insurance, you get to keep it. Those proponents wrote a provision into the new health care law in an attempt to fulfill this promise by grandfathering existing plans. Recently, the Department of Health and Human Services issued a new regulation on these ``grandfathered'' health plans. Lo and behold, what did the new regulations show? It showed that 51 percent of American workers will be in plans without ``grandfathered'' status by 2013, in just 3 short years. In fact, under the worst case analysis, as many as four of five small business employees and 69 percent of all American workers will lose their current coverage. Almost 70 percent of those who were comforted by the President's promises are going to be sorely disappointed very quickly. You do not have to believe me. All you have to do is look at the Obama administration's own estimates. Yet instead of solving this problem and fulfilling the promise, the administration has a different approach: ramping up the public relations strategy. According to the Washington Post, the White House has hired ``a senior official whose sole portfolio will be to sell the health care overhaul to the public in the months leading up to the November elections.'' The administration is spending millions of taxpayer dollars to sell the law to the American public. But let's look at reality versus what we are hearing. The Congressional Budget Office recently estimated that less than 12 percent of small businesses--less than 12 percent of small businesses--will benefit from the much touted small business tax credit. Yet the small business tax credit is one of the main talking points used to convince Americans that this law is actually good for them. In fact, the Internal Revenue Service recently sent out 4.4 million postcards to let small businesses know they might be eligible for small business tax credits. The IRS spent $1 million in taxpayer dollars on those postcards alone. It does not stop there, though. The Centers for Medicare and Medicaid Services recently mailed a brochure to senior citizens to ``inform them'' about the new law. Well, who paid the bill for that? Taxpayers are footing the $18 million bill for marketing of a piece of legislation to themselves that they did not want in the first place. This classy brochure outlines provisions such as closing the doughnut hole and preventative health care services. However, there are some important details that are not in the brochure. CMS neglects to mention some very key information. For example, less than 10 percent of Medicare beneficiaries will actually receive the $250 rebate for entering the doughnut hole coverage gap. Yet the new health care law will cause all prescription drug Part D premiums to rise, according to the Congressional Budget Office. When our seniors heard the word ``reform,'' they never would have imagined it meant they all pay more while getting less than 10 percent benefit. Let me repeat that. Prescription drug premiums go up for all participants, and only 1 in 10 will see the $250 check. Over $\1/2\ billion in Medicare savings will be redirected toward creating a new entitlement program. The brochure also claims the new law preserves Medicare. Yet according to the Obama administration's own Medicare Actuary, Medicare Advantage enrollment will be cut in half. More than one in seven hospitals could become unprofitable as a result of the law ``possibly jeopardizing access to care for Medicare beneficiaries.'' Before I came over here, I had a meeting with those in the oncologist area who were saying: This is a problem. What are they going to have to do to solve it? They will have to pull in satellite facilities, and rural health care suffers. Rural beneficiaries feel the pain of this legislation. The New York Times recently published an article entitled ``White House and Allies Set Up to Build Up Health Law.'' The article stated: President Obama and his allies, concerned about the deep skepticism over his landmark health care overhaul, are orchestrating an elaborate campaign to sell the public on the new law, including a new tax exempt group that will spend millions on advertising to beat back attacks on the measure and Democrats who voted for it. The article also highlights that many outside groups are now running campaigns to try to sell the bill to the public, in some cases with very direct help from the administration. With all this going on, with all of this in mind, it is appropriate to ask a few questions--for example, should not the administration be concerned more about implementing the law, especially considering they have missed several deadlines? Is this taxpayer-funded marketing effort crossing boundaries between policy and good politics? Why do we have to spend taxpayer dollars to win over the public if the merits of this law are so solid? People in Nebraska are not fooled by glossy brochures and media blitzes, especially when the facts are so clear. Facts are stubborn things. The administration's own regulation predicts many employees will not be able to keep their insurance plan. Their own Actuary confirms that Americans will still see health care costs rise because this new law does not bend the health care cost curve down. And the marketing campaign is not going to convince seniors that when they are losing services, they somehow benefit from this new law, especially since it makes it more difficult for them to access home health care services which have a bull's-eye for cuts, hospice services which have a bull's-eye for cuts, and home nursing services which have a bull's- eye for cuts. We will continue to try to talk about what this health care bill really means to Americans. I yield the floor and suggest the absence of a quorum.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise today to remember a fallen hero, U.S. Army SPC Blaine Redding of Plattsmouth, NE. Blaine was a proud member of Company A, 2nd Battalion, 327th Infantry Regiment, of the 101st Airborne Division, operating in one of the most dangerous areas of Afghanistan, the Kunar Province. On June 7, only 4 weeks after arriving in that country, Specialist Redding was killed when his vehicle was struck by a remotely detonated improvised explosive device. His death is a great loss to our Nation and to Nebraska, his home State. Blaine was a model of persistence, determination, and patriotism. Faced with challenges during his adolescent years, he realized that military service was the best way to fulfill his longings. Blaine overcame an early departure from high school by earning a general equivalency diploma to join the U.S. Army. He was determined to sustain a family history of service to our country in uniform, beginning with a great-grandfather and continuing through subsequent generations. Fort Campbell became a very special place for Specialist Redding. He and his brother, PFC Logan Redding, were assigned to the elite 101st Airborne Division. But more important, he met his future wife Victoria, or Nikki, while at Fort Campbell. They were married on March 13, 2010. With this came a renewed sense of responsibility to defend this great Nation and its principles of freedom. Specialist Redding knew combat operations, having completed already a year-long tour in Iraq. The rugged terrain and close proximity to the Pakistan border of the area of Afghanistan where he was poses special challenges to allied forces. Losses have been heavy in this region. Specialist Redding was comforted by his brother being deployed nearby. Ultimately, Logan would aid in returning his brother's body to the United States. Specialist Redding will be remembered in different ways. His Army buddies sometimes refer to him as ``a perfect soldier,'' a great ``mortar man.'' To family and friends, he had a priceless personality. To his wife Nikki, he was a devoted husband with a very big heart. The decorations and badges earned during a far too brief Army career speak to his dedication and to his bravery: the Army Commendation Medal, the Army Achievement Medal, the National Defense Service Medal, Global War on Terrorism Service Medal, Army Service Ribbon, and the Purple Heart. He proudly wore the Combat Infantry Badge and Air Assault Badge. Today, I join Nikki, family, and friends in mourning the death of their beloved husband, son, brother, and friend. Blaine made the ultimate sacrifice in defense of our great Nation, and we owe him and his family an immeasurable debt of gratitude. May God be with the Redding family, friends, and all those who mourn his death and celebrate his life. We will remember Blaine as we remember all the Nation's fallen warriors who gave their lives so that we may live in peace. Their names are etched on the conscience of our Nation in glory undimmed unto the end of our people. I also offer my prayers to all those serving in uniform today, and especially those serving in peril overseas. May God bless them and their families and see them through these difficult times. Mr. President, I yield the floor. I suggest the absence of a quorum.

Mr. JOHANNS

Mr. JOHANNS. Madam President, may I inquire how much time remains?

Mr. JOHANNS. If I could be forewarned when there is a minute remaining?

Mr. JOHANNS

Mr. JOHANNS. Madam President, I rise today to discuss an issue I believe is of significant importance to our Nation's economy. There has been a lot of talk lately about the whole idea of increasing exports. I--like, I guess, every other Member of this body--support the goal of expanding exports. Increasing exports means companies will sell more of their goods and services into more markets around the world. A number of those companies, I might add, are found in rural communities, found in States such as Nebraska. I was sitting there when President Obama, in his State of the Union Address, set a goal. He said: I want to double exports in the next 5 years. Since then, the administration has pushed its National Export Initiative, which appears to be about increasing spending and the size of government. But a more sensible course of action would truly be to increase exports--sell more. I am talking about free trade agreements. The previous administration negotiated a number of trade agreements, but there are three pending from the previous administration: Colombia, South Korea, and Panama. Unfortunately, these agreements have been languishing since they were first agreed to--now around 3 years ago. The current administration briefly seemed to be on the right track when the President stated his goal of strengthening trade with Colombia, South Korea, and Panama, again in the State of the Union Address. I was pleased to hear that. The President hit the right tone there. I must admit, though, up to that point, the administration's trade policy was enormously unclear to me, and I guarantee it was to everybody else. I thought that finally we had a trade policy. But, unfortunately, since that speech there has been no action. So I have to ask, What is the holdup? I do not know how you can claim your goal is to double exports and then not take the action on pending trade agreements which provide the very direct, ready-made way to move us forward. Each one of these agreements lowers tariffs on America's goods and services. I will tell you from a lot of experience, that is the quickest way to increase exports. With U.S. unemployment now hovering around 10 percent, we should be focused like a laser beam on helping businesses grow and create jobs. Enacting the pending trade agreements will help us get there. The U.S. Chamber of Commerce estimates that these agreements could bolster our economy by $40 billion. Conversely, if the United States fails to implement the agreements with Colombia and Korea, the chamber estimates that more than 380,000 U.S. jobs will be lost or displaced. The trade agreements were negotiated nearly 3 years ago. Yet they have not come to the Congress. While we fail to act, our global competitors are locking up these marketplaces. Several nations are negotiating or finalizing negotiations with the same three countries. Yet our agreements with those same countries are signed and sealed and ready for a vote. Our competitors are, very simply, gaining an advantage over our producers, our exporters, our employees, and they are laughing all the way to the bank. Now we even have representatives from those countries saying they are ready to move forward without us. Earlier this week a respected publication, the Des Moines Register, quoted the Minister of Economic Affairs at the South Korean Embassy as saying this: The U.S. runs the risk of losing the Korean market within a decade if you can't get a free trade agreement ratified. Furthermore, the article reported that South Korea is likely to complete a free trade agreement with the European Union by January. So we are not just at risk of losing the opportunity to increase exports. If other countries keep negotiating trade agreements while this great Nation sits on its hands, we are going to lose the market share we have today. I suspect this is just the beginning. These countries are not going to wait around forever while we twiddle our thumbs and hope that throwing money at a few government agencies and hiring more government employees will somehow increase exports. Each nation we have sat down with, we have negotiated, we have found common ground and reached agreement. Now it is time for the final step. The step is to vote on the agreements. Think of the big picture. Roughly 95 percent of the world's consumers live outside the United States. The global marketplace is asking for us to go and do business there. It is important to agriculture, but it is also important to our entire economy. You see, in agriculture, exports account for over 25 percent of total ag sales. We like to say that every third row of crops is sold into the international marketplace. In fact, agriculture is one of the few areas where the United States has had a net trade surplus in recent years. These agreements are necessary for agriculture, for farmers and ranchers. They are good for small businesses in my State and across the country. As Secretary of Agriculture, I traveled the world helping to negotiate trade deals. I have seen the positive results for exporters. I have seen firsthand the importance of these pending agreements. Each one would level the playing field for America's farmers and ranchers and companies, creating jobs, helping to reinvigorate our economy. If we are going to meet this goal of doubling exports, we have to do more than give a speech. We have to take these agreements and put them into the equation and get a vote on that. Consider this: American producers are currently forced to pay substantial tariffs on their exports to Colombia, to South Korea, to Panama. These agreements would wipe out most if not all of those tariffs. Roughly $2.8 billion in tariffs on American exports has been paid to Colombia alone since the Colombian agreement was signed in November of 2006. That is $2.8 billion that could have stayed in the United States to hire new workers. Most Americans probably assume Colombian exporters pay the identical U.S. tariffs, but that is not the reality. Colombian producers do not pay a nickel on 90 percent of the products they sell in the United States. The Colombian Free Trade Agreement would allow American producers to compete on a level playing field.

Mr. JOHANNS. In South Korea, it is the same story. And I could go on and on through each agreement and show that what they are about is bringing tariffs down for our products that we are paying today. Well, I have given this speech now I think twice on the floor of the Senate and a number of times as I have been out and talked to people across this country. I hope this is the last time I need to come here to advocate just to give us a vote. My hope is the administration will send these agreements to the Congress for action. I yield the floor.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise today in support of an alternative approach to the extenders legislation. The Thune amendment is a very simple, if not a novel idea in Washington these days. The novel idea is that it would actually pay for the spending proposed in the bill--all of it. Furthermore, it doesn't raise harmful taxes on the job creators of this country to pay for temporary tax relief. It does not raise taxes temporarily, nor does it raise taxes permanently, as the underlying bill proposes to do. To illustrate the difference between the Thune amendment and the Baucus substitute, I will share a USA TODAY editorial from May 25, 2010. I am quoting: Now it's time to start making choices about what's vital, and for those programs that are paying the bills instead of borrowing. I could not agree more with that editorial. The alternative is a good first step on the road to fiscal responsibility. We all noted recently that our national debt has reached $13 trillion, and as alarming as that milestone is, we are actually on pace to double that by 2020. For 2010 alone, the United States is expected to run an annual deficit of $1.6 trillion--1 year. Next year isn't much better with a projected deficit of $1.3 trillion. Total U.S. Government debt is near 100 percent of gross domestic product. Let me say that again. Our debt is near 100 percent of our entire gross domestic product. According to the Congressional Budget Office, net interest on publicly held debt would more than quadruple between 2010 and 2020, rising from $209 billion in 2010 to $916 billion in 2020. These are sobering figures. We should be under no illusions that the road to fiscal responsibility will be anything but a hard job, but we have to start somewhere. It just isn't acceptable to kick the can down the road and continue to deem all of our spending as an emergency. As the USA TODAY editorial noted: None of these needs suddenly popped up yesterday. The dictionary defines emergency as: ``a sudden, generally unexpected occurrence.'' In Congress-speak, though, an emergency is something you don't want to pay for. The amendment fully offsets the spending and tax relief provisions by enacting a series of responsible initiatives such as rescinding unobligated stimulus funds; cutting $100 million out of Congress's budget; cutting wasteful and duplicative government programs--640 different instances are identified in the amendment; freezing Federal Government salaries; capping the hiring of Federal employees; cutting the budgets of Federal agencies by 5 percent--something the President and OMB Director Peter Orszag outlined on Monday; and selling unused government property and real estate. I wish to be clear about something. Even I support some of these programs that are targeted. However, we are in a dire fiscal situation that calls for significant contributions from everyone. Government cannot be all things to all people, and some reductions must be made because it is very clear by any economist's definition that this spending is not sustainable. We must examine our government spending and weed out the lowest priorities. We must make hard choices. That is why we are sent here. But that means establishing priorities and having the courage to make those decisions. Just look at the recent study by the Bank for International Settlements. It ranks the United States of America fourth in general government debt among developed countries, ranking only behind Greece--which is getting a lot of attention these days--Italy, and Japan. Being ranked No. 1 is not a goal we should be working to achieve, but that is certainly where we are headed if we keep spending over 40 percent more than revenues are bringing in. If we want our children and our grandchildren to have any chance at a prosperous future, we must start to make tough decisions today. As I mentioned, another reason to support the alternative is that it does not contain tax increases. Let's take a look at the tax increases contained in the Baucus substitute. We have higher taxes on carried interest, new taxes on S corporations, and harmful retroactive taxes on other parts of the economy. Punishing job creators with tax increases that will only stifle growth, expansion, and investment is not the recipe for success. Nearly 10 percent unemployment is high enough. Congress should not be adopting policies that will push it higher. Yet, ironically, only here in Washington would this bill be titled a ``jobs bill.'' Plus, only in Washington, DC, does it make sense to pay for temporary, short-term extensions of tax relief with permanent tax increases. Is it any wonder so many business groups that typically support tax relief are opposed to the Baucus bill? On one hand, they need the tax relief for the rest of the year, but at the high cost of paying more taxes permanently, many are saying: Thank you, but no thanks. Finally, the bill increases the taxes oil companies are required to pay into the Oil Spill Liability Trust Fund from 8 cents to 41 cents--a fivefold increase. At first glance, this seems reasonable given the disastrous environmental mess that is occurring in the gulf. But in this bill, the money is being used to pay for new, unrelated, more government spending. My friends on the other side of the aisle claim the money will stay in the fund, but you can't have it both ways. You can't claim to be using the money both for gulf cleanup and to finance other spending. To do both would add an additional $15 billion to our national debt beyond what is being claimed. It is a lot like the health care bill which pays for new entitlement by siphoning $\1/2\ trillion in the Medicare trust fund. Its backers claim to be strengthening the trust fund, but they are double-counting the money. The extenders bill pays for new spending by siphoning $15 billion from the oilspill cleanup funding. This amendment offers Senators a choice between increasing our national debt when the country is crying out for fiscal responsibility versus paying for what we spend without increasing taxes or increasing the deficit--making hard choices. I am fully aware some will come to the floor criticizing the amendment, making all sorts of claims, but I disagree. The amendment attempts to make tough choices, rational choices. We have to start somewhere. I urge my colleagues to support the Thune amendment. Mr. President, I yield the floor.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, let me, if I might, start out and say how much I appreciated the comments by the Senator from South Dakota. Many months ago I did a roundtable with a great company in Nebraska, Nucor Steel. Nucor Steel is one of those companies you hope takes a look at your State and creates the jobs that they have in your State--and they have. They employ about a thousand people. They do everything right. They are very pro-America. They are a well-managed company. They are a company that pays well. On average across the Nucor system, their wages are about $70,000 a year. For that area of any rural State, that is huge. That is huge. We sat down in this roundtable. As the Senator from South Dakota points out, the impact on our businesses--the first thing I asked the folks of Nucor Steel, I said to them, Where is your competition? Who are you competing with? They said: The Chinese. I said: The Chinese? They said: Absolutely. When we go out and fight for a contract to keep these people employed, we are fighting with the Chinese. I said: Let me ask you, talk to me about the impact of all of this legislation and various proposals on climate change on your company and that competitive relationship. They were very blunt and straightforward. They said: Very simply, Mike, here is what happens. We go in a situation where we cannot compete. Already, this is a very tough business. If you pile onto us these additional requirements, we are in trouble immediately. Here is what I want to say about the Murkowski amendment, to get started here today. I respect the Senator from Alaska for bringing this forward because this is the kind of debate we should be having on this very important issue on the Senate floor and on the House floor. This should not be a situation where we have relegated or allowed the responsibility to be taken over by bureaucrats here in Washington, DC. I rise today to offer my support for Senator Murkowski's resolution of disapproval. At the end of last year, as we all know, EPA announced that greenhouse gas emissions would be regulated under the Clean Air Act. But Congress never designed the law to do that. Yet this administration seems absolutely bent on this overreaching, regardless of, congressional intent. That is why I am one of the cosponsors on this resolution. The resolution is very simply our way of saying, here in Congress, the Clean Air Act was never designed to allow you, the EPA, to regulate greenhouse gases. This endangerment finding is simply bad for everybody. It is bad for Nucor Steel, it is bad for business, and it is bad for every American out there who flips on a light switch. EPA tells us over 6 million entities will be captured by these new permitting requirements. Who are they? They are commercial buildings, they are hospitals, they are ethanol plants. You can keep naming business after business that will get caught up in this. Thousands of business owners would now have to go to the EPA if they plan to expand through new construction or modifications. One Nebraska manufacturer recently wrote to me, concerned with this very stark reality, and said: ``These regulations will certainly influence our future decisionmaking regarding acquisitions, expansions, and new plants.'' So at a time where our economy is struggling, where everybody is trying to figure out the best pathway to create jobs----

Mr. JOHANNS. Let me wrap up and ask my colleagues to support this very important effort by Senator Murkowski.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise to speak a little bit about the health care plan that was passed now a few months ago. Of course, there was a lot of buildup to that plan. One of the things that was said over and over again by President Obama was: ``If you like your health care plan, you can keep your health care plan.'' The White House, of course, has very vigorously defended that promise. In fact, the White House responded to an op-ed that was entitled ``No, you can't keep your health care plan.'' That is what that op-ed was titled. The White House responded last week on the White House blog and they said this: The 150 million Americans with employer-sponsored health insurance--who make up the vast majority of those with health insurance today--will not see major changes to their coverage. The White House's Stephanie Cutter went on to say: At the end of the day, employer-sponsored insurance will be improved but will look much the same as it does now. The administration is continuing to try to convince the American people that, in fact, that is going to be the case. However, no matter how many times they say it, study after study tells us the opposite. Less than 2 months ago, after the bill became law, clear evidence is now emerging that the promises are impossible to keep. Recently, certain companies were required by securities law to report the impact of the new health care law on those companies. The company reports so concerned supporters of the health care law that they said we are going to bring these companies in. We are going to do an investigation. We will have a hearing on this. However, when they reviewed these companies' internal documents, the supporters of the health care law, those demanding the hearing, immediately backed off. You see, they saw in black and white why so many Americans are going to lose the health care coverage they like under this legislation. Companies with longstanding employer-sponsored health plans were legitimately, lawfully, legally contemplating just paying the fine instead of continuing the more expensive employee insurance programs. Yes, all of a sudden the hearing was canceled. There was no interest in the hearing. One can speculate it was canceled because the findings would have exposed a very serious policy flaw of the health care law. Headlines are hard to defend when they shout: ``Companies contemplate dropping employer-sponsored health insurance plans.'' This is very worrisome, but it is not unexpected. Last July I spoke about this on the Senate floor, right at this spot. I and many others warned that the proposed penalties for businesses would create a very perverse incentive. I said this: When you do all the math, this is no penalty at all compared to the cost of private insurance. It would encourage employers to dump their employees from their health insurance. That is what I said a year ago. But supporters of health care reform denied it. They provided assurance to the American workers that they, in fact, would be able to keep their health insurance plan. Now, 10 months later, what is happening? Companies are, in fact, contemplating dropping their plans. Why? Because that perverse incentive is there. To do so would significantly lower their costs and increase the costs for taxpayers and Medicare beneficiaries. Let's look at AT&T, for example. You see, for them, paying the Government fine instead of providing employee insurance would cut their annual health care expenses from $2.4 billion annual expenses to $600 million. That is a 75-percent savings. Other companies, though, have sent similar signals. An official with John Deere has indicated they should look into, ``just paying the fine.'' Caterpillar said this: They are giving this ``serious consideration.'' Another survey showed that these are not isolated cases. A Washington State University survey, published in the Puget Sound Business Journal, concluded this: [A]bout a third of Seattle area executives said it may be cheaper for their businesses to stop offering health care benefits and pay fines. If a major employer discontinues health insurance for its employees, brace yourself, because its competitors will do the same. The savings are just too dramatic, and that is not the only problem out there. The Congressional Budget Office cost estimate assumed that companies would be covering more employees in 10 years, not less. This optimistic view may have led to a very optimistic cost projection. If employees lose their employer-sponsored insurance plans, then they are going to be forced to get their health insurance elsewhere, likely through the health insurance exchanges. Then they would be eligible for government subsidies. Let me state that another way: They would be eligible for taxpayer- paid subsidies to cover that cost. This will cause the actual cost of the bill to skyrocket. From almost a year ago until early this year, many of us warned that this law was built on the shakiest of policy grounds and even shakier projections relative to its financing. Yet proponents said don't worry. As we go forward, though, expect more bad news about this very flawed piece of policy. The White House can do all it wants to try to convince Americans of the merits of this law. But you know what. When Americans lose the insurance they like and businesses struggle to grow and expand, Americans will wonder how Congress could have been so foolish to pass such poor policy. Many warned this was coming. Unfortunately, the warnings were ignored in the effort to try to get this passed. I remember standing here on Christmas Eve, voting against this piece of legislation. But this new law is far from reform. It spends $2.6 trillion to take this great Nation in the wrong direction. Now, hopefully, I pray that in the near future more rational minds can agree on a more rational national policy. But until then, the adverse consequences will continue to fill the headlines and, more important and sadly, Americans will be hit by the realities of this flawed policy. They will have no recourse if one day their boss walks in and announces that it is more cost- efficient for this company to say to them: Go to the exchange. We will not be providing a health insurance plan. You see, in this country employees do not work by contract. My hope is we can agree on a more efficient policy before we are left wondering why there are so many broken promises. I yield the floor.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise to speak a little bit about the health care plan that was passed now a few months ago. Of course, there was a lot of buildup to that plan. One of the things that was said over and over again by President Obama was: ``If you like your health care plan, you can keep your health care plan.'' The White House, of course, has very vigorously defended that promise. In fact, the White House responded to an op-ed that was entitled ``No, you can't keep your health care plan.'' That is what that op-ed was titled. The White House responded last week on the White House blog and they said this: The 150 million Americans with employer-sponsored health insurance--who make up the vast majority of those with health insurance today--will not see major changes to their coverage. The White House's Stephanie Cutter went on to say: At the end of the day, employer-sponsored insurance will be improved but will look much the same as it does now. The administration is continuing to try to convince the American people that, in fact, that is going to be the case. However, no matter how many times they say it, study after study tells us the opposite. Less than 2 months ago, after the bill became law, clear evidence is now emerging that the promises are impossible to keep. Recently, certain companies were required by securities law to report the impact of the new health care law on those companies. The company reports so concerned supporters of the health care law that they said we are going to bring these companies in. We are going to do an investigation. We will have a hearing on this. However, when they reviewed these companies' internal documents, the supporters of the health care law, those demanding the hearing, immediately backed off. You see, they saw in black and white why so many Americans are going to lose the health care coverage they like under this legislation. Companies with longstanding employer-sponsored health plans were legitimately, lawfully, legally contemplating just paying the fine instead of continuing the more expensive employee insurance programs. Yes, all of a sudden the hearing was canceled. There was no interest in the hearing. One can speculate it was canceled because the findings would have exposed a very serious policy flaw of the health care law. Headlines are hard to defend when they shout: ``Companies contemplate dropping employer-sponsored health insurance plans.'' This is very worrisome, but it is not unexpected. Last July I spoke about this on the Senate floor, right at this spot. I and many others warned that the proposed penalties for businesses would create a very perverse incentive. I said this: When you do all the math, this is no penalty at all compared to the cost of private insurance. It would encourage employers to dump their employees from their health insurance. That is what I said a year ago. But supporters of health care reform denied it. They provided assurance to the American workers that they, in fact, would be able to keep their health insurance plan. Now, 10 months later, what is happening? Companies are, in fact, contemplating dropping their plans. Why? Because that perverse incentive is there. To do so would significantly lower their costs and increase the costs for taxpayers and Medicare beneficiaries. Let's look at AT&T, for example. You see, for them, paying the Government fine instead of providing employee insurance would cut their annual health care expenses from $2.4 billion annual expenses to $600 million. That is a 75-percent savings. Other companies, though, have sent similar signals. An official with John Deere has indicated they should look into, ``just paying the fine.'' Caterpillar said this: They are giving this ``serious consideration.'' Another survey showed that these are not isolated cases. A Washington State University survey, published in the Puget Sound Business Journal, concluded this: [A]bout a third of Seattle area executives said it may be cheaper for their businesses to stop offering health care benefits and pay fines. If a major employer discontinues health insurance for its employees, brace yourself, because its competitors will do the same. The savings are just too dramatic, and that is not the only problem out there. The Congressional Budget Office cost estimate assumed that companies would be covering more employees in 10 years, not less. This optimistic view may have led to a very optimistic cost projection. If employees lose their employer-sponsored insurance plans, then they are going to be forced to get their health insurance elsewhere, likely through the health insurance exchanges. Then they would be eligible for government subsidies. Let me state that another way: They would be eligible for taxpayer- paid subsidies to cover that cost. This will cause the actual cost of the bill to skyrocket. From almost a year ago until early this year, many of us warned that this law was built on the shakiest of policy grounds and even shakier projections relative to its financing. Yet proponents said don't worry. As we go forward, though, expect more bad news about this very flawed piece of policy. The White House can do all it wants to try to convince Americans of the merits of this law. But you know what. When Americans lose the insurance they like and businesses struggle to grow and expand, Americans will wonder how Congress could have been so foolish to pass such poor policy. Many warned this was coming. Unfortunately, the warnings were ignored in the effort to try to get this passed. I remember standing here on Christmas Eve, voting against this piece of legislation. But this new law is far from reform. It spends $2.6 trillion to take this great Nation in the wrong direction. Now, hopefully, I pray that in the near future more rational minds can agree on a more rational national policy. But until then, the adverse consequences will continue to fill the headlines and, more important and sadly, Americans will be hit by the realities of this flawed policy. They will have no recourse if one day their boss walks in and announces that it is more cost- efficient for this company to say to them: Go to the exchange. We will not be providing a health insurance plan. You see, in this country employees do not work by contract. My hope is we can agree on a more efficient policy before we are left wondering why there are so many broken promises. I yield the floor.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise today to talk about why cloture should not be invoked on this so-called financial reform bill. The events that transpired in the fall of 2008 and into 2009 are times that no one wants to repeat. That time was marked with extreme market volatility; credit all but drying up; a housing crisis we are still struggling to overcome; and taxpayers bailing out Wall Street. History books will undoubtedly look at that period with a magnifying glass. Hearings were held, testimony was heard--all in an attempt to identify what went wrong and what Congress could do to fix the broken parts of our system. I began this multiyear process with a resolve to the American people to fix the system. It is our job to protect taxpayers from ever again being on the hook for reckless and risky Wall Street players. Unfortunately, this final bill is anything but reform. Instead, this bill pays little regard to its massive government expansion or host of unintended consequences. In addition, it ignores some of the major causes of the last crisis. Proponents simply say reforming Fannie and Freddie will have to wait for another day. And in a twist of irony, it turns out that supporters of this bill are the Wall Street giants themselves such as Goldman Sachs and Citigroup. Yet, proponents of the bill are attempting to paint those opposed to the bill as attempting to protect Wall Street. The American people are not buying it. Those actually opposing the bill are Main Street businesses, those with little, if anything, to do with the last crisis. Groups like the Chamber and the NFIB hardly represent Wall Street insiders. And when the average American thinks of a Wall Street reform bill, they do not expect it to regulate the local HyVee grocery or Tractor Supply Store. Today, I would like to highlight some of my biggest concerns. If this bill becomes law, we are going to see a massive new government bureaucracy with unchecked powers and limitless authority. The new Consumer Financial Protection Bureau's powers are so broad--it will be allowed to creep into every area of American business and monitor consumer behavior. Have we not listened to anything the American people are telling us? They want less, not more government intrusion into their lives. We have now seen the U.S. Government become the majority owner of an American car company. We have seen government take over the student loan business. Most recently, a health care law added massive new costs and a massive new government entitlement program. And now the Consumer Financial Protection Bureau adds the potential for the government to creep into every avenue of our economy. How can we claim we are addressing the root causes of the financial crisis by creating new consumer rules that cause a restriction in credit? How will regulating community banks, florists, dentists, and manufacturers help prevent another Wall Street meltdown? What other agency in our system has this type of authority? It is telling that NFIB is against this new agency. They don't represent the big banks, but instead the businesses and job creators of our country. They are worried they will be swept under these new rules and I don't blame them. I also have deep reservations with the legislation's derivatives title. What started out as a bipartisan Agriculture Committee agreement has morphed into what almost everyone agrees is unworkable. The White House has concerns, Treasury Secretary Geithner has concerns, Obama administration adviser Volcker has concerns, Federal Reserve Chairman Bernanke has concerns, FDIC Chair Sheila Bair has concerns. Yet Senators just keep ignoring the warnings. This is legislative malpractice. The derivatives title seeks to address the largest dealers. Yet this derivatives title overreaches--impacting community banks, farmers, manufacturers, and thousands of others who use these instruments to manage their risks. A failure to provide an appropriate end user exemption will have the perverse effect of actually making businesses more risky. As derivatives contracts become more expensive, legitimate businesses will be unable to adequately plan for unexpected events. Furthermore, by banning the large dealers from engaging in derivative transactions, we won't really be banning them. We will only prevent them from occurring in the United States. No one should kid themselves into thinking our global competitors won't step in. A massive migration of derivative contracts into areas of the world that are unregulated, helps no one. By pushing these contracts into the dark, we are only increasing our global systemic risk. The problems at AIG have clouded our judgment regarding the usefulness of the rest of the derivatives market. Now are reforms needed? Without a doubt. However, the current approach unfortunately throws the baby out with the bathwater. It will only harm our U.S. competitiveness and those that use derivatives to legitimately protect their business from risks. And finally, let me say what this legislation is missing. Shocking as it is, nothing in the bill addresses Fannie Mae and Freddie Mac. Already, the taxpayer has given these mortgage giants $130 billion and now we find they want another $18 billion more. Unfortunately, once you have turned on this faucet, it is hard to turn off. And the taxpayer well is running dry. The government took over these mega firms in 2008 and we have done nothing to extricate ourselves from them. In fact, since the United States guarantees Fannie and Freddie, taxpayers are on the hook for roughly $5 trillion in mortgage liabilities. So if everyone knows we must do something, how can we ignore them in this massive 1,400-page bill? Furthermore, how could my colleagues reject an amendment that would have--at the very least--provided transparent accounting of the liabilities of Fannie and Freddie? If the taxpayers are on the hook for these liabilities, shouldn't this risk be on the Federal balance sheet? Wasn't it President Obama himself who advocated for honest accounting in our budget? This elephant in the room will cause further destruction to our fragile economy if we don't take serious action. The root cause of the housing crisis was that people bought houses they couldn't afford. No one can claim that the mortgage market was not a major factor in our financial meltdown. Yet we ignore underwriting standards. Unfortunately, the Senate rejected an amendment that would have mandated stricter underwriting standards including a 5-percent downpayment requirement. Instead, we kicked the problem to the financial protection bureau to put on their already long to-do list. It is with regret that I will not be supporting the final regulatory bill. Government expansion, overreaching regulations, and impacting Main Street businesses that had nothing to do with the crisis are not the reforms the American people want. I yield the floor and suggest the absence of a quorum.

Mr. JOHANNS

Mr. JOHANNS. Mr. President, it is my understanding that title X of the bill would give the Bureau of Consumer Financial Protection the power to regulate not only businesses that provide financial products and services to consumers but also companies that provide services to these businesses. I understand that the purpose of giving the bureau the power to regulate these service providers is to prevent a financial service company's use of a service provider to frustrate the efforts of the bureau to protect consumers because important functions that bear directly on consumers are contracted out to service providers. I also understand that this approach is designed to provide the bureau with authority comparable to the authority that Federal bank regulators have over service providers to banks under the Bank Service Company Act. Am I correct in understanding that it is the intent of the service provider provisions for the bureau to focus on the service contracted out, not the terms of the service contract? Further, am I correct that it is not the intent of the service provider provisions for the bureau to subject the terms of business-to-business contracts, or the agreements between providers of consumer financial products and services and their own service providers, to the jurisdiction of the bureau, even when there may be disputes between these business parties?

Mr. JOHANNS

Mr. JOHANNS. Mr. President, I rise to support the Chambliss-Shelby derivative substitute, and I am very pleased to indicate that I am a cosponsor of that amendment. There is no doubt, when you are talking about derivatives, you are talking about contractual obligations that are as complicated as any financial industry in our system. So going about trying to figure out how best to regulate them is no easy task. I think that is acknowledged on both sides. Both the Banking and the Agriculture Committees have wrestled with what is the best approach to regulating this market that, to date, has been somewhat unregulated, to say the least. I regret to say that the current derivatives title that is in the bill being debated--if you study it--is overregulation 101. I worry about the host of unintended consequences that will beset our economy if it passes in its current form. It is not accidental that there has been article after article pointing out how much heartburn there is on both sides of the aisle relative to the current proposal that is being debated. The Chambliss-Shelby derivatives substitute is a sensible approach. I have talked to dozens and dozens of those impacted. I have to tell you they are very concerned about the downside impact on our economy. They say it is unnecessary with the new, robust clearing regime that is in place. Yet the Dodd bill has an exchange requirement. Why would we not enact meaningful clearing regulations and then add another layer on top, if necessary? Additionally, I worry about the trickle-down effects for community banks that hedge their interest rate risks with large banks. I come from the State of Nebraska. I don't even think there is a Wall Street in the State of Nebraska. We are basically small community banks. I have had some of our smallest banks warn me about the dangers of the Dodd proposal. If these larger institutions are banned from engaging in swaps, as the Dodd bill would do, who will work with the community banks to keep interest rates low for our farmers, ranchers, and small businesses? Furthermore, banning banks from engaging in derivatives isn't going to stop the practice. We don't pass laws for the world. We pass laws for the United States. All we are going to end up doing is sending this $600 trillion market out of this country. In fact, I had a small community banker in my office recently who said to me: Mike, these products are absolutely essential to what I do. If they are forced to another part of the world, we will be forced to acquire that product from another part of the world. Driving this activity back into the dark--which is what we would do if that were to happen--and actually increasing our risk and putting it in an economic climate outside the United States is a meltdown recipe. The underlying bill treats farm credit system institutions similar to the big Wall Street firms. It doesn't exempt them from coming up with costly capital and margin requirements. Does anybody believe for a second that isn't going to hurt farmers and ranchers and the cost of their loans? I was the former Secretary of Agriculture. Please, believe me, you cannot do this and not expect to have a very negative consequence on farmers and ranchers and small businesses. Farm credit institutions, our farmers, and farm cooperatives had nothing to do with this financial meltdown. Yet they are being dragged down with the ship. Finally, certain trades are simply so unique but so necessary and so specialized that the clearing requirements simply don't work. That doesn't mean they should not be transparent or that they should not be disclosed, but we should recognize the uniqueness of that situation. Why punish these trades that may pose no systemic risk by imposing higher capital requirements? Yet that is what the Dodd bill does. The bill before us has the potential to have very negative impacts on our economy. It is simply an overreach. I am not the only one here today who has serious concerns. The White House, the Federal Reserve, former Federal Reserve Chairman Paul Volcker, and the Chair of the FDIC have raised similar concerns relative to this approach. On April 30, 2010, in a letter from FDIC's Sheila Bair, she says this: If all derivatives market-making activities were moved outside of bank holding companies, most of the activity would no doubt continue, but in less regulated and more highly leveraged venues. A Federal Reserve staff memo says this: The prohibition would not promote financial stability or strong prudential regulation of derivatives or derivatives dealers; would have serious consequences for the competitiveness of U.S. financial institutions; and would be highly disruptive and costly, both for banks and customers. My point exactly. Finally, Chairman Volcker also expressed concerns with the derivatives title of the bill: The provision of derivatives by commercial banks to their customers in the usual course of a banking relationship should not be prohibited. I worry that at some point the Senators are going to come to the floor and pass this mess, and we are going to be stuck with it. The Shelby-Chambliss amendment is a thoughtful and reasonable approach. It will increase transparency and government oversight of the derivatives market. If we do what is proposed with this Dodd bill, we will push derivatives right back into the shadows. They will be unregulated and they will occur in another part of the world and we will bear the risk and the cost of that. These individuals simply used derivatives--these people I am talking about are farmers, ranchers, farmers co-ops--to protect themselves from risk. They are not Wall Street speculators. This proposal from the Shelby-Chambliss approach simply says: Let's use common sense when it comes to the derivatives market. It brings the current unregulated over-the-counter derivatives market into the light where transparency is paramount. This is an enormous departure from current law. In fact, it is a 180- degree change. It attempts to bring swap trades onto a clearing platform. Yet it also recognizes that companies across our country use these complex products as part of their business activity every day to protect themselves from unreasonable risk. Look who is supporting this proposal. This approach has gained the support of the National Association of Manufacturers. That can hardly claim to be Wall Street insiders. The alternative recognizes the negative consequences businesses would face with too rigid a law. Those dangers are obvious--loss of jobs, jobs moving overseas, constriction in liquidity, lack of credit, higher interest rates for farmers in my State, and higher farm input costs. It also distinguishes that these businesses were not part of the economic meltdown. They are not the AIGs of the world. Instead, they are the companies that use derivatives to manage their finances to keep down their costs, to control interest rate fluctuations, to manage currency volatility and other risk mitigation tools. The recent prices revealed how inadequate our oversight of derivatives was and how complex this area is. But if we adopt this blanket approach on the rhetoric of punishing Wall Street, what we will do is punish our farmers, our ranchers, our small business people. We will punish the people who are working this area by literally eliminating their jobs. I thank Senators Chambliss and Shelby. They understand what is at stake. This is a reasonable approach and an approach I am glad to support. I yield the floor.

Mr. JOHANNS

Mr. JOHANNS. Madam President, I am just going to speak for 2 minutes this morning, but I would like to stand to take a moment to voice my support for the Tester-Hutchison amendment. This amendment will ensure that banks of all sizes pay their fair share by broadening the assessment base that is used by the FDIC. The FDIC would determine bank premiums by basing it on total assets, not just domestic deposits. For far too long, community banks have paid a disproportionate share of the deposit insurance premiums. This amendment levels the playing field. It is a good piece of policy. It will put community banks on a more equal footing with the large bank conglomerates. So I urge my colleagues to vote for this commonsense amendment. Let me wrap up by saying, the Independent Community Bankers have looked at this amendment. This amendment would reduce assessments for 98 percent of the banks with less than $10 billion in assets, keeping nearly $4.5 billion in the banks--much needed capital to make our economy grow. Madam President, I yield the floor.

Mr. JOHANNS. Madam President, I rise today to discuss the consumer protection piece of the financial reform bill we have been debating. Let me start by expressing my appreciation for the good work of Chairman Dodd and the good work of Ranking Member Shelby and others who are making their way through a thoughtful process to try to get an overall bill that will work. This piece of the bill, though, in my judgment, needs a tremendous amount of effort, attention, and work yet. The consumer protection piece has generated a lot of debate. We have all asked the question in Banking Committee hearings and on the floor: What is the best way to protect consumers? Let me underscore that. This has not been a debate about whether we do or not. No one is talking about ignoring this piece of the legislation. No one is advocating that we do nothing on consumer protections. What we are trying to focus on is the best way of doing it. We need to keep that perspective in mind as this debate unfolds and motives and words get distorted and stretched. The bill before us establishes a consumer protection regime that is going to be housed at the Federal Reserve. But let me emphasize, that does not mean it is under its supervision. It functions like a stand- alone agency. This new ``bureau'' will have what I would describe as unprecedented powers. It will reach into nearly every area of our economy with power over nearly everything. Anything that resembles the term ``financial in nature'' will come within the purview of this bureau. I must admit, as this debate was going on, I found it surprising, if not shocking, that folks such as car dealers, accountants, and lawyers were showing up at my office to talk about the impact on them. It is no wonder that so many business groups have come out in opposition to this current piece of this legislation. I am not talking about banks. I am talking about business groups. The Chamber of Commerce sent a letter outlining concerns on April 28 on behalf of--and I am using their language--``hundreds of thousands of nonfinancial services businesses.'' These hundreds of thousands of businesses--many of them small businesses--had absolutely nothing to do with the last crisis. Yet with this new bureau, I believe they will be punished or, at a minimum, tied up in redtape. There are many pieces of this on which I could spend a lot of time talking on the floor, but what I have tried to do today is to encapsulate my thoughts into five areas, five concerns, if you will. The first area is the unlimited rulemaking authority provided for in this legislation. Because the term ``abusive'' was added to the unfair and deceptive acts or standards, there is virtually no limit to the kinds of rules this new bureau can write. We also know that the term ``abusive'' is entirely subjective. So how do you determine abusive? Will you make each customer take a financial literacy test? Is abusive different for Mike Johanns than it is the next customer? Because ``abusive'' can be defined so differently from one customer to the next, we can see the unlimited problem that is created. The second area, no veto power. I consistently said that it is a mistake to separate consumer protection from the issues of safety and soundness of the institution. If a proposed rule will have a negative effect on the safety and soundness of financial institutions, then we need some kind of checks and balances. Checks and balances are good. In this bill under debate, this new agency only has to list the regulator's concerns, not take them into any kind of meaningful consideration. The third area, privacy rights. While there are a lot of privacy concerns here, two major ones come to mind. Let me go to the language of the bill itself. Section 1022 mandates the bureau to: . . . gather information . . . regarding the organization, business conduct, markets, and activities of persons operating in consumer financial services markets. A person is defined in the bill as an ``individual.'' So do you follow me? What this means is the bureau can look into the business conduct of the average person out there. Section 1071 requires any deposit-taking financial institution to geocode customer addresses and maintain records of deposits for at least 3 years. As Jim Harper from the Cato Institute described it: Think of the government having its own Google map of where you and your neighbors do your banking. Is that what Americans want out of this bill? The fourth item is the preemption standard. The current bill really changes current Federal law under the guise of giving States more power over their consumer protection laws. This worries me. This will wreak havoc for financial companies operating in more than one State. What we would be saying is they will have to comply with a patchwork of 51 State laws, and State AGs will have the power to enforce State and Federal laws against national banks. If this were the way since the beginning of time, one might say: Well, they have adapted to it. But to put them in this kind of regimen is literally to say to them: You are going to have to chew up mountains of capital to try to comply with all these various rules and regulations and laws of the various States. The fifth item I wanted to mention is the expansive reach. This bill includes what I regard as an overly broad definition of ``consumer financial product or service'' and ``service provider.'' Specifically, section 1027 will subject numerous merchants to the regulation of this new bureau just because the business provides the ability to their customers to repay in four installments. Imagine that you order a camcorder for the holidays off a home shopping network. This company provides you with the flexibility of making four installment payments. This new company could be swept under this new bureau. How long do you think companies will continue to provide that kind of flexible option to consumers if they are going to be buried in regulation? That is why the dentists, the lawyers, the advertising agencies, the accountants, and even florists are concerned with this bill and are showing up in our offices saying: What are you doing? I don't know about anyone else, but I can make the case without any hesitation that my local florist doesn't come to mind when I think about the players who brought our economy to the edge. In response to this expansive and unfettered bureau, I am proud to announce my support for an alternative. This alternative, led by Senator Shelby, is well thought out, is a reasonable approach and I believe a compromise to a very difficult issue in this legislation. It would establish a consumer protection division within the FDIC, which I believe is a natural fit since this agency is already tasked with protecting consumer deposit accounts. This new division would have authority to make rules relative to consumer protection. All rules, regulations, and orders would receive the approval of the board of the FDIC--an important check and balance. This is a very important distinction in terms of what we are debating today. Board approval will ensure that actions taken by the division appropriately consider safety and soundness of the financial institution, while ensuring that consumer safeguards are in place. While it allows primary supervision and enforcement to exist with the existing regulators, it does not bring in nonbank mortgage originators for supervision. I will end on a final thought. Many have claimed that these mortgage insurers acted unfairly and that they preyed upon unsophisticated borrowers during the last crisis. This ensures the mortgage broker operating out of his garage or whatever is going to be regulated. Finally, this new agency will be able to go after the bad actors, and that is what we should be doing. Anyone who shows a pattern of material violations will be brought under this new FDIC division. Let me wrap up where I began. I applaud all my colleagues who have spent so much time and energy focusing on the consumer piece of this regulatory reform. Chairman Dodd led us through hearing after hearing trying to figure out the best way to protect consumers. Senator Shelby, our ranking member, worked on those issues in concert. We can get this right, but in my judgment, where we are today, the proposed legislation on the floor does not get it right. Let's focus on getting it right, getting the bad actors. I believe the approach that is being championed by Ranking Member Shelby is a reasoned one that elevates consumer protection while keeping safety and soundness as a paramount consideration. I ask my colleagues to support the alternative. Madam President, I yield the floor.