Brad Sherman

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, imagine an antisocialist resolution so poorly drafted that the cochair of the CPA Caucus finds it necessary to come here and denounce it. But this resolution equates Willy Brandt with Kim Jong-un, Medicare with the Great Leap Forward, and European Socialist Allies of America and NATO, with the worst murderers in history. Democracy calls for every country to decide what blend of government regulation of business, what blend of government programs to have, and that is a decision for each country to make. Instead, we have a resolution that provides a misleading and sophomoric description of history. We are told that all socialism is equal, and that Marxist-Leninism is the same as the European Socialists. When communism stood over Europe and could have conquered the Western world, we organized NATO. Here are the NATO leaders who were all socialists: Harold Wilson, Willy Brandt, Francois Mitterand, and so many others, as shown on the chart. Without them, Stalinism may well have prevailed. Yet, this resolution condemns them. Then we are told, Oh, well, then the anti-communists must be great people. Yes, like Francisco Franco and the rest of those identified on this chart. Later today, the Republican leadership wants to take someone off her committee because they say they are dedicated to fighting anti- Semitism. Yet, on this same day, they bring a resolution to this floor that equates some of the greatest leaders of Israel with some of the greatest mass murderers of history. Look at the history of Israel. The founder of Israel, Ben-Gurion, a socialist; Golda Meir, a member of the Socialist International; and Shimon Peres, President of Israel and President of the Socialist International. Yet, they say they are against anti-Semitism. Mr. Speaker, 73 percent of the American people believe Republican leadership is ignoring the problems facing America, per a CNN poll. And we could dismiss this resolution as just a stupid waste of time consistent with that ignoring.

Mr. SHERMAN. Can I get another 30 seconds?

Mr. SHERMAN

Mr. SHERMAN. Mr. Chairman, I have an amendment at the desk.

Mr. SHERMAN. Mr. Chair, American gas prices are too high. The pressure is on this Congress to do something about it. President Biden has done something about it by releasing oil at a strategic time from the Strategic Petroleum Reserve, and gas prices are down from their peak. But Americans want more. They want real action, and instead, they get what is nothing more than a 2-day fraud on this House floor: a bill that would do absolutely nothing to reduce oil prices or gas prices. Yet, by spending 2 days on the floor and by making this the bill of the week, we fool the American people into thinking that Congress is doing something. Now, how utterly meaningless is this bill? It would do nothing to increase oil production in the United States for it calls only for a plan to be created but not necessarily implemented. It implies that it would do something to increase oil production but not for well more than a year after the crisis began any spike in oil prices. Finally, even if more oil is produced in the United States, it will be exported and will lower the world price perhaps by a penny. This is a messaging bill. Its message is to attack President Biden, who is the only one who has actually done something to reduce oil prices. So let's look at what this bill does. It calls for a plan. If the administration wants to give us a plan, then give us a plan. Washington is filled with plans. The American Petroleum Institute has a plan. Everybody has a plan. So we draft another plan. What does that do? Now, it forces the administration to write a plan about leasing more land for oil drilling. They are free to list parcels where everybody knows there is no oil and nobody wants to bid. If they don't want to do a plan, then that is the plan they will give us. But let's say they give us the plan that the majority seems to want. They can write the plan, accompany it with a letter explaining that they think it won't reduce oil prices and that it is bad for the environment, and therefore they are not going to implement it. So now we have a plan that is similar to what they want and a letter saying why it won't be implemented. This is what we offer the American people? If we are going to have a bill that requires a plan, then we ought to adopt this amendment that offers the administration a chance to create a different kind of plan, a plan to prohibit or limit exports. The illustration of how important this is can be seen just north of our border. Canada produces twice as much oil as they consume, and their consumers are paying $2 a gallon more than we are paying. So producing more oil inside your country doesn't seem to lower oil prices for those living to the north of the United States. Why? Because the oil is simply exported at the world price. Now, that guarantees--if we actually produced more oil in the United States and exported it--more profits for oil companies but not a penny of reduction at the pump. If instead we had a plan to limit or prohibit exports, then we would lower certainly the price of natural gas, and I believe that under many circumstances we would reduce the price of oil and gasoline paid for by the American people. So the majority comes to this floor with a bill requiring a plan to be added to the hundreds of existing plans that already exist that requires the administration to create a plan that the majority tells us the administration doesn't want to create, allows the administration to create a plan that they wouldn't like, allows the administration to create a plan that they would like and then refuse to implement it, and then tells the American people that they are doing something to lower the price of gasoline now. Let's point out that we are going to produce more oil in this country in 2023 than any other year in our history. So this is a message bill that is sending a false message. We are going to produce more oil in 2023 than any other year. But even if we did lease more land, and even if they did drill on it, that is a response that might affect us in 2025. Why don't we have something that will lower gas prices now? So if we want to engage in this process of telling the American people that we are doing something or that we would do something but it is the other party's fault, then for God's sakes, bring forward a bill that if enacted--which, of course, won't happen--but if enacted, that would actually do something. This bill will not increase oil production in the United States, and oil production in the United States, if exported, will do nothing to help the American consumer. Mr. Chairman, vote for my amendment, and I yield back the balance of my time.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, for 46 days, the Government of Azerbaijan has forcibly cut off 120,000 ethnic Armenians in the Republic of Artsakh. They are cut off from the outside world. Food has become scarce. They have to ration even basic items. Diapers and medicine supplies have become so low that Facebook pages are opening where residents are trying to find these items from their neighbors. Residents are separated from their families on the other side of the border in Armenia, including children who have been attending school or visiting families. Azerbaijan has even gone so far as to cut off natural gas during the depth of winter. A humanitarian crisis is brewing, and we should act to prevent it. Let's be clear about what this attempt is. It is an attempt by Azerbaijan to force Artsakh's ethnic Armenian population out of their homes by making life in Artsakh impossible. The tactic is blockade. The effect is civilian deprivation. The object is ethnic cleansing. But don't take my word for it. Listen to Azerbaijani dictator Aliyev who made his intentions clear when this blockade unfolded by saying, ``Whoever does not want to become our citizen . . . can leave.'' What does he mean? The ethnic Armenians are citizens. They are citizens of the Republic of Artsakh, but Aliyev doesn't recognize that citizenship and instead uses it as an excuse to say that he wants to ethnically cleanse these 120,000 people. I am glad that Secretary Blinken earlier this week called on President Aliyev to end this blockade, but we know that dictators don't often respond to calls for justice. I urge the administration to put real weight behind these calls by making clear that there will be consequences to Azerbaijan by plunging the people of Artsakh into this humanitarian disaster, including sanctions if necessary. The administration should enforce section 907 to stop all military assistance to Azerbaijan and to provide critical humanitarian aid to the people of Artsakh, actions that are long overdue. Ever since I came to Congress almost 27 years ago, I have introduced and fought for a resolution to recognize the Armenian genocide, the first genocide of the 20th century. Back then it was not uncommon for Members of this body to minimize or even deny the systematic ethnic cleansing and murder of 1\1/2\ million Armenians, Greeks, or Syrians and others by the Ottoman Empire, but Armenian Americans and their allies did not give up. For decades, they spoke truth to power and turned the political tide until the Armenian genocide was recognized by this House and then by President Biden. It may have taken longer, but we got there. This is a painful moment for the Armenian community. I am confident that the Armenian people will rise in strength. Armenians have outlived those who said there was no Armenian genocide, and they will outlive those who say there is no Artsakh. I urge the Biden administration and all Members of this body to take a forceful stance against Azerbaijan's shameful attempts at ethnic cleansing of the Armenian population of Artsakh through this deadly blockade. Debt Limit Crisis

Mr. SHERMAN. Mr. Speaker, we have already hit the debt limit. Republicans say they want to negotiate. We negotiate about spending all the time. What they really mean is that they want additional leverage by threatening this country with a default on our debt, which would cost us, according to Moody's Analytics, 6 million jobs, a 9 percent unemployment rate, $15 trillion lost in our investment markets. Already they are dillydallying with this debt limit. Their playing Russian roulette with our economy has already hurt our economy. As the chief Democrat on the Capital Markets Subcommittee, I am here to tell you that the cost of capital is higher and projects are not going forward because of the actions they have taken so far. They want to negotiate? They want to negotiate going backward. They want to negotiate reducing Social Security benefits. They want spending cuts, but they won't specify what they want. If we are going to negotiate, let's negotiate going forward. Let's talk about increases in Social Security benefits, let's negotiate getting rid of the $2 trillion of unjustified Trump tax cuts that went chiefly to corporations and the wealthy. You want to negotiate? Fine, we will negotiate going forward, but ultimately we will end up with a clean debt limit. You can't just love your country when your guy is in the White House. You can't play Russian roulette just because you don't like the President and you think that President will take the political hit. We need to show the world that our governance in America is sound and that our economy is worthy of investment.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, what political nonsense this bill is. It allows an American oil company to buy oil from the SPR on Monday and sell it to China on Tuesday, which means it is fine for them to see SPR oil going to China as long as an American oil company makes a little money out of it. And, of course, as the ranking member points out, it allows all the other oil in the country, 98 percent of our exports to China, to go to China unchecked. If we were serious about lowering prices for the American consumer, we would look at what the Republicans did in 2015 when they ended our ban on exports and insisted that that be added to the spending bill that shut down the government. I had a bill introduced last month to ban American exports of oil when oil is selling for over $70 a barrel. We need to ban the exports of natural gas when prices are too high for American consumers. Finally, this bill tries to attack the Biden administration's use of the SPR to lower gas prices here, where it has been somewhat effective and has made money for the United States Treasury. Let's legislate seriously to lower oil and natural gas prices for the American consumer, instead of simply insisting that if American SPR oil goes to China, an oil company has to be a middleman and make a little money off of it.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, for most of my life, I have been a student of history. As a CPA, a tax lawyer, and a former head of the second largest tax agency in this country, I focused on the fact that if you look at empires, republics, and kingdoms, the ones that succeeded were those that were able to collect taxes. And when they were unable to collect taxes, they fell. I have seen patriotic anarchists come to this floor. They want America to be strong, but they want our ability to enforce our financial laws to be weak. There are those who say correctly that we should not defund the police because we have crime in the streets. But we also have to prevent crime in the suites. Yet every time a billionaire successfully cheats on his taxes, a member of the Freedom Caucus earns his wings. There are two threats to our ability to collect taxes. Both of them seem to be supported by many on the Republican side. The first of these is the underfunding of the IRS. For 3 days and 3 long nights, we heard each faction of the Republican Party say how they wanted procedures that would eventually lead to reducing our national debt, and then the first thing they bring to the floor is a bill that increases the national debt by $1.6 trillion according to six bipartisan Secretaries of the Treasury. Frankly, I think that estimate is way too low because I have seen tax collection from every side; as a legislator, as a tax administrator and auditor, and as an adviser to private businesses. When you conduct audits, you not only bring in money from that taxpayer, but you create an image in that social circle that tax returns need to be filled out accurately and even conservatively. That will no doubt lead to far more tax collection than the $1.6 trillion that has been estimated. Keep in mind that working people really can't evade taxes. They get W-2s and 1099s. It is those with complicated tax returns and our large corporations that we are talking about. Now, with the additional funding the Democrats have provided the IRS, we can finally put ``service'' back into Internal Revenue Service. Hopefully, they will answer the damn phones. We need to see one IRS employee for every 2,000 tax returns that are filed. As you can see on this chart, that is what Ronald Reagan had back in 1988. Now, we are close to 3,500 tax returns for every IRS employee. That is untenable. That is why Donald Trump could take outrageous positions in his tax returns. He counted on light audits. Ronald Reagan paid his taxes and staffed the IRS. Stand with Ronald Reagan and stand with adequate funding for the Internal Revenue Service. There is a second threat to our ability to collect taxes--it is longer term--and that is the possible rise of cryptocurrency. When somebody tells you what they are, believe them. Cryptocurrency tells you what it is or aspires to be in its name. Cryptocurrency literally means hidden money. Now, I am the only Member of this House to get a grade of F from the only organization dedicated to crypto advancement that rates Members of this House because I have been trying to ban crypto for over 5 years. No one has helped me more in that effort than Sam Bankman-Fried, but some will view Sam Bankman-Fried as just one big snake in a crypto Garden of Eden. The fact is, crypto is a garden of snakes. From the outside, it looks like it is just a token, an electronic pet rock, something to bet on, not because it has any value or use but because you might be able to sell it for even more to somebody else. But longer term investors in crypto are investing in it because they hope it becomes a currency. How does crypto compete with the dollar, the existing U.S. currency? It is right there in the name. Cryptocurrency means hidden money, and the market for cryptocurrency is tax evaders trying to hide their assets from the IRS.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, it's appropriate for me to republish my statement of March 11, 2019 on the meaning of cosponsoring legislation. Much of that statement was a republication of my statement of September 29, 2010, as I've maintained a consistent policy on this issue. The following is a republication of my statement of March 11, 2019. ``Madam Speaker, on Wednesday, September 29, 2010 stated for the Record: `Madam Speaker, I wish to clarify that when I cosponsor a bill, it does not necessarily mean that I agree with every part of it. At a minimum, my cosponsorship indicates that I support moving the bill forward through the legislative process, including being marked up in committee, and if sent to the floor by the relevant committee(s), then subject to consideration and amendment on the floor.' Let me reiterate that 2010 statement and provide additional background. I believe in the legislative process. I believe bills are improved during committee mark-ups and by consideration of amendments on the floor. The effect of cosponsoring a bill is to signal to the relevant committee chair(s) that I believe the bill should be marked-up in committee, a process that may well improve the bill (and in some cases may make the bill worse). When I decide to cosponsor a bill after it has completed the committee process, I do signal to the Speaker and Rules Committee that I believe the bill should be considered on the floor, and almost always under an open rule.''

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, for 3 days and 3 long nights, every class of Republican came to this floor to argue about which of them hated the national debt more. Now, as the first thing, they bring forth a bill that will increase the national debt by $1.6 trillion, according to six bipartisan Secretaries of the Treasury. Working people can't evade taxes. They get W-2s and 1099s. Republicans support this bill, because every time a billionaire successfully cheats on his taxes, a member of the Freedom Caucus earns his wings. As co-chair of the bipartisan CPA Caucus, and former head of the second largest tax agency in America, I say we need staff to put the Service back into the Internal Revenue Service. One employee for every 2,000 tax returns filed, that is the staffing level that Ronald Reagan insisted upon. It is the level Democrats would restore. Trump took outrageous positions on his returns, and counted on a light audit. Whereas Ronald Reagan paid his taxes and staffed the IRS. Don't make honest taxpayers feel like suckers. Stand with Ronald Reagan and vote ``No.''

Mr. SHERMAN

Mr. SHERMAN. Now, the crypto industry knows that their arguments are bad, and the advice given to anyone who has a bad public policy is when you come to Washington, you better bring a lot of money. It is being said that Sam Bankman-Fried showered money on Democrats, but what actually happened is exemplified by his statements just last month. He said he gave equal amounts to Democrats and Republicans. He gave the money to Democrats above the table, and he gave the money to Republicans to dark money organizations, super-secret super-PACs. He explained his reasoning, and it actually makes sense. He says the press is liberal. I know my colleagues on the Republican side agree with that, and that the press would vilify him if he was giving money to Republicans. So he gave the money to Democrats above the table, to Republicans under the table, and according to him kept it about equal. But, of course, Sam Bankman-Fried wasn't the only one involved in FTX. We have also his co-CEO of one of the FTX organizations, Ryan Salame, who gave many tens of millions of dollars exclusively to Republicans. Now, I want to discuss the role that crypto plays in light of our capital markets. Our capital markets are designed to get people with savings to be willing to take risks to use, what economists have called for over a century, animal spirits, and to take the risk and invest as equity capital, sometimes debt capital, in businesses that make America great, that provide jobs, that create products, or invest in municipal bonds and build a school, build a hospital, build a road. And especially that risk capital, that equity capital, we encourage by spending hundreds of billions of dollars a year through our tax system to provide a capital gains allowance, a much lower tax for those who make money by taking risks and investing their capital. But what role does crypto play in this? It takes those animal spirits, that limited supply of capital that people are willing to put at risk, and diverts them into betting on crypto tokens, where the investment does nothing to provide jobs or to build plants. I think, though, I may have overstated because the crypto world does create some jobs: Jobs in crypto mining, which is to say jobs in coal mining. You see, the way you get crypto is you get a whole bank of computers to do literally trillions of calculations, and if you do those calculations, with a little luck you get a bitcoin. And so the big cost is not the computers, believe it or not, it is the electricity. So we have coal miners mining coal to fuel coal plants that were previously mothballed and have been taken out of mothballs to create the electricity to allow people to mine bitcoin. Now, it has not always done with coal. Iran is subject to our sanctions, as well they should be. In fact, I got involved in looking at crypto by seeing what role crypto might play in undermining our sanctions of Iran, which is working right now to develop a nuclear weapon. Iran, due to these sanctions, can't export all its oil. What do they do with the oil? They burn it, create electricity, mine crypto, and then they have a hidden currency that they can use to fund Hamas, Hezbollah, the Houthi, and those are just the terrorist organizations whose names begin with H that are funded by the Government of Iran, which is engaged in crypto mining right now. So one of the issues is, will crypto succeed? Not if we are successful in imposing the Know Your Customer anti-money laundering laws to the entire crypto ecosphere because if you take the hidden away from the cryptocurrency, it has no advantage over the dollar as a currency. But we in Washington may fail to act. After all, the money and the power is in the hands of the crypto billionaires. But the bigger threat to crypto is crypto. I will explain that by talking a little bit about the theory of currency. How is it that any currency acquires value? Well, many millenia ago, our species in various places all decided that gold was valuable. Hire an anthropologist, maybe they can explain why, but gold has had value as far back as history goes. The U.S. Government then created a paper dollar tied to gold, redeemable in gold, a fixed amount of gold, and then centuries later, because people were used to the dollar itself being valuable--they had forgotten how tied to gold it was--the currency was valuable in and of itself, and the tie to gold was eliminated. Now, of course, you don't even deal with paper dollars all that often. It is an electronic representation of a paper dollar that used to be a representation of solid gold. So some smart guys who knew a lot about computer programming, et cetera, decided, Well, why can't we do that? If the U.S. Government is able to print money, why can't we print money? And since money isn't actually printed on paper, but is electronic, why can't we create electronic money? And so they did. They argued one thing, that the amount of bitcoin, or whatever cryptocurrency it was, was finite. Only a certain amount could be mined. Now, they assured us there is no back door that would allow the creators to create an unlimited amount of bitcoin and, after all, if you can't trust the people in the crypto industry, who can you trust? But even if there is a finite amount of this or that cryptocurrency, there is an infinite number of cryptocurrencies. Compare that to fiat currencies, to governmental currencies. There are a couple hundred countries in the world. That is it. Those are the ones that can create governmental currencies. But every day somebody creates a new cryptocurrency, and we have a plethora of coins, so while there is a finite number of each coin, there is an infinite number of coins. Furthermore, there is no particular reason to think that one cryptocurrency is more valuable than the other. Is bitcoin more valuable than ethereum? Why? Why not? What about dogecoin? What about hamster coin? I asked this question in a hearing almost a year ago. One of my nice staffers, I was about to say pesky staffers, tapped me on the shoulder and said: Boss, there already is a hamster coin. So I said, well, gee, what about cobra? There is already a cobra coin. So I went into the next hearing and said there might be a mongoose coin, and think of what a mongoose could do to a cobra. You know mongooses are able to kill any cobras, and of course a mongoose could really devour a hamster. I put that forward as a joke, identified it as a joke, and 4 hours later somebody created mongoose coin, and a few hours after that it allegedly had a value of hundreds of millions of dollars. This self-mocking competition for some coins by other coins demonstrating there is an infinite number of coins, and any one of those coins could be more valuable than the other coin, ultimately will mean that crypto does not emerge as a currency. Compare that to governmental currencies. I mean, certain cryptocurrencies, including mongoose coin, today could be worth absolutely zero, whereas ethereum could be more valuable than bitcoin or not. Could be zero. Whereas the Uruguayan peso will always have a value because there will always be a Uruguay. The capitalized value of all outstanding Uruguayan pesos will always be considerably less than the U.S. dollar because the United States will always be more important than Uruguay. So you know what the different currencies are tied to. You know the pecking order. You know the size of the United States economy, you know the size of the Uruguayan economy, and if you make up a country and print a currency, it is going to be worthless. You make up a cryptocurrency, could be as valuable as mongoose coin. So crypto has no apparent value, and yet one cryptocoin competes with the other. I think this is a house of cards that collapses, but not right away. FTX was not the end of the story. But let's say you are looking for a crypto exchange, God forbid. If you saw FTX, they had no audit at all, and I speak as I believe the only Democratic CPA returning to the next Congress. I am an old auditor. No audit. You go to a Binance, which right now has had $3 billion withdrawn in the last 24 hours, and they have no audit, but they did have a proof of reserves done by an auditing firm, but a proof of reserves is not an audit. Or you could go to Coinbase. They have an audit, but no internal control report on the audit. And if you listen to the testimony of John Ray before the Committee on Financial Services, he is the bankruptcy trustee for what's left of FTX, the focus of his problem or the problem he identified was no internal control. So you look at the major exchanges, you don't have a true audit with an internal control audit on any of the ones I identified. You have to wonder, why would you want to play in that world. Now, as I said, the SEC is acting way too slowly. And they need to be aggressive and go after every crypto exchange, if any of the crypto assets being exchanged is a security, and most of them in the opinion of the SEC, is a security. I wish I could tell you it was cut and dry which cryptocurrencies were securities and which were not. Believe it or not, it all depends upon a statute passed in the 1930s and a court case decided in the 1940s; the Howey case. And so it is probable but not certain that the vast majority but perhaps not all cryptocurrencies are subject to SEC jurisdiction. That is why Sam Bankman-Fried was here in Washington to try to get us to pass a statute that would reduce or eliminate the likelihood of success that the SEC would have in courts to show that cryptocurrencies are a security, and the crypto exchanges are securities exchanges. I would hope that emboldened by recent events, that the SEC would shut down these exchanges. They are exchanging unregistered securities. Now, I would hope that Congress would pass a law at least defining all cryptocurrencies as subject to SEC jurisdiction, but I think given the money and power of people who make money, literally--crypto billionaires, they make money by making money. They have a lot of it. Now, I know that crypto is down about 60 percent from earlier this year. It is still a lot of money. In every other business, in order to make money, you have to make a product, provide a service. They have made money without doing any of that. It is a very profitable business. And so they will continue to press Congress, I fear successfully, into not passing legislation that undermines the SEC. But for God's sake, I don't think we will be able to pass this legislation making clear that the SEC has jurisdiction. They are going to have to win that one in the courts; I think they will. But for God's sake, let's make sure that we don't pass legislation that undermines the likelihood of the SEC winning in the courts. Now, I would like to address a cousin of cryptocurrency, stablecoin. Talk about an oxymoron. Some stablecoins have absolutely collapsed. But a well-regulated stablecoin tied to the dollar is really just a money market fund but hipper. Because your grandfather invested in money market funds, coin sounds like cryptocurrency, and your grandfather doesn't understand that. I am not sure anybody understands it. So stablecoin, if well regulated, is simply a money market fund, but invariably, it is a money market fund tied to crypto investing. If you have an account with a stockbroker, you no doubt have a money market fund where your cash is stored until you decide which stocks to buy, or which bonds to buy. So the money in that money market fund is awaiting deployment in investments that build the American economy. Stablecoin is just another name for money market fund, but it will be tied to an account with a crypto broker awaiting deployment in dogecoin or mongoose coin or bitcoin, or ethereum, or any one of the cryptocurrencies. So you can put me down as a skeptic of cryptocurrency. I think I have covered the reasons why it will not succeed, why investment in it is subject to a very substantial risk of theft. And why if, God forbid, and in the unlikely event that it does succeed, it will undermine the power of the U.S. Government to enforce our fiscal and white-collar laws. I look forward to working with my colleagues to at least make sure that we do not undercut the possibility of effective regulation of cryptocurrency, that perhaps we provide for the regulation and tough regulation of cryptocurrency with the Know Your Customer and the anti- money laundering statutes and that at least we do no harm. Mr. Speaker, I yield back the balance of my time.

Mr. SHERMAN. Mr. Speaker, for 5 years, I have been trying to ban American investments in cryptocurrency. I am the only Member of this House to get an F grade from the only crypto-promoting organization that rates Members of Congress. My fear is that we will view Sam Bankman-Fried as just one big snake in the crypto garden of Eden. The fact is, crypto is a garden of snakes. Now, from the outside, crypto just looks like a token, an electronic pet rock for the 21st century, something that might be good to invest in--though it has no apparent value--because you might get somebody else to buy it from you for more than you paid for it. But in reality, crypto aspires to be a currency and compete with the U.S. dollar. It is not a currency yet, but if it has any long-term value, it is because its promoters are successful in turning it into a currency. Now, the U.S. dollar is an excellent currency. It is a medium of exchange that will be used billions of times today for people to buy this or that. It is a medium of exchange. It is a measure of value. So how can a cryptocurrency compete with the U.S. dollar and other established currencies? Whenever you come up with a new product, you find an advantage that you think you have--at least for part of the market--of your product over the incumbent products, and then you name your product after that advantage. The advantage that crypto hopes to be its ticket to become a currency is right there in the name: Cryptocurrency literally means hidden money. Well, is there a big market for hidden money? Well, there are the drug dealers, the human traffickers, the sanctions evaders who will find that to be a good feature. As Sam Bankman-Fried would tell you today, there is a hell of a market for those who need a currency that will help them hide assets from the bankruptcy courts. But the true big market for a hidden currency is tax evasion. Now, I know there are some on the other side who are kind of happy every time the IRS is defeated. It is said that anytime a billionaire successfully cheats on his taxes, a member of the Freedom Caucus earns his wings. The other announced purpose of cryptocurrency design is not just to be a currency available to those who want hidden money, but to compete with the U.S. dollar as a world reserve currency. This would enrich the crypto oligarchs beyond measure and take thousands of dollars a year of advantage away from every American family because every American benefits from the fact that the U.S. dollar is the established world currency. Now, Sam Bankman-Fried, or should I say inmate 14372, had one purpose in his efforts in Congress. And he was well known in Congress. The only one wearing shorts walking around. His one purpose was to keep the SEC, the Securities and Exchange Commission, out of the crypto world to provide a patina of regulation, baby regulation by assigning crypto to the Commodity Futures Trading Commission, an organization a little laxer and a lot smaller than the SEC. I have one admonition for my colleagues. Don't trash Sam Bankman- Fried and then pass his bill. I fear this could happen because Sam was not the only crypto oligarch with PACs and lobbyists and all the pressure and all the money coming from the pro-crypto side. There is no PAC in Washington, there is no lobbyist here getting paid millions of dollars to work for efficient law enforcement or investor protection or sanctions enforcement. Now, I have heard some criticize the SEC, and I will do a little bit of that later in this speech. In July, I chaired a hearing of our subcommittee, the Investor Protection, Entrepreneurship, and Capital Markets Subcommittee, and pushed the SEC's head of enforcement for not doing what should have been done, and that is to go after every crypto exchange because the SEC has taken the position in court that virtually every cryptocurrency is, in fact, an unregistered security. That means that every crypto exchange is an illegal exchange. But the SEC has been unwilling to act on that conclusion because they are under intense pressure from a few in Congress. Mr. Speaker, I include in the Record a letter signed by 19 Members of Congress that was designed as a push-back pitch, if you know baseball, to push the SEC out of enforcement of crypto. Congress of the United States, Washington, DC, July 15, 2022. Hon. Gary Gensler, Chair, U.S. Securities and Exchange Commission, Washington,

Mr. SHERMAN. Now, this letter tells the SEC to back off, and here is the quoted language, from dealing with the ``purported risk of digital assets.'' Well, it is a few months after that letter was written, and there are a lot of people who sent their money to the Bahamas who do not think that the risk of digital assets is merely purported. I would also include in the Record, there hopefully being no objection, statements from eight members of the Financial Services Committee on the Republican side that were designed to attack the SEC from even trying to get involved in the regulation of cryptocurrency.

Mr. SHERMAN

Mr. SHERMAN. Madam Speaker, I ask unanimous consent to remove the gentleman from Illinois (Mr. Foster) as cosponsor of H.R. 2374, the Peace and Tolerance in Palestinian Education Act.

Mr. SHERMAN

Mr. SHERMAN. Madam Speaker, I rise in support of H.R. 7066, the Russia and Belarus Financial Sanctions Act. I thank Chairwoman Waters, Ranking Member McHenry, and my co-lead on this bill, the gentleman from Arkansas (Mr. Hill), for their work in bringing forward this legislation. This bill passed unanimously in the Financial Services Committee in March. The Russia and Belarus Financial Sanctions Act represents a significant step forward in imposing sanctions on Russia and on Belarus for their historic aggression. I have spent 26 years on the Foreign Affairs Committee and well over a decade on the Congressional Ukrainian Caucus. I understand the importance of financial sanctions in changing Russia's behavior in part through my discussions with President Zelenskyy and other Ukrainian leaders who have pointed out that that is their Achilles' heel. Chairwoman Waters and I have for several years been pushing to prohibit Americans from purchasing all new Russian sovereign debt and have passed that through the House several times. But that was before the invasion. As has been explained by my colleagues who have spoken, we now have effective sanctions prohibiting U.S. financial institutions from engaging in a wide range of transactions with Russian and Belarusian individuals and entities--particularly the Russian Central Bank--many of the state-owned enterprises and financial institutions, and oligarchs. But what people have not focused on is that these sanctions apply only to U.S. persons and do not apply to the over 1,000 foreign subsidiaries of American financial institutions. As we meet here today, foreign subsidiaries owned by U.S. financial institutions are engaging in the very financial transactions that we have prohibited if engaged by a U.S. institution. It is time to deal with this gaping loophole. That is why this bill requires all U.S. financial institutions to prevent their foreign subsidiaries from engaging in transactions prohibited to U.S.-based financial institutions. Madam Speaker, I think it is important that this bill has acquired bipartisan support and shows that Congress comes together to deal with this outrageous invasion, and I urge my colleagues to support this timely legislation.

Mr. SHERMAN

Mr. SHERMAN. Madam Speaker, I include in the Record the accompanying three letters from Americans for Financial Reform, the Consumer Federation of America, and Public Citizen, which express support for my amendment, No. 573, which was included in En Bloc amendment No. 1 to H.R. 4521. Americans for Financial Reform, February 2, 2022. Dear Members of the Committee: Americans for Financial Reform support Chairman Sherman's amendments to amend H.R. 4521, the America COMPETES Act. We support Representative Sherman's amendments that would close some of the gaps that allow covered companies to escape from financial reporting requirements with the Securities and Exchange Commission through exemptions in Regulation D, Regulation S, and Rule 144A. This would increase transparency and accountability. The amendment would require identification of: Issuer Issuer's place of incorporation Amount of issuance Principal beneficiaries of issuer Use of proceeds, including each country and industry where proceeds are invested. Sincerely, Americans for Financial Reform.

Mr. SHERMAN

Mr. SHERMAN. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4616) to deem certain references to LIBOR as referring to a replacement benchmark rate upon the occurrence of certain events affecting LIBOR, and for other purposes, as amended.

Mr. SHERMAN. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on this legislation.

Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, today we show that the House of Representatives can deal with a really big problem before it becomes a crisis and before almost anybody even knows that there is a problem. We can deal with such a problem without drama, without deadlock, without partisanship. We can do it a year and a half before it all explodes, so as to give the Senate, the regulatory agencies, and the private sector the time that they need to do this job long before the impending uncertainty disrupts our economy. As co-chair of the CPA Caucus, I am here to certify that this is the most important genuinely boring bill that will come before this House this year. Mr. Speaker, there are trillions of outstanding loans that have adjustable interest rates. The adjustment of these loans is tied to the London Interbank Offered Rates, known as LIBOR. LIBOR has been referred to as the most important interest rate in the world. We are dealing here with adjustable rate mortgages, business loans and securities, and even some student loans. For many years LIBOR was the index. When LIBOR went up, the interest rate on these instruments would go up. When LIBOR went down, the interest would go down. For many years it worked well. LIBOR is based on a survey of British bankers. A few years ago some British bankers lied and some went to jail. Our friends across the pond said they would stop publishing the LIBOR index. We asked them to keep doing it. They are going to stop on June 30, 2023. Some $16 trillion of loans and business instruments will still be outstanding. Those instruments will specify that you calculate the interest rate based on LIBOR, and LIBOR will not exist. These $16 trillion of loans and other business instruments do not specify what is supposed to happen if you go to calculate the interest rate based on LIBOR and there is no LIBOR. That is why they are called tough legacy LIBOR instruments. We could do what all too often happens in Washington--we could ignore the problem. We could then leave it up to tens of thousands of class action lawsuits, hundreds of thousands of regular lawsuits, as borrower and lender try to figure out what interest rate would apply. That would be terrible for our economy and our court system. We have got a better idea. The legislation before us today, H.R. 4616, the Adjustable Interest Rate (LIBOR) Act, which will provide borrowers, investors, and all those in the financial space certainty as to what happens when LIBOR is no longer published. Before I continue, I want to thank Chairwoman Waters and Ranking Member McHenry, and their staff for working closely with me to get this bill on the floor today. I particularly want to thank Rob Robilliard of my staff who has poured his heart and soul into this bill for the entire year. I am pleased to say that H.R. 4616 has received the support of 21 business organizations, I would say every business organization with a stake in this matter, including the American Bankers Association, the Independent Bankers, and the Chamber of Commerce. I want to particularly thank Kristi Leo, President of the Structured Finance Association, for working with us on this bill. The legislation has also won the support of so many public interest groups, including the National Consumer Law Center and Americans for Financial Reform. I particularly want to thank Andrew Pizor of the National Consumer Law Center for his assistance. Not only has this legislation received support from these important organizations, but every word--and I mean every word--has been carefully reviewed by the Federal Reserve Board, the U.S. Treasury Department, the Securities and Exchange Commission, the Office of Controller of the Currency, the Federal Housing Finance Agency, and the Consumer Financial Protection Bureau. We have revised it again and again based on their comments. Each of these agencies has cleared on every word of the bill before us today. Once again, I want to thank the staff, particularly of the Federal Reserve, for their excellent work for helping us draft this legislation: Mackenzie Gross, Evan Winerman, and Mark Van Der Weide. This text before us is a consensus product and all the agencies have signed off. We have worked with over 100 different organizations and groups, and to my knowledge none oppose the text that is before us today. I want to thank the Alternative Reference Rate Committee, which was convened by the New York Fed which created the structured overnight finance rates, which are based on the treasury markets. Those markets are public, transparent, and not subject to manipulation. It is a broad market. Unlike the LIBOR rate, it is not subject to manipulation. This bill provides that as to that $16 trillion of tough legacy LIBOR, pursuant to regulations published by the Fed, the various SOFR rates that are applicable will stand in for the LIBOR rate once the LIBOR rate is no longer published. It sounds simple, but let me tell you it has been a hell of a year as you try to get consensus on a bill affecting $16 trillion. Mr. Speaker, I want to talk a little bit about why this bill is necessary and why it is so important. Just 2 months ago, October 20, the Federal Reserve, the CFPB, the FDIC in conjunction with the State Bank and Credit Union Regulators issued a joint statement stating that failure to adequately prepare for LIBOR's discontinuance could undermine the financial stability and safety and soundness of the institutions they oversee. The Financial Stability Oversight Council, which we created in response to the 2008 meltdown, said that a cessation of LIBOR has the potential to significantly disrupt our financial markets. The SEC similarly warned that LIBOR's discontinuance may pose a significant risk to our stock and bond markets. Secretary Janet Yellen and Federal Reserve Board Chair Powell told us that we need legislation to deal with this matter at the Federal level, and it is bipartisan. Steve Mnuchin testified to the same thing when he was Secretary of the Treasury in the Trump administration. Finally, I should point out that Federal Reserve Chair Powell has told us that failure to deal with this presents a big financial stability risk to our entire economy. As to the scope of this bill, it deals only with tough legacy LIBOR. It does not deal with those instruments that expire while LIBOR is still published, nor does it deal with those instruments that are created in the future and do not reference LIBOR. There was an earlier draft of this bill that set forth the obvious, and that is the substitution of SOFR for the LIBOR index does not constitute a sale or exchange for tax purposes. We took that out because we wanted to move the bill quickly and not cause a referral to the Ways and Means Committee. Mostly we took it out because it was absolutely unnecessary. It is very clear under existing tax law, the change of one index to another index that is incredibly similar, in this case, designed to be as close as humanly possible does not constitute a sale or exchange, but especially where that change is through the operation of law and where the change is necessitated because the original index is no longer published. The tax outcome is obvious and does not need to be part of the statute. The last change we made in this bill was to add the words ``for purposes of the governing law of such LIBOR contracts'' to section 5(d). We did that to make it clear that we weren't dealing with any tax issue and anybody could hold it up to a magnifying glass and try to find a tax word in it. By putting these words in it we satisfied the Committee on Ways and Means. There is no taxation in this statute. This law does deal and preempts the field with regard to all non-tax law, that means contract, commercial, financial law at both the Federal, State, and local level. Finally, this act does not prescribe what interest rates ought to be used in the future. That is up to the parties involved. Nothing in this bill is designed to encourage the use of SOFR or any other particular benchmark interest rate, nor does it encourage or authorize any Federal regulatory agency to push any bank or other institution to use any particular rate in the future. That is up to them. This bill deals with $16 trillion of tough legacy LIBOR. It is a consensus product. It is the result of the work of regulators, industry, and the public interest community. Mr. Speaker, I urge its adoption and I reserve the balance of my time. House of Representatives, Committee on Ways and Means, Washington, DC, December 7, 2021. Hon. Maxine Waters, Chairwoman, Committee on Financial Services, Washington, DC. Dear Chairwoman Waters: In recognition of the desire to expedite consideration of H.R. 4616, the ``Adjustable Interest Rate (LIBOR) Act of 2021,'' the Committee on Ways and Means agrees to waive formal consideration of the bill as to provisions that fall within the rule X jurisdiction of the Committee on Ways and Means. The Committee on Ways and Means takes this action with the mutual understanding that we do not waive any jurisdiction over the subject matter contained in this or similar legislation, and the Committee will be appropriately consulted and involved as the bill or similar legislation moves forward so that we may address any remaining issues within our jurisdiction. The Committee also reserves the right to seek appointment of an appropriate number of conferees to any House-Senate conference involving this or similar legislation. Finally, I would appreciate your response to this letter confirming this understanding and would ask that a copy of our exchange of letter on this matter be included in the Congressional Record during floor consideration of H.R. 4616. Sincerely, Richard E. Neal, Chairman.

Mr. SHERMAN. Mr. Speaker, I would be thrilled.

Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I wish to respond to this gentleman's remarks about the process. First, this bill is a good bill. Vote for the bill. There is no doubt this bill is a good bill. I don't need to talk about the process, but I will for just a second. As to whether we had sufficient hearings and enough hearings that match the interest of this House, we had a full hearing of my subcommittee on this, and it is not as if 400 Members of the House showed up and said: We are not a member of the subcommittee, but can we participate? It is not as if the balcony is filled. It is not as if we deprived our colleagues of information they were anxious to obtain. But it is not just one hearing of the subcommittee. I regarded at least a dozen of the hearings of the Financial Services Committee over the last 2 years as hearings on LIBOR. In my opening remarks, I quoted what Secretary Mnuchin said. He said that in response to my questions when he came before us at hearings. The gentleman knows that at least probably a dozen hearings that we have had at Financial Services where we had the Secretary of the Treasury, where we had the Chair of the Federal Reserve, where we had other experts, I asked a question about LIBOR. And if my colleagues had found this subject near as interesting as I do, they would have asked questions about LIBOR as well. So we had one hearing dedicated to LIBOR and a dozen and more hearings where those dedicated to LIBOR could have asked questions. As to whether people in this House should think that we are interfering with the rights of businesses to transact business, I include in the Record a letter in support of this bill signed by 21 business groups basically, every business group that deals with any instrument tied to the LIBOR index. December 7, 2021. Hon. Nancy Pelosi, Speaker, House of Representatives, Washington, DC. Hon. Kevin McCarthy, Republican Leader, House of Representatives, Washington, DC. Dear Speaker Pelosi and Republican Leader McCarthy: We, the undersigned organizations, support H.R. 4616, the ``Adjustable Interest Rate (LIBOR) Act,'' to address ``tough legacy'' contracts that currently reference LIBOR. We respectfully request the House of Representatives expeditiously pass this legislation. In June 2023, all tenors of US dollar LIBOR, one of the most important financial benchmarks that underpins nearly $200 trillion in financial contracts, will cease to be published. As a result, there are trillions of dollars of hard to modify financial contracts, securities, and loans that use LIBOR--known as ``tough legacy'' contracts--that are unable, before this end date, to either convert to a non- LIBOR rate or amend the contracts to add adequate fallback language to another rate. Without federal legislation to address these contracts, investors, consumers, and issuers of securities may face years of uncertainty, litigation, and a change in value. This would thereby create ambiguity that would lead to a reduction in liquidity and an increase in volatility. H.R. 4616 provides a solution for these ``tough legacy'' contracts that have insufficient fallback language and cannot otherwise be amended among the parties. The legislation is narrowly crafted to allow parties to contracts that already have effective fallback provisions to opt-out of the legislation and to only apply to tough legacy contracts so that new or future business will not be affected. In addition, the legislation offers uniform, equitable treatment for all U.S. contracts that fall under the federal legislation. It creates a safe harbor from litigation for parties that are covered by the legislation and prevents otherwise inevitable litigation costs and gridlock. The need for uniform federal legislation has been expressed by consumer groups, investors, financial regulators, and industry participants. We thank the House Committee on Financial Services for providing a bipartisan solution that offers fair, equitable and consistent treatment for all ``tough legacy'' contracts in support of the LIBOR transition by passing H.R. 4616 out of the committee by voice vote. We wholeheartedly support the Adjustable Interest Rate (LIBOR) Act and ask that you and all Members of the House of Representatives vote in favor of this critical legislation. Sincerely, Securities Industry and Financial Markets Association (SIFMA); Structured Finance Association (SFA); Bank Policy Institute; National Association of Corporate Treasurers; Education Finance Council; The Loan Syndications and Trading Association (LSTA); The International Swaps and Derivatives Association (ISDA); The Real Estate Roundtable; The Financial Services Forum; Institute of International Bankers; Government Finance Officers Association. Mortgage Bankers Association; Commercial Real Estate Finance Council (CREFC); Consumer Bankers Association; Investment Company Institute; Institute for Portfolio Alternatives; Independent Community Bankers of America; U.S. Chamber of Commerce, Center for Capital Markets Competitiveness; Housing Policy Council; Student Loan Servicing Alliance; American Bankers Association; The American Council of Life Insurers (ACLI).

Mr. SHERMAN. Finally, as to the issue, I agree with the gentleman that I would like to have had this bill come up 2\1/2\ years before LIBOR ceased to be published. We are bringing this to this House 1\1/2\ years before LIBOR ceases to be published. Compared to everything else in Washington, that is record time. I speak today on a fiscal year that began October 1 where we hope to pass the appropriations bills in February. Dealing with a problem 1\1/2\ years before it happens may not be 2\1/2\ years in advance, but it is good compared to everything else I have seen. Mr. Speaker, I reserve the balance of my time.

Mr. SHERMAN. Mr. Speaker, I would simply say to my Republican colleagues who may be watching: You don't have to trust the 21 business groups who have signed the letter that I just included in the Record, and you don't have to trust me. Listen to the words you just heard from our colleague, Mr. Hill: This bill does not increase government or regulatory power. You ought to vote for the bill. Mr. Speaker, I reserve the balance of my time.

Mr. SHERMAN. Will the gentleman yield?

Mr. SHERMAN. This bill reflects an awful lot of work by the regulators, particularly the Fed.