Brad Miller

Mr. MILLER of North Carolina

Mr. MILLER of North Carolina. Madam Chair, exempting this funding source from SEC regulation is not all this bill does. It also prohibits the States from doing anything. This is not a case where the proponents of the bill are saying, let's not let the Federal Government do this; let's let the States do this. They say, no, the States can't touch it at all. The people of the various States, using their right to vote, can't decide that in their State they want someone looking at what is being offered to mom-and-pop investors to make sure that they're not getting flim-flammed. That is a great deal of the investor protections that we've had in this country. It has been done at the State level, and this takes those cops off the beat altogether. So if you think that the people of the States should be able to exercise their own judgment about whether they want their States looking at what is being offered to mom-and-pop investors, you should vote against this bill.

Mr. MILLER of North Carolina

Mr. MILLER of North Carolina. Mr. Speaker, on that I demand the yeas and nays.

Mr. MILLER of North Carolina. I have an amendment at the desk.

Mr. MILLER of North Carolina. Mr. Speaker, this amendment will require a disclosure that if there are going to be unregulated solicitations, unregulated advertisements asking for investments in these companies, at the very least, the advertisement or the solicitations should reveal if they are to disclose if there is a compensation agreement with the executives or a golden parachute severance package and what those are so that investors won't find that they are buying into a company that, if it does make a profit, there are already contracts in place that will make sure all those profits go to the executives who are there and not to the investors. We've heard all manner of glowing praise for the kinds of small businesses that might benefit from this bill. I think the gentleman from Illinois referred to these as gazelle companies. Mr. Speaker, there has been a bad history of flim-flams that have taken investors' money. The reason that we have investor protections is not just because of the self-aggrandizing ambitions of regulators. It is because there has been a history of abuse, and that abuse discourages capital from coming. No one is going to want to invest when there have been well publicized examples of investors who put their money into unregulated companies like these, like what this bill would create and lost their entire investment because it all was grabbed by a handful of executives. And these disclosures are even more important because these companies will not be subject to the say-on-pay rules under the financial reform legislation passed and signed into law just last year. And we've already seen from the experience on say-on-pay that there remain real abuses of executive compensation. Even though many companies have changed their practices and have made them more transparent because they are worried about putting their pay practices to a vote of the shareholders, they fear disapproval, and they've changed their practices. But even with that, about 2 percent--which is actually a pretty big number--get turned down. And they all get turned down for pretty much the same reasons. There is no connection between pay and performance. There are poor pay practices, like long-term benefits without any kind of a performance measure. There are bonuses that were way too easy to achieve, that the bar was set very, very low. There are performance measures that make no sense or simply that there was poor disclosure of what the compensation was, or the compensation was simply too much for the size of the company and what others in the industry are paying. These companies will not have say-on-pay. They will not get a chance to vote on executive compensation, and they might find that they have bought into a company that has pay practices already in place, executive compensation contracts, golden parachute contracts that really ensures that even if the company does prove to be profitable, they won't get the benefit of the profits. It will all go to the executives who are selling them investments, who are encouraging them to invest in those companies. These are obviously very, very helpful disclosures. This is important information for investors, and honest small businesses should not hesitate in the least to provide it. State of North Carolina, Department of the Secretary of State, November 3, 2011. Re H.R. 2930--``Entrepreneur Access to Capital Act of 2011'' Hon. Melvin Watt, Rayburn HOB, Washington, DC. Dear Representative Watt: I am writing to express my concern with H.R. 2930, the Entrepreneur Access to Capital Act, which could be voted on by the House this week. This legislation, intended to promote an internet-based fundraising technique known as ``crowd-funding'' as a tool for investment, will preempt state investor protection laws and weaken important investor protections. Crowdfunding is an online money-raising strategy that began as a way for the public to donate small amounts of money, often through social networking websites, to help artists, musicians, filmmakers and other creative people finance their projects. The concept has recently been suggested as a way of assisting small businesses and start-ups looking for investment capital to get their business ventures off the ground. Soliciting charitable donations from strangers online to advance a goal or cause is one thing. Selling shares in a business online to strangers who expect to realize a potential return on their investment is something very different. H.R. 2930 contains a preemption provision that would prohibit my agency from requiring the filing or disclosure of information about these investment opportunities before they are offered to the public in my state. I believe enacting this preemption would be a serious mistake because, based on our previous experience, many of the crowdfunding opportunities will be targeted at Mom and Pop retail investors. The authority to require filings is critical to my office's ability to ``get under the hood'' of an offering to make sure that it really is what it says it is. I appreciate efforts by Congressman Ed Perlmutter (D-CO) to work with the bill's sponsor to produce a bipartisan amendment that would alleviate the states' concern with the preemptive provisions of H.R. 2930. Unfortunately, the Perlmutter-McHenry Amendment made in order by the Rules Committee on November 2 does not achieve this goal. Indeed, by simply clarifying that states ``retain jurisdiction . . . to investigate and bring enforcement actions with respect to fraud or deceit,'' the amendment essentially restates the preemptive provisions as they existed in the original bill. H.R. 2930 may he well intended. but I am concerned that it could create serious enforcement challenges and potentially open the door to the possibility of significant increases in investment fraud. Small businesses are vital to job growth and to improving the economy in our state, but by displacing significant safeguards currently provided by the crucial role of state securities regulators. Congress could enact policies intended to strengthen the economy that have precisely the opposite effect. As North Carolina's top investor protection official, I urge you not to support H.R. 2930 in its current form. I understand the North American Securities Administrators Association (NASAA), of which I am a member, is already hard at work on a state level model rule on crowdfunding that would preserve a state's ability to prevent scam artists from using crowdfunding offerings as the latest method for ripping off Main Street investors. I urge you to remove the state preemption section from the bill. Thank you for your attention to this important matter. Please don't hesitate to contact me if I may be of any assistance, or if you or your staff have questions regarding the legislation in question. Sincerely, Elaine F. Marshall, Secretary of State. I yield back the balance of my time.

Mr. MILLER of North Carolina

Mr. MILLER of North Carolina. Mr. Speaker, we have honored the Army's Buffalo Soldiers and the Army's Tuskegee Airmen. It's time to give the Montford Point Marines the honor that is their due. The Montford Point Marines fought an enemy abroad and injustice at home. They served with great valor and distinction and loved their country more than their country loved them at the time. President Roosevelt ordered in 1941 that the Marine Corps be opened to African Americans, but the Marines considered themselves the most elite branch of our military and the most traditional, and many resented Roosevelt's order that African Americans be accepted. The first African American marines were hardly welcomed with open arms. Their segregated unit was stationed at Montford Point, North Carolina. They were near Camp Lejeune, but the Montford Point Marines could not enter Camp Lejeune except in the company of a white officer. They were passed over for years for promotions that white marines achieved in weeks. When they trained with white marines, which was rare, they waited until white marines had eaten before they went through the chow lines. The Montford Point Marines were sent to the Pacific theater to serve behind the lines, not in combat for which they were presumed to be unsuited. No one told the Japanese. The Montford Point Marines served in Saipan, Iwo Jima and Okinawa, three of the bloodiest battles in the Pacific. They came under intense fire and showed great courage, winning the praise of skeptical white officers. President Truman fully integrated the Armed Forces in 1948, and African American marines served side by side with white marines in Korea and in every conflict since then. The distinguished service of the Montford Point Marines largely made that possible. General Amos, the commandant of the Marines, said he wants every marine, from private to general, to know the history of the marines who fought an enemy overseas, and racism and segregation in their own country. I want every marine and every American to know that history. Semper Fi.

Mr. MILLER of North Carolina

Mr. MILLER of North Carolina. Mr. Chairman, I have an amendment at the desk.

Mr. MILLER of North Carolina. I also disagree with the gentleman who just spoke. The reason that all of the Republicans want to talk about whether the commission ought to be five members on a commission or one director is that's the only part of the bill that really can be argued one way or the other. I mean, there are arguments one way or the other. I think it will be a much stronger agency if there is one director, but everything else in the bill really cripples this agency before it can even take hold. And I also disagree with the argument that everybody here wants to protect consumers. No, they do not. We saw what happened in the last decade, we know who was doing it. It was the most powerful industry in America, and they were making a ton of money by cheating consumers, cheating consumers on credit cards, cheating consumers on mortgages, cheating consumers on overdraft fees, and on and on. And we've heard the same arguments about this that we heard a century ago. A century ago, when Theodore Roosevelt pushed for pure food laws, the meat packers said, do you want government to take away your right to buy meat? Do you want government to take away your freedom to buy beef from diseased animals or spoiled beef? And the American people said yeah, that's exactly what we want. We want to know what we're getting. And Americans want to know what they're getting in financial products too. Do they want to lose the freedom to get a subprime loan when they qualify for a prime loan? Yes, they do. Do they want to have a credit card, to know what they are getting in a credit card? Yes, they do. Do they want to know what's really in their overdraft fees? Yes, they do. They want to know that there is somebody with their interests at heart who is reading all that fine print that the banks' lawyers wrote to be good for the banks, profitable for the banks, and let the consumer have no idea what's in that little print in the legalese. Yes, they want someone, a strong agency reading that fine print with their interests at heart and saying, no, you can't do that; you can't cheat consumers that way. That's what this agency does, and the American people want it.

Mr. MILLER of North Carolina. Mr. Chairman, I know that the Republicans' political consultants have said that they need to argue because Americans really do like this agency that is huge and that has dictatorial powers and unchecked accountability. The problem with that argument is that it is completely untrue. This agency has all of the oversight, more than every other agency has. Before they adopt a rule, they have to let everyone know they're thinking about adopting a rule; they have to take public comment; then they have to propose the rule; then they have to take more public comment. After all that, they can then be taken to court. If the rule is arbitrary and capricious and if there is no evidence to support it, it can be overturned by a court. There is ample protection in the law already. We do not need the additional check of having the regulators, the supposed watchdogs who did such an abysmal job in the last decade, having a veto over everything they do. There are protections enough already.

Mr. MILLER of North Carolina. Mr. Chair, it is simply not true that we all here want to protect consumers; we just have an honest disagreement about the best way to do it. This bill really cripples the ability of the CFPB to be an effective watchdog for consumers. And the way that it does it, probably the most harmful part of the bill, is the veto power, the greater veto power it gives the Financial Services Oversight Council and the way that that council has to exercise that veto. Here is what the CFPB has to do to pass a rule in the first place. First of all, they cannot require any financial institution to do anything. They can't say, You have to give people this mortgage or this credit card contract. They can just forbid. They can say, You can't use this contract, this mortgage, this credit card contract because this cheats people. They cannot require; they can only forbid. And before they forbid, before they pass a rule that says, You can't do that because it cheats people, it abuses people, they have got to consider all the benefits to the consumers that might come from that, as well as to the financial institutions that offer it. They've got to consider whether it really reduces the ability of consumers to get credit, and they've got to consider the effect on the financial institutions, and they've got to consult with all the other regulators whose business it is to make sure that the financial institutions don't go broke. And then they've got to publish it. They've got to let people comment. They've got to build evidence. And if they don't have support for the rule, it can be turned over by a court. But even before it goes to a court, it goes to this panel, this Financial Stability Oversight Council, and it can be vetoed if they decide that it threatens the stability of the financial system or the safety and soundness of the banking system. This bill changes it and says, not just that they can overturn it, but they have to overturn if it threatens the safety and the soundness of financial institutions; in other words, if it would make specific banks go broke. Some banks, I agree with what the gentleman from Wisconsin has said repeatedly, most small banks, most credit unions have had honest business practices. But there are some sleazy ones out there, and we saw what they did in the last decade. Under the bill, as it is written, if one of those banks comes forward and says, Unless we can do this sleazy thing, we're going to go out of business, the Financial Stability Oversight Council has to disallow it if it would put them out of business. Mr. Chairman, some of those banks, some of those sleazy, scuzzy banks need to be out of business. If the only way they can stay in business is by cheating consumers, they should be out of business. But this bill would not allow that to happen. A consumer protection rule could not go into effect if it put specific banks out of business. That's an enormous change, and it cripples the ability of the CFPB to be an effective watchdog for consumers. What this amendment does is, if any one of those prudential regulators, those watchdogs that are supposed to make sure the banks don't go broke is going to challenge any rule of the CFPB, they have got to say exactly how they think it would threaten the safety and soundness of the financial institutions, make a bank go broke, and they've got to say who they are, who is this rule going to put out of business. Because the American people are entitled to know if this agency, this FSOC, the Financial Stability Oversight Council, is acting on behalf of the American people and on behalf of the consumers or if they are protecting sleazy banks that stay in business whose whole business model is cheating consumers. I reserve the balance of my time.

Mr. MILLER of North Carolina. Mr. Chairman, one of the changes that doesn't sound like it does much but really does is when you change the word ``may'' to ``shall.'' Not only can this FSOC overturn a rule when they think it might affect the safety and soundness of the system, they have to overturn it. They have to overturn it if they think it's going to put a specific bank out of business. That's not a small change. That's not a high standard. That is a very low standard, and it is one that completely cripples the bill. I yield the balance of my time to the gentleman from Massachusetts.

Mr. MILLER of North Carolina. Mr. Chairman, I demand a recorded vote.

Mr. MILLER of North Carolina. I claim time in opposition.

Mr. MILLER of North Carolina. I yield 2 minutes to the gentleman from Connecticut (Mr. Himes).

Mr. MILLER of North Carolina. Sometimes it really is helpful, when you want to amend the law, to read the law. This amendment is almost completely redundant, and where it is not redundant, it is annoyingly pointless. This is what the law already requires: Before the CFPB can adopt a rule, it has to consider the potential benefits and costs to consumers and to the financial industry. It has to consider the impact of the rule. It has to consider whether it constricts credit, whether it makes it harder for small businesses or individuals--households--to get credit. All this amendment would require is already in the bill. The CFPB's rulemaking requires that they give notice that they're going to consider a rule, and then they've got to take comment. Then they've got to propose a rule, and then they've got to take comment again. They know that, if anybody is against it, they've got to be prepared to defend it in court, and they've got to show that they developed the evidence that supports the rule and supports what the benefits are and what the costs are and whether it keeps people from getting credit. What this amendment would also do is to make the CFPB prepare this report when nobody is against it, when everybody is perfectly fine with it, when it doesn't hurt anybody, when it doesn't bother anybody. It's minor. It's procedural. It would still require this silly, pointless report for a rule that nobody is against. I understand that most Members do not want to make government unwieldy and filled with red tape. This amendment would just make government more unwieldy and filled with more red tape. So I oppose the amendment. I yield back the balance of my time.

Mr. MILLER of North Carolina. Mr. Chairman, I demand a recorded vote.

Mr. MILLER of North Carolina

Mr. MILLER of North Carolina. Mr. Chairman, I demand a recorded vote.

Mr. MILLER of North Carolina. Mr. Chairman, this amendment is similar to others that we have heard today. This amendment would reduce the Fossil Energy Research and Development account by $24.018 million, and will put as much of that money as our rules will allow into the Energy Efficiency and Renewable Energy Research, Development, Demonstration, and Deployment. The bill now is $5.9 billion less than the administration's request and is more than $1 billion less than last year's funding. Fossil energy is a glaring exception to the austerity visited upon every other kind of energy research, but the Fossil Energy program gets an increase of $24 million above what the administration requested and $32 million more than last year's levels. This amendment would reduce that account, Fossil Energy, to the level of the administration's request, and will put as much money as possible back into energy efficiency and renewable energy research, which now gets a $331 million cut, or more than 25 percent, more than a quarter. Mr. Chairman, I agree that we need to be doing fossil energy research. It is more than 70 percent of our energy now, and it will be the bulk of our energy supply for the foreseeable future. We do need an abundant and clean supply of fossil energy, but it's hard to look at the spending levels in this bill and not see some hypocrisy at work. I am the ranking Democrat on the Energy and Environment Subcommittee, and I have heard again and again in committee hearing after committee hearing and in subcommittee hearing after subcommittee hearing the same stale talking point that it is not the place of the Federal Government to pick energy winners and losers and that taxpayers shouldn't have to subsidize the development of alternative fuels. Just last week, in a hearing in the committee, one of my Republican colleagues on the committee said we should promote an all-of-the-above approach--oil, nuclear, coal, natural gas. Heck, I'm okay with wind, solar, water, biofuels and everything else you can think of as long as it isn't subsidized by the American taxpayer. And we've heard that same talking point again and again today. The subsidy, the help with funding for research that the alternative energy now gets, is tiny in comparison to what traditional energy sources--fossil fuel and nuclear--have gotten for a long time. And if Republicans are now pushing alternative energy and energy efficiency technologies away from the public trough, it is so they can make more room for fossil fuels and nuclear. Of course those traditional industries have been subsidized right along, and they continue to be subsidized in this bill today. Taxpayers subsidize it, in addition to this little bit of research funding, with very significant tax incentives--the subject of discussions over at Blair House the last few weeks, and we've heard there is no budging on that. And we know that those industries fully expect, if disaster strikes, if there is a massive oil spill or, God forbid, a nuclear accident, they won't really have to pay the cost. They will get help with that; they will get bailed out. We are not talking about basic early-stage research here; that's somewhere else in the bill. This is all late-stage applied research. But in the case of alternative energies, we have fledgling industries, economically vulnerable industries that have some ways to go to get to the marketplace before they can turn a profit. And on the other hand, we've got an industry that is 70 percent of our current energy supply. They're up and running, they're in good shape, they're fabulously profitable. The top five oil and gas companies made $32 billion in profits in the first quarter--the first quarter, $32 billion, 3 months. To that industry Republicans say, belly on up to the public trough, boys; we'll make room for you. The energy research that we're talking about in the EER&E is wind, solar, biomass, water--on and on. You know what they are. We need to make some of those technologies work, or we are not going to have enough energy in the future. And in the shorter term, they promised healthy competition for the fossil fuel industry to bring down the cost of energy for Americans. It's hard, in fact, to look at the hostility of Republicans to those industries, to those emerging energy technologies and think a big part of their hostility is not at the bidding of the fossil fuel industry to smother that competition in the crib. I urge adoption of this amendment. I yield back the balance of my time.

Mr. MILLER of North Carolina. I have an amendment at the desk.

Mr. MILLER of North Carolina

Mr. MILLER of North Carolina. Mr. Speaker, I have a motion to recommit at the desk.

Mr. MILLER of North Carolina. I am, in its current form.

Mr. MILLER of North Carolina. The consideration of this bill has been bipartisan to this point, and that certainly does not need to change now. This motion to recommit does not really send it back to committee. It certainly doesn't kill it. It is consistent with the spirit of the bill. This is simply the last amendment and should be considered in the same bipartisan way all the other amendments have been considered. Mr. Speaker, our future prosperity does depend upon our being the most innovative country in the world, the most innovative economy in the world. American scientists and American engineers are doing great work. We are doing some of the most advanced, sophisticated research in the world. For instance, we lead the world in solar cell research. We are making some of the greatest breakthroughs in that technology. Much of it is funded by the Department of Energy or by other Federal research programs. But 80 percent of the manufacturing of solar cells is being done in Asia, mostly in China. What is happening is that firms are getting Federal funds to do research to improve solar cell technology. They're developing advanced technology, but when the time comes to manufacture a product coming out of that research, those firms are contracting with Chinese manufacturers to make the products. That is just one example of companies that are doing research here but manufacturing somewhere else when American workers need good manufacturing jobs. Mr. Speaker, the benefit of innovation should not just be higher profits for American corporations. The benefit should be good jobs for American workers. Under this motion to recommit, those companies will still get their patents, but they don't go to the front of the line. The people who go to the front of the line are those who will pledge that they will do their manufacturing here in the United States, creating good jobs for American workers. Second, we all know that there are countries in the world that don't really respect American patent rights and that don't treat American inventors fairly when they try to get patents in those countries. This motion to recommit will still allow those inventors, people from those countries, to get patents. We will treat them better than their countries treat American inventors. But they go to the back of the line. They do not get priority when it comes time to have their patents considered. Help American workers share in the prosperity that comes from American innovation from our research, from our innovation. Support this motion to recommit. I yield back the balance of my time.

Mr. MILLER of North Carolina. Mr. Speaker, I demand a recorded vote.

Mr. MILLER of North Carolina

Mr. MILLER of North Carolina. Madam Chair, I move to strike the last word.

Mr. MILLER of North Carolina. I rise to oppose the nonsensical pending amendment and the underlying bill, although the underlying bill doesn't really do all that, but most of all to disagree with the remarks of the gentleman from Kentucky just now, and from other remarks like that, that what the Republicans have done is not going to affect the people on Medicare now or the people who are older than 55, 55 and older. What it does, in fact, is shift more and more of the cost of health care to people who cannot afford it so that the richest Americans will not have to pay taxes. They will cut taxes for the richest Americans by even more, and they will protect insurance company profits and the profits of everyone else in the health care field who are making vulgar profits that are causing American health care to be twice as expensive as health care anywhere else in the developed world. The arguments and what the Republican Congress has done in these last few months have made very clear how cynically dishonest everything Republicans said about health care in the last 2 years really was, especially about Medicare. When Democrats really did find a way to get control of costs without affecting the quality, the availability of care, the access to care, the quality of care, all Republicans would say, even when it was specifically and narrowly targeted at fraud, they said that we were cutting Medicare. Now we see what they really think about Medicare. Now we see how little they really do understand how important Medicare is to the financial security of older Americans, of Americans in retirement. They say it will not affect you if you are over 55; if you are 55 or older. Well, I just turned 58. It is nice to know that Republicans care that much about me; but let me tell you, that is not the way it is going to work. Well, when I turn 65, I'll qualify for Medicare. Presumably, I'll get Medicare. My 96-year-old mother, who I also did visit this weekend, will get Medicare. I feel pretty confident she'll get Medicare for the rest of her life and that, when I turn 65, I'll get Medicare. For the guy who is 53 now, which is just 5 years younger than I am, at 60 he'll be paying taxes for my Medicare, and he won't be getting it. He'll never get it. What he will get instead is a coupon, a voucher. He'll get an allowance to go buy private insurance, and private insurance is simply not going to pay for what Medicare pays for. It's going to be far more expensive. The Congressional Budget Office estimates that in just 10 years those folks will have to pay 60 percent of their own health care costs if this plan goes through, what they call a ``path to prosperity,'' which should be called the ``path to insurance company profits.'' In 20 years, it will be two-thirds of their health care costs. They'll be paying for it. They'll also be paying taxes. Working Americans, people who are still in the workforce, will be paying taxes so that I get Medicare, and they know that's not the deal they're getting. The deal they'll be getting is that little voucher, that puny little voucher, that puts them at the mercy of insurance companies. Now, Republicans thrive on resentment. All of Republican politics seems to be built around resentment. I don't want to have a Nation so filled with resentment between generations. Ms. Edwards spoke just a moment ago about the contract between generations, that just as our parents took care of us in our childhoods, we will take care of our parents and their generation when they retire. We'll take care of them with our Social Security taxes and our Medicare taxes. They will get those benefits. Yet under the Republican plan, the path to insurance company profits, they won't get Medicare. They'll get that little voucher. How long is that going to go on before that resentment builds up? How long is that going to go on before the people who are paying the taxes for it and who know they'll never get it are going to say, No, no more of this. We have got to change this? Madam Chair, what we want is for all Americans to get the same deal. We want the people who are 65 and the people who are 96 to get the same deal, the people who are 70 to get the same deal, the people who are 58 to get the same deal, the people who are 50 and 30 to get the same deal. If this Congress is willing to control costs, even though that means limiting the profits of some of the people who are getting really rich from our dysfunctional health care system, we can do that. I yield back the balance of my time.

Mr. MILLER of North Carolina

Mr. MILLER of North Carolina. I yield back the balance of my time.