[Congressional Record Volume 159, Number 22 (Tuesday, February 12, 2013)]
[Senate]
[Pages S658-S661]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GRASSLEY (for himself, Mr. Johnson of South Dakota, Mr. 
        Enzi, and Mr. Brown):
  S. 281. A bill to amend the Food Security Act of 1985 to restore 
integrity to and strengthen payment limitation rules for commodity 
payments and benefits; to the Committee on Agriculture, Nutrition, and 
Forestry.
  Mr. GRASSLEY. Mr. President, I rise today to talk about the farm bill 
and then specifically about reforming payment limits for farm programs.
  As one looks back to the fall of 2011 and the failure of what was 
referred to as the ``supercommittee,'' we saw many committees continue 
on with business as usual afterwards. However, one committee's members 
took it upon themselves to continue efforts to tackle spending and 
propose meaningful cuts--the Senate Agriculture Committee.
  For that matter, the House Agriculture Committee worked towards that 
end as well. I commend Chairman Stabenow and then Ranking Member 
Roberts for corralling the many ideas of the members of the committee 
to write a bill that cut $23 billion.
  We were able to work in committee to get the bill done. We were able 
to work in a bipartisan manner to get the bill across the Senate floor. 
It is how legislation is supposed to be considered and debated in the 
Senate.
  One of the measures in last year's farm bill was my proposal 
reforming payment limitations in the farm program.
  Adopting reforms to payment limitations contributed to the $23 
billion in savings. Beyond just being a part of saving money, these 
reforms help ensure farm payments go to those who they were originally 
intended--small and medium-size farmers.
  In addition, the reforms include closing off loopholes so nonfarmers 
can't game the system. I will come back to my proposed reforms in a 
minute after I say just a few words about the overall farm bill 
picture.
  As we all know, Congress was not able to complete work on the farm 
bill last year. But that is not for a lack of desire by either the 
Senate nor the House Agriculture Committees. There remains a desire to 
get a 5-year bill passed.
  Supporters of the farm bill need to take a hard look at what 
challenges were presented last year to getting the bill done. We need 
to forge ahead knowing some tough decisions need to be made.
  For the Senate, we need to consider whether it is realistic that we 
only reduce $4 billion out of the nearly $800 billion nutrition title. 
More can and should be done. The nutrition title comprised by far and 
away the largest expenditure in the bill.
  There are more reforms we can make to programs such as food stamps, 
and they are reforms that cut down on waste, fraud, and abuse in the 
program but also safeguard assistance for people who need it.
  There are other programs we need to take a fresh look at. Should we 
accept the status quo on the sugar program? How do we handle dairy 
policy? What policy can we implement in the commodity program that 
won't distort planting decisions but maintains an effective safety net?
  These are some of the many issues we need to debate again and decide. 
I, for one, hope we are able to start soon and work together to get a 
5-year bill completed this year. Our farmers and rural communities 
deserve to have certainty.
  When we do move forward on drafting a new farm bill, I will again be 
pushing for the reforms to payment limitations. That is why today I am 
introducing the Farm Program Integrity Act of 2013 with Senators 
Johnson of South Dakota, Senator Enzi, and Senator Brown.
  The proposed legislation strikes a needed balance of recognizing the 
need for a farm safety net while making sure we have a defensible and 
responsible safety net.
  In case there is any doubt, we do need a farm program safety net. For 
those who argue we do not need a safety net for our farmers, I argue 
they do not understand the danger of a nation which does not produce 
its own food.
  Take Germany and Japan during World War II, for instance. There came 
a point where their soldiers had difficulty fighting because they 
didn't have food to eat. So today their respective governments maintain 
vigorous support for their farmers.
  It is a matter of social cohesion as well. Without a secure source of 
food, we jeopardize our very way of life. Look around the world where 
there is hunger and you see rioting, stealing, and other acts of 
violence. We need our farmers to keep producing our food.
  For all the advances in modern agriculture, farmers are still subject 
to

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conditions out of their control. Just look at the drought that still 
grips much of the U.S.
  Without an adequate safety net, some farmers would be left with no 
ability to make it the following year. That would mean potentially less 
food being produced for an ever-increasing world population. That is a 
scary prospect.
  While farmers need a safety net, there does come a point where a 
farmer gets big enough and financially secure so that he can weather 
tough times without much assistance from the government.
  Somehow, though, over the years there has developed this perverse 
scenario where big farmers are receiving the lion's share of farm 
program payments. We now have the largest 10 percent of farmers 
receiving nearly 70 percent of farm payments.
  There is nothing wrong with a farmer growing his operation, but the 
taxpayer should not be subsidizing large farming operations to grow 
even larger. By having reasonable caps on the amount of farm program 
payments any one farmer can receive, it helps ensure the program meets 
the intent of assisting small and medium-size farmers through tough 
times.
  My proposed caps on payments will also help encourage the next 
generation of rural Americans to take up farming.
  I am approached time and again about how to help young people get 
into farming. When large farmers are able to use farm program payments 
to drive up the cost of land and rental rates, our farm programs end up 
hurting those they are meant to help.
  It is simply good policy to have a hard cap on the amount a farmer 
can receive in farm program payments. We will keep in place a much 
needed safety net for the farmers who need it most. And it will help 
reduce the negative impact farm payments have on land prices.
  Our bill sets the overall cap at $250,000 for a married couple. In my 
State, many people would say this is still too high.
  But I recognize that agriculture can look different around the 
country, and so this is a compromise.
  Just as important to setting a hard cap on payments is closing off 
loopholes that have allowed nonfarmers to game the farm program.
  The bill being introduced today will do this by cutting off the 
ability of these nonfarmers from abusing what is referred to as the 
``actively engaged'' test.
  In essence, the law says one has to be actively engaged in farming to 
qualify for farm payments. However, this has been exploited by people 
who have virtually nothing to do with the farming operation yet receive 
payments from the farm program.
  Our Nation has over $16 trillion in debt. We cannot afford to simply 
look the other way and let people abuse the farm program.
  The Farm Program Integrity Act of 2013 is the same in purpose as what 
it states in the name. This is about increasing the integrity of the 
program.
  My colleagues here in the Senate agreed with me last year as we 
included these pivotal reforms in the farm bill. I am confident these 
reforms will garner similar approval in the 113th Congress.
  I mentioned earlier how we need to assess some of the challenging 
areas of farm policy as we look to pass a 5-year farm bill, and some 
tough decisions need to be made.
  However, my proposed reforms regarding payment limits do not pose a 
tough decision. They are common sense and necessary reforms.
  Mr. JOHNSON of South Dakota. Mr. President, I rise today to join with 
my friend and colleague from Iowa, Chuck Grassley, in introducing the 
Farm Program Integrity Act of 2013, which would establish commonsense, 
meaningful farm program payment limitations. I am pleased that Senator 
Sherrod Brown and Senator Mike Enzi are also joining us in this effort. 
At a time when our country faces significant budgetary constraints, it 
is important that we look for bipartisan and commonsense approaches to 
restructuring programs in such a way that improves their effectiveness 
while also reducing the deficit. Our legislation will do that, and our 
approach has already garnered widespread support.
  The current structure of our farm support program has, in a number of 
ways, failed rural America. In 2008, the largest 12.4 percent of farms 
received 62.4 percent of farm program payments, according to the United 
States Department of Agriculture's Economic Research Service, USDA ERS. 
With such a disproportionate share of the program going to the largest, 
most capitalized operations, the small and medium-sized family farmers 
are squeezed out of the business. The farm bill is intended to provide 
programs that function as a safety net for farmers, but it has instead 
become a cash cow for the few large producers. We must maintain a 
safety net for producers, but the system must be targeted to family 
farmers instead of large agribusinesses.
  The 2008 farm bill took some important steps to strengthen the 
integrity of our farm support system. The bill established an income 
threshold for program eligibility in which payments are limited to 
producers with less than $500,000 in non-farm Adjusted Gross Income, 
AGI, and $750,000 in on-farm AGI, for a total limit of $1.25 million 
AGI. Additionally, the law eliminated the triple-entity loophole and 
required that payments go to a specific individual through direct 
attribution. These were important first steps. However, there is much 
more we must do to restore integrity to our farm programs.
  Under the current law, we have a system of support for producers in 
the form of direct and counter-cyclical payments. Direct payments are 
capped at $40,000 and counter-cyclical payments are capped at $65,000; 
additionally, there is no cap on marketing loan gains and loan 
deficiency payments, and thus, there is effectively no total 
limitation. This is unacceptable. Without a cap on payments, the 
Federal Government is subsidizing producers to get bigger, which in 
turn makes it more difficult for the smaller family farmers, and 
particularly young and beginning producers, to survive.
  Last June, we took some meaningful steps in the Senate to address the 
structure of our farm support system. Senators from both sides of the 
aisle came together to pass the Agriculture Reform, Food, and Jobs Act, 
S. 3240, commonly referred to as the farm bill, with broad support. The 
bill, as passed out of the Senate Agriculture Committee, contained a 
hard cap of $50,000 on payments under the new Agriculture Risk 
Coverage, ARC, program, a program developed to replace the antiquated 
direct and counter-cyclical programs.
  The committee-reported bill also contained important language to 
close loopholes that have allowed ``paper-partners,'' or individuals 
not directly engaged in the farming operation, to receive farm program 
payments. The bill created an important new standard for determining 
who qualifies as a farm manager. In addition to the language 
incorporated into the underlying bill, Senator Grassley and I also 
offered an amendment during floor consideration to cap marketing loan 
gains and loan deficiency payments at $75,000. Our amendment passed 
overwhelmingly with 75 votes.
  The House Agriculture Committee marked up and reported its own 
version of the farm bill reauthorization. Unfortunately, the House 
leadership refused to bring the bill to the floor before the end of 
2012. As a result, Congress was left in the position of having to pass 
an extension of the 2008 farm bill, and push off work on a full 
reauthorization, including the important reforms we included in the 
Senate-passed bill, until the 113th Congress.
  The legislation we are offering today combines the cap on farm 
program payments and language to close loopholes from the Senate-passed 
bill. As Congress proceeds with reauthorizing our farm programs, I will 
continue pushing to ensure that we finally provide for meaningful 
payment limitations and target assistance to small and medium-sized 
family farms.
  As the most important industry in South Dakota, agriculture is the 
economic engine that drives our rural communities. Without viable 
family farmers and ranchers, our small towns and Main Street businesses 
would face significant financial hardships. I have worked with Senator 
Grassley on this issue for a number of years, and I'm proud to once 
again join with him today to continue this important fight.

[[Page S660]]

                                 ______
                                 
      By Mr. REED (for himself, Mr. Grassley, and Mr. Leahy):
  S. 286. A bill to enhance civil penalties under the Federal 
securities laws, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mr. REED. Mr. President, today I am reintroducing the Strengthening 
Enforcement of Civil Penalties Act or the SEC Penalties Act with my 
colleague, Senator Grassley. I am pleased that Senator Leahy has joined 
us in introducing the bill this year.
  The SEC Penalties Act will enhance the ability of securities 
regulators to protect investors and demand greater accountability from 
market players. Unfortunately, even after the financial crisis that 
crippled the economy, some on Wall Street continue to pursue profits at 
all costs, making the calculated decision to do wrong and move on. 
Without the consequence of meaningful penalties to impact decision-
making, I fear we will continue to witness a disturbing culture of 
misconduct by some on Wall Street.
  The current regime for securities law violations limits by statute 
the amount of penalties the Securities and Exchange Commission, SEC, 
can fine an institution or individual. During hearings I held in 2011 
in the Securities, Insurance, and Investment Banking Subcommittee, I 
found out how this limitation significantly ties the hands of the SEC 
in performing its enforcement duties. At that time, the agency had been 
criticized by a Federal judge for not obtaining a larger settlement 
against Citigroup, a major player in the financial crisis that ended up 
settling with the SEC in an amount that was a fraction of the cost the 
bank had inflicted on investors and the profits the bank had ultimately 
pocketed. The SEC explained that the low settlement amount was because 
it was statutorily prohibited from levying a larger penalty.
  The bill we are introducing seeks to substantially update and 
strengthen the SEC's civil penalties statute. This legislation should 
cause potential and current offenders to think twice before engaging in 
misconduct by increasing the statutory limits on civil monetary 
penalties, directly linking the size of these penalties to the scope of 
harm and associated investor losses, and substantially raising the 
financial stakes for repeat offenders of our nation's securities laws.
  Specifically, our bill would increase the per violation cap for the 
most egregious securities laws violations to $1 million per offense for 
individuals and $10 million per offense for entities. This will help 
ensure that the SEC's most severe, or ``tier three,'' penalties will 
help deter people from engaging in the most serious offenses, rather 
than have such wrongdoing be viewed as just the cost of doing business. 
Under existing law, the SEC can only penalize individual securities law 
violators a maximum of $150,000 per offense and institutions $725,000 
per offense.
  Our bill also would allow penalties equal to three times the economic 
gain of the violator. It provides a new calculation method that 
includes the amount of associated investor losses as part of the 
penalty determination. This should allow the SEC to address situations 
where the actual economic gain to the violator is relatively small 
compared to the extent of the wrongdoing or the harm caused to 
investors.
  The SEC Penalties Act also addresses the disconcerting trend of 
repeat offenders on Wall Street. Our bill includes two statutory 
changes to substantially improve the ability of the SEC's enforcement 
program to ratchet up penalties for recidivists.
  One provision would allow the SEC to triple the applicable penalty 
cap for recidivists who, within the preceding five years, have been 
criminally convicted of securities fraud or been the subject of a 
judgment or order imposing monetary, equitable, or administrative 
relief in any action alleging SEC fraud.
  The other provision would allow the SEC to seek a civil penalty if an 
individual or entity has violated an existing federal court injunction 
or bar imposed by the SEC. Many believe this approach would be more 
efficient, effective, and flexible than the current civil contempt 
remedy.
  Finally, under the SEC Penalties Act, the penalty relief available in 
administrative proceedings would be the same as it is in district 
court.
  The nearly one-half of all U.S. households that own securities 
deserve a strong cop on the beat that has the tools it needs to go 
after fraudsters and the difficult cases arising from our increasingly 
complex financial markets. The SEC Penalties Act will help by giving 
the SEC more tools to demand meaningful accountability from Wall Street 
and protect investors, which in turn will improve transparency and 
increase confidence in our financial system. I urge my colleagues to 
support this important bipartisan legislation.
                                 ______
                                 
      By Ms. LANDRIEU (for herself and Mrs. Shaheen):
  S. 289. A bill to extend the low-interest refinancing provisions 
under the Local Development Business Loan Program of the Small Business 
Administration; to the Committee on Small Business and 
Entrepreneurship.
  Ms. LANDRIEU. Mr. President, I come to the floor today to discuss the 
importance of small businesses in the United States. It cannot be 
stated enough that small businesses are the economic engines of our 
country. Small businesses also represent the essence of the American 
Dream. They are creators of new jobs and innovative technologies. In 
fact, over the last 15 years, businesses employing less than 500 people 
have created 93 percent of all new jobs and employed 58.6 million 
workers. Businesses employing less than 20 people alone employed 21.3 
million workers. In my home state of Louisiana, small businesses make 
up about 98 percent of businesses. As Chair of the Senate Committee on 
Small Business and Entrepreneurship, I remain focused on the needs of 
these small businesses. That is why I am here today to introduce a bill 
that I believe will help spur job creation among small businesses.
  As you know, right now our country is only slowly recovering from the 
worst economic downturn since the Great Depression. This economic 
downturn disproportionately affected small businesses and, in turn, 
stifled their ability to generate growth for the country. Sadly, since 
November 2008, 80 percent of the job losses have come from small 
businesses. An estimated 2.16 million jobs were lost in the private 
sector from November 2008 through February 2009--nearly 40 percent from 
businesses with less than 50 employees. Ten jobs lost here and five 
jobs there add up. These are the job losses that hurt our economy, our 
communities and our families.
  With this in mind, I was proud to lead Congressional efforts to enact 
the Small Business Jobs Act of 2010, Public Law 111-240. President 
Obama signed this legislation into law on September 27, 2010. This 
legislation focused on the three ``C's'' important to small businesses: 
Capital, Contracting, and Counseling. Today I would like to focus on 
Capital and more specifically, on the Small Business Administration's 
504 Loan Refinancing Program, which unfortunately expired in September 
2012.
  The 504 loan program is a long-term financing tool for economic 
development that provides small businesses with long-term, fixed-rate 
loans to help them acquire major fixed assets and real estate for 
expansion or modernization. The Small Business Jobs Act of 2010 allowed 
small businesses to use the 504 loan program to refinance certain 
qualifying existing debt for 2 years. While loan volumes were 
relatively low in the program's first year, the SBA made a number of 
program modifications to encourage and allow more small businesses to 
take advantage of the long terms and low interest rates offered by the 
program. In fiscal year 2012, the program's second and final year, the 
SBA approved over 2,400 refinancings for over $2.2 billion to small 
businesses.
  Unfortunately, on September 27, 2012, the program expired just as it 
was gaining traction in the small business community. Over the past 
year, in my conversations with small business owners and in testimonies 
given in roundtables and hearings before the Committee on Small 
Business and Entrepreneurship, I have consistently heard the need to 
extend this portion of the 504 loan program. The bill that I am 
introducing today would extend for 5 years the provision allowing small 
business owners to use Small Business Administration, SBA, 504 loans to 
refinance existing commercial mortgages. Extending the 504 refinancing 
program is a commonsense way to help small

[[Page S661]]

businesses and create jobs. By allowing small businesses to refinance 
qualified commercial real estate debt, this program lowers their 
monthly mortgage payments at no cost to taxpayers. At a time when we 
are still facing high unemployment, this extension is one of many 
things that we should be doing to put more capital in the hands of 
America's job creators.
  I would like to reiterate that this is not a new proposal, and it has 
consistently received bipartisan support. In total, last year I filed 
this extension either as a bill or an amendment four times. The 504 
refinance provision extension was originally introduced as S. 2364 by 
Senators Snowe, Landrieu, Isakson, and Shaheen. Title II of the SUCCESS 
Act, which I introduced during the 112th Congress, also included the 
refinance provision. On July 12, 2012, the Senate voted on the SUCCESS 
Act as part of Senate Amendment 2521 to S. 2237, the Small Business 
Jobs and Tax Relief Act of 2012. Although the amendment came up short 
of the 60 votes needed to end debate, the SUCCESS Act amendment 
received a strong 57 bipartisan votes, including five of my Republican 
colleagues. Finally, I included the provision in a substitute amendment 
that I cosponsored to the JOBS Act of 2012 and offered the 504 
refinancing language as an amendment to the Veterans Jobs Bill. I urge 
my colleagues on both sides of the aisle to come together in support of 
this common-sense, cost effective program.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 289

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Commercial Real Estate and 
     Economic Development Act of 2013'' or the ``CREED Act of 
     2013''.

     SEC. 2. LOW-INTEREST REFINANCING UNDER THE LOCAL DEVELOPMENT 
                   BUSINESS LOAN PROGRAM.

       (a) Repeal.--Section 1122(b) of the Small Business Jobs Act 
     of 2010 (15 U.S.C. 696 note) is repealed.
       (b) Restoration of Low-interest Refinancing Provision.--
     Subparagraph (C) of section 502(7) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 696(7)) (relating to 
     refinancing not involving expansions), as in effect on 
     September 25, 2012, shall be in effect during the period 
     beginning on the date of enactment of this Act and ending 5 
     years after that date of enactment.

                          ____________________