[Congressional Record Volume 158, Number 16 (Wednesday, February 1, 2012)]
[Senate]
[Pages S238-S250]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STOP TRADING ON CONGRESSIONAL KNOWLEDGE ACT OF 2012

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of S. 2038, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 2038) to prohibit Members of Congress and 
     employees of Congress from using nonpublic information 
     derived from their official positions for personal benefit, 
     and for other purposes.

  Pending:

       Reid amendment No. 1470, in the nature of a substitute.
       Reid (for Lieberman) amendment No. 1482 (to amendment No. 
     1470), to make a technical amendment to a reporting 
     requirement.
       Brown (OH) amendment No. 1478 (to amendment No. 1470), to 
     change the reporting requirement to 10 days.
       Brown (OH)-Merkley amendment No. 1481 (to amendment No. 
     1470), to prohibit financial conflicts of interest by 
     Senators and staff.
       Toomey amendment No. 1472 (to amendment No. 1470), to 
     prohibit earmarks.
       Thune amendment No. 1477 (to amendment No. 1470), to direct 
     the Securities and Exchange Commission to eliminate the 
     prohibition against general solicitation as a requirement for 
     a certain exemption under Regulation D.
       McCain amendment No. 1471 (to amendment No. 1470), to 
     protect the American taxpayer by prohibiting bonuses for 
     senior executives at Fannie Mae and Freddie Mac while they 
     are in conservatorship.
       Leahy-Cornyn amendment No. 1483 (to amendment No. 1470), to 
     deter public corruption.
       Coburn amendment No. 1473 (to amendment No. 1470), to 
     prevent the creation of duplicative and overlapping Federal 
     programs.

[[Page S239]]

       Coburn-McCain amendment No. 1474 (to amendment No. 1470), 
     to require that all legislation be placed online for 72 hours 
     before it is voted on by the Senate or the House.
       Coburn amendment No. 1476, in the nature of a substitute.
       Paul amendment No. 1484 (to amendment No. 1470), to require 
     Members of Congress to certify that they are not trading 
     using material, nonpublic information.
       Paul amendment No. 1485 (to amendment No. 1470), to apply 
     the reporting requirements to Federal employees and judicial 
     officers.
       Paul amendment No. 1487 (to amendment No. 1470), to 
     prohibit executive branch appointees or staff holding 
     positions that give them oversight, rulemaking, loan or 
     grantmaking abilities over industries or companies in which 
     they or their spouse have a significant financial interest.
       DeMint amendment No. 1488 (to amendment No. 1470), to 
     express the sense of the Senate that the Senate should pass a 
     joint resolution proposing an amendment to the Constitution 
     that limits the number of terms a Member of Congress may 
     serve.
       Paul amendment No. 1490 (to amendment No. 1470), to require 
     former Members of Congress to forfeit Federal retirement 
     benefits if they work as a lobbyist or engage in lobbying 
     activities.

  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. LIEBERMAN. Madam President, it is a new day and with it comes the 
hope we will make more progress than we did yesterday. Actually, we 
were prepared, after some good work by the four of us--Senator Collins; 
Senator Brown; the occupant of the chair, Senator Gillibrand; and 
myself--and our staffs to move forward yesterday afternoon. 
Unfortunately, we were blocked in that. But I know efforts continue to 
allow us to at least proceed with the amendment Senator Paul offered 
that was modified--or prepared to be modified, after discussion, with a 
reasonable conclusion that I think will be supported by most Members of 
the Senate.
  There is so much we can do. Our staffs worked overnight. They have 
tried to divide the amendments into those that are germane and relevant 
and those that are not. I understand leadership on both sides will be 
talking about how to proceed.
  I repeat what I said at the outset--and I know all of us who have 
worked so hard to respond to the concern that Members of Congress and 
our staffs are not covered by insider trading laws--that we not try to 
solve every problem or correct every potential source of public 
mistrust of Congress on this bill for fear that we will, therefore, 
never get anything accomplished.
  I am hopeful, as the morning goes on and certainly into the 
afternoon, after discussions that occur at the lunch hour, we will be 
able to proceed to handle some amendments in an expeditious way and 
that we can see our way to the end of consideration of this bill, 
remembering that on the basic provisions of the bill we have 
overwhelming bipartisan support.
  I understand the vote on cloture to proceed to the bill does not 
exactly express support for the final vote, but there were only two who 
voted against cloture, so clearly an overwhelming number of Members of 
the Senate want to proceed to vote on the bill.
  If we do not break this unfortunate and unnecessary and harmful 
gridlock, either the majority leader is going to have to file cloture 
or leave the bill and go on to other pressing business--FAA 
reauthorization and the like--and that would be not only disappointing 
to us, but having aroused the hope that we would respond to the public 
concern and anger about the possibility that we are not covered by 
insider trading laws, we will have ended up increasing that concern and 
anger and disenchantment with Congress. I do not think any of us want 
to do that.
  With that appeal to our colleagues to apply a certain rule of reason 
so we can get something done that will be good for our government and 
the people's respect for us, I am very pleased to see my colleague from 
Connecticut, Senator Blumenthal, in the Chamber. I know he has an 
amendment he wants to offer at this time, and I will yield the floor to 
him.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. BLUMENTHAL. Madam President, I thank the Presiding Officer, the 
distinguished Senator from New York, and my colleagues, Senator 
Lieberman, Senator Collins, and Senator Brown, for their superb 
leadership on this issue, and I am very pleased to strongly support the 
underlying bill.


                Amendment No. 1498 to Amendment No. 1470

  Madam President, I ask unanimous consent that the pending amendment 
be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BLUMENTHAL. Madam President, I call up amendment No. 1498.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Connecticut [Mr. Blumenthal], for himself 
     and Mr. Kirk, proposes an amendment numbered 1498 to 
     amendment No. 1470.

  Mr. BLUMENTHAL. Madam President, I ask unanimous consent that reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To amend title 5, United States Code, to deny retirement 
   benefits accrued by an individual as a Member of Congress if such 
              individual is convicted of certain offenses)

       At the appropriate place, insert the following:

     SEC. __. APPLICATION TO OTHER ELECTED OFFICIALS AND CRIMINAL 
                   OFFENSES.

       (a) Application to Other Elected Officials.--
       (1) Civil service retirement system.--Section 8332(o)(2)(A) 
     of title 5, United States Code, is amended--
       (A) in clause (i), by inserting ``, the President, the Vice 
     President, or an elected official of a State or local 
     government'' after ``Member''; and
       (B) in clause (ii), by inserting ``, the President, the 
     Vice President, or an elected official of a State or local 
     government'' after ``Member''.
       (2) Federal employees retirement system.--Section 
     8411(l)(2) of title 5, United States Code, is amended--
       (A) in subparagraph (A), by inserting ``, the President, 
     the Vice President, or an elected official of a State or 
     local government'' after ``Member''; and
       (B) in subparagraph (B), by inserting ``, the President, 
     the Vice President, or an elected official of a State or 
     local government'' after ``Member''.
       (b) Criminal Offenses.--Section 8332(o)(2) of title 5, 
     United States Code, is amended--
       (1) in subparagraph (A), by striking clause (iii) and 
     inserting the following:
       ``(iii) The offense--

       ``(I) is committed after the date of enactment of this 
     subsection and--

       ``(aa) is described under subparagraph (B)(i), (iv), (xvi), 
     (xix), (xxiii), (xxiv), or (xxvi); or
       ``(bb) is described under subparagraph (B)(xxix), (xxx), or 
     (xxxi), but only with respect to an offense described under 
     subparagraph (B)(i), (iv), (xvi), (xix), (xxiii), (xxiv), or 
     (xxvi); or

       ``(II) is committed after the date of enactment of the 
     STOCK Act and--

       ``(aa) is described under subparagraph (B)(ii), (iii), (v), 
     (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), 
     (xv), (xvii), (xviii), (xx), (xxi), (xxii), (xxv), (xxvii), 
     or (xxviii); or
       ``(bb) is described under subparagraph (B)(xxix), (xxx), or 
     (xxxi), but only with respect to an offense described under 
     subparagraph (B)(ii), (iii), (v), (vi), (vii), (viii), (ix), 
     (x), (xi), (xii), (xiii), (xiv), (xv), (xvii), (xviii), (xx), 
     (xxi), (xxii), (xxv), (xxvii), or (xxviii).''; and
       (2) by striking subparagraph (B) and inserting the 
     following:
       ``(B) An offense described in this subparagraph is only the 
     following, and only to the extent that the offense is a 
     felony:
       ``(i) An offense under section 201 of title 18 (relating to 
     bribery of public officials and witnesses).
       ``(ii) An offense under section 203 of title 18 (relating 
     to compensation to Member of Congress, officers, and others 
     in matters affecting the Government).
       ``(iii) An offense under section 204 of title 18 (relating 
     to practice in the United States Court of Federal Claims or 
     the Unites States Court of Appeals for the Federal Circuit by 
     Member of Congress).
       ``(iv) An offense under section 219 of title 18 (relating 
     to officers and employees acting as agents of foreign 
     principals).
       ``(v) An offense under section 286 of title 18 (relating to 
     conspiracy to defraud the Government with respect to claims).
       ``(vi) An offense under section 287 of title 18 (relating 
     to false, fictitious or fraudulent claims).
       ``(vii) An offense under section 597 of title 18 (relating 
     to expenditures to influence voting).
       ``(viii) An offense under section 599 of title 18 (relating 
     to promise of appointment by candidate).
       ``(ix) An offense under section 602 of title 18 (relating 
     to solicitation of political contributions).
       ``(x) An offense under section 606 of title 18 (relating to 
     intimidation to secure political contributions).
       ``(xi) An offense under section 607 of title 18 (relating 
     to place of solicitation).
       ``(xii) An offense under section 641 of title 18 (relating 
     to public money, property or records).

[[Page S240]]

       ``(xiii) An offense under section 666 of title 18 (relating 
     to theft or bribery concerning programs receiving Federal 
     funds).
       ``(xiv) An offense under section 1001 of title 18 (relating 
     to statements or entries generally).
       ``(xv) An offense under section 1341 of title 18 (relating 
     to frauds and swindles, including as part of a scheme to 
     deprive citizens of honest services thereby).
       ``(xvi) An offense under section 1343 of title 18 (relating 
     to fraud by wire, radio, or television, including as part of 
     a scheme to deprive citizens of honest services thereby).
       ``(xvii) An offense under section 1503 of title 18 
     (relating to influencing or injuring officer or juror).
       ``(xviii) An offense under section 1505 of title 18 
     (relating to obstruction of proceedings before departments, 
     agencies, and committees).
       ``(xix) An offense under section 1512 of title 18 (relating 
     to tampering with a witness, victim, or an informant).
       ``(xx) An offense under section 1951 of title 18 (relating 
     to interference with commerce by threats of violence).
       ``(xxi) An offense under section 1952 of title 18 (relating 
     to interstate and foreign travel or transportation in aid of 
     racketeering enterprises).
       ``(xxii) An offense under section 1956 of title 18 
     (relating to laundering of monetary instruments).
       ``(xxiii) An offense under section 1957 of title 18 
     (relating to engaging in monetary transactions in property 
     derived from specified unlawful activity).
       ``(xxiv) An offense under chapter 96 of title 18 (relating 
     to racketeer influenced and corrupt organizations).
       ``(xxv) An offense under section 7201 of the Internal 
     Revenue Code of 1986 (relating to attempt to evade or defeat 
     tax).
       ``(xxvi) An offense under section 104(a) of the Foreign 
     Corrupt Practices Act of 1977 (relating to prohibited foreign 
     trade practices by domestic concerns).
       ``(xxvii) An offense under section 10(b) of the Securities 
     Exchange Act of 1934 (relating to fraud, manipulation, or 
     insider trading of securities).
       ``(xxviii) An offense under section 4c(a) of the Commodity 
     Exchange Act (7 U.S.C. 6c(a)) (relating to fraud, 
     manipulation, or insider trading of commodities).
       ``(xxix) An offense under section 371 of title 18 (relating 
     to conspiracy to commit offense or to defraud United States), 
     to the extent of any conspiracy to commit an act which 
     constitutes--

       ``(I) an offense under clause (i), (ii), (iii), (iv), (v), 
     (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), 
     (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), 
     (xxiii), (xxiv), (xxv), (xxvi), (xxvii), or (xxviii); or
       ``(II) an offense under section 207 of title 18 (relating 
     to restrictions on former officers, employees, and elected 
     officials of the executive and legislative branches).

       ``(xxx) Perjury committed under section 1621 of title 18 in 
     falsely denying the commission of an act which constitutes--

       ``(I) an offense under clause (i), (ii), (iii), (iv), (v), 
     (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), 
     (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), 
     (xxiii), (xxiv), (xxv), (xxvi), (xxvii), or (xxviii); or
       ``(II) an offense under clause (xxix), to the extent 
     provided in such clause.

       ``(xxxi) Subornation of perjury committed under section 
     1622 of title 18 in connection with the false denial or false 
     testimony of another individual as specified in clause 
     (xxx).''.

  Mr. BLUMENTHAL. Madam President, essentially this amendment, very 
simply and directly, assures that Members of Congress who may be 
prosecuted and convicted of the offenses specified in the amendment 
also should see their pensions revoked, along with potentially other 
crimes that they may have committed.
  The purpose essentially is to assure the credibility of Congress by 
revoking pensions of corrupt Members of Congress, not only those who 
may be convicted under this pending bill--insider trading--but also a 
variety of other public corruption offenses. In fact, the amendment 
adds 22 new public corruption offenses to existing law that merit the 
cancellation or revoking of congressional pensions.
  I have worked with Senator Kirk, who, unfortunately, could not be 
with us today. He and his staff have been integral. It is a bipartisan-
proposed statute that is similar to one I worked to enact in 
Connecticut when I was the attorney general there.
  The guiding principle is absolutely crystal clear, consistent with 
the basic measure we are considering: not one dime of taxpayer money 
should go to corrupt elected officials.
  Over the past 50 years, Members of Congress have been convicted of 16 
separate felonies. So the need for this measure is considerable, even 
if it is a small minority of the Members of Congress. In fact, right 
now, approximately $800,000 a year is paid to Members of Congress who 
have been convicted of these kinds of felonies.
  So I wish to particularly thank Senator Kirk and quote him since he 
could not be here today. He said, earlier this year, of this 
legislation:

       American taxpayers should not be on the hook for the 
     pension benefits of convicted felons. Expanding current law 
     to include additional public corruption felonies will block 
     pension benefits for Members who fail to honor their pledge 
     to defend the Constitution and uphold the laws of the United 
     States. Once you have violated the public trust in that way, 
     I think that the taxpayers should not be supporting your 
     retirement.

  In short, very simply, a breach of law by an elected official is a 
serious offense that should have consequences. Taxpayers should not pay 
for the retirement benefits of elected officials convicted of a 
felony--Members of Congress, anyone else--especially as the United 
States faces the soaring deficits that it does now and the crippling 
debt that grows even higher.
  I urge my colleagues to support this amendment.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SHELBY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 1491 to Amendment No. 1470

  Mr. SHELBY. Madam President, I ask unanimous consent that the pending 
amendment be set aside, and I call up my amendment No. 1491, which is 
at the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The assistant bill clerk read as follows:

       The Senator from Alabama [Mr. Shelby] proposes an amendment 
     numbered 1491 to amendment No. 1470.

  Mr. SHELBY. Madam President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

    (Purpose: To extend the STOCK Act to ensure that the reporting 
 requirements set forth in the STOCK Act apply to the executive branch 
                       and independent agencies)

       On page 7, line 7, strike ``a'' insert ``each officer or 
     employee as referred to in subsection (f), including each''.
       On page 7, line 8 insert a comma after ``employee of 
     Congress''.
       At the end, insert the following:

     ``SEC. 11. PROMPT REPORTING AND PUBLIC FILING OF FINANCIAL 
                   TRANSACTIONS FOR EXECUTIVE BRANCH.

       ``Each agency or department of the Executive branch and 
     each independent agency shall comply with the provisions of 
     section 8 with respect to any of such agency, department or 
     independent agency's officers and employees that are subject 
     to the disclosure provisions under the Ethics in Government 
     Act of 1978.''.

  Mr. SHELBY. Madam President, I rise today to talk about the amendment 
that I have offered, No. 1491, to the STOCK Act.
  Right now, the STOCK Act, as it is written, does not apply to the 
public disclosure requirements to the executive branch or independent 
agencies.
  The amendment that I have offered this morning ensures the public 
disclosure of all trading by senior government officials. Yes, I will 
say it again. My amendment ensures the public disclosure of all trading 
by senior government officials.
  This is a very reasonable amendment, as it is limited to the 
executive branch and independent agency personnel who are already 
subject to the reporting requirements.
  My amendment merely expands the enhanced disclosure requirement under 
the STOCK Act to these current filers. Without this amendment, it would 
be impossible for the public to know whether the executive branch 
officials are complying with the STOCK Act. The public should be able 
to monitor trades of all executive and legislative branch officials in 
the same manner. Let's not make Congress transparent while leaving the 
executive branch and independent agencies in the dark.
  Ironically, the disclosure provisions of the STOCK Act currently do 
not apply to the Securities and Exchange Commission, their employees, 
and so forth, which is the body that will be responsible for enforcing 
such provisions on Congress. That is nonsense. The SEC, which has 
access to vast financial markets information, should be held to

[[Page S241]]

the same standards it has been charged with enforcing.
  My amendment will apply the disclosure provisions of the STOCK Act to 
all branches, ensuring transparency for all in government.
  I appreciate the willingness of the chairman and ranking member of 
the Homeland Security and Governmental Affairs Committee to work with 
me. I look forward to working with them more to improve public 
disclosure for both the executive and legislative branches.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. LIEBERMAN. Madam President, I thank my friend from Alabama for 
coming to the floor and proposing his amendment. I agree that there 
should be parity between the legislative and executive branches 
wherever it is appropriate. I am very happy to work with him.
  I must say that yesterday we made some progress on a somewhat similar 
amendment by Senator Paul to appropriately scope the amendment on 
requiring executive branch officials to report on their financial 
transactions to Senate-confirmed positions. I don't know whether that 
is the resolution here, but I think we should work on it. I want to 
state for the record that the executive branch is not free of conflict-
of-interest regulations. In fact, in some sense you might say they have 
tougher restrictions. Even the SEC employees have to get permission 
before they can make stock transactions, and then they have to file 
disclosures not within 30 or 10 days but within 2 days, I believe. 
There are many other regulations on them.
  I think part of what is going on here is the nature of the two 
branches of Government to deal with conflicts of interest. We have 
focused on a system of disclosure and transparency. We have embraced 
the adage that sunlight is the best disinfectant. In contrast, the 
executive branch actually addresses potential conflicts of interest 
through not just transparency but statutory mandates that require the 
divestiture of stock when it may involve a conflict of interest and 
recusal being involved in handling anything that relates to any 
personal interest that an individual in the executive branch has. There 
is a very extensive system of high-ranking agency officials being 
forced to divest themselves of conflicting stock holdings--obviously, 
sometimes at a financial loss.
  There could be an amendment to come up on that. But to do it in 
exactly the way--at least on the recusal section--the executive branch 
does it would not be appropriate for Members of Congress because 
Members are called on to vote on issues across the widest array of 
activity. Recusal, therefore, is not a viable option because it would 
deny our constituents representation and our votes on a very wide array 
of public issues. An amendment on divestiture of blind trusts or mutual 
funds is another question.
  But the main point I wanted to make is there is a lot of regulation 
on the executive branch. The ethics rules, requirements, and guidance 
that have been put forth over the years by the Office of Government 
Ethics and at the agencies are extensive. I know volume of pages of law 
isn't everything, but it says a lot. There are six pages in the Senate 
Code of Conduct that cover conflicts of interest, while there are 
literally hundreds of pages of rules and requirements governing such 
conflict of interest situations for the executive branch.
  The amendment offered by the Senator from Alabama, as drafted, would 
require that the annual filings of over 300,000 career civil servants 
and managers be published on the Internet. That is a lot of people and 
a lot of work to be done to process and handle those. But I understand 
the intention of Senator Shelby. I think it is a good intention. 
Senator Wyden has a similar amendment, and I wish to work with them, as 
I know Senator Collins would as well, to see if we can come to some 
meeting of the minds that would allow us to achieve the purpose we all 
have in the underlying bill, which is to build confidence in our 
government and its integrity.
  The PRESIDING OFFICER (Mr. Franken). The Senator from Maine.
  Ms. COLLINS. Mr. President, I support the intent of the amendment 
offered by the Senator from Alabama. I think he is right, we need 
parity, as much as possible, in the disclosure requirements. I also 
believe he is correct the disclosure reports should be online so they 
are easily accessible. So the intent of his amendment is one I 
wholeheartedly support.
  As Senator Lieberman does, I have some questions about the universe 
of Federal employees who would be covered by the amendment of the 
Senator from Alabama. We have been working successfully with the 
Senator from Kentucky, who first brought up this issue of parity, to 
make sure the scope of coverage is appropriate. It seems to me one way 
to solve these issues is to use a similar scope as we have agreed on 
with Senator Paul in the amendment that Senator Shelby has brought 
forth. We would then have a certain consistency that we had vetted the 
universe of Federal employees that should be covered. That seems to me 
to be a very appropriate and relatively easy fix to this issue.
  I do want to emphasize that I agree with Senator Shelby that those 
Federal employees should be required to file in the same timeframes as 
Members of Congress and their staffs, and that certainly those reports 
should be accessible online.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  Mr. BROWN of Ohio. Mr. President, I ask unanimous consent the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1481

  Mr. BROWN of Ohio. Mr. President, across the Nation, Americans wonder 
if Washington is working for them. Congress's approval rate, as we know 
so well, is an abysmal 13 percent, 12 percent--different surveys--but 
not very good. One factor contributing to this distrust is the sense 
that elites in Washington are using their positions to get ahead 
financially. Members of Congress have the privilege and the honor of 
being elected to serve the public. Unfortunately, some elected 
officials have used the information they have acquired through service 
to the public--and I might put service to the public in quotation 
marks--to enrich their stock holdings. That is wrong. Public servants 
should not receive financial benefits for the votes they cast or the 
issues they work on. That is why I appreciate the work Senator 
Gillibrand, Senator Lieberman, and Senator Collins are doing in this 
legislation.
  How many articles do we have to read about the appearance of 
impropriety on the investment decisions of lawmakers and their staff? 
In a Washington Post article from June of 2010, Taxpayers for Common 
Sense said:

       By being on a committee with a particular jurisdiction, 
     they're in a better position of influencing the performance 
     of their investments, or at least appearing to have that 
     ability.

  I am not saying my colleagues do that. I think perhaps some do. I do 
not know that, but I do know that the appearance to the public is that 
Members of the Senate are in a position to enrich themselves on a 
variety of issues and investments.
  In a Washington Post article on December 20, the Project on 
Government Oversight--this was about a year, 13, 14 months ago, this 
article--said:

       It's a problem. They will come back and say that it's 
     ludicrous that I would think of my stocks, that they only 
     think about the nation's interests and of their constituents. 
     The problem is, we can't know.

  That is exactly right. We can't know.
  This is a USA editorial from yesterday:

       If lawmakers were really concerned with ethics, they'd put 
     their equity holdings in blind trusts, so they wouldn't have 
     the obvious conflict of interest that comes from setting the 
     rules for the companies they own.
       Banking committee members wouldn't invest in financial 
     institutions, armed services committee members wouldn't 
     invest in defense contractors, and energy committee members 
     wouldn't investment in oil companies.

  These stories simply do not reflect well on the world's greatest 
deliberative body. Most of us think these investments don't affect our 
decisions. They probably do not. But isn't it time we hold ourselves to 
a higher standard?
  That is what the STOCK Act is all about. The Senate is considering 
the

[[Page S242]]

STOCK Act, which clarifies the insider trading laws, that they apply 
the same way to Members of Congress as they do to people in the rest of 
the country. But the STOCK Act only deals with insider trading, which 
is very important, but that is only a small part of the problem. 
Senator Merkley and I are proposing the Putting the People's Interests 
First Act amendment to the STOCK Act. It would require all Senators and 
senior staff, probably legislative director, their most senior 
legislative people--person--and their Chief of Staff, all Senators and 
their Chiefs of Staff, all subject to financial disclosure, to sell 
individual stocks, divest themselves of individual stocks that create 
conflicts or place all of those individual stock investments in blind 
trusts.
  No one is required to avoid equities. We can still invest in broad-
based mutual funds or exchange-traded funds. We have already had this 
in a limited way. Senate ethics rule 37.7 requires committee staff 
making more than $125,000 a year to ``divest himself or herself of any 
substantial holdings which may be directly affected by the actions of 
the committee for which {that person} works'' unless the Ethics 
Committee approves an alternate arrangement.
  The Armed Services Committee requires all staff, spouses, and 
dependents to divest themselves of stock in companies doing business 
with the Department of Defense and Department of Energy. The Committee 
does permit the use of blind trusts.
  In the executive branch, Federal regulations and Federal criminal law 
generally prohibit employees, their spouses, and their children from 
owning stock in companies they regulate.
  All Senator Merkley and I are saying is Members of the Senate should 
hold themselves to the same standard we require of committee staff and 
executive branch employees. We tell committee staff and executive 
branch employees they can't do this. Why should we be allowed to do 
this? If we think this is a sacrifice--which it is not, ultimately--
remember that while the median net worth of all Americans dropped 8 
percent from 2004 to 2010, the median net worth of Members of Congress 
jumped 15 percent over that same period. It is not a judgment of my 
colleagues, simply what we should do, what the public would want us to 
do.
  Some argue selling our stock will make us lose touch with the rest of 
society. That thinking falls on deaf ears for most Americans. Why 
should they vote on issues that affect the oil industry when they own 
oil stocks? Why should Members of the Senate vote on issues that affect 
health care when they own stock in pharmaceutical companies--Big PhRMA 
stocks?
  Appearance matters. Right now the American people do not trust that 
we are acting in the Nation's best interests far too often.
  I will close with this and then turn to Senator Merkley. Public 
service is a privilege. Folks around Washington are paid pretty well 
for what we do--are paid very well for what we do. We take these jobs 
seriously. We should take them seriously. We should look at them as the 
privilege they are to serve in the greatest deliberative body in the 
world and get to serve my State, 11 million people; the State of 
Senator Gillibrand, 19 million people, something like that; and the 
State of Senator Merkley--millions of people we serve. It is a 
privilege to do it. There is no reason our colleagues need to be buying 
and selling stocks in multimillion dollar portfolios. When asked about 
the fact that the Senate Armed Services Committee conflict of interest 
rules apply only to staff and to DOD appointees, President Bush's 
Deputy Secretary of Defense Gordon England said, ``I think Congress 
should live by the rules they impose on other people.''
  In the State of the Union Address the President said, ``Let's limit 
any elected official from owning stocks in industries they impact.''
  Everything we do in this body, almost everything we do--committee 
hearings, floor sessions, calls to agencies--affects businesses and the 
profits businesses make or do not make. That is why Senator Merkley and 
I are introducing this amendment. It is simple. It is direct. The 
public should expect nothing else.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. MERKLEY. Mr. President, I am delighted to rise today in support 
of the STOCK Act and in support of amendment No. 1481 that my colleague 
from Ohio has put forward to address the fundamental issues of conflict 
of interest that reside here in our body.
  Let me start with the defining principle; that is, there should not 
be one set of rules for Members of Congress and a different set of 
rules for ordinary Americans. I think the citizens of the United States 
of America in every State understand that principle. Everyone else in 
the country has to abide by rules that say they cannot profit in the 
stock market from privileged information. There is no reason those 
rules should not apply to Members of Congress.
  Indeed, Members of Congress at any given time can hold access to 
immense amounts of information from previews of economic forecasts, 
from advanced knowledge of events affecting major employers in their 
State, to classified defense information that might have implications 
for, for example, the oil market.
  Under the right circumstances, all of this information can provide 
insider knowledge of which ways the markets are likely to move. So I am 
delighted that this body has voted overwhelmingly to move forward with 
the STOCK Act. It would make clear that trading on congressional 
knowledge is no more acceptable than any other form of insider trading, 
and it would also make financial disclosures for Members of the Senate 
searchable online, and that is also very important in the principle of 
transparency.
  These are important steps, but they do not go far enough. Let's 
remember that insider trading is extraordinarily difficult to define 
and extraordinarily difficult to prosecute. Where did you get that 
information and what truly motivated you to make a particular trade in 
a stock? And because of that, when the conflict of interest exists, we 
have stepped forward to say that this must be addressed. We ask members 
of the executive branch to put aside their individual stocks in 
situations where the conflict arises. We ask our staff members to set 
aside and divest themselves of their stock when a conflict of interest 
arises. We applaud the fact that partners in law firms dealing with 
cases set aside and divest themselves of stock when the conflict of 
interest arises. But somehow we have not seen fit to have the debate 
about our own activities.
  My colleague put it very well when he said: Why should we allow 
Members of Congress to hold oil stocks and then vote on issues 
affecting oil companies? Why should folks be able to invest in 
renewable energy companies and then fight for tax credits that benefit 
renewable energy companies? Why should we allow Members to hold stock 
in pharmaceutical companies and then be deciding on issues such as 
whether we should have competition in the pricing of pharmaceuticals 
for Medicare? It is a direct conflict of interest.
  Any Member of this body who says, I never even gave a passing thought 
to the impact on my several-hundred-thousand-dollar investment in X, Y, 
and Z, I must say, well, I honor their thought, but it doesn't address 
the issue about us as an institution because no one else outside these 
walls will believe you didn't think a little bit about the impact on 
your personal financial portfolio when you voted for that tax credit or 
you voted for that policy that made your investment worth a lot more 
than it would have been otherwise.
  The people in America are far ahead of us. During January, I had 
seven townhall meetings in which the STOCK Act came up several times, 
and I asked for feedback. I said: How many folks here believe Congress 
should live by the same rules of insider trading that everyone else in 
America lives by? And there was not a person who raised their hand in 
support of having a separate set of rules for Congress. Then I asked 
the question: Do you think we should go further? Should Members not be 
allowed to hold individual stocks given that they are making decisions 
that affect the values of the stock? Again universal support that 
Congress should address this conflict of interest in the same way we 
have addressed it for the executive branch or for our staff members. So 
the citizens of this country understand this.

[[Page S243]]

  The amendment that Senator Brown is championing and that I am 
partnering to support has three advantages: It directly prevents 
conflict of interest, and that is a good thing. Second, it eliminates 
the appearance of impropriety. It gives Americans confidence that we 
are addressing issues not with a thought to our personal financial 
status, and that is a good thing. Third, it is very straightforward to 
enforce. It is not like insider trading, which is difficult to define 
and difficult to prosecute. It is very clear-cut. You get rid of your 
individual stocks and you hold broad mutual funds, you hold your 
investments in a blind trust. These are reasonable options. So for 
these three reasons, the Members of this body should debate this.
  I know many do not agree. A number have come up to me and said they 
are almost offended by the notion that we would address conflict of 
interest in this body. I would invite them to come to the floor and 
converse on this. Yes, it is a longstanding Senate tradition, but there 
have been a lot of longstanding Senate traditions that didn't work well 
for the Senate and our place in helping to shape the laws of this 
Nation. We have changed many of them, and we should change this.
  I encourage my colleagues to support the amendment Senator Brown has 
put forward, and I applaud him for doing so.
  The PRESIDING OFFICER. The Senator from Ohio.


                    Amendment No. 1481, as Modified

  Mr. BROWN of Ohio. Mr. President, I ask unanimous consent to bring up 
a modified version of amendment No. 1481.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The amendment is as follows:

       At the end of the amendment, insert the following:

     SEC. ___. PUTTING THE PEOPLE'S INTERESTS FIRST ACT OF 2012.

       (a) Short Title.--This section may be cited as the 
     ``Putting the People's Interests First Act of 2012''.
       (b) In General.--A covered person shall be prohibited from 
     holding and shall divest themselves of any covered investment 
     that is directly, reasonably, and foreseeably affected by the 
     official actions of such covered person, to avoid any 
     conflict of interest, or the appearance thereof. Any 
     divestiture shall occur within a reasonable period of time.
       (c) Definitions.--In this section:
       (1) Securities.--The term ``securities'' has the same 
     meaning as in section 3 of the Securities Exchange Act of 
     1934 (15 U.S.C. 78c).
       (2) Covered person.--The term ``covered person'' means a 
     Member, officer, or employee of the Senate, their spouse, and 
     their dependents.
       (3) Covered investment.--The term ``covered investment'' 
     means investment in securities in any company, any comparable 
     economic interest acquired through synthetic means such as 
     the use of derivatives, or short selling any publicly traded 
     securities.
       (4) Officer or employee.--The term ``officer or employee of 
     the Senate'' means any individual whose compensation is 
     disbursed by the Secretary of the Senate or employee of the 
     legislative branch (except any officer or employee of the 
     Government Accountability Office) who, for at least 60 days, 
     occupies a position for which the rate of basic pay is equal 
     to or greater than 120 percent of the minimum rate of basic 
     pay payable for GS-15 of the General Schedule.
       (5) Short selling.--The term ``short selling'' means 
     entering into a transaction that has the effect of creating a 
     net short position in a publicly traded company.
       (d) Exceptions.--
       (1) Broad-based investments.--Nothing in this section shall 
     preclude a covered person from investing in broad-based 
     investments, such as diversified mutual funds and unit 
     investment trusts, sector mutual funds, or employee benefit 
     plans, even if a portion of the funds are invested in a 
     security, so long as the covered person has no control over 
     or knowledge of the management of the investment, other than 
     information made available to the public by the mutual fund.
       (2) Certain spousal investments.--Nothing in this section 
     shall preclude a spouse from purchasing, selling, investing, 
     or otherwise acquiring or disposing of the securities of the 
     company in which the spouse is employed.
       (e) Trusts.--
       (1) In general.--On a case-by-case basis, the Select 
     Committee on Ethics may authorize a covered person to place 
     their securities holdings in a qualified blind trust approved 
     by the committee under section 102(f) of the Ethics in 
     Government Act of 1978.
       (2) Blind trust.--A blind trust permitted under this 
     subsection shall meet the criteria in section 102(f)(4)(B) of 
     the Ethics in Government Act of 1978, unless an alternative 
     arrangement is approved by the Select Committee on Ethics.
       (f) Application.--This section does not apply to an 
     individual employed by the Secretary of the Senate or the 
     Sergeant at Arms.
       (g) Administration and Enforcement.--
       (1) Administration.--The provisions of this section shall 
     be administered by the Select Committee on Ethics of the 
     Senate. The Select Committee on Ethics is authorized to issue 
     guidance on any matter contained in this section.
       (2) Enforcement.--
       (A) Penalty.--Whoever knowingly fails to comply with this 
     section shall, upon proof of such knowing violation by a 
     preponderance of the evidence, be subject to a civil fine of 
     not more than $50,000, depending on the extent and gravity of 
     the violation.
       (B) Reporting.--
       (i) Committee notification.--The Select Committee on Ethics 
     shall notify the United States Attorney for the District of 
     Columbia that a covered person has violated this section.
       (ii) Secretary of the senate notification.--The Secretary 
     of the Senate shall notify the United States Attorney for the 
     District of Columbia that a covered person required to file 
     reports under title I of the Ethics in Government Act has 
     violated this section.

  Mr. BROWN of Ohio. Mr. President, I would just briefly explain that 
we narrowed the amendment to only cover those who disclose, which means 
people pretty much making over $120,000 or so. It conforms with the 
disclosure requirement under the STOCK Act. Our concern is top staff in 
major decisionmaking positions and sitting U.S. Senators. That is our 
target, that is our concern, and we wanted to conform it with 
provisions Senator Gillibrand has put in her legislation subject to the 
STOCK Act.
  Thank you, Mr. President. I appreciate Senator Merkley's input and 
involvement in helping with this amendment.
  I yield the floor.
  Mrs. GILLIBRAND. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. INHOFE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Udall of New Mexico). Without objection, 
it is so ordered.


                Amendment No. 1500 to Amendment No. 1470

  Mr. INHOFE. Mr. President, I ask unanimous consent that the pending 
amendment be set aside and call up amendment No. 1500.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Oklahoma [Mr. Inhofe], for himself and 
     Mrs. Hutchison, proposes an amendment numbered 1500 to 
     amendment No. 1470.

  Mr. INHOFE. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

              (Purpose: To prohibit unauthorized earmarks)

       At the end of the amendment, insert the following:

     SEC. ___. PROHIBITION ON UNAUTHORIZED EARMARKS.

       (a) In General.--It shall not be in order to consider a 
     bill, joint resolution, conference report, or amendment that 
     provides an earmark.
       (b) Supermajority.--
       (1) Waiver.--The provisions of subsection (a) may be waived 
     or suspended in the Senate only by the affirmative vote of 
     three-fourths of the Members, duly chosen and sworn.
       (2) Appeal.--Appeals in the Senate from the decisions of 
     the Chair relating to any provision of this section shall be 
     limited to 1 hour, to be equally divided between, and 
     controlled by, the appellant and the manager of the measure. 
     An affirmative vote of three-fourths of the Members of the 
     Senate, duly chosen and sworn, shall be required to sustain 
     an appeal of the ruling of the Chair on a point of order 
     raised under this section.
       (c) Earmark Defined.--In this resolution, the term 
     ``earmark'' means a provision or report language included 
     primarily at the request of a Senator or Member of the House 
     of Representatives providing or recommending a specific 
     amount of discretionary budget authority, credit authority, 
     or other spending authority for a contract, loan, loan 
     guarantee, grant, loan authority, or other expenditure with 
     or to an entity, or targeted to a specific State, locality, 
     or congressional district unless the provision or language--
       (1) is specifically authorized by an appropriate 
     congressional authorizing committee of jurisdiction;
       (2) meets funding eligibility criteria established by an 
     appropriate congressional authorizing committee of 
     jurisdiction by statute; or

[[Page S244]]

       (3) is awarded through a statutory or administrative 
     formula-driven or competitive award process.

  Mr. INHOFE. Mr. President, today I understand Senator Toomey is going 
to be offering an amendment that will--it is quite an 
oversimplification to state it this way, but it would make permanent 
the temporary ban on earmarks. I think this is something we have talked 
about and talked about and talked about on this floor. In fact, the 
last time we talked about an amendment to put a moratorium on earmarks, 
my conservative rating of No. 1 in the U.S. Senate moved to No. 20 
because I was telling the truth and not demagoguing an issue.
  The problem we have is this: When the House of Representatives, first 
of all, came up some time ago--2 years ago--with doing away with 
earmarks, putting a moratorium on earmarks, then they defined what that 
moratorium was and defined an earmark in a certain House rule. The 
bottom line is this: It said it is any kind of an appropriation or 
authorization.
  Now, here is where the problem is. Because everybody is upset with 
the process that has taken place by Democrats and Republicans on the 
floor of this Senate--and I will not name names, but I think most of 
the Members know the ones I am talking about. Many of them are members 
of the Appropriations Committee, where they would sit down during the 
course of an appropriations bill, and they would swap out deals, 
favors, and get things for their State. This is the type of thing that 
is wrong, and it should not take place.
  But I have to remind my friends here that we have a Constitution for 
this country. Article I, section 9 of the Constitution makes it very 
clear that we--those of us in this Chamber and in the House Chamber 
across the hall--have a primary constitutional responsibility; that is, 
to authorize and appropriate. That is what article I, section 9 of the 
Constitution says we are supposed to be doing.
  If you go back and study what Justice Joseph Story, back in 1833, 
talked about, he kind of made the interpretation of the intent of the 
Constitution so far as what our duties and the President's are. He said 
very clearly that we are doing this because if the President has the 
power to do the appropriating--or if you want to call it earmarks, you 
can call it earmarks--appropriating or authorization, that is too much 
power in the hands of one person. So he is very specific that our 
Founding Fathers wanted to make sure the President does not do this.
  So what happens today? Today we get a budget from the President, 
which is taking place right now as we speak. I could talk about this, 
all the deficits in the budget and all that, but that is not my purpose 
for being here. My purpose for being here is to articulate how things 
are working today and how they have worked up until the moratorium 
language came into effect.
  The President sends a budget to Congress. Then that is supposed to go 
to authorizing committees. I am on two authorizing committees--one is 
Environment and Public Works, one is the Senate Armed Services 
Committee. The Senate Armed Services Committee is staffed with experts 
in areas of missile defense, in areas of national defense, in areas of 
strike vehicles, in areas of lift capacity--all the areas that are in 
his budget in every area of national defense. But here is the thing: 
These are experts, so they advise us as we have our meetings and we are 
drafting in the Senate Armed Services Committee--SASC--the defense 
authorization bill, the NDAA, as we did just a few months ago. We come 
up with how we think we should be spending the money to defend America 
within the parameters of the President's budget.
  I will give you an example. A couple years ago, before there was any 
discussion on the moratorium, the President had in his budget $330 
million to go to a launching system. It was called a bucket of rockets. 
It was a good system, something we need, something that would be very 
helpful to have. But with the limited resources we have and the fact 
that we were fighting a war on two fronts at that time, we made a 
determination in the Senate Armed Services Committee that $330 million 
would be better spent if we bought six new F-18E/F models. Those are 
strike vehicles. One of reasons for that was the President in his 
budget did away with the only fifth-generation fighter we had, the F-
22. That was back in his first budget, and he is talking about delaying 
the F-35, the Joint Strike Fighter, which is going to be necessary to 
have.
  So we made that decision, and that was made by a majority of the 
members of the Senate Armed Services Committee. It had nothing to do 
with whose home State makes the F-18. None of that made any difference. 
It was just that we could do a lot more to defend America by having six 
new F-18s than we could by having the launching system called a bucket 
of rockets. Now, if you do that today, that is an earmark, to say: 
Well, no, that was not in the President's budget.
  I have to remind everyone, it does not matter whether the President 
of the United States is a Democrat or Republican; the President is the 
guy who designs the budget. A lot of people do not know that. It is not 
the Democrats, not the Republicans, not the House, not the Senate. It 
is the President. When he designs this budget, he makes the 
determination as to how he thinks everything should be spent. If we say 
we cannot do authorization and appropriation, then that would be called 
an earmark, and there is a ban on earmarks.
  The reason I have kind of walked around the barn a long way on this 
issue is that I have an amendment, the amendment I have just now 
brought up for consideration, amendment No. 1500. What that does is it 
merely defines an earmark as an appropriation that has not been 
authorized. I just described the authorization process. If we go 
through that, then there are not going to be any earmarks in the way 
most people think of earmarks, but we will be doing our duty.
  I feel very confident we are going to be able to get this passed. 
Several of the individuals here very responsibly have talked about this 
issue. For example, Senator Toomey said yesterday on the floor that 
some earmarks ``ought to be funded. But they ought to be funded in a 
transparent and honest way, subject to evaluation by an authorizing 
committee.'' So here is the author of the ban on earmarks agreeing that 
if we go through an authorization process, it is all right to fulfill 
our constitutional function of appropriating and authorizing.
  Senator Coburn, my junior Senator, said:

       It is not wrong to go through an authorization process 
     where your colleagues can actually see it. It is wrong to 
     hide something in a bill. . . .

  Agreed. We all agree on that. That was a year ago when he made that 
statement.
  Senator McCain--by the way, I introduced this amendment in bill form 
last year. He was my cosponsor. We introduced it together. That was 
merely changing the definition of an earmark to be an appropriation or 
spending that has not been authorized.
  Senator McCain said:

       Some of those earmarks are worthy. If they are worthy, then 
     they should be authorized.

  That is the whole issue. I can understand some Democrats wanting to 
do away with congressional earmarks because if they do that, it goes 
right back to Obama. If I were in a position where I felt President 
Obama or any other President could do a better job of appropriating 
money, that would be another motivation to do this. But for responsible 
conservatives who believe in what the Constitution says, this is a very 
easy solution to the problem.
  The amendment will be brought up. I do not know when yet. I suppose I 
could find out just what our timing is going to be. But the amendment I 
have offered simply bans any congressional earmark that is not first 
authorized.
  If we do this, instead of an outright ban, it will preserve our 
ability to keep the President's power in check. I would hope that many 
of my colleagues go back and read what our Founding Fathers had in mind 
when they talked about article I of the Constitution. I think they 
would find that they made it very clear we want to have a separation of 
those powers so we do not have either the House or the Senate or the 
Presidency doing everything. Instead, we should follow the 
Constitution.
  So that is what my amendment is all about. I will be looking forward 
to bringing it up. I think it probably will be considered today. I look 
forward to that.

[[Page S245]]

  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mrs. GILLIBRAND. Mr. President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. GILLIBRAND. Mr. President, we have an incredibly important 
opportunity to do something so basic, so commonsense to begin restoring 
the faith and trust that the American people have in this institution. 
We have a responsibility to do it right, to show without question, 
without any ambiguity, that all Members of Congress, their staffs, and 
Federal employees play by the exact same rules as everyday Americans.
  The American people deserve to know their lawmakers' only interest is 
in what is best for the country, not their financial interest. Members 
of Congress, their families, their staffs, and Federal employees should 
not be able to gain any personal profit from information they have 
access to that ordinary Americans do not--whether it is trading stock 
or making inside real estate deals. It is simply not right. Nobody 
should be above the rules.
  The commonsense bill before us would finally codify this principle 
into law, as it should be. Chairman Lieberman, Ranking Member Collins, 
Senator Brown of Massachusetts, and their committee members and staffs 
have crafted a very strong bipartisan bill with teeth that is narrowly 
tailored and targeted to ensure that we achieve this very common goal. 
Because of this bipartisan work, last night this Chamber came together 
in what has become nearly an unprecedented fashion these days and voted 
almost unanimously to begin debate on this sorely needed legislation. 
As we continue to debate, I urge my colleagues to focus on the specific 
task at hand. Let's show the American people we can come together and 
get this done to begin to restore their trust in us.
  If there are ideas to make the bill stronger, let's debate them. But 
let's not get bogged down in the politics as usual, with nongermane 
side issues that will prevent us from swiftly moving on an up-or-down 
vote the American people expect of us. We are already starting in a 
strong position with our colleagues in the House.
  This STOCK Act legislation is very similar to legislation introduced 
by my colleague in the New York delegation, Congresswoman Louise 
Slaughter, and Congressman Tim Walz. I thank them for their 
longstanding advocacy and focus and leadership on this important issue.
  Our bill, which has received the support of at least seven good 
government groups, covers several very important principles. First, 
Members of Congress, their families, their staffs, and Federal 
employees should be barred from gaining any personal profit on the 
basis of knowledge gained through their congressional service or from 
using knowledge to tip off anyone else.
  This bill will, for the first time, establish a clear fiduciary 
responsibility to the people we serve. This simple step removes any 
present doubts as to whether the SEC and the CFTC are empowered to 
investigate and prosecute cases involving insider trading of securities 
from using this nonpublic information. It also provides additional 
teeth. Such acts would also be in violation of Congress's own rules, to 
make it clear that this activity is inappropriate and subjects Members 
to additional disciplinary measures by this very body.
  Second, Members should be required to disclose major transactions 
within 30 days to make this information available online for their 
constituents to see, providing dramatically improved oversight and 
accountability. We should be able to agree that these reports should be 
available in the light of day and not stored in some dusty back room.
  The committee heard experts testifying during a Senate hearing that 
reducing this new reporting requirement to 90 days was not good enough. 
The committee listened to these experts carefully, and the bill has 
been strengthened and currently has a 30-day proposal, a sea change of 
improvement from the current reporting requirement of a yearly 
reporting requirement on a paper document.
  Some critics say this bill is unnecessary and is already covered 
under current statutes. I have spoken with experts tasked in the past 
with investigations of this nature, and they strongly disagree. We must 
make it clear as day and unambiguous that this kind of behavior is 
illegal.
  President Obama told us in the State of the Union to send him a bill, 
and he will sign it right away. We should not delay. This is the time 
to act. Let's show people who send us here that we can come together 
and do the right thing. Let's show them we know they deserve a 
government that is worthy of them. We have an opportunity to take a 
step toward restoring some of the faith that has been lost in 
Washington and in this institution. I urge my colleagues to seize this 
opportunity.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mrs. BOXER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Cardin). Without objection, it is so 
ordered.
  Mrs. BOXER. I ask unanimous consent to set aside the pending 
amendment.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                Amendment No. 1489 to Amendment No. 1470

  Mrs. BOXER. I call up amendment No. 1489 and ask for its immediate 
consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant bill clerk read as follows:

       The Senator from California [Mrs. Boxer], for herself and 
     Mr. Isakson, proposes an amendment numbered 1489 to amendment 
     No. 1470:
       At the end, add the following:

     SECTION 9. REQUIRING MORTGAGE DISCLOSURE.

       Section 102(a)(4)(A) of the Ethics in Government Act of 
     1978 (5 U.S.C. App) is amended by inserting after ``spouse'' 
     the following: ``, except that this exception shall not apply 
     to a reporting individual described in section 101(f)(9)''.

  Mrs. BOXER. I am sure, listening to that, it is hard to understand 
exactly what this is all about, so let me take a moment.
  I want to first thank Senators Lieberman and Collins for all their 
hard work and I want to thank Senator Gillibrand for writing the STOCK 
Act.
  I come to the floor as the chairman of the Ethics Committee with an 
amendment that we wrote together, Senator Isakson and I, who is the 
vice chair of the committee. So this is quite a bipartisan amendment 
and I don't think it should be controversial or troublesome in any way.
  This amendment actually comes from a bill that Senator Isakson and I 
wrote together after the Countrywide fiasco. If you want to recollect 
that unhappy issue, it was a situation where Countrywide had set up a 
VIP program and they literally targeted Members of Congress of the 
House and Senate to put them into this program and never told the 
Members of Congress that there was this program, and yet it went 
forward. And because there is no rule that personal mortgages be shown 
on the disclosure form, this was quite a shock when it all came out. 
What we are saying is we want to improve the disclosure requirement on 
home mortgages.
  Right now, if it is at your own personal home, you don't have to show 
the mortgage, and this would correct that. It would mean that you have 
to show the date the mortgage was entered, the balance, and a range, 
the interest rate, the terms, the name and address of the creditor. So 
it is an omission--but actually it is a pretty glaring omission--in our 
financial disclosure requirements because, again, of the Countrywide 
example. We don't want to have a situation--because we are not allowed 
to get better treatment than anyone else. And the fact that we didn't 
disclose these mortgages--it was quite a story when it came to light 
that there was this special VIP program at Countrywide. So this 
legislation, this amendment, addresses this omission. It requires 
Members of Congress to make a full and complete disclosure of all the 
mortgages on their personal residences.

[[Page S246]]

  Again, right now this requirement is in place for mortgages that you 
may have on investment properties but not on your personal properties. 
It would include Members of Congress and their spouses as well.
  In his State of the Union Address, the President spoke about the 
deficit of trust between Washington and the rest of the country. I 
don't know that this amendment is going to cure all those problems, but 
I do think it shows that we are ready to learn from a bad experience, 
which was the Countrywide experience. So I think the Boxer-Isakson 
amendment and the underlying bill are sensible steps toward rebuilding 
our Nation's faith in government.
  Again, the rules are already clear that we are not permitted to get 
any financial arrangements that are better than they are for any other 
constituent, so I think by this disclosure we are saying that even in 
our own personal mortgages we have to be aware of this. I think this 
listing is called for, and I urge my colleagues to support this 
amendment and the underlying legislation.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  Ms. COLLINS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. COLLINS. Mr. President, I want to comment briefly on the 
amendment that has been proposed by the Senator from California to the 
legislation written by Senator Brown. Senator Gillibrand has a similar 
bill as well, and I want to explain to our colleagues what the state of 
the current law is, which I think would be helpful.
  Under the Ethics in Government Act of 1978, there is an exemption 
from disclosure for mortgages secured by real property that are the 
personal residence of the reporting individual or his spouse.
  Under the liabilities section of that same report, which we now file 
annually, liabilities in excess of $10,000 must be reported that are 
owed by the Member, the spouse, or the dependent child to any one 
creditor during any time during the reporting period. Credit card 
debts, for example, are reported. Other kinds of loans are reported. 
Mortgages held on investment properties--properties, for example, that 
are rented--are reported. The exemption only goes to the personal 
residence of the Member and/or the Member's spouse.
  I am unclear, and need to get clarification from Senator Boxer and 
also the Office of Government Ethics, whether her amendment would 
extend the new disclosure requirement that she is proposing to 
executive branch employees or whether it would only apply to the 
legislative branch. As I read her amendment, it looks as though it only 
applies to the legislative branch and perhaps only to Members.
  I would ask, through the Chair, if the Senator from California could 
clarify for me--this is truly an informational question--whether she is 
intending this new requirement to apply to congressional staff and 
whether she is intending this new requirement to apply to executive 
branch members who are currently required to file an annual financial 
disclosure form.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. I very much thank Senator Collins for that question.
  Senator Isakson and I, as the chair and vice chair of the Ethics 
Committee, are applying this to the Members of Congress. That is 
because the scandal that took place with Countrywide involved the 
Members of Congress. We are not including staff in this. It also 
applies to more than one residence, because some of our Members have 
seven homes, six homes, four homes, two homes. If you have mortgages on 
any of those properties, you would now have to disclose those.

  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. Mr. President, I thank the Senator from California for 
clarifying that issue and answering my question.
  I guess my further question would be, why would we only apply it to 
Members of Congress and not apply it to members of the executive 
branch? For example, I would argue that if there are conflict of 
interest issues or allegations of a sweetheart deal for mortgages that 
might be revealed by this disclosure, that that would apply equally to, 
say, Treasury officials--in fact, even more so to Treasury officials or 
bank regulators--as it would Members of Congress.
  I wonder if the Senator's intent is to make sure that Members are not 
getting sweetheart deals on their mortgages--which obviously no Member 
should be receiving a sweetheart deal on a mortgage--why that same 
logic would not apply to executive branch officials, particularly since 
arguably they have far more direct influence and jurisdiction and 
regulatory authority over financial institutions than do Members of 
Congress.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. Mr. President, I would be happy to go on as a cosponsor 
to Senator Collins if she wants to take on the additional burden of 
moving this idea forward. I don't have any problem with it.
  The point is, I am here--and I have been very open about it because I 
know what I am talking about when it comes to Members of Congress, 
because as chair of the Ethics Committee, I don't oversee Treasury. 
This is not my role, this is not my expertise, and I am very humble 
about that. I did see what happened here, along with, I would say, 
every member of the Ethics Committee and Senator Isakson.
  This is a bipartisan amendment and we know what we are talking about, 
and we are saying there was a problem and Members of Congress were 
courted by Countrywide. Did they court other people? I don't know. But 
if there is some proof that they did and there is need to go and cover 
them with a similar amendment, I would be happy to work with my 
colleague on that. But I am not going to change this particular piece 
of legislation, because I know what I am talking about here. I know how 
to fix this. I know we have made a big mistake, and I feel it is our 
job to clean up our own business. And our own business, when it comes 
to this, is not good.
  Would I wish to look over at what the Bush administration did or what 
the Obama administration is doing or what other administrations will 
do? I am happy to do that. But I am here to address our house--our 
house. Clean it up. Act as a role model.

  I do not have any problem with supporting another piece of 
legislation. Maybe there is a problem over there. I, frankly, do not 
know what their ethics rules are. I know what our ethics rules are, and 
I know we have made a glaring omission when Members may have three, 
four, five, six, seven houses; they may have two, three, four, five, 
six mortgages and they never have to show them. Let's clean it up.
  If my friend believes there is need for another amendment, I am happy 
to look at it. But Senator Isakson and I are doing something we have 
long wanted to do. This is not something we just made up. We have had a 
bill for a long time doing exactly this. This is a moment we would like 
to get it done.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. Mr. President, the reason I am raising this issue--I 
realize the Senator from California has not had the misfortune I have 
had, of being constantly on the floor listening to the debate on this 
bill--but a major issue we have been grappling with is parity in the 
rules. This issue has not just come up with regard to the amendment of 
the Senator from California, it has come up over and over.
  I am not in any way singling out the Senator from California to raise 
this issue. This has come up on every single issue we have been 
tackling on the floor, which is, if we are going to have more 
disclosure for the legislative branch, should we not have the exact 
same or comparable disclosures for high-ranking executive branch 
officials?
  The issue I raised, I wish to assure the Senator from California, is 
no means unique to her amendment. It has come up over and over and, 
indeed, the first amendment that we were supposed to have voted on last 
night was an amendment by Senator Paul, making clear that this bill 
applied to the

[[Page S247]]

executive branch and then Senator Shelby had an amendment to make sure 
there was online disclosure by the executive branch.
  This is an issue that has permeated the entire debate on the STOCK 
Act. It is not unique to the issue that has been raised by the Senator 
from California.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. I thank my colleague for that because it was a little 
surprising. My understanding, and I hope to stand corrected by the 
Senator from Maine, if I am wrong, and the Senator from New York, that 
the whole idea behind the STOCK Act, the bill written by Senator 
Gillibrand and the bill written by Senator Brown, did not deal with the 
executive branch. I thought the whole notion behind this was for us to 
clean up our act. Clean up our act over here. That is the best way to 
proceed.
  I have no problem if my colleague wants to write an amendment, she 
herself, on this particular issue. If she can make the case that it has 
been shown that VIP loans were given to members of the executive 
branch--whether under George Bush or Barack Obama--and I think in the 
years she is looking at it would have been under Bush, but those are 
the years the Countrywide scandal took place--if my friend has absolute 
information for me that shows that members of the Bush administration 
or the Obama administration got special treatment from the Countrywide 
scandal, I would like to know about it. I do not know anything about 
that at this time.
  If my friend believes it would be a good thing to do, to offer a 
separate amendment covering certain members of the executive branch, I 
am happy to look at it. But it strikes me as bizarre that this has 
become an issue. It sounds like what is going on from the Republican 
side is all of a sudden they want to turn attention over to the 
executive branch rather than focus it on us--which I think is critical. 
But I am happy to look at any amendment that deals with abuses the 
Senator can show me were occurring over on the executive branch side 
during those years that Countrywide was doing its damage. I would be 
happy to support an amendment. But I think we should keep this 
amendment clean. I think this amendment should be clean because we are 
looking at a particular ethics rule and we are essentially cutting out 
a loophole which has allowed colleagues to not have to list their 
personal residences when, in fact, we know some of them got special 
treatment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. Mr. President, first, let me make the point to the 
Senator from California, I am a cosponsor of the STOCK Act. I 
cosponsored Senator Brown's bill, so it is not that I do not think 
legislation is needed in this area. I am a cosponsor on this bill and 
have commended him for his work. But the fact remains that in our 
committee markup the bill was changed.
  I know the Senator was distracted when I answered that question. The 
bill was changed in committee to extend to the executive branch. It is 
in the bill that is before us now. The Senator was misinformed in that 
regard. The bill was changed to make very clear that the insider 
trading prohibition applied to the executive branch and that executive 
branch members have a duty to their agencies, to the government. We 
make that explicit. That was changed in committee.
  The Senator is not correct that the bill that was brought to the 
floor only applied to Congress. It does not. It applies to the 
executive branch.
  The second point I will make is this is not a partisan issue. We have 
bills on both sides of the aisle. We have amendments on both sides of 
the aisle. Indeed, we have disclosure amendments that apply to the 
executive branch coming from both sides of the aisle. Senator Wyden has 
a disclosure amendment that is similar to that of Senator Shelby's. We 
are working with both of those offices right now to try to work those 
out.
  I do not know how this all of a sudden became a partisan debate or a 
debate about the Bush administration or anything. This is a debate 
about good government and how we can best assure the American people 
that, regardless of whether public officials are in the executive 
branch or the legislative branch, they are putting the public's 
interests ahead of their private interests and that they are not 
profiting from insider information, nonpublic information that is not 
available to the public which they are using inappropriately--if, in 
fact, that is even happening--for personal gain.
  I did wish to clarify that the bill, as reported from committee, does 
apply to the executive branch as well as the legislative branch, that 
the statement made by the Senator was inaccurate in that regard, and 
that we have amendments on both sides of the aisle that we are working 
on right now to extend the disclosure requirements, the reporting 
requirements to the executive branch. Those are amendments coming from 
both Democrats and Republicans.
  I would like to yield at this point to the Senator from 
Massachusetts.
  Mrs. BOXER. Mr. President, if I can respond?
  The PRESIDING OFFICER. The Senator from Maine has the floor.
  Mrs. BOXER. The Senator can't yield--I would like to have the floor 
now. She can't yield to another colleague except if it is for a 
question. I would like to have the floor since the Senator just said I 
was incorrect. I would like to correct her, if I might.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. What I said was, when these bills were introduced, they 
were directed at the Congress. That is what I said. I talked about the 
bills. I did not talk about what went on amending them, et cetera. I 
will repeat what I said was accurate. Both Mr. Brown's bill and Mrs. 
Gillibrand's bill were, in fact, talking about the Congress.
  What I would also like to say is if my colleague wants 
bipartisanship, she should be happy with this amendment since it is 
coming from Senators Boxer and Isakson, the chairman and the vice 
chairman of the Ethics Committee.
  We did not investigate the executive branch and Countrywide's going 
after the people in the Bush administration and the Obama 
administration. We do not have that information. If she has information 
that shows there have been sweetheart deals over there, I certainly 
want to know about it. As I said, if my colleague wants to offer a 
first-degree amendment that broadens this, I am happy to look at it. 
Because if it can be shown to me that there have been abuses over 
there, from the mortgage companies going after these folks over there, 
I am happy to agree to that. I would have to take it to Senator Isakson 
because he is, in fact, the coauthor. Also, I have to point out that 
this same amendment I offered was put forward in a bill by Senator 
Cornyn in 2008. So there is a lot of interest on this.
  I am a person who likes to know what I am talking about. I try very 
hard. I do not know if there has been abuse from the mortgage companies 
over to the executive branch. But I know for sure there has been a big 
problem here with colleagues getting sweetheart deals. I want to put an 
end to it.
  If my colleague wants to strengthen my amendment, she can offer a 
second-degree amendment. If she can prove to me that there has been 
abuse and there has been a problem and there is not enough protection, 
I am happy to support it. But I guess I am a little taken aback as I 
come here in a bipartisan spirit to offer a bipartisan amendment, I 
have kind of been the subject of some weird sort of attack for not 
going far enough with my amendment. I find it bizarre, to be totally 
frank, and I will continue to stay on the floor until I understand what 
this is all about. Maybe I have nothing to do with it. If I said 
something wrong, I would like to know what it is. But I am offering, in 
good faith, a bipartisan amendment that is a no-brainer, that comes 
straight out of the Countrywide scandal that we studied in a bipartisan 
way, in Congress, and we are moving to correct the problems we know 
exist.
  If there are more problems out there and if my friend has proof of 
that, if she can prove it to us, I am happy to support a first-degree 
amendment to this amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. Mr. President, I do not know why the Senator from 
California, first of all, is assuming I am somehow

[[Page S248]]

opposed to her amendment. I have not said that. What I raised was a 
very legitimate question of asking whether she had considered extending 
it to the executive branch.
  Then her response seems to be an attack; that if I have information 
that there are problems and sweetheart deals in the executive branch, I 
should prove them.
  I am not making allegations. I do not make unsubstantiated 
allegations against individuals. What I was trying to tell the Senator 
from California is that the issue of the scope and applicability of 
this bill has come up over and over. It came up in committee. We 
changed the bill in committee to make it clear that the prohibition 
against insider trading and a duty applied to the executive branch as 
well as to the legislative branch.
  I have not criticized her amendment in any way. I asked a series of 
questions about the scope of her amendment because this issue has come 
up repeatedly, on both sides of the aisle. It came up in committee 
during our markup. It has come up on the Senate floor repeatedly as far 
as what the disclosure requirements should be and to whom they should 
apply.
  I am the one who is baffled by the response of the Senator from 
California, since I have not indicated any opposition whatsoever to her 
amendment.
  I have merely brought up the fact that the issue of the scope of this 
bill has come up repeatedly, so I was curious why she chose to have 
such a narrow bill rather than applying it to executive branch 
officials who filed the same kinds of disclosure.
  The PRESIDING OFFICER. The Senator from California.
  Ms. BOXER. Mr. President, we can go back and forth 100 ways to 
Sunday. I thought I explained exactly why Senator Isakson and I have a 
narrow bill. We are trying to fix a problem we know exists. We feel 
very strongly that for the good of the Senate, in particular--because 
this is the body we serve in. We love it. We want to make it strong and 
appreciated and not derided. We had a scandal that touched this body 
and we had a thorough investigation. It took a long time to get to the 
bottom of it. We uncovered the fact that Countrywide had a sweetheart 
deal and they were aiming it at Members of Congress.
  We have crafted this amendment to respond to what we know is a 
problem. I am not in the business of coming down here and legislating 
on things that I might guess are a problem or, gee, maybe I can throw 
out a fishing net and catch everybody in it. If there is a problem 
elsewhere, I am happy to support my colleague if she would like to 
broaden this. I am not against it. I am saying for me and Senator 
Isakson, we have offered an amendment that cures a very simple problem; 
that ethics rules, as they are today, allow Senators and Members of 
Congress to avoid showing the mortgages they hold on personal 
residences. If the same thing exists in the executive branch, I don't 
know about that. I am dealing with an amendment here and so is Senator 
Isakson, that we know about.
  If the Senator asks again why our amendment is narrow, let me again 
answer it in another way: We are curing a narrow problem but a problem 
that exists. We are not throwing out some big fishing net to catch 
everybody in it whom we don't know about. We think this will make the 
Congress a better place. We do. Because there are Members who have two, 
three, four, and five homes. They may have two, three, four, and five 
mortgages, and we think it is important for the public to know that.
  But, again, I hope my colleague from Maine supports this. I don't 
know if she does.
  She doesn't oppose it. That is a good start. I hope she supports it. 
If she feels she can make it stronger, she should offer a first-degree 
amendment, let me take a look at it, let me see whether it is 
necessary, and let me see whether there is reason to do it. I can 
surely tell her I am very open to broadening it, but the reason it is 
crafted the way it is is that it is dealing with a problem we are not 
guessing exists; we know it exists where there have been abuses before 
and we are trying to cure that problem.
  I thank the Senator for her patience.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. BROWN of Massachusetts. Mr. President, I enjoyed that back and 
forth debate very much. I appreciate the spirit in which that amendment 
was offered. I wrote the original bill. It was my bill and Senator 
Gillibrand then filed a bill. We went through the committee process, 
and the original intent of the bill was to deal with insider trading. 
It applied to all Federal employees, not just congressional, so it is 
an insider trading bill.
  The spirit of what we have been trying to do over the last day and a 
half is to address issues equally so as to eliminate all appearances of 
impropriety and for any branch of government to not play by the same 
rules as the American people would play by. So every single amendment 
that has come through this Chamber right now has not only been expanded 
to cover, obviously, those in the Senate and the House of 
Representatives but also equally to the executive branch.
  So if this amendment is going to have any chance of passing, I can 
assure you I will not support it unless it specifically also applies to 
the executive branch. If she wants to amend it or modify it to include 
that, then it will have a good chance of passing; if not, I will do my 
best to prohibit it because it needs to be applied to everybody. For us 
to come and say we need to come up with proof that somebody is doing 
something or not doing something--listen, it is no different than what 
we are trying to do on the insider trading bill. There is no one who 
has been brought to court and found criminally responsible. We are 
dealing on inference and reference and innuendo. That is why we are 
trying to reestablish the trust with the American people to do 
something that would not traditionally have been done but not for a 60-
minute speech. So if we knew something was happening in the mortgage 
industry, great, let's let it apply across the board and not exclude a 
group of Federal employees for some particular political reason.
  Once again, if she wants to amend it, great. If not, I am going to do 
my best to make it amended so we can have it apply equally if we are 
going to ultimately take it up.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. BEGICH. Thank you, Mr. President. I also enjoyed this debate. I 
agree with Senator Brown. It is a form they already fill out now. We 
just have to add one other line. It is not complicated. I think it is a 
good idea. I will leave it at that.
  I ask unanimous consent to speak in morning business about the STOP 
Act.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Begich pertaining to the introduction of S. 2054 
are printed in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. BEGICH. Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. TESTER. Mr. President, I wish to thank the Senator from Alaska 
for his explanation of what has been going on as far as executive 
compensation with FHFA.


                Amendment No. 1492 to Amendment No. 1470

  Mr. TESTER. Mr. President, I would ask the Senate set aside the 
pending amendment and call up amendment No. 1492.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Montana [Mr. Tester] proposes amendment 
     numbered 1492.

  Mr. TESTER. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To amend the Securities Act of 1933 to require the Securities 
 and Exchange Commission to exempt a certain class of securities from 
                               such Act)

       At the end, insert the following:

     SEC. ___. SMALL COMPANY CAPITAL FORMATION ACT OF 2012.

       (a) Short Title.--This section may be cited as the ``Small 
     Company Capital Formation Act of 2012''.
       (b) Authority to Exempt Certain Securities.--
       (1) In general.--Section 3(b) of the Securities Act of 1933 
     (15 U.S.C. 77c(b)) is amended--
       (A) by striking ``(b) The Commission'' and inserting the 
     following:

[[Page S249]]

       ``(2) Additional exemptions.--
       ``(A) Small issues exemptive authority.--The Commission''; 
     and
       (B) by adding at the end the following:
       ``(B) Additional issues.--The Commission shall by rule or 
     regulation add a class of securities to the securities 
     exempted pursuant to this section in accordance with the 
     following terms and conditions:
       ``(i) The aggregate offering amount of all securities 
     offered and sold within the prior 12-month period in reliance 
     on the exemption added in accordance with this paragraph 
     shall not exceed $50,000,000.
       ``(ii) The securities may be offered and sold publicly.
       ``(iii) The securities shall not be restricted securities 
     within the meaning of the Federal securities laws and the 
     regulations promulgated thereunder.
       ``(iv) The civil liability provision in section 12(a)(2) 
     shall apply to any person offering or selling such 
     securities.
       ``(v) The issuer may solicit interest in the offering prior 
     to filing any offering statement, on such terms and 
     conditions as the Commission may prescribe in the public 
     interest or for the protection of investors.
       ``(vi) The Commission shall require the issuer to file 
     audited financial statements with the Commission annually.
       ``(vii) Such other terms, conditions, or requirements as 
     the Commission may determine necessary in the public interest 
     and for the protection of investors, which may include--

       ``(I) a requirement that the issuer prepare and 
     electronically file with the Commission and distribute to 
     prospective investors an offering statement, and any related 
     documents, in such form and with such content as prescribed 
     by the Commission, including audited financial statements and 
     a description of the issuer's business operations, its 
     financial condition, its corporate governance principles, its 
     use of investor funds, and other appropriate matters; and
       ``(II) disqualification provisions under which the 
     exemption shall not be available to the issuer or its 
     predecessors, affiliates, officers, directors, underwriters, 
     or other related persons, which shall be substantially 
     similar to the disqualification provisions contained in the 
     regulations adopted in accordance with section 926 of the 
     Dodd-Frank Wall Street Reform and Consumer Protection Act (15 
     U.S.C. 77d note).

       ``(C) Limitation.--Only the following types of securities 
     may be exempted under a rule or regulation adopted pursuant 
     to paragraph (2): equity securities, debt securities, and 
     debt securities convertible or exchangeable to equity 
     interests, including any guarantees of such securities.
       ``(D) Periodic disclosures.--Upon such terms and conditions 
     as the Commission determines necessary in the public interest 
     and for the protection of investors, the Commission by rule 
     or regulation may require an issuer of a class of securities 
     exempted under paragraph (2) to make available to investors 
     and file with the Commission periodic disclosures regarding 
     the issuer, its business operations, its financial condition, 
     its corporate governance principles, its use of investor 
     funds, and other appropriate matters, and also may provide 
     for the suspension and termination of such a requirement with 
     respect to that issuer.
       ``(E) Adjustment.--Not later than 2 years after the date of 
     enactment of the Small Company Capital Formation Act of 2011 
     and every 2 years thereafter, the Commission shall review the 
     offering amount limitation described in paragraph (2)(A) and 
     shall increase such amount as the Commission determines 
     appropriate. If the Commission determines not to increase 
     such amount, it shall report to the Committee on Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate on its 
     reasons for not increasing the amount.''.
       (2) Treatment as covered securities for purposes of 
     nsmia.--Section 18(b)(4) of the Securities Act of 1933 (15 
     U.S.C. 77r(b)(4)) is amended--
       (A) in subparagraph (C), by striking ``; or'' at the end 
     and inserting a semicolon; and
       (B) by redesignating subparagraph (D) as subparagraph (E), 
     and inserting after subparagraph (C) the following:
       ``(d) a rule or regulation adopted pursuant to section 
     3(b)(2) and such security is--

       ``(I) offered or sold on a national securities exchange; or
       ``(II) offered or sold to a qualified purchaser as defined 
     by the Commission pursuant to paragraph (3) with respect to 
     that purchase or sale.''.

       (3) Conforming amendment.--Section 4(5) of the Securities 
     Act of 1933 is amended by striking ``section 3(b)'' and 
     inserting ``section 3(b)(1)''.
       (c) Study on the Impact of State Blue Sky Laws on 
     Regulation a Offerings.--Not later than 3 months after the 
     date of enactment of this Act, the Comptroller General 
     shall--
       (1) conduct a study on the impact of State laws regulating 
     securities offerings (commonly referred to as ``Blue Sky 
     laws'') on offerings made under Regulation A (17 C.F.R. 
     230.251 et seq.); and
       (A) transmit a report on the findings of the study to the 
     Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate.


                Amendment No. 1503 to Amendment No. 1470

  Mr. TESTER. Mr. President, I ask that the amendment be set aside, and 
I ask unanimous consent to call up amendment No. 1503.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Montana [Mr. Tester] proposes amendment 
     numbered 1503.

  Mr. TESTER. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

     (Purpose: To require Senate candidates to file designations, 
              statements, and reports in electronic form)

       At the end, add the following:

     SEC. __. FILING BY SENATE CANDIDATES WITH COMMISSION.

       Section 302(g) of the Federal Election Campaign Act of 1971 
     (2 U.S.C. 432(g)) is amended to read as follows:
       ``(g) Filing With the Commission.--All designations, 
     statements, and reports required to be filed under this Act 
     shall be filed with the Commission.''.

  Mr. TESTER. Mr. President, I also ask unanimous consent to be 
recognized to speak on this amendment for up to 5 minutes.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. TESTER. Mr. President, I am pleased to offer this amendment with 
Senator Cochran and ask unanimous consent that he be added as a 
cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. TESTER. This is a straightforward amendment. It simply requires 
candidates for the Senate, both challengers and incumbents, file their 
quarterly campaign finance reports electronically. Anyone seeking the 
Presidency or a spot in the U.S. House of Representatives is required 
to submit campaign finance records electronically right now, but 
Senators or would-be Senators are not. It makes no sense.
  Right now, Senate candidates drop off a hard copy of their filing 
report with the Secretary of the Senate. Someone from the FEC comes 
over and then takes the reports over to the FEC to make copies, and 
then, finally, the copies are put online.
  These documents often run hundreds of pages in length. The FEC 
estimates it wastes about $250,000 of taxpayer money each year just to 
make those copies and put them online. Now, that might not sound like a 
lot of money in Washington, DC, but the idea of spending $1/4 million 
on an outdated process represents what is wrong with Washington, DC.

  Americans deserve to know how much money candidates raise and from 
whom, and they deserve to be able to access that information in real 
time.
  It is not just the cost of the current process that folks should be 
angry about. The process of making copies and posting the documents 
online takes weeks. That is not just a waste of time, it is bad for the 
democratic process.
  Campaign finance data filed right before a general election is not 
available to the public until the following February, long after the 
election has already taken place.
  Since the Citizens United ruling, folks aren't able to tell who is 
funding third-party advertisements. It is hard enough to know who is 
spending the money on third-party advertisements. The least we can do 
is to make sure that folks have better access to the information about 
who is giving to the candidates.
  My bill from the last Congress had strong bipartisan support--14 
Democrats, 6 Republicans, and 5 of the cosponsors are members of the 
Homeland Security Committee. I especially appreciate, and I wish to 
thank, the Republican manager of the STOCK Act, Senator Collins, for 
being a supporter of that original bill.
  We have an opportunity to do something that cuts government spending 
and adds more transparency and accountability to the elections process. 
I urge all of my colleagues to support this amendment.
  With that, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LIEBERMAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Merkley). Without objection, it is so 
ordered.

[[Page S250]]

  Mr. LIEBERMAN. Mr. President, for the information of our colleagues, 
productive work is going on to try to reach a final list of amendments 
for the STOCK Act and to have an agreement which will come up for a 
vote, and to have that obviously by a bipartisan agreement. We are 
making progress. I hope we can continue to do that.


                            Order for Recess

  I ask unanimous consent that the Senate recess from 4 to 5 p.m. so 
that all Senators can attend a classified briefing.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LIEBERMAN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BARRASSO. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BARRASSO. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                            A Second Opinion

  Mr. BARRASSO. Mr. President, I come to the floor, as I do week after 
week, as a physician who practiced medicine in Wyoming for a quarter of 
a century to give a doctor's second opinion about the health care law.
  I was thinking last week, while sitting in the House Chamber when the 
President was giving his State of the Union Address, about something he 
said. He said:

       We will not go back to an economy weakened by outsourcing, 
     bad debt, and phony financial profits.

  Repeating, he promised not to go back to an economy weakened by phony 
financial profits. That is why today, in the next hour or so, the House 
of Representatives will answer the President's call. They will agree. 
They will vote to repeal the CLASS Act--a program that is the perfect 
example of phony financial profits.
  Let me explain further. President Obama's health care law established 
the CLASS Act--a brandnew Federal long-term care entitlement program. 
CLASS pays a stipend to individuals enrolled when they are unable to 
perform daily living activities, such as dressing, bathing, and eating. 
The issue is that to qualify for the CLASS benefit, an individual would 
have to pay a monthly premium for 5 years before the Federal Government 
starts to pay out any benefits. Well, that sounds great, but not so 
fast. It turns out that the math for the program doesn't add up and it 
will not work.
  The worst part about it is that the administration has known from the 
very beginning that this CLASS Program--and the President's entire 
health care law--was built on phony financial profits. Specifically, 
the Obama administration hid behind a Congressional Budget Office 
estimate showing that this program would reduce the deficit by $70 
billion over a 10-year period. These savings are entirely mythical, and 
they come from premiums collected over the first 5 years. During that 
time, the program isn't required or even allowed to pay out individual 
benefits. Over its first 10 years, this program, the Congressional 
Budget Office estimated, would collect $83 billion in premiums but 
would only pay out $13 billion in benefits. But then instead of holding 
on to the $70 billion in excess premiums collected to pay out future 
expenses, the Washington Democrats used it as an accounting gimmick, a 
budgetary trick to pay for the President's health care law. Adding 
insult to injury, Washington Democrats then tried to claim that the 
same $70 billion could also be used to pay down the deficit. Talk about 
phony financial profits. This is the very practice used by the 
President that the President now objects to.
  The good news is that the administration finally admitted late last 
year that the CLASS Act was a complete failure and they could not make 
it work. The bad news is that the phony financial profits continue.
  Just because the program won't go forward doesn't mean that the costs 
of the President's health care law don't go forward, because they do. 
Now the American people are stuck with the bill, and it is a much more 
expensive bill than the one they had been promised and the one they had 
expected. In fact, just yesterday, the nonpartisan Congressional Budget 
Office reported that the health care law is now likely to cost $54 
billion more than expected between 2012 and 2021.
  As Politico says:

       The big change that makes the law more expensive is the 
     Obama administration's decision not to implement the CLASS 
     Act, which means the government will not collect $76 billion 
     in premiums over the next 10 years.

  I applaud the House for taking the lead and voting to repeal the 
CLASS Act. I call on President Obama and my colleagues in the Senate to 
do exactly the same. Senate majority leader Harry Reid should bring 
H.R. 1173, the Fiscal Responsibility and Retirement Security Act, to 
the Senate floor for a vote. This bill will repeal the CLASS Act so 
that the American people have a clear understanding of the cost of the 
President's health care law.
  It is time to end the phony financial profits in the President's 
health care law that continue to burden our economy and our Nation. It 
is time to finally find out if the President truly does believe in 
fairness because if he does, he will repeal the CLASS Act and make it 
clear that he has the same accounting standards for Washington as he 
has for the private sector. Washington should not be able to cook the 
books and to make the President's health care law look more financially 
sound than it really is.
  The American people are sick of phony financial profits, and they are 
demanding fairness in the public sector as well as the private sector. 
That is why I will continue to come to the floor and fight each and 
every day to repeal and replace the President's broken health care 
law--replace it with a patient-centered plan, a plan that allows 
Americans to get the care they need from a doctor they want at a price 
they can afford.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  Mr. BARRASSO. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________