Maxine Waters

Ms. WATERS

Ms. WATERS. I yield an additional 30 seconds to the gentleman.

Ms. WATERS. I yield myself 30 seconds. Mr. Speaker and Members, the gentleman talked about being in step with me and what I supposedly said when we first dealt with this issue in the Financial Services Committee. And he is correct. But when do you learn? After JPMorgan, am I to understand that nobody has learned a lesson? When do they learn that Volcker is still not in place yet? So all I will say is that I have an opinion that must be recognized. I yield 2 minutes to the gentleman from Minnesota (Mr. Ellison), who happens to be the cochair of the Progressive Caucus of Congress, is the deputy whip, and also serves on the Financial Services Committee.

Ms. WATERS. I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, I would like to read a statement from Ms. Sheila Bair who formerly chaired the FDIC. She said: Derivatives have many legitimate functions, but they can be high risk and poorly understood because of their complexity by bank managers and even regulators, as we saw with the ``London Whale'' debacle. So keeping them outside of insured banks and making the market fund them is the way to go. This will increase market discipline and protect the FDIC. She said: I'm concerned that Members of Congress act on these issues without full understanding of the ramifications. If we are going to revisit derivatives regulation, I'd go in the direction of more market discipline and disclosure, rather than letting big derivatives dealers use insured deposits to support their high-risk operations. The Executive Office of the President sent over a statement that includes these words: Wall Street Reform represents the most comprehensive set of reforms to the financial system since the Great Depression, and its derivatives provisions constitute an important part of the reforms being put in place to strengthen the Nation's financial system by improving transparency and reducing risks for market participants. Again, let me refer you to Representative Hensarling who said: Certainly, we have to do a better job ring-fencing, fire- walling--whatever metaphor you want to use--between an insured depository institution and a noninsured investment bank. I ask for a ``no'' vote on this bill.

Ms. WATERS. Mr. Speaker, I demand a recorded vote.

Ms. WATERS

Ms. WATERS. Mr. Speaker, I demand a recorded vote.

Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays.

Ms. WATERS

Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from Minnesota (Mr. Ellison), cochair of the Progressive Caucus, a member of the Financial Services Committee, and Democratic whip.

Ms. WATERS. I yield the gentleman an additional 1 minute.

Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from Virginia, Mr. Bobby Scott, who is on the Judiciary Committee and who is the ranking member on its Subcommittee on Crime, Terrorism, Homeland Security, and Investigations.

Ms. WATERS. I yield the gentleman an additional 1 minute.

Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from New Jersey (Mr. Andrews), who is an expert on retirement savings. He is the ranking member on the Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions. He is also the cochair of the Steering and Policy Committee. (Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

Ms. WATERS. Mr. Speaker, I would like to inquire as to how much time we have remaining on this side.

Ms. WATERS. I am prepared to close. However, I will reserve the balance of my time if the chairman has other Members that he would like to put forth at this time.

Ms. WATERS. I yield myself such time as I may consume. Mr. Speaker and Members, H.R. 2374 is yet another attempt by Republicans to prevent our regulators from doing their job, this time protecting the average retail investor when they try to save for retirement. Under this bill, the Securities and Exchange Commission would have to navigate new obstacles to harmonize the standard of care broker-dealers and investment advisers have when providing investment advice. The Department of Labor would have to wait possibly forever to update its rules protecting 401(k) and IRA plan participants. H.R. 2374's restrictions put additional work in the way, stopping brokers from SEP dealing when selling investment products to Main Street. Several studies have demonstrated that Americans do not understand that a broker does not necessarily have the investor's best interest when pushing financial products. The line between advisers and brokers has blurred over the last few decades, and this bill makes it harder to bring clarity for investments. Mr. Speaker and Members, this administration has taken a strong stand against this bill. Let me read to you from the letter that they have sent to us, and I would like to offer this for the Record: The administration strongly opposes passage of H.R. 2374 because it would derail important rulemakings under way at the Securities and Exchange Commission and the Department of Labor that are critical to protecting Americans' hard-earned savings and preserving their retirement security. They further say: H.R. 2374 prohibits Labor from issuing a rule to protect investors until the SEC engages in and completes further study of the effect of a rulemaking on retail investors. Of course, there is a lot said here, but I think this says it all: The bill would hinder efforts to protect consumers from conflicts of interest among brokers, dealers, financial advisers, and others whose incentives may be misaligned with investors, potentially leading to deceptive and abusive practices. The administration is committed to ensuring that American workers and retirees are able to receive advice about how to invest their money in safe, secure, and transparent financial products that is free from harmful conflicts of interest. Mr. Speaker and Members, I would just bring this to your attention: the Department of Labor is working to protect investors. My friends on the opposite side of the aisle are working to protect broker-dealers who may not have the best interest of these small individuals who want to invest, who want to earn money for retirement. My friends on the opposite side of the aisle are putting all of this energy out to protect them no matter if they may be in a conflict of interest with those who are simply trying to save for retirement. I have watched as we have been through the subprime meltdown in this country. People lose money in their 401(k)s. I have watched people lose money in their IRAs. I have watched single women in their 60s losing their entire investment retirement savings who can't go back to work because they are too old--they can't find a job. Whose side are we on? Are we on the side of broker-dealers who will have no fiduciary responsibility, who can tell you any old thing, direct you any old place? They get higher commissions and the people lose money. Whose side are we on? Why are we here in the Congress of the United States of America, voted on by our constituents to come here to advocate for their best interest? The gentlelady from Missouri talked about what a hard time families are having. She is right. Families are having a hard time. I want to tell you, families are having a hard time even when my friends on the opposite side of the aisle would deny them food stamps when they lose their jobs, even when they stand here in the Congress of the United States and support sequestration that denied that family the ability to send their child to Head Start. They don't have money for fancy early childhood education. Head Start is all they have, but they are losing the ability to do that because my friends on the opposite side of the aisle support cutting back every agency. My friends on the opposite side of the aisle can't care about families in the way that they say they do because they shut down this government and they caused families to lose money to stay at home, to not know when they were going to get paid, or how to pay their bills. Not only did they harm these families; they harmed many of our agencies that are trying to help the families. I could go on and on and on. But let me say that consumer protection is advocated by some organizations we are all familiar with: AARP, AAUW, AFL-CIO, AFSCME, Alliance for Retired Americans, Americans for Financial Reform, the Association of BellTell Retirees, on and on and on. These are the people who protect consumers. I will submit this for the Record. I yield back the balance of my time. Executive Office of the President, Office of Management and Budget, Washington, DC, October 28, 2013. Statement of Administration Policy H.R. 2374--Retail Investor Protection Act (Rep. Wagner, R-MO, and Rep. Murphy, D-FL) The Administration strongly opposes passage of H.R. 2374 because it would derail important rulemakings underway at the Securities Exchange Commission (SEC) and the Department of Labor that are critical to protecting Americans' hard-earned savings and preserving their retirement security. H.R. 2374 prohibits Labor from issuing a rule to protect investors until the SEC engages in and completes further study of the effect of a rulemaking on retail investors. The bill ignores the fact that significant work has already been conducted in both agencies and that the agencies have included and continue to include the public, industry, and numerous stakeholders in their rulemaking processes. Moreover, the two agencies are already working closely to avoid conflicting requirements for the regulated community, and this legislation would hamper effective coordination between the two agencies. The bill would hinder efforts to protect consumers from conflicts of interest among brokers, dealers, financial advisors, and others whose incentives may be misaligned with investors, potentially leading to deceptive and abusive practices. The Administration is committed to ensuring that American workers and retirees are able to receive advice about how to invest their money in safe, secure, and transparent financial products that is free from harmful conflicts of interest. These ongoing rulemakings are designed to protect trillions of dollars in retirement savings of millions of workers and retirees by ensuring that paid advisors and other entities do not place their own financial interests over those of their customers. This legislation would place an unnecessary obstacle in the way of these efforts to prevent such harmful conflicts of interest, which hurt businesses, consumers, and retirees and their families. If the President were presented with H.R. 2374, his senior advisors would recommend that he veto the bill. Groups in Opposition to H.R. 2374 1. AARP 2. AAUW 3. AFL-CIO 4. AFSCME 5. Alliance For Retired Americans 6. Americans for Financial Reform (AFR)-w/over 200 signatories 7. The Association of BellTell Retirees, Inc. 8. Certified Financial Planner Board (CFP) 9. Consumer Federation of America 10. Financial Planning Association 11. Fund Democracy 12. Investment Advisor Association (IAA) 13. National Council of La RAZA 14. The National Association of Personal Financial Advisors (NAPFA) 15. The National Association of Professional Geriatric Care Managers 16. North American Securities Administrators Association (NASAA) 17. OWL-The Voice of Midlife and Older Women 18. Pensions Rights Center 19. ProtectSeniors.org 20. Public Citizen 21. Wider Opportunities for Women

Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from Massachusetts (Mr. Lynch), a member of the Financial Services Committee.

Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentlelady from New York (Mrs. Carolyn B. Maloney), who serves as the ranking member on the Subcommittee on Capital Markets and Government Sponsored Enterprises of the Financial Services Committee.

Ms. WATERS. Mr. Speaker, I yield 4 minutes to the gentleman from California, Congressman George Miller, who is the ranking member on the Committee on Education and the Workforce. (Mr. GEORGE MILLER of California asked and was given permission to revise and extend his remarks.)

Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume. I strongly oppose H.R. 2374, the bill inappropriately entitled the Retail Investor Protection Act. Quite the opposite. H.R. 2374 hinders the Labor Department and the Securities and Exchange Commission from protecting the average retail investor when they save for retirement. For the last 2 years, the Labor Department has been updating an outdated rule regarding the fiduciary responsibility owed to employee benefit plans under the Employee Retirement Income Security Act of 1974, ERISA, and for Individual Retirement Accounts, IRAs, under the Tax Code. Today retirees are more likely to rely on 401(k)s than IRAs and are less likely to have defined benefit plans from their employers. At the same time, financial products have become increasingly complex. The cost of rules governing the rights of investors and the responsibilities of advisers are more than 35 years old. DOL is attempting to modernize these rules in order to reflect the changing nature of the retirement marketplace. Given these realities, it is necessary for the Department to make sure that the professionals offering retirement advice have a duty to put their clients' interests first before their own or, at the very least, tell their customers that they may be conflicted. At the same time, the SEC is considering moving forward on a rulemaking that would impose a uniform fiduciary standard of conduct for broker-dealers and investment advisers consistent with the Dodd- Frank Act. This would ensure that whatever the business model, if an individual is providing personalized investment advice about securities to a retail customer, they would have a duty to put that customer's interests before their own. This is particularly important as many retail customers are unaware of the differences in the standards of care that various professionals owe them. Both agencies have been making progress with their rules, collecting the necessary data and responding to stakeholder concerns about preserving access to investment advice, particularly for individuals with small accounts. Given these facts, H.R. 2374 is the wrong approach. This legislation makes it significantly more difficult for both the SEC and the Department to move forward. First, the provision requiring the SEC to do a new study, another study documenting that investors are being systemically harmed or disadvantaged under the existing standard, creates a high hurdle for the Commission to overcome. The purpose of this provision is to impose further roadblocks before the Commission can take any action, providing another avenue for industry to sue the SEC. Secondly, H.R. 2374 would prohibit the Labor Department from modernizing the fiduciary duty standard under ERISA and the Tax Code until the SEC issued their rule. This provision would represent a historic abrogation of the Department's unique authority, and in spite of whatever pressing need for an updated rule. Finally, H.R. 2374 seems premised on the faulty notion that the Department and the SEC are not coordinating when, in fact, staff have regular ongoing SEC-DOL staff meetings; in addition, leadership meetings, as well as a memorandum of understanding to share information on retirement and investment matters. On behalf of millions of consumers, retirees, and investors, several organizations, including the AARP, the Consumer Federation of America, the AFL-CIO, and Americans for Financial Reform all oppose this legislation. A coalition of financial planning professionals wrote that H.R. 2374 is a backdoor attempt to undermine investor protection provisions in Dodd-Frank. In addition, SEC Chair White said in a letter to the committee that H.R. 2374 would make it difficult for the Commission to adopt such a rule. Simply put, H.R. 2374 just goes too far. The bill holds the Labor Department hostage while throwing out roadblocks for the SEC. Mr. Speaker, for these reasons, I urge a ``no'' vote on this bill. I reserve the balance of my time.

Ms. WATERS

Ms. WATERS. Mr. Speaker, for more than two decades, Congressman Major Owens served the citizens of Brooklyn, New York in the United States Congress. He was a humble man of great character and dedicated his life to public service. Congressman Owens was an extremely important member of the U.S. House of Representatives, who was an expert in education policy. In Congress, he fought to secure $100 million in federal funds for historically black colleges and spearheaded efforts to increase federal involvement in reducing high school dropout rates. Congressman Owens used his position within the halls of Congress and in the community to ensure that every American lived a better life. Congressman Owens provided leadership within the Congressional Black Caucus fighting for the rights of minorities in addition to advocating for workers and the poor and middle class families. Congressman Owens was also an advocate for disabled Americans playing an instrumental role in passing the Americans with Disabilities Act of 1990 in Congress. It was an honor to serve with him as a colleague and a privilege to know him as a dear friend. My thoughts and prayers are with his wife, Maria and his family during this very difficult time.

Ms. WATERS

Ms. WATERS. Mr. Speaker, I ask unanimous consent that the House bring up the Senate amendment to H.J. Res. 59, to open the government and go to conference on a budget so that we can end this ridiculous Republican government shutdown.

Ms. WATERS

Ms. WATERS. Mr. Speaker, I thank Congressman Takano for organizing this very special Special Order so that we can talk about what is happening with our great State of California. Mr. Speaker, I rise today to once again call for an end to this unnecessary government shutdown and talk about the significant consequences it is having for the people of my district, California's 43rd. The recession hit the people of my district hard. Delinquencies, foreclosures, and job losses crippled our economy and our neighborhoods. Five years later, we are just beginning to emerge from these hard times. But the irresponsibility of the Republican Party has threatened our fragile recovery. Their strategy, planned and financed by extremists like the Koch brothers, Heritage Action, and the Club For Growth, is to hold the American people and the economy hostage in order to push an extremist ideology. Their desire to eliminate the Affordable Care Act is misguided, wrong, and harmful to the American people. The Affordable Care Act is the law of the land. It has been validated by the reelection of President Obama and supported by the Supreme Court of the United States of America. It is settled law, and we should not be threatening American jobs and the American economy to repeal it. Mr. Speaker, veterans in my district are being harmed by the shutdown. If this unnecessary stalemate does not end by November 1, the Veterans Affairs Department will not be able to issue checks to more than 5 million beneficiaries. This is unacceptable. In addition, small businesses in my district are being severely harmed. The Small Business Administration's lending program has been stopped, and the process to obtain government contracts has also been halted. In 2012, the SBA approved over $366,000 in small business, real estate, and equipment loans every day in my district. Each day this senseless shutdown continues, hundreds of thousands of dollars in economic development all across my district is being undermined. In Torrance, Inglewood, Gardena, Hawthorne, Lawndale, and Los Angeles itself, retail stores, restaurants, and small businesses are hurting because of the shutdown. Prominent business groups in my district, such as the Los Angeles Area Chamber of Commerce, the Torrance Chamber of Commerce, California Chamber of Commerce, California Manufacturers and Technology Association, and 14 other local chambers of commerce across the State have all said that the impacts of a shutdown could be harmful and disruptive to their businesses. The Republican Party likes to talk about how much they support small businesses, but when extremist billionaires like the Koch brothers start throwing their money around, Republicans tell small business owners, You are on your own. The Head Start program, which has put thousands of children on a solid path to a well-rounded education, has effectively closed services in many States and regions across the country. California is no exception. I am outraged that our Nation's children are suffering the consequences of these Republican games. The Republican sequester already cut 57,000 children from Head Start. This program is a crucial lifeline in my district, combating poverty and making our communities safer, better places to live. We need to restore it today. Finally, I want to discuss the shutdown's serious impact on California's fledgling housing market. My district's housing market is finally finding its footing after years of instability. The Republican shutdown is throwing a massive wrench in that process. A prolonged shutdown will cause tremendous harm to home buyers seeking to close on mortgage loans. These delays are detrimental to all home buyers, but particularly those who are buying for the first time. Mr. Speaker, tomorrow will mark the first paycheck many affected employees will miss as a result of the shutdown. These are hardships many in my district cannot afford. Each day this senseless shutdown continues risks further irreparable damage to my district's economy, families, and businesses. It must end now. Just yesterday, we heard more bad news for our State. Governor Jerry Brown announced that he will soon be forced to make the difficult decision of whether the State will pay for the continued operation of Federal programs used by millions of Californians. These include programs such as the Supplemental Nutrition Assistance Program, subsidized school meals, and nutrition assistance for pregnant women and infants, all of which could be interrupted in November. I urge my Republican colleagues to stop using the American people and the American economy as pawns in this debate. It is time for the Republican Party to end this ridiculous game and open the government today. I thank Congressman Takano for organizing this very important Special Order.

Ms. WATERS

Ms. WATERS. Put a clean CR on the floor so that we can vote for all of government to be protected. Don't pit children against veterans, et cetera. I will not be bullied into supporting this measure. I urge my colleagues to stand with me. Despite my love for this program, I must vote against this measure. I ask my colleagues to stand up to these Republican tricks and vote ``no.''

Ms. WATERS. Mr. Speaker, I rise in opposition to this legislation. You will find no stronger supporter of the Head Start program than I. For years, I worked first as a teacher in Head Start, and later I was a supervisor for Parent Involvement and Volunteer Services. I know Head Start. The experience was life changing--inspiring me to join the war on poverty and dedicate myself to improving the lives of low-income children and families. Thanks to Head Start, thousands of children have been put on a solid path to a well-rounded education. Head Start teaches children to feel good about themselves, to have a positive self-image. Head Start introduced children to books and reading and to how to resolve conflicts. We gave full examination and discovered educational disabilities, and we gave them the path to good health services. The opposite side of the aisle claims they support Head Start and early childhood education, but they supported sequestration that has robbed 57,000 children of the opportunity to be in the Head Start program. This Republican destructive strategy--picking winners and losers, who will survive and who will not--is not the right way to go.

Ms. WATERS

Ms. WATERS. Mr. Speaker, I rise today to discuss the irresponsibility of the Republican Party in holding hostage the full faith and credit of the United States. As hundreds of thousands of Federal workers go without pay, as home buying slows to an eventual halt, and as Federal agencies remain unable to complete the important work of implementing the Wall Street Reform Act, Republicans are threatening another crisis that could have significant impacts on our financial markets and the economic security of all Americans. They do this in pursuit of an ideological agenda. The result is continued instability and uncertainty for our economy and fragile recovery. We should not default on our obligations. The ramifications of doing so would be serious. The underpinnings of the entire financial system could be affected, with the possibility of triggering a financial crisis reminiscent of the days following the failure of Lehman Brothers--only this time, it would be far worse. If the U.S. defaults on its debt, lending--the lifeblood of our economy--would dry up. The dollar's value could drop, and we could see dramatic increases in interest rates on everything from mortgages and auto loans to credit cards. Not only that, but every U.S. corporation and municipality would likely see their borrowing costs climb as well. Unemployment rates would rise precipitously just as we're beginning to recover. If Congress cannot do its job in a timely manner, in the future, the government's ability to pay its debts will be looked upon with uncertainty by investors and markets, leading to higher borrowing costs in the future and, in turn, an increase in our Nation's deficit. Worst of all, we could see another dramatic loss of wealth for working Americans. History tells us that even the threat of default can send shock waves through our financial system. In 2011, just the prospect of defaulting on our debt caused a drop in consumer and business confidence, a 17 percent decline in the S&P 500 index of equity prices, and increased volatility in the stock market; and, of course, we received a downgrade in the U.S. Government debt. The drop in equity caused by the 2011 debt ceiling fight had serious consequences for American families. The months following saw a $2.4 trillion decline in household wealth and an $800 billion drop in retirement assets. The cost of homeownership also increased, as risk- averse lenders increased the cost of borrowing to purchase a home. The 2011 debate showed us the very serious consequences of even debating whether we should pay bills already incurred. But no one knows with certainty the full extent of the damage to the economy should the U.S. actually default on its debts. We have heard speculation ranging from bad to the catastrophic. I, for one, do not want to find out. What I do know is that everyone from Wall Street CEOs, the U.S. Chamber of Commerce, to small business owners, and prominent conservative economists are concerned with the significant damage that could result from a debt ceiling standoff. Warren Buffett, Ben Bernanke, Hank Paulson, and the heads of the Nation's largest financial institutions have been outspoken about the need to end this hostage crisis now. Mr. Speaker, the American people have been through enough. We remain in the midst of a government shutdown with no end in sight. It is hurting real people and damaging our economic recovery. At this tenuous time, defaulting on our Nation's debt could create the perfect storm that may roil financial markets and undermine the credibility of the United States; but, most importantly, it could be devastating for American families who are already suffering in the aftermath of a major recession, foreclosure crisis, and now a government shutdown. So I urge my colleagues to stop using the debt ceiling to push extremist ideology and vote now on a clean debt limit increase. The gentlewoman from Tennessee said she doesn't know what we mean when we talk about a ``clean debt limit increase.'' I think she knows. She knows that they should not try to do away with the ACA--that is, the Affordable Care Act, known as ObamaCare--and hold us hostage because they don't like it. The ObamaCare legislation was passed. It is in law. President Obama was absolutely supported by the citizens of this country when they voted the President to be reelected once again. The Supreme Court supported it. If they wish to do away with ObamaCare, they should go through the legislative process and repeal it; but no, they are holding us hostage on the budget.