Collin Peterson

Mr. PETERSON

Mr. PETERSON. Mr. Chairman, you know, this is kind of a surreal debate because I don't think we're talking about the real issue here. You know, the cotton program isn't perfect. A lot of the programs that we have in the Agriculture Committee aren't perfect. Freedom to Farm, it was passed in '96. It got us into some of these problems. I opposed. It saved a little bit of money, and then we ended up spending 10 times as much money bailing people out when it collapsed. So you have got to be careful what you are doing. But the problem here is, we're arguing about something that no longer exists. This program that they sued us under no longer exists. We have fixed it two or three times. We tried to address this. It was never good enough for the Brazilians. But we made some changes, and we made some more changes, and then we made some more changes in the 2008 farm bill. It's still not good enough for them. Cotton went through some very difficult times. I don't have any cotton in my district. This is not a parochial issue for me. But if they wouldn't have had that safety net, we would have been out of the cotton business. But what was going on at the same time? We had Brazil using government money to increase cotton production in Brazil. And this is something that isn't considered in the WTO because we are such geniuses that we agreed to this agreement that tied our hands and gave our competitors the ability to eat our lunch. And that's what's going on. You know, JBS, which just took over a big part of the livestock industry in this country, is financed by the Brazilian Government. They own 30 percent of JBS. Nobody complains about that. The Brazilian Government created most of this competition that collapsed the cotton prices worldwide. And then we agreed to let China into the WTO, and they promised that they weren't going to go into cotton production. We shipped our textile market to China and collapsed all of our textile industry. And what happened? They increased production like crazy. India increased production like crazy. Our cotton prices went down below the cost of production because of these trade agreements that we got involved in. But the way they're structured, there's nothing we can do about it. But they're going to sue us over a little step two program that we now got rid of, trying to keep our people in business. Now, if you want to ship the whole cotton industry to Brazil and China and India, you are on a good start to doing that. And if you keep on this road, you're going to ship the rest of agriculture to these so- called developing nations that are not developing nations. If you've been to Brazil, in agriculture, they are anything but a developing nation; but they're protected under the rules that we agreed to in this WTO deal. So is this a perfect solution? No. But we couldn't get the Brazilians to honestly sit down and work this out because they don't want to. They're trying to use this for other reasons, for other advantages in these trade negotiations and so forth. And I don't think we can ever do anything to satisfy them. So there's more to this than people are talking about here. This is not about saving money. This is about making sure that we can have a safety net in this country so we can maintain production of agriculture in the United States and not ship it all to other countries and not get dependent on foreign countries for our food, like we've become dependent on foreign countries for our energy. That would be the worst thing that could happen to us. So I just hope people understand all of the different ramifications. This isn't a perfect deal; but for the time being, it's probably the best solution that we can come up with. I yield back the balance of my time.

Mr. PETERSON. Mr. Chairman, I move to strike the last word.

Mr. PETERSON

Mr. PETERSON. Mr. Chairman, I rise today in support of H.R. 910. We recently held a hearing in the Agriculture Committee with folks from the EPA and from people in agriculture, and the message that we heard was pretty clear from agriculture that they believe the EPA needs to be reined in, not only as regards this bill, but other measures that are being considered within the EPA as well. What this bill will do is hit a pause button on the EPA's current efforts to regulate greenhouse gases, and that's exactly what people in agriculture think we need. I have traveled the country, all over the country, talking to agriculture producers both in my district and other places, and they are concerned about what they see coming out of this agency, the regulations that they are seeing. And what really concerns them is that the agency does not seem to understand agriculture and, frankly, doesn't seem to want to understand agriculture. These proposed regulations we're seeing from EPA could potentially get in the way of what agriculture producers are already doing when it comes to conservation of our natural resources. American farmers and ranchers rely on these resources to provide the world's food supply and are committed to preserving them for the next generation. The EPA claims to be operating in an open and transparent manner, but the agency is sending mixed messages. At the recent hearing that I mentioned earlier, we were told that agriculture is currently exempt from proposed regulations, yet press reports have quoted the administrator since as saying the EPA will begin looking at regulating greenhouse gases from farms as soon as 2013. If Congress doesn't do something about the regulations being imposed on our farmers, ranchers and rural communities, the economic effects are going to affect everybody in America. We are being asked to feed more and more people not only in this country, but around the world. This kind of legislation, the effect is going to be to make it harder to do that and also to raise the cost on all of the consumers in this country at a time when that's the last thing that we need. I encourage my colleagues to support H.R. 910.

Mr. PETERSON

Mr. PETERSON. Madam Speaker, I rise today to join in this discussion with my good friend Chairman Lucas of the Agriculture Committee, and I yield myself such time as I may consume. As the chairman indicated, yesterday on a bipartisan basis we adopted the oversight plan, such as what we have done in the past when we were in charge of the committee, working in a bipartisan basis. And I would argue that the committee, under my jurisdiction, did the oversight work that was necessary and we made the changes and addressed the issues as they came up. We made significant improvements in the farm bill back in 2008 in terms of conservation programs, other kinds of things--crop insurance--through the new SRA that was adopted in May. So I would argue that we did our work on the Agriculture Committee. A good part of the chairman's time was taken talking about the EPA. I couldn't concur with him more. But the problem is, we don't have jurisdiction over the EPA. I hope that under the new leadership here that we will be able to work with the committees that have jurisdiction so we can straighten out some of the things that are going on over in the EPA and some of these other agencies. But all we can control is what we have under our jurisdiction in the Agriculture Committee. And I can commit to you that the Democrats on the committee will work with the Republicans to make sure that we do the right things on the Agriculture Committee; that we follow the plan that we adopted yesterday, and we do the aggressive oversight. We are 100 percent in favor of that. In terms of the issues that the chairman talked about that are under our jurisdiction, the GIPSA law or rule that's being proposed, the CFTC rule that's being proposed, these are still proposed rules, and they're going through the process. And I have some optimism that at the end of the day that those things are going to come to a point where they're readable and acceptable. But if they aren't, we will take a look at them. In terms of the CFTC, there are a lot of rules and regulations that they are in the process of implementing. The reason they are doing it is that we asked them to do it. This is not something they have manufactured over there. This has been directed by the Congress, and I would argue that it's needed. We had a situation before where they were only doing five regulations a year because we had a $600 trillion, $700 trillion market that was completely unregulated, completely in the dark, and it was a big part of this financial crisis and collapse that we had. At the time that we did the CFMA back in 2000, we were told that the folks who were in the swap market were rich people, that they had to have $10 million to even get into this market, that they were gambling with their own money. Really, it was none of our business that they were rich. They knew what they were doing. If they wanted to gamble their money, that was their business. The problem, we find out, is that they weren't putting the money up. They weren't putting the capital and collateral behind these swaps, and it almost took down the entire world financial system. So I would argue that a lot of what the CFTC is working on are things that are going to have to be done. Not that I'm a big fan of regulation, but in this case, the private sector went amuck in some of these areas. I think we are going to have to require that they put their money up, that they put up the capital and collateral, and that we make sure we don't get in this situation again where the public has to bail out these financial firms. We heard yesterday from the Secretary that he has no intention of regulating the end users. We gave that exemption in the law, and it looks like, in the way he has implemented it, the end users are not going to be subject to these capital and margin requirements. On the other hand, the financial firms that qualify as swap dealers or as swap participants are going to have to put their money up, and it needs to happen because we don't want to get in this situation again. Having said all of that, let's see what happens and what the final rules are that they come out with at the CFTC. Let's see what happens with the final rules that come out with regard to GIPSA. I am hopeful that we are going to get the right kind of outcome when they listen to everybody. They've had an open process, and they've been listening and taking thousands of comments. If there are problems and if they've gone beyond the law or if they've gone off in a direction that we didn't intend, I will work with the chairman to make sure we get that straightened out. So I am here today to pledge the cooperation of the minority on these issues. I hope the chairman can convince his colleagues on these other committees, which are driving us nuts in some of these areas as well as some of these other agencies, to come up with some process where we can be involved to straighten some of that out. I would love to work with you on that. We are with you 100 percent, and I look forward to working with the chairman and with the other members to get the right kind of outcome. Madam Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. PETERSON

Mr. PETERSON. Madam Speaker, I rise today to congratulate one of my distinguished constituents, Dr. Russ Colson, the 2010 Professor of the Year awarded by Carnegie Foundation for the Advancement of Teaching and the Council for Advancement and Support of Education. Dr. Colson was hired by Minnesota State University Moorhead in 1993 to teach geology at a school that did not have an existing geology program. In an area like the Red River Valley with its rich geologic history, a strong program was necessary and Dr. Colson worked to create a stand-out geology program at one of our nation's stand-out universities. He has put an emphasis on experiential learning in nearly three- quarters of his classes. A self-described ``science coach,'' Dr. Colson introduces students to geology around the globe through hands-on experiences--applying what is learned in books to the real world. He is beloved by faculty and students alike. His students praise his teaching style for helping them develop skills necessary in the 21st century. A fellow faculty member refers to Dr. Colson as ``the best.'' Dr. Colson is the first professor from a Minnesota public university to receive this award but likely not the last. I offer my heartfelt congratulations to Dr. Colson, his family and the MSUM community on this impressive achievement.

Mr. PETERSON

Mr. PETERSON. Madam Speaker, pursuant to House Resolution 1493, I am submitting changes in law that will help achieve deficit reduction by reducing waste, fraud, abuse, and mismanagement; promoting efficiency and government reform; and controlling spending in the programs within each Committee's jurisdiction. This year saw significant deficit reduction resulting from crop insurance changes enacted by Congress in the Food, Conservation, and Energy Act, FCEA, of 2008. In that legislation, the Committee included a provision directing the Administration to renegotiate the federal crop insurance program's Standard Reinsurance Agreement, which sets the financial terms and conditions for companies which participate in the program. The fruits of our effort were borne when USDA completed its renegotiation this past June, resulting in a more efficient crop insurance program and net savings, according to the Congressional Budget Office, of almost six billion dollars for deficit reduction. This six billion dollars represents a seven percent reduction in the crop insurance program's baseline from FY 2011-20, making the Committee on Agriculture the only Committee in the U.S. House of Representatives that has accomplished deficit reduction this year through decreasing mandatory spending for programs under its jurisdiction. If other federal government spending was trimmed by a similar percent reduction and the savings dedicated to deficit reduction, we would reduce the budget deficit by almost three trillion dollars during FY 2011-20. Federal spending to support production agriculture, according to CBO, represents less than one-half of one percent of all Federal Government spending. With these reductions, I believe agriculture has gone above and beyond any expectation with regard to finding cuts to reduce the deficit. However, this does not mean our programs are completely free of waste, fraud, abuse, and mismanagement or inefficiency. As Chairman, I can assure you that I will continue to lead the Committee's efforts through investigations, hearings, and general oversight to find other ways to improve further the operation of the government programs under our jurisdiction.

Mr. PETERSON

Mr. PETERSON. Mr. Speaker, I would like to enter into the Record a letter that Chairman Frank and I received from Chairmen Lincoln and Dodd on the treatment of end users under the derivatives title of the bill. As the letter makes clear, we have given the regulators no authority to impose margin requirements on anyone who is not a swap dealer or a major swap participant. While the regulators do have authority over the dealer or MSP side of a transaction, we expect the level of margin required will be minimal, in keeping with the greater capital that such dealers and MSPs will be required to hold. That margin will be important, however, to ensure that the dealer or major stock participant will be capable of meeting their obligations to the end users. We need to make sure that they have that backing. I would also note that few, if any, end users will be major swap participants, as we have excluded ``positions held for hedging or mitigating commercial risk'' from being considered as a ``substantial position'' under that definition. I would ask Chairman Frank whether he concurs with my view of the bill.

Mr. PETERSON. Mr. Speaker, I yield such time as he may consume to the gentleman from Iowa (Mr. Boswell).

Mr. PETERSON. The gentleman is correct. My interpretation of the exclusionary provision from the definition of swap that he mentioned is that the exclusion would apply to transactions in which the parties' delivery obligations are booked-out, as the gentleman described. The fact that the parties may subsequently agree to settle their obligations with a payment based on a price difference through a book- out does not turn a forward contract into a swap. Excluding physical forward contracts, including book-outs, is consistent with the CFTC's longstanding view that physical forward contracts in which the parties later agree to book-out their delivery obligations for commercial convenience are excluded from its jurisdiction. Nothing in this legislation changes that result with respect to commercial forward contracts.

Mr. PETERSON. I thank the gentleman. I encourage people to support the conference report. I have no further requests for time, and I yield back the balance of my time.

Mr. PETERSON. Mr. Speaker, I rise today to discuss some of the jurisdictional issues that arise out of Title VII of H.R. 4173. The bill brings a new regulatory regime to swaps as it will be defined under the Commodity Exchange Act, CEA. Title VII of H.R. 4173 extends the Commodity Futures Trading Commission's, CFTC's, exclusive jurisdiction under the CEA to also include swaps, except as otherwise provided elsewhere in Title VII. Also included in Title VII are two savings clauses for the Securities and Exchange Commission, SEC, and one for the Federal Energy Regulatory Commission, FERC. Title VII allocates authority over swaps and security-based swaps as follows. First, the CFTC has exclusive jurisdiction over swaps, including swaps on broad-based security indexes. Within the swap definition is a category of swaps called security-based swap agreements. For this specific category of swaps, the CFTC will continue to exercise its full jurisdictional authority, while the SEC may exercise certain specific authorities over these products, as outlined in Title VII. Title VII also clarifies that the SEC has jurisdiction over security-based swaps, which are swaps on narrow-based security indexes and single securities, and that the two agencies share authority over mixed swaps. Nothing in the SEC savings clauses, or any other provision of Title VII, alters the existing jurisdictional divide between the CFTC and SEC established by the Johnson-Shad Accord which, among other things, provides the CFTC exclusive jurisdiction over futures (and options on futures) on broad-based security indexes. Nor do these savings clauses, or any other provision of Title VII, divest or limit the authority that the CFTC shares with the SEC over security futures products as authorized by the Commodity Futures Modernization Act of 2000. This bill also clarifies the authorities of the CFTC and FERC over financial instruments--both swaps and futures--traded pursuant to FERC or state approved tariffs or rate schedules. Section 722 preserves FERC's existing authorities over financial instruments traded pursuant to a FERC or state approved tariff or rate schedule, which under current law does not extend to CFTC-regulated exchanges and clearinghouses, because these are within CFTC's exclusive jurisdiction. The CFTC's authorities over futures and swaps traded pursuant to FERC or state approved tariffs or rate schedules are also fully preserved. The bill further specifies that, outside of regional transmission organizations/independent system operators (RTOs/ISOs) markets, the CFTC shall continue to have exclusive jurisdiction over financial instruments traded on CFTC-regulated exchanges, such as NYMEX or ICE, traded through swap execution facilities, or cleared on CFTC- regulated clearinghouses. To avoid the potential for overlapping or duplicative FERC and CFTC authority, the bill provides the CFTC with the authority to exempt financial instruments traded within an RTO/ISO from CFTC regulation if the CFTC determines the exemption would be consistent with the public interest and the purposes of the Commodity Exchange Act. Section 722 also preserves FERC's anti-manipulation authority as it currently exists under the Federal Power Act and the Natural Gas Act prior to enactment of this legislation.

Mr. PETERSON. Mr. Speaker, I yield such time as he may consume to the gentleman from Pennsylvania (Mr. Holden).

Mr. PETERSON. I thank the gentleman for yielding. Mr. Speaker, I rise today in support of the conference report on H.R. 4173, The Wall Street Reform and Consumer Protection Act. I want to start by thanking Chairman Frank, who has demonstrated his great policymaking skills and leadership on this important issue. The staffs of both the House Agriculture Committee and the Financial Services Committee have worked closely on this legislation for the past year, and it is thanks to our efforts that we have a conference committee report for us today. One of the bill's key components is title VII, which brings greater transparency and accountability to derivative markets. When the House considered financial reform in December, derivatives were one area in which we had strong bipartisan support. The House produced a very good product. The Senate's efforts on derivatives went in a very different direction. As with any legislation with such stark differences, compromises had to be made. This comprehensive legislation represents a middle ground between the House and Senate products. While no one got everything they wanted in this bill, I think we got a bill that will help prevent another crisis in the financial markets like the one we experienced in 2008. The House Agriculture Committee started looking at some of the issues addressed in this legislation even before evidence of the financial crisis started to appear. I am pleased that the conference report contains many of the provisions the House Ag Committee endorsed over the course of passing three bills on this topic. Let me briefly talk about some of those provisions. Our in-depth review of derivative markets began when we experienced significant price volatility in energy futures markets due to excessive speculation--first with natural gas and then with crude oil. We all remember when we had $147 oil. The Ag Committee examined the influx of new traders in these markets, including hedge funds and index funds, and we looked at the relationship between what was occurring on regulated markets and the even larger unregulated over-the-counter market. This conference report includes the tools we authorized and the direction to the CFTC to mitigate outrageous price spikes we saw 2 years ago. The House Agriculture Committee also spent a great deal of time considering the role of derivatives in the collapse of the financial markets and debating different approaches to regulating these financial tools. In the end, it was the Agriculture Committee, on a bipartisan basis, that embraced mandatory clearing well before the idea became popular. Clearing is not only a means to bring greater transparency to the derivative markets, but it also should reduce the risk that was prevalent throughout the over-the-counter market. The conference report closely follows the House approach to mandatory clearing. In crafting the House bill and the conference report, we focused on creating a regulatory approach that permits the so-called end users to continue using derivatives to hedge risks associated with their underlying businesses, whether it is energy exploration, manufacturing, or commercial activities. End users did not cause the financial crisis of 2008. They were actually the victims of it. Now, that has been of some concern and, frankly, a misinterpretation of the conference report's language regarding capital and margin requirements by some who want to portray these requirements as applying to end users of derivatives. This is patently false. The section in question governs the regulation of major swap participants and swap dealers, and its provisions apply only to major swap participants and swap dealers. Nowhere in this section do we give regulators any authority to impose capital and margin requirements on end users. What is going on here is that the Wall Street firms want to get out of the margin requirements, and they are playing on the fears of the end users in order to obtain exemptions for themselves. One of the sources of financial instability in 2008 was that derivative traders like AIG did not have the resources to back up their transactions. If we don't require these major swap participants and swap dealers to put more backing behind their swap deals, we will only perpetuate this instability. That is not good for these markets, and it is certainly not good for end users. I am confident that after passing this conference report we can go home to our constituents and say that we have cracked down on Wall Street and the too-big-to-fail firms that caused the financial crisis. With that, I urge my colleagues to support the passage of this conference report. I reserve the balance of my time.

Mr. PETERSON. Yes, I fully agree. The language says that institutions to be considered for the exemption shall include those with $10 billion or less in assets. It is not a firm standard. Some firms with larger assets could qualify, while some with smaller assets may not. The regulators will have maximum flexibility when looking at the risk portfolio of these institutions for consideration of an exemption.

Mr. PETERSON

Mr. PETERSON. Madam Speaker, I rise today to honor the accomplishments of Tom McRoberts on the occasion of his retirement from the University of Minnesota, Morris (UMM). During his career of over 34 years with the University, Tom has served several communities as an administrator, mentor, and innovative educator. These titles are unable to capture the full measure of Tom's contribution to the University, local community, the state of Minnesota. Tom is tireless in his efforts to expand learning opportunities. His ingenuity has never been bound by his official titles of Director of Continuing Education and Regional Programs, Director of the Center for Small Towns, Director of the Center for International Programs, and the other positions he's held over the years. Tom has served as a mentor and academic advisor to numerous students who have gone on to obtain internships and jobs in the public service arena and win prestigious national scholarships. He has been instrumental in developing programs to connect the University to the local community and to open the world for exploration by the students he has so faithfully served, including establishing the UMM Center for International Programs and creating the UMM Summer Scholars program for gifted high school juniors from around the region, soon to be in its twenty-sixth year. Over the years, Tom has been recognized for his remarkable contributions with a number of honors, including the all-University John Tate Award for Excellence in Undergraduate Advising, the UMM Academic Staff Award, the College of Continuing Education Deans Award for Individual Achievement, and the University of Minnesota Presidents Award for Outstanding Service. This impressive record of service doesn't begin to describe the man. As his colleagues and students note, Tom is modest, compassionate, and blessed with a good sense of humor. One close colleague has described Tom as a specialist in making things happen without claiming credit. He accepts assignments others won't take. He sees opportunities to do good and he takes them and when these aren't obvious, he creates them. Tom has truly made walking the extra mile a way of life, achieving a legacy of accomplishments that will pay dividends for generations to come. Madam Speaker, I wish to extend my congratulations and appreciation to Tom McRoberts for the extraordinary career at the University of Minnesota Morris.

Mr. PETERSON

Mr. PETERSON. I thank the gentleman. I rise in opposition to the amendment, and I do so reluctantly because I know the sponsors of this amendment are sincere in their attempt to address potential problems that they fear could arise with the underlying bill. But I have to say that we have looked at these issues in great depth in the committee, and it is not that we haven't considered them. In the first issue, banning of financial products, our concern there is that we believe that if we ban these products, they will simply move overseas and outside of our ability to regulate them. And if they are dangerous products and if they are something that shouldn't be done, I don't know if it makes any sense if we are just going to transfer that over to a foreign country. Our committee went to Europe. We recognize that most of the companies that do business in the United States also do business in Europe, and that is how we came down on that issue. Another provision strikes the term ``balance sheet risk.'' We had considerable discussion about this. We think we have got the right terminology to get at the issue that some of the end users had. They felt that without that term, they might limit some of their transactions. And for those of us in agriculture, these things are very important to us because we are actually hedging physical risk. That is why I introduced an amendment directing the regulators to define the terms in explicit terms so that we would be clear about this. But as I said during that debate, the Agriculture Committee will definitely haul them up and straighten them out if they don't get the right answer to that. Finally, the amendment limits the applicability of legal certainty of swaps. This amendment asks the question why illegal swaps should be enforceable. The answer is that otherwise you will encourage illegal behavior. If a swap dealer or an end user finds itself in a money- losing swap, it would be easy to engage in some illegal behavior to negate the swap and escape its financial liability. The standard of illegality is not very high. You wouldn't have to commit fraud to invalidate a swap; you just don't have to follow the regulations. So do we really want businesses making the calculation between the costs associated with paying a fine to regulators for failing to dot the i's or cross the t's versus the costs associated with honoring their swap obligation? If the end user is harmed by the fraudulent action of its swap counterparty, the CFTC has the tools to seek restitution for the end user from the counterparty. Ending legal certainty causes more problems than it solves, in our opinion. I know the sponsors of this amendment have good intentions, but I think that the amendment goes a little too far to address problems that it seeks to correct, and I would urge my colleagues to oppose the amendment.

Mr. PETERSON. Madam Chair, I have no further speakers, so I yield back the balance of my time.

Mr. PETERSON. I thank the gentleman. I rise in opposition to this amendment. This issue of authority for regulators to set margin requirements for end users was one issue that we could not agree upon during our negotiations, so I think it's appropriate that we resolve it here. First, I want to remind Members that in the underlying Peterson-Frank amendment that we've adopted with regard to swap dealers and major swap participants and their security-based swap counterparties, regulators will have full authority to set margin requirements appropriate for the uncleared swaps that they hold. So that authority will be in place with regard to the banks. Because swap dealers and major swap participants are so heavily involved in the swap market and are interconnected with potentially hundreds of different counterparties, we believe it's important that we regulate their margins for the protection of their end-user customers and the financial system as a whole. However, I don't think that we need the regulators putting margin requirements on end users in order to protect the swap dealers and major swap participants. I think they can look out for themselves. The so-called end user community of energy companies, manufacturers and on and on, did not, as has been said, cause the problem. They are concerned about potential impact of this amendment, and so I urge my colleagues to oppose the amendment.

Mr. PETERSON. I thank the gentleman for yielding. Madam Chair, I rise in opposition to this amendment, and I do so reluctantly because I know the concept of what the gentleman is trying to accomplish has been endorsed by CFTC Chairman Gensler. First, let me explain what's already in the Peterson-Frank amendment. If clearing mandate applies to a swap or class of swaps, then the swap dealers and major swap participants not only have to clear such trades but also have to execute them on or through a futures or securities exchange or a swap execution facility. Now, banks hate this because it will expose their trades among themselves to the light of day. It will provide greater price transparency and will narrow their spreads and cost them money, all to the benefit of the end user. For the end users, we provide an exemption from the clearing mandate and, consequently, from the execution mandate. Mr. Stupak's amendment would preserve the clearing exemption but impose an execution mandate on end users, the idea being that the more swaps that can go through a swap execution facility, the greater price transparency you receive, the better deal an end user can make. In theory, this all makes sense; however, the end user community doesn't buy it. They question whether the price information that will come out of the swap execution facility will actually be beneficial to them, and they also know that there will be costs to bear because the facilities won't perform this service for nothing. End users don't know whether the benefits will outweigh the costs. I have a real problem telling people that are in the business what's good for them when they don't believe it. So I have here a letter from various groups who like the Peterson- Frank approach. Among them are the American Gas Association, the Public Gas Association, Public Power Association, Wind Energy, Edison Electric, Electric Power Supply Association, Independent Petroleum Association, Natural Gas Supply Association, NRECA, the Chamber of Commerce, 3M, Cargill, John Deere, Caterpillar, Medtronic, Zimmer, Ecolab, and others. So I ask my colleagues to oppose the amendment.

Mr. PETERSON. Madam Chair, I yield 1 minute to the distinguished chairman of the Financial Services Committee, the gentleman from Massachusetts (Mr. Frank).

Mr. PETERSON. Madam Chair, I yield myself such time as I may consume. This amendment puts forth a process where we can obtain some clarity regarding limited exception to clearing requirements. Specifically, it requires the CFTC to define the terms ``commercial risk,'' ``operating risk,'' and ``balance sheet risk,'' which are used in the statute to define what types of risk a company may hedge and remain eligible for limited exception to clearing. I understand how some could be concerned that balance sheet risk could be interpreted more broadly to encompass financial risk, but not commercial risk. That is why I introduced this amendment directing the regulator to define these terms. By providing for the agency to define these terms, the burden will be placed upon them to ensure the companies seeking the limited exception to the clearing requirement do not abuse that exception. And if we think the CFTC gets it wrong, between the Agriculture Committee and the Agriculture appropriations subcommittee, we have lots of opportunities to haul them up here and show them the error of their ways. This amendment is supported by the Commodity Markets Oversight Coalition and many other groups. I urge my colleagues to adopt the amendment. Madam Chair, I reserve the balance of my time.

Mr. PETERSON. Madam Chair, I'm now pleased to recognize the gentleman from Iowa, the chairman of the General Farm Commodities and Risk Management Subcommittee that deals with this issue and is a leader on this issue for us on the Agriculture Committee, Mr. Boswell, for 3 minutes. (Mr. BOSWELL asked and was given permission to revise and extend his remarks.)

Mr. PETERSON. Madam Chair, I'm pleased to yield 2 minutes to the gentlewoman from Illinois (Ms. Bean).

Mr. PETERSON. I reserve the balance of my time.

Mr. PETERSON. Madam Chair, I yield 3 minutes to the gentleman from Connecticut (Mr. Himes).