[Congressional Record Volume 162, Number 82 (Tuesday, May 24, 2016)]
[Senate]
[Pages S3065-S3075]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DISAPPROVING A RULE SUBMITTED BY THE DEPARTMENT OF LABOR
The PRESIDING OFFICER. The clerk will report the resolution.
The senior assistant legislative clerk read as follows:
A joint resolution (H.J. Res. 88) disapproving the rule
submitted by the Department of Labor relating to the
definition of the term ``Fiduciary.''
The PRESIDING OFFICER. Pursuant to the provisions of the
Congressional Review Act, 5 USC 801, and following, there will be up to
10 hours of debate, equally divided between those favoring and opposing
the resolution.
The Senator from Georgia.
Mr. ISAKSON. Mr. President, H.J. Res. 88 is exactly the same as the
resolution of disapproval I introduced in the Senate, but it has
already passed the House. So today if we could take a vote and pass it,
we could send it to the President, hopefully, for his signature or at
least for him to express himself one way or another.
There are nine letters in the word ``fiduciary.'' There are 672 pages
of definitions describing that one 9-letter word. This is a solution in
search of a problem. It is bad for America, bad for our savers, and
makes ``too big to fail'' even bigger in America today.
I ask unanimous consent to have printed in the Record a letter from
461 people of the United States of America who are opposed to this
bill.
There being no objection, the material was ordered to be printed in
the Record, as follows:
May 23, 2016.
To the Members of the United States Senate: The undersigned
associations, chambers of commerce, organizations, and small
businesses are writing to express our deep concerns regarding
the U.S. Department of Labor's (DOL) final rule on the
Definition of a Fiduciary. This rule disproportionately
disadvantages small businesses and those businesses with
assets of less than $50 million, and stifle retirement
savings for millions of employees by placing additional
burdens on America's leading job creators, small businesses.
This will substantially reduce retirement savings for many
Americans, and therefore we urge you to support S.J. Res. 33.
On April 6, 2016, the DOL issued a final rulemaking that
expands what is considered fiduciary investment advice under
the Employee Retirement Income Security Act (ERISA),
negatively impacting small business retirement plans and
savers with less than $50 million in assets. Through SEP IRAs
and SIMPLE IRAs, small business owners and their employees
have accumulated approximately $472 billion of retirement
savings covering more than 9 million U.S. households. The DOL
final rule threatens the continued success of these plans and
the ability of small businesses to provide retirement
security at a time when millions of Americans have reached or
are approaching retirement age. Ultimately, it may even
encourage additional saving losses for those who will not be
able to access meaningful investment assistance.
First, the final rule makes it harder to provide retirement
plans to small businesses or any business that has less than
$50 million in assets (small plans). The broadened definition
of investment advice includes routine communications where no
intention to provide individualized fiduciary advice has been
expected, such as ``sales'' communications and certain
educational materials. However, despite this broad
definition, the proposal carves out large plan advisors from
this definition. If a fiduciary has $50 million or more in
assets, the advisor to that large plan is exempt from being a
fiduciary, while an advisor to a fiduciary with less than $50
million in assets, which primarily constitutes small
businesses, is not.
Because an advisor to plans with less than $50 million are
not carved out of the rule, the advisor who is trying to
market retirement savings option to a small plan is
considered to be providing investment advice and must
determine how to comply with the rule. Due to these
additional burdens advisors to small plans are likely to
incur additional costs, which will be passed on to the plan.
Further, some advisors to small plans may be incentivized to
no longer offer their services to small plans if they
determine that the small-scale of such plans means the
expense and risk of changing business models and fee
structures is not justified.
Second, advisors to small plans must either change their
fee arrangement or qualify for a special rule called an
``exemption'' in order to provide services on the same terms
as before. The new exemption called the ``Best Interest
Contract'' incorporates many new challenging conditions and
requirements that would substantially increase costs for
advisors that may ultimately get passed down to small plans
or small business employees.
Finally, the final rule limits investment education to IRA
owners, including small business employees participating in a
SEP IRA or SIMPLE IRA plan. While advisors are permitted to
provide model asset allocations appropriate for IRA owners,
they are not permitted to help identify specific funds or
investment options that correlate to the model asset
allocations. This restriction will make it more challenging
for small business employees, and may ultimately deter them
from saving for retirement altogether.
More complex regulations mean more hurdles and compliance
costs and a greater likelihood of litigation. Main Street
advisors will have to review how they do business and likely
will decrease services, increase costs, or both. Under the
final rule, small business SEP IRA and SIMPLE IRA arrangement
will become more expensive to serve, meaning that small
businesses will ultimately lose access to their advisors and
disproportionately bear the costs of excessive regulation.
Consequently the DOL's fiduciary rule ultimately harms the
very small businesses and workers they are intended to
protect. We strongly urge the Senate to take action to help
preserve retirement savings for Americans.
Mr. ISAKSON. I want to read one paragraph from the letter because it
says better than anything I could say what is wrong with the fiduciary
rule that is proposed by the Department of Labor.
First, the final rule makes it harder to provide retirement
plans to small businesses or
[[Page S3066]]
any business that has less than $50 million in assets. . . .
The broadened definition of investment advice includes
routine communications where no intention to provide
individualized fiduciary advice has been expected.
It exempts anybody with over $50 million in assets from being applied
to the rule and includes everybody with under $50 million.
The President of the United States has said, as have so many of us on
the floor of the Senate, that it is time for us to end too big to fail.
Since what happened in 2008 to our people and our economy, we know that
businesses get so large, they get unwieldy, and that they get so
strong, sometimes the little guy can get crushed. But here is a rule
that is proposed to help the little guy, and what does it do? Under the
law, it exempts the big guys if they have $50 million or more in
assets, but if they have $50 million or less in assets, it imposes 672
pages of new definitions of fiduciary rules.
Again, it is a solution in search of a problem that does not exist.
It also has a broad number of restrictions on IRA investment advice
that investment adviser can give to an IRA saver. We know there are a
lot of people around this town, in Washington, who want to end the IRAs
and put government savings accounts in charge of everybody. This may be
a part of that motivation to drive a fiduciary rule that creates more
government savings accounts, more government savings programs, and
fewer decisions the individual can make. The rule singles out the IRA
for these new regulations that did not previously apply to them, and
that is another reason this is a problem. In fact, to tell you the
honest truth, what this bill does is it promotes less advice or no
advice at all to a small saver and free exemption under the law to a
big company managing their savings.
We need to get the American people saving money. We need to get them
planning for their future. Let's think about this for a second. We have
a safety net today in America. We have a safety net of housing. We have
a safety net of food stamps. We have rent subsidies. We have SSI
disability. We have all kinds of welfare and benefits for people who
have fallen through the cracks. Every person who falls through the
cracks deserves the help of this country, but every person who can save
for their future and avoid becoming dependent on the government is
money in the bank for us, and it is money in the bank and freedom for
them.
To put more restrictions on a small saver, more restrictions on those
who provide business to small savers--all we are doing is causing more
people to go on the safety net of American Government benefits and less
people to provide for themselves.
If ever there were one reason and one reason alone that we should
disapprove this resolution, it is this: Secretary Perez proposed this
in 2010 and dropped it because there was so much opposition.
They came back with this new proposal in 2016, and they propounded
the rule, and the rule is now before us in this 672 pages. But the
Senate can take the initiative today to join the House in rescinding
this rule and recalling this rule and not letting it go into effect.
A vote to recall this rule and rescind this rule is a vote for small
business, a vote for freedom, a vote for equity, and a vote for the
American people. A vote to reinstate or keep this rule instated is a
vote against the small guy and for the big corporate financial
interests in Washington and New York City. I don't think we want to do
that. I think we want Americans saving for themselves--free Americans
giving good advice to citizens who invest and seeing to it that every
American citizen is planning for their future.
Today I join the 461 folks who signed this letter to the Senate. I
join my 41 colleagues in the Senate who joined me in sponsoring the
Senate resolution. I join the majority in the House of Representatives
who say this rule goes too far. And I plea with each and every Member
of the Senate, when they vote today, to vote to rescind the fiduciary
rule propounded by the Department of Labor. Let's send it to the
President, and let's send him a message. If he wants to end too big to
fail, then let's start passing laws that cause too big to fail not to
get bigger and instead empower small business, the American people, and
the small saver.
I urge my colleagues to vote yes in favor of the resolution of
disapproval.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mrs. MURRAY. 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. MURRAY. Mr. President, after a lifetime of hard work, all
seniors should have the chance to live out their golden years on firm
financial footing and with peace of mind. A secure retirement is also
important to strengthening our Nation's middle class and ensuring that
our country works for all Americans and not just the wealthiest few,
but for too long the deck has been stacked against people trying to
save up for their retirement. That is especially true for far too many
people seeking retirement advice. Until now, financial advisers and
brokers were under no legal obligation to work in their client's best
interest, and without this requirement, some financial advisers have
lined their own pockets by steering clients toward complicated
investments. Some have recommended that retirees make transactions that
come with hidden fees and some advisers get a commission when they sell
a financial product, even if it doesn't make sense for the client.
We finally have a new protection that would right that wrong. It is
called the fiduciary rule, and it is pretty simple. It says: If you are
going to give people advice on their retirement accounts, you should
put the client's best interest in front of your own. Unfortunately, we
are here because Republicans want to block that new rule from helping
families, and that is just wrong. It is not fair to people all over the
country who are trying to put money away for retirement.
Let's understand this new important protection and how it will help
families. Many Americans are not financially prepared for retirement.
Middle-class wages have been stagnant for decades, and it is getting
harder and harder for people to make ends meet let alone save for their
retirement. In fact, more than half of Americans have less than $10,000
in savings. Households with people between the ages of 55 and 64 only
have a little more than $14,000 in their retirement savings account,
and that is the group of people closest to retirement.
Today families need every dollar they save for retirement to count.
When people seek out retirement investment advice, many financial
advisers do the right thing and put their clients first. They hold
themselves to a higher standard than what the new law currently
requires, but some others do not.
Take the man who worked for 50 years as an electrical engineer for a
utility company. His daughter shared his story anonymously, but I think
it is an important illustration for anyone who wants to save for their
retirement. The man built a retirement nest egg in stocks and savings.
When he was 80 years old, he sought out advice from a financial
adviser--someone he thought he could trust. That financial adviser
recommended he switch his savings to more complicated investment
products. Those products came with a commission, so the adviser was
paid with each and every transaction. Those transactions ultimately
whittled down the retiree's savings by more than two-thirds--two-thirds
of his retirement savings. A few years of bad, biased advice from a
financial adviser decimated 50 years of savings.
The new fiduciary rule from the Department of Labor would close the
loopholes that allow brokers and financial advisers to give their
clients biased advice. Advisers will now make a legally binding
commitment to the families they work with. Families today have enough
to worry about. Questioning the advice they get on their retirement
accounts should not have to be one of them.
Unfortunately, instead of standing up for retirement savers across
the country, my Republican colleagues are dead set on saving the status
quo. Republicans want to roll back this new protection that would help
retirees keep more of their retirement savings, and they want to make
sure the Department of Labor can never again create a
[[Page S3067]]
protection to prevent financial advisers from bilking savers out of
their hard-earned money. We know what the Republicans will say to
defend this outrageous position, so let me go ahead and address those
issues point by point. Contrary to what my Republican colleagues will
argue, this is a workable solution. The Department of Labor went to
great lengths to create a deliberate process and took the feedback from
consumer groups and the financial industry itself to make it easier for
them to implement this new rule. Many firms and advisers are already,
by the way, putting families first, so we know working in the client's
best interest can work. That is No. 1.
No. 2, the Department of Labor absolutely has the authority to create
this important protection for families. In 1974, Congress passed the
Employee Retirement Income Security Act, and that law gives the
Department of Labor clear authority to define a fiduciary as it relates
to retirement savings.
Finally, this rule will help savers regardless of how big their
retirement savings account is. Some of my Republican colleagues are
arguing that financial firms will cut off advice for low- and middle-
income savers, but I want to remind my friends across the aisle that
many firms have already figured out how to help these so-called small
savers, and these firms are doing it while also adhering to the
fiduciary standard. Republicans say their opposition to the rule is all
about helping small savers, but I guarantee these savings are not small
to these families who rely on that money in their retirement. In fact,
they have the most to lose through financial advisers' hidden fees and
complicated financial products with lower returns.
It is time we protect these so-called small savers from conflicted,
biased advice. Over the years, millions of families have worked hard.
They put their money away for retirement and have invested their
savings to grow their retirement nest eggs. In short, they have tried
to do everything right. Unfortunately, some financial advisers have not
always done the right thing because they haven't had to, and that needs
to change, but the resolution the Republicans are offering today would
be a major step backward.
I urge my colleagues to reject this resolution. Instead of attacking
a family's best chance of getting guaranteed, unbiased retirement
advice, I hope my Republican colleagues will work with Democrats to
ensure that more seniors can have a secure retirement, expand their
economic security, and help our economy grow from the middle out, not
from the top down.
I thank the Presiding Officer, and I yield the floor to my colleague.
The PRESIDING OFFICER. The Senator from Minnesota.
Adam Walsh Reauthorization Bill
Ms. KLOBUCHAR. Mr. President, I come to the floor to speak in favor
of the Adam Walsh Reauthorization Act, which I am pleased to say passed
the Senate yesterday. I thank my colleagues Senator Grassley and
Senator Schumer for their work on this issue.
I was proud to be a cosponsor of this bipartisan legislation which
reauthorizes key provisions of the Adam Walsh Child Protection and
Safety Act. This bill was named for Adam Walsh, who was abducted from a
Sears department store and murdered when he was just 6 years old. We
need to work harder to prevent horrific crimes like this from happening
again.
In this regard, Federal support is vital to State and local law
enforcement efforts to make sure sex offenders can be tracked and
monitored. This legislation creates a safer environment for our
children by providing needed resources for those on the frontlines. In
particular, this legislation assists State and local law enforcement in
improving sex offender registries and information sharing and aids them
in locating and apprehending sex offenders. It also authorizes
resources for the U.S. Marshals to aid State and local law enforcement.
We know sex offenders are not afraid to move across State lines, and
that is why it is critical to provide the resources needed to fight to
keep our children safe from criminal predators and other influences
that are dangerous to their safety and well-being.
As a former prosecutor, I know the importance of sex offender
registries in equipping our law enforcement officers with every tool
available to prevent sex crimes.
When I was county attorney for Minnesota's most populous county, I
saw firsthand the pain and heartbreak caused by sexual abuse to
survivors and their families. During that time, I made aggressive
prosecution of those who victimize children a top priority.
I wish I could say the tragedy that befell Adam Walsh was an
isolated, one-time incident, but it is still happening across the
country. Just earlier this month in St. Paul, MN, a 7-year-old girl was
abducted within 1 minute of being out of her father's sight. That girl
was luckier than some. Police found her and arrested her alleged
abductor within hours of her abduction, but still the scars of the
traumatic event will haunt her for the rest of her life.
I am hopeful we can come together to prevent these horrible crimes
and ensure that the Adam Walsh Reauthorization Act becomes law. Now
that the Senate passed this commonsense legislation on a bipartisan
basis, the House should do the same.
Export-Import Bank
Mr. President, I now rise to speak on another topic; that is, my
strong support for the Ex-Im Bank--the Export-Import Bank. With the
leadership of many in this Chamber, including Senators Cantwell,
Heitkamp, Brown, Graham, and many others on both sides of the aisle, we
have worked very hard and were able to reauthorize the Ex-Im Bank late
last year.
Currently, only two of the five Ex-Im Board seats are filled, and
that is not functional. As a result, the Ex-Im Board cannot approve
loan guarantees and other financing tools for medium- and long-term
transactions valued in excess of $10 million, and the Board cannot put
the reforms in place that were an important part of the reauthorization
bill. Some of my colleagues who actually voted for this bill--and some
who didn't--said it should be reformed and that there should be
changes. We put those reforms in place and had it reauthorized. It was
the will of the Senate, Congress, and President to get it reauthorized,
and it was reauthorized, but it still cannot function for any new
transactions of any significant size nor can any of the reforms be put
in place. Why? Because of the dysfunctional situation of only having
two of the five Board seats filled.
In January, Mark McWatters was nominated to serve on the Ex-Im Board.
He is qualified, and by confirming Mr. McWatters, we can give the Ex-Im
Bank the quorum it needs to support American businesses that want to
sell products overseas.
The Export-Import Bank Reform and Reauthorization Act of 2015, which
was included in the Fixing America's Surface Transportation bill, or
the FAST Act, included several changes to the existing structure of the
Ex-Im Bank, including risk management policies, fraud controls, and
ethics reforms, as well as promoting exports for small businesses.
Under these reforms, small business financing would be increased,
electronic document systems would be modernized, the Bank's fraud
controls would be reviewed, and the risk to taxpayers would be reduced.
But without a quorum and Board approval, without having this additional
person confirmed--the Republican nominee--the Ex-Im Bank is not able to
adopt the accountability measures or update the loan limits so that
American businesses have access to the financing they need to compete
globally.
The governance measures in the Ex-Im Bank reauthorization strengthen
the oversight of the Bank's operations and procedures. They would
establish the Office of Ethics, headed by a chief ethics officer who
reports directly to the Ex-Im Bank Board. They would also create a
chief risk officer and a risk management committee which are designed
to oversee the Bank's operations, conduct stress tests of the Bank's
portfolio, monitor exposure levels and review Ex-Im Bank's default rate
reports. These were all issues that were raised by those who wanted
either to get rid of the Bank or greatly change the Bank--right? So we
put a number of these reforms in place.
Why didn't we adopt these reforms? Because my colleagues on the other
side of the aisle are not allowing a Republican nominee to get on this
Board.
[[Page S3068]]
That is the definition of dysfunction. These reforms will help the Bank
function better and protect taxpayer resources, which is what my
colleagues are wanting to do to protect taxpayer resources, but yet we
cannot put the reforms in place.
The Ex-Im reauthorization also modified certain loan terms and
increased the threshold for midterm and long-term financing and for
small business working capital loans and guarantees. The increased
financing amounts will help U.S. businesses access international
markets.
When our companies are competing against overseas companies for
contracts, they need the Ex-Im Bank. In 2015, the Ex-Im Bank provided
support for $17 billion in U.S. exports--not million, but $17 billion
in U.S. exports. That is a lot of jobs. That means $17 billion of
products from our country, made in the United States and made by
American workers.
It sounds like a lot. The cap that we have in place now is $135
billion for total outstanding financing. But a recent article in the
Financial Times shows that the China Development Bank and the Export-
Import Bank of China combined had an estimated $684 billion in total
development financing. We are out there at $17 billion with a cap of
$135 billion.
We need to make Ex-Im fully functioning so that it can approve all
deals just like its counterpart in China, just like our counterparts in
other developed nations. We also want to put these important reforms in
place that many of our friends on the other side of the aisle want to
see in place. If we don't, countries like China are going to eat our
lunch.
It is not just China. There are 85 credit export agencies in over 60
other countries, including all major exporting countries. Our companies
are competing against foreign businesses that are backed by their own
countries' credit export programs and often receive other government
subsidies. Why would we want to make it harder for our own companies--
American companies--to create jobs right here at home? That is what we
are doing.
We, the Congress, and certainly the President realized that we needed
to reauthorize the Bank. But now we are not able to function and to put
on simply one more Board member, and we don't have a quorum to make
decisions. That Board member is a Republican nominee. If we want a
level playing field for our businesses, we need to have our Export-
Import Bank open and running.
This is about jobs. In 2015, the Ex-Im Bank provided $17 billion in
financing that supported 109,000 U.S. jobs. This is despite the fact
that the charter lapsed between July and December of last year, meaning
that they literally could only do their work for half the year.
We need to make sure that the Ex-Im Bank is able to make small
businesses and American businesses grow and reach markets all over the
world.
The Ex-Im Bank offers loans, loan guarantees, and export credit
insurance. Increased accountability and oversight are needed to make
sure these programs are strong.
Since we reauthorized the Ex-Im Bank, 649 transactions worth $1.8
billion have been approved, supporting hundreds of U.S. small
businesses. These small business owners, such as the many I have met
with in Minnesota, told me that the Ex-Im Bank is essential for their
ability to access new and emerging markets all over the world.
Balzer is an example of an agricultural equipment manufacturer with
75 employees and based in Mountain Lake, MN, a town of 2,000 people.
They now export 15 percent of the total sales with the help of the Ex-
Im Bank. Over the past 5 years Ex-Im financing has supported $1.7
million in exports. But guess what. What if Balzer got bigger and
became a medium-size company wanting to do something over $10 million.
What if they wanted to do something new and get a new bigger loan, but
they can't get it approved because we only have two of the five members
on the Ex-Im Bank Board. So we cannot get the new financing approved.
Do we think they are doing that in China? Do we think they are doing
that in any other developed nation where they say: Well, we are just
going to have two of the five people on this Board to do some of the
work with some of the smaller companies, which are important, but we
are not going to be able to do anything when they are competing for a
major contract. That is what we are doing right now.
Take Ralco, a small animal feed manufacturer in Marshall, a town of
13,500. Ralco is a third-generation family business that just
celebrated its 45th anniversary. Ralco exports to over 20 countries.
Over the last 5 years, Ex-Im has provided financing that supports
nearly $11.7 million in exports for Ralco. If that was just in one
contract that was over $10 million in new financing, they wouldn't be
able to get it approved because of the fact that the Banking Committee
and this Congress has decided to stall out and approve the Ex-Im Bank
but cut off its ability for any major new financing. That is what is
happening right now.
How about Superior Industries in Morris, MN? Superior manufactures
bulk-material processing and handling systems. There are 5,000 people
in this town, and 500 people in Morris work at that company. That is 10
percent of the population. Ex-Im has provided financing that supports
nearly $3.1 million in exports for Superior over the last 5 years.
The list goes on. These are not large corporations. These are family
businesses and smaller companies that are essential to the economic
well-being of the towns and counties. The Ex-Im Bank helps these small
businesses from all over my State compete and export globally. These
are success stories, and we need more of them.
These are the stories we are hearing from every State. These are the
stories we want to hear--not the stories that we are now hearing about
companies that are closing down operations or that are laying off
employees because they are not able to access the new financing they
need to make major deals. They are going to foreign companies whose
countries have the foresight and have their act together in their
governments or in their congresses so they don't leave three of five
positions open on their financing authority boards.
Ex-Im has many transactions waiting for Board approval. There are
about $10 billion of deals waiting in this pipeline. So when my
colleagues talk about creating jobs, there are $10 billion in private
deals in the pipeline simply waiting to have one Board member confirmed
so that we can get this done.
The Ex-Im Bank reauthorization passed with broad bipartisan support.
We need to confirm J. Mark McWatters and put in place these important
reforms to start approving transactions so our businesses can export to
the world.
Usually, people sometimes stall on a confirmation because someone is
viewed as too extreme or there is some problem with their record. This
is a Republican nominee to fill a Republican slot on the Board. We need
to get this done. Our workers, our businesses, and our country are
counting on us to get this done.
I ask my colleagues to urge the Banking Committee to get this nominee
through or somehow through some other procedural genius way bring this
to the floor so that we can get this done.
I yield the floor.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. ALEXANDER. Mr. President, the Congressional Review Act resolution
of disapproval is about protecting the right of ordinary Americans to
retire. That is what this is about.
We are trying to stop the Labor Department's so-called fiduciary
rule, which will restrict access to basic retirement planning advice
for all but the wealthiest Americans and will force ordinary Americans
to go it alone and to try to make the best guess they can about how to
manage their money for retirement. Here is how. The administration's
new rule updates the rules and requirements for retirement advisers,
now requiring them to act as ``fiduciaries.'' That, like many of the
administration's rules, sounds good and sounds helpful, but in practice
it is going to cause great harm.
The administration has created new legal liability, and that
liability is so risky that advisers will only take on that liability
and risk if they are advising individuals with big assets, so that the
potential return outweighs the risk. In other words, good retirement
advice will be available only to the rich under this rule.
[[Page S3069]]
We know this because a similar rule was implemented in the United
Kingdom in 2013. The result was that people with smaller savings
accounts lost access to retirement advice. Many firms quit providing
face-to-face advice for small accounts. A quarter of all small firms
were forced to close shop altogether. The United Kingdom's four largest
banks have all raised the minimum levels of assets for clients to
receive advice--$80,000 at one bank, $160,000 at another, $355,000 at a
third, and $800,000 at a fourth--due to the new rules. So to access
retirement accounts at the United Kingdom's biggest banks, you have to
have at least $80,000 in your account.
So what would that look like here in the United States? Well, 77
percent of 401(k) balances in the United States are below $80,000, the
lowest threshold, and 99.2 percent of the 401(k) balances in the United
States are below the $800,000 threshold. So if the banks of the United
States respond like the United Kingdom's banks did to this rule, we
might find that less than 1 percent of Americans will be rich enough to
receive retirement advice at one of our Nation's largest banks.
We should call this ``Only the Rich Retire'' rule.
Americans with smaller retirement savings or Americans who are just
getting started saving for retirement are at the greatest risk for
losing access to affordable retirement advice. Unless you have at least
$80,000, you may not be able to get advice. Your small amount may not
be worth the liability to the adviser. This will force middle- and low-
income Americans to invest on their own without advice. This means they
may not save at all or may make poor decisions at critical times like
market downturns. Younger Americans, minorities, and women are the most
likely to be hurt. Ninety-five percent of Americans between the ages of
25 and 34 with 401(k) plans have balances under $80,000. Seventy-five
percent of Black households and 80 percent of Latino households age 25
to 64 have less than $10,000 in retirement savings, compared with 50
percent of White households. The median IRA balance is $25,969 for
American women compared to $81,700 for men. Even left-leaning
economists estimate that this rule would cost middle-class Americans as
much as $80 billion in lost savings.
The late Chet Atkins, the prominent guitarist from Nashville, said:
``In life you have to be mighty careful where you aim because you are
likely to get there.'' Well, retirement is all about planning. If you
don't know how to plan, it is going to be pretty hard to retire. In
Chet Atkins' terms, if you are not able to make a plan, it is hard to
retire.
Retirement planning is complicated. Our tax system is a mess. Most
working Americans don't have time to learn about all the financial
vehicles available for them to save and to understand exactly what
steps they must take to have enough money to enjoy life when they end
their careers. This rule comes at a time when many Americans are
beginning to save money again after surviving the worst recession since
the Great Depression and the slowest recovery since the Great
Depression. This rule is allegedly to protect individuals from
misleading investment advice, but in practice the new rule will make
retirement planning unaffordable for lower to middle-income Americans
whose accounts are not valuable enough for advisers to take on the new
legal liability created by this rule.
One of the most radical and out-of-touch aspects of the Obama
administration's agenda has been its labor policies. Take the overtime
rule. At colleges, this rule could force students to pay more tuition.
One Tennessee college estimates $850 more per student. The President is
running around talking about keeping college costs down. Why is it that
this administration is coming out with a rule that would raise tuition
$850 per student?
At workplaces, this overtime rule could result in workers having
their hours and benefits cut, fewer opportunities for advancement, less
flexibility, and less control over their work arrangements.
Then there is the joint employer decision. Through this National
Labor Relations Board decision, the administration is trying to steal
the American dream from owners of the Nation's 780,000 franchise
businesses and from millions of contractors by destroying the franchise
model that has helped so many Americans go from cashier to business
owner.
Then there is ObamaCare. The health care law defines full-time work
as only 30 hours. That really sounds more like France than the United
States. It has forced employers to cut their workers' hours or reduce
hiring altogether in order to escape ObamaCare's mandate and its
unaffordable penalties.
Then there are micro-unions. This National Labor Relations Board
decision will allow collective bargaining units made up of subsets of
employees within the same company. It will divide workplaces. It will
make it harder and more expensive for employers to manage their
workplace and do business.
The U.S. Chamber of Commerce noted recently:
``The overtime regulation joins the recently finalized
fiduciary rule which will reduce the ability of small
business to provide retirement benefits; the EEOC's proposed
revised EEO-1 form that will explode the burden on employers
for reporting compensation by micro-demographics; OSHA's
just-released injury reporting regulation that will result in
sensitive employer data being posted on the Internet for use
by unions and trial lawyers; and the Department of Labor's
recently issued `persuader' regulation that is intended to
chill the ability of employers to retain competent labor
counsel during union organizing campaigns.''
This retirement rule is only the most recent in a series of actions
that make it much harder for employers to add jobs and much harder for
workers to climb the economic ladder of opportunity.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Flake). The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. GRASSLEY. 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. GRASSLEY. Mr. President, I ask unanimous consent to speak as in
morning business for 10 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mosaic Life Care Investigation
Mr. GRASSLEY. Mr. President, I wish to address an important
investigation that has produced significant results for low-income
people and that the Republican majority in the Senate helped bring
about.
In late December 2014, news reports indicated that a nonprofit
hospital chain in Missouri and Kansas, Mosaic Life Care, had been
aggressively suing low-income patients. These news reports further
indicated that many of these patients qualified for financial
assistance and were wrongly placed in collection.
Let me be clear. Nonprofit hospitals should not be in the business of
aggressively suing their patients. As recipients of a tax-exempt
status, these hospitals have a heightened duty to assist patients in
qualifying for financial assistance. That means these hospitals must
implement a financial-assistance policy where low-income persons
receive free- or reduced-cost care. Further, these types of hospitals
must assist low-income persons in ensuring that the proper paperwork
for government assistance or private insurance is properly filed. In
essence, because of the favorable tax treatment these hospitals
receive, they have a duty to help our Nation's most vulnerable.
For these reasons, I began my investigation into Mosaic to determine
what, if anything, went wrong. On January 16 of last year, I sent a
letter to Mosaic to begin my inquiry. Over the past year, my staff has
met with Mosaic representatives, exchanged numerous emails, and had
many phone calls to get a better idea of the process at issue. It
became clear that Mosaic was lacking the right number of personnel to
manage financial assistance intake.
Common sense tells me that when anyone visits a hospital, it is often
a scary event under any condition. When we go to hospitals, it is
generally because something has gone wrong. In that moment of need, we
put our lives in the hands of professionals to help us get healthy. In
those moments of pain and fear, we put our trust in medical
professionals to give us the right care. In other words, we place our
trust in the hospital to have hired the right
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people. And, as normally happens, after treatment is provided, here
comes the bill.
Again, common sense tells me nothing in life is free. Someone, not
always the patient, will always have to pay the bill. It is common
sense; there is no free lunch. But when it involves low-income persons
and a nonprofit charity hospital has provided the treatment, that
hospital should provide some type of financial assistance or help to
get financial assistance if it is available. That obligation exists
simply because of the tax-exempt status.
If you want that status of tax exemption, you are supposed to help
those who are less fortunate. So when that bill comes, the hospital
must ensure that it has people in place to assist the patient in filing
for financial assistance if it is available. If the patient doesn't
have any coverage, but his or her income is so low that they qualify
for free- or reduced-cost care, the hospital should ensure that
patients know help is available.
It is common sense. Employees should explain the process and
patients' rights. Tax-exempt hospitals cannot be in business to profit
from poor people who may not know what form to file. That is not what
Congress intended to happen when we created the tax exemption.
During the course of my investigation into Mosaic, I made clear that
they must have adequate personnel. In response to my overtures, Mosaic
has hired seven resource advocates to assist with Medicaid,
supplemental assistance, and Social Security disability applications.
Two additional financial counselors were reassigned to focus solely on
assisting patients navigate the financial assistance process.
Importantly, Mosaic will hire an additional financial counselor
dedicated to its outpatient clinic. Finally, five patient financial
service representatives have been assigned with the duty of ensuring
the timely processing of financial assistance applications.
These are very important as well as productive steps to take. It just
makes sense for a charitable health care institution to help its low-
income patients rather than sending debt collectors after them and
suing them. It is common sense. You cannot get blood out of a turnip.
Further, during the course of my investigation, I made clear that
charging interest on accounts prior to final judgment would further
burden the poor. Nonprofits need to take steps to reduce debt burdens,
not increase that debt.
In response, Mosaic will no longer charge interest on accounts until
a final court judgment. Further, to provide even more opportunity for
patients to receive financial assistance, Mosaic has extended its four-
statement bill cycle to six. That will allow more opportunities for
patients to receive notice of their ability to receive financial
assistance. These steps will help patients in the long run.
Again, common sense tells me it is important, and it is important to
note that there is a certain amount of self-responsibility to be
accepted when someone incurs a bill for services rendered. But that
doesn't mean hospitals shouldn't lend a helping hand. Just look at any
Medicare and/or health insurance bill that you get. You know then how
intimidating that document can be.
The changes I just mentioned are not the end of this, however. I wish
to note a much more profound result. I repeatedly urged Mosaic to look
at low-income patients already in the collection system or the court
system. Over the course of several months, I urged them to consider
forgiving their debt when it was obvious that people didn't have the
income to pay.
In response, Mosaic instituted a 3-month debt-forgiveness period
running from October 1, 2015, to December 31, 2015. Importantly, during
this forgiveness period, Mosaic lowered the threshold by which a
patient could qualify for financial assistance. When a patient was
already in collection or already subject to a court judgment, they
could apply for debt forgiveness.
Mosaic recently informed me of the results of their change of policy.
The debt forgiveness program resulted in 5,542 financial assistance
applications, of which 5,070 were approved. A total of $16.9 million in
debt, interest, and legal fees were forgiven. Over 5,000 people no
longer have to worry about their debt burden; 5,000 people are free
from the vice grip of almost $17 million.
Medical debt is vicious. It is a mental and emotional drain that can
bring the strongest among us to our knees. For some patients, they will
never be able to pay off their debt.
Mosaic eventually did the right thing. It deserves credit for that.
Considering where I started in this investigation, it probably shocks
Mosaic that I would compliment them. But I speak from the heart that
when they make these changes, they ought to be complimented.
Now, thousands of people have a new lease on life, thanks to Mosaic's
meeting nonprofit tax-exempt responsibilities. That is where we are
coming from. If it hadn't been for the tax exemption and accepting the
responsibilities of tax exemption, there would be no way we could
complain about Mosaic.
I wish to point out a lesson to all 535 Members of Congress. That is
why oversight is so important. That is why I take my responsibilities
as chairman of the Judiciary Committee so seriously. Results matter.
Mr. President, I ask unanimous consent that all time spent in quorum
calls be charged equally to both sides during debate in relation to
H.J. Res. 88.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. GRASSLEY. I yield the floor.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. BOOKER. Mr. President, I rise today to join my colleagues in
supporting the conflict-of-interest rule that was recently finalized by
the Department of Labor. This is a fair and balanced rule that protects
our Nation's retirees and savers. In fact, it is a rule that makes sure
that in the midst of a retirement crisis in this country, where people
are having a harder and harder time making sure that after working a
lifetime they have the money they need to retire--it is bringing common
sense back to that process.
I firmly believe that the conflict-of-interest rule should not be a
partisan issue. That is because this rule comes down to those
fundamental ideas that really know no party bounds. Again, the idea for
me is about honor and common sense.
By honor, I mean the idea that we are a country that believes every
American deserves a fair opportunity to succeed. Fairness is at the
core of our Nation's ideals--this idea that we are all bound to do what
we can to identify and change systems that stack the deck against hard-
working families that play by the rules.
This body and its history have done so much to level the playing
field and make sure that we have a free market and a fair market. It is
because we as a nation value dignity and stand against those who seek
to exploit or take advantage of others. In fact, we understand that we
have an obligation to our country men and women. We have an obligation
to each other to ensure that there is a level playing field that no one
can take advantage of or exploit.
We participate in, abide by, and are meant to benefit from this
social contract and understand that a social contract and a vibrant
economy are not mutually exclusive. Actually, they reinforce one
another.
These principles make America exceptional. They empower and embolden
our free-market economy. They generate strength and security for more
families. They ensure abundance and allow us to strive for ideals of
life, liberty, and the ability to pursue happiness. So I believe we are
honor bound to uphold these principles, to ensure fairness and
opportunity for all. We also must understand that fairness is a key
ingredient in broad-based economic growth and strength.
When I talk about common sense, I mean people have a reasonable
expectation, in a free market, to be treated fairly and justly,
especially in those areas that are most critical to their lives. It is
rational, therefore, and just common sense, for us to insist that when
we are treated by a doctor, that the doctor is going to place the
interest of our health over their own financial interests. It is
understandable that when we go to see a doctor, what is paramount is
what is in our best interest. It is also understandable that we
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have that standard when it comes to the law; and, when we seek legal
counsel, we are right to expect our lawyers to act in our best
interest. That is the standard for doctors and for lawyers, for our
health and well-being and for those legal decisions that will affect
our lives profoundly.
When we seek advice on an issue as serious as our health, our
livelihoods, and our finances, we expect to be treated with the highest
standards of care, and those professionals--those lawyers or doctors--
shouldn't in any way be inhibited in their ability to make a
livelihood. Indeed, in many cases, they should flourish.
While the vast majority in the financial industry are strong advisers
who put the interests of their clients first, the challenge we have
right now is that unlike doctors and lawyers, those financial advisers
are not required to put the interest of their clients at the high level
of a fiduciary standard. As a result of not having that same high
standard of care as doctors and lawyers, there are some within that
industry who actually take advantage of families trying to plan for
their retirement.
A large money market manager recently said: ``As active equity
managers we have all been on the hook lately to justify our value
proposition. And we should be, since the facts clearly show that as an
industry, we have not consistently provided the performance that
investors deserve.''
Here are folks who have incredible financial knowledge,
sophistication, and acumen talking to everyday Americans and putting
forth this idea that they are going to help them retire with security,
but they have no obligation to do what is in their best interest, to
uphold the highest standard of care. That is problematic, and industry
leaders understand that. They understand we cannot allow space for
those who might seek to exploit families, struggling to retire, for
their own financial interest.
It is this idea that is at the root of the conflict-of-interest
rule--the idea that hard-working Americans saving for retirement
deserve to be treated with fairness, with honor, and with a mutual
obligation Americans should have toward each other, so that if they
seek advice from a financial adviser, they deserve to get advice that
prioritizes their needs above all others. This is about fairness. This
is about common sense.
I was proud to stand with the Secretary of Labor, Secretary Perez,
and my colleagues Senator Warren and Senator Murray when this final
rule was announced. I am proud that prior to that, the rule went
through a very lengthy and diligent process that allowed for robust
feedback from all types of stakeholders. Throughout the rulemaking
process, the Department of Labor demonstrated patience and
inclusiveness of all perspectives, and, most of all, an unyielding
commitment to protecting our Nation's workers and retirees--protecting
the bedrock of our country and the very idea of the middle class; that
if you work hard and play by the rules, you can retire with security
and dignity.
The result of all the work of the Department of Labor and their
commitment to this ideal is a fair and balanced rule based on the ideas
of common sense and honor. The fact is, for so many Americans, it could
not come at a more important time. In fact, it could not come at a more
urgent time. We have a retirement crisis in our country. So many people
are working harder and harder but are finding themselves with more
month at the end of their money than money at the end of their month.
Many people are finding it harder and harder to save for retirement.
In fact, right now one in three aren't saving for retirement. The
Federal Reserve found that a whopping 47 percent of Americans don't
have the savings to even cover a $400 emergency expense. Since the
financial crisis, retirement readiness for the average American has
actually decreased.
Families are seeing greater challenges now in securing their own
future. They are seeing greater difficulties securing the American
dream of being able to work hard, play by the rules, and retire with
dignity and security. I know this personally, and my office does
because we hear from constituents all the time about their real
stories, not just of the difficulties of planning for retirement but in
dealing with a financial industry that often takes advantage of their
clients.
Last year I heard from one of my constituents in Lakewood who wrote
to tell me about his mother. After losing her husband, she went to seek
advice from a financial adviser to help her sort out her finances and
plan for her retirement. She put her trust and her livelihood in the
hands of this adviser, but the conflicted advice she received ended up
costing her tens of thousands of dollars.
Saving for retirement is stressful. At kitchen tables in every town,
every city across the country, families are struggling to figure out
how best to save for retirement, and here was an adviser who provided
conflicted advice, costing my resident in Lakewood tens of thousands of
dollars because they trusted and relied on the fact that the advice the
financial retirement adviser was giving them was in their best
interest. This is wrong, and it is unfair.
Especially for those Americans who don't have much to begin with, the
way they manage their retirement savings means so much. Huge gulfs
continue to persist in retirement savings between men and women, the
poor and the wealthy, and minority families and their White peers. This
is a problem for all Americans, from all different backgrounds. It is a
crisis in our country.
For so many Americans, in regard to this rule, there is so much at
stake. Good advice from a retirement adviser can make a world of
difference. In fact, it can be the difference between security and
financial crisis. It can be the difference between retiring with ease
versus retiring with stress and dependence. That is why the advice of a
trusted retirement professional is so important.
There are many good actors in this space who know that increased
transparency, increased accountability, and the idea of profitability
don't need to be mutually exclusive. In fact, there are people making
extraordinary livings in this space by doing the right thing for their
clients. Honest, hard-working brokers know that updating the standards
expected of retirement advisers is common sense, fair, and it actually
helps America as a whole become stronger.
That is why industry leaders are already making changes to prepare
for this rule's implementation and why the CEO of a major money
management firm recently implored his industry colleagues by saying:
Let's not lose sight of why clients engage us in the first place: to
help them save the money they need to buy a house, send their kids to
college, retire comfortably and meet any other long-term financial
goals they have.
This CEO is 100 percent right, and I am happy many companies are
beginning to ensure their retirement plans make the most of their
employees' savings. According to a recent Wall Street Journal report,
the administrative cost of retirement plans fell to their lowest level
in a decade in 2015 and with this rule, they will continue to fall.
The needle is moving in the right direction. To attempt to block this
rule now would be a step backward, and it would send a message to hard-
working Americans and retirees that they simply don't matter enough to
this body; that this body cares more about special interests than hard-
working families. It cares more about financial advisers on Wall Street
and their ability to exploit middle-class Americans than it does those
middle-class Americans who believe in the American dream that is being
put at risk. To not support this rule would be to roll back what we all
know; that we can create a win-win and a fair economy that doesn't
exploit people who are vulnerable but uplifts them, where both
financial adviser and middle-class retirees can have success. I know
men and women in our country--and many who serve here--who know and
understand the challenges of planning for retirement.
Look, on the day this rule was announced earlier this year, I
understood some people would try to fight this, and I turned to the
folks listening and said: Look, this fight is not over. We are going to
have to continue. Let us as a nation fight for what is right, not for
the special interests of the wealthy few. Let's not allow people to
feast upon the retirement savings from the hard work of others, but
let's fight to affirm the middle-class dream in America. Let's fight to
make sure we are
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doing right by folks. Let's create a level playing field.
This is a fight for people like the constituent of mine who not only
lost her husband but too much of her savings and now is trying to pick
up the pieces. This fight is not over for hard-working families across
this country who are diligently saving for retirement and for whom
these hidden fees, unfortunately, threaten to undermine decades of hard
work. These hidden fees are insidious. These hidden fees allow some
advisers to exploit people for their own enrichment. These hidden fees
are un-American.
We must continue to make sure those hard-working advisers who provide
exemplary levels of service, who prioritize their clients' interests,
are the ones being elevated in this fairer system and not being
maligned by those few bad actors who feast upon the savings of other
people.
This fight has to be about what it means to be an American. That is
what this body did when it passed the Employee Retirement Income
Security Act 40 years ago. We believed in the idea that America is a
place where if you work hard and you play by the rules, you can retire
with dignity and don't have to worry that your doctor or your lawyer or
your financial adviser will exploit you and thrust you into insecurity
or worse.
This is what we must do in this body now. In the spirit of past
actions, we must put the interest of our middle-class constituents
first, plain and simple. This rule is fair. This rule is balanced. This
rule helps our free market economy. This rule ensures that the highest
standard will be applied to something as precious and fundamental as
our retirement savings. It preserves honor in this business. It
preserves honor for America. The needle has already moved forward. We
cannot afford to go back.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Republican whip.
National Defense Authorization Bill
Mr. CORNYN. Mr. President, we will be voting on something known
around here as the fiduciary rule, which the Senator from New Jersey
just spoke on, and later we will be voting on inspection of catfish.
Now, people might wonder, as significant as those two issues are, why
we are not dealing with the Defense authorization bill that Senator
McCain has been pressing our Democratic friends to allow us to get
started with. For my money, there is simply nothing more important for
the Congress to do than to make sure our men and women in uniform have
the support and the resources and the training they need in order to
fight our Nation's fights and win our Nation's wars. But because of the
objection of the Democratic leader yesterday, here we are.
I have to say to my friend, the Senator from New Jersey, talking in
support of this fiduciary rule that was created by Dodd-Frank, to me,
this just exemplifies this paternalism which has typified this
administration when dealing with the economy. They don't actually
believe consumers know how to make good choices for themselves, so they
are going to force a Federal regulation and rule and a one-size-fits-
all standard on the financial services industry.
I have to say that I don't think it is any coincidence that our
economy grew at one half of 1 percent last quarter. That is pathetic
economic growth, and it is simply not fast enough for our economy to
create jobs in order to allow people to work full time instead of part
time and for those who have left the labor force to join the labor
force and to provide for their families and pursue their dreams. But it
is unfortunately typical of the regulatory approach of the Obama
administration, which I think helps strangle the economy and economic
recovery.
Economists and many people much more knowledgeable than I have said
that after the 2008 fiscal crisis, we should have seen a bounce, a V-
shaped bounce. We hit bottom; we should have bounced back up.
Unfortunately, we have been at a very flat recovery--if you can call it
much of a recovery--since 2008, primarily because people are in doubt
whether their plans for small business, medium-sized business, or large
business, for that matter, will be put in political peril because of
the uncertainty of the regulatory approach of the Obama administration.
That is why we need to disapprove this fiduciary rule and to get the
government out of the way, particularly when it comes to people who
choose their own financial advisers. It is just another example of the
wet blanket the regulatory approach of the Obama administration has
been on the economy in general--just one small example.
As I said at the outset, we should be talking about the national
defense authorization bill, which passed out of the Armed Services
Committee with overwhelming bipartisan support. Only three members of
the Armed Services Committee voted against it. But rather than be
debating that, here we are.
We should be talking about and voting on the Defense authorization
bill because of obviously how important it is to our country's safety
and security. As I mentioned, it provides our military the funding and
authorities they need in order to protect and defend us, and it ensures
that our warfighters are equipped for success on the battlefield.
The President's senior adviser, Ms. Valerie Jarrett, claimed recently
that President Obama had ended two wars and that this was part of his
legacy. I am wondering which wars she was referring to because,
frankly, the world is on fire. The Director of National Intelligence,
James Clapper, has said that never in his long career--and I think it
goes back 50 years or more--in the intelligence community has he seen a
more diverse and a more threatening environment. We know we have
conventional threats like a newly emboldened Vladimir Putin threatening
Europe and the NATO alliance there. Then we have terrorist groups like
ISIS, the Islamic State, which has morphed from Al Qaeda--the radical
religious ideology which has told them that in the name of their
religion, they can murder innocent men, women, and children.
A few weeks ago I had the chance to travel with some of my colleagues
from the House side to visit some of our troops stationed in the Middle
East. It was obviously an honor to visit with those serving our country
so selflessly in remote parts of the world, where they are separated
from their families and putting service to country above self. We had a
chance to visit the U.S. Navy's Fifth Fleet in Bahrain and the
Multinational Force & Observers, the MFO, an international peacekeeping
group at the North Camp in the Sinai Peninsula. Quite a few members of
the Texas National Guard served there until they ended their tour just
recently. In meeting with those folks on the ground and learning more
about the situation, one thing is clear: The Middle East continues to
be a region racked by instability and violence at every turn.
I have previously spoken about how the imprudent drawdown of U.S.
troops in Iraq without getting a status of forces agreement, which
would have allowed a larger U.S. presence there, much as we had after
the war in Germany, in Japan, and elsewhere, where we frankly have seen
thriving economies and stable countries spring up after the wake of
terrible wars--unfortunately, President Obama did not see that as a
priority. And because of the precipitous drawdown in Iraq, a power
vacuum was left.
If there is one thing we should have learned on 9/11, it is that
power vacuums are breeding grounds for terrorists, and that is as true
today as it was back then.
So now the Islamic State--the latest iteration of Islamic extremism--
has carved out a safe haven in Iraq and Syria, virtually wiping off the
map the border between those two countries, and it continues to grow in
north Africa and the Middle East. The terrorist group's influence in
the region couldn't be clearer.
As I mentioned, on the Sinai Peninsula, I had a chance to visit with
some of our soldiers about the threats they face from ISIS-affiliated
groups every day, including the use of improvised explosive devices by
some of the groups who have now pledged allegiance to the Islamic
State.
Back in March, it was reported that an ISIS-linked group killed more
than a dozen of Egypt's security forces in the Sinai, and unfortunately
that carnage continues.
There is no doubt that ISIS is continuing to work against U.S.
interests and against our allies, targeting not
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only Egyptian forces in this instance but, at times, U.S. forces on the
ground as well.
Unfortunately, ISIS has taken advantage of a power vacuum left in
Libya after the President led a coalition to topple Libyan strongman
Muammar Qadhafi and unfortunately created another power vacuum there
which continues to this day. We would have thought we would have
learned something from our experience in Iraq, but apparently President
Obama did not because he had no real plan for a post-Qadhafi Libya, no
plan and no strategy in place on how to move forward afterward. As I
said, now Libya is a failed state and a breeding ground for ISIS.
In Tunisia, we actually had the chance to visit with the U.S.
Ambassador to Libya. Unfortunately, as the Ambassador and his country
team said, we haven't actually been to Libya. They are literally an
embassy in exile in Tunisia but doing the best they can to try to
figure a way forward in Libya.
One thing we know for sure is that Libya plays host to an increasing
number of ISIS fighters. Some even estimate that the ranks of ISIS have
doubled in Libya in the past year alone. Left unchecked, this ISIS safe
haven in Libya, a country which is obviously strategically located
across the Mediterranean from Europe, where it is pretty easy passage
up into the EU, movement around the EU and then in countries--38
countries in total have visa waiver agreements with the United States,
and people can travel to the United States from those countries without
a visa. But this jumping-off point in Libya to Europe and then to other
places is a real threat and provides another base from which ISIS can
continue to terrorize and target the United States and our friends and
partners.
As I mentioned, we were able to travel to Tunisia and visit with the
relatively newly democratically elected President there. Tunisia touts
itself as one of the rare success stories of the Arab spring--maybe the
only success story--but their hold on the country is enormously
fragile, primarily because the terrorist threat has killed the tourist
activity that has been part of the economic lifeblood of that beautiful
country right on the Mediterranean Sea in north Africa. Unfortunately,
Tunisia is seeing an influx of its own citizens traveling to Libya to
join ISIS, and today Tunisia remains one of the major sources of
foreign fighters for this terrorist army.
After its campaign of rape and genocide against the Yazidis,
Christians, and Shia Muslims, ISIS continues to expand across north
Africa and the Middle East, all the while working against U.S.
interests, not only in the region by inciting violence and terrorist
attacks but also in Europe and in places like San Bernardino, CA.
Of course, our military serves in dangerous places all over the
world, as do other people who bravely serve in a civilian capacity with
our intelligence community and others. Today the threats extend all the
way from an aggressive Russia, as I mentioned earlier, to NATO's
doorstep, to an increasingly belligerent China in the South China Sea--
a topic the President, no doubt, is discussing during his visit in
Hanoi--and then there are the repeated unchecked provocations of North
Korea. These are all areas marked by volatility and unpredictability.
Given these threats, given this danger, given this need, we would
think there would be bipartisan support for doing our work here and
actually debating and voting on the Defense authorization bill.
The bottom line is that our military men and women must be prepared
for all potential contingencies, and the Defense authorization bill is
our chance here in Congress to make sure they have the training and
equipment to do just that.
It is pretty clear that the administration's disengagement around the
world over the last 7 years has not been working, and I have been
saying that for some time. But the Defense authorization bill we will
move to tomorrow is an opportunity for Congress to provide for our
troops to the greatest extent possible and ensure that they are ready
to face all of these threats. The Defense authorization bill would
authorize resources to fight ISIS and to counter Russian aggression and
shore up U.S. and NATO capabilities.
As we begin this debate and discussion, let's keep at the forefront
of the conversation the men and women who are out there in harm's way
facing these myriad of threats, separated many times from their family
and their community and their friends, and let's work in good faith to
get this bipartisan bill passed as soon as we can.
Mr. President, 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. WYDEN. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mrs. Fischer). Without objection, it is so
ordered.
Mr. WYDEN. Madam President, last month the Department of Labor laid
out new safeguards that will help middle-class savers in a rule
pertaining to advice given by financial advisers. Today the Senate has
taken up a resolution of disapproval that will undo that progress. I
urge my colleagues to oppose it. The Senate ought to be doing
everything it can to help middle-class workers save for retirement.
Instead, this resolution would go in the opposite direction.
Workers from Oregon and across the Nation are facing a savings
crisis. Fewer and fewer people have access to the type of simple,
reliable pensions that were once commonplace. The ``Leave it to
Beaver'' ideal of getting a family-wage job, working your way up in a
company, and retiring with a pension and a gold watch is not the
prospect in front of many American workers today.
For most Americans, the road to retirement now takes many more twists
and turns. The burden of figuring out how to save, which seems to get
tougher all the time, often falls directly on the workers themselves.
First come the tough questions, and they come right up front: when to
start saving, how much to set aside, when to retire, and how much to
draw down each month. What happens if you outlive your savings? You
have to study the markets, stocks and bonds, mutual funds, exchange-
traded funds, index funds. You have to decide what kind of risks you
can afford to take on. It is even complicated for employers who have to
pick from a long list of different kinds of retirement plans: 401(k)s,
SIMPLE IRAs, SEPs, employee stock ownership plans, stock bonus plans--
to name just a few.
It should come as no surprise to anybody that Americans frequently
turn to financial planners to help figure out these issues. It is my
view that the overwhelming majority of these advisers are honest
individuals who act in the best interest of their clients, but without
modern protections in place, some bad actors, unfortunately, choose to
push their clients toward products with higher fees and lower returns.
It could mean the loss of tens of thousands of dollars from a
retirement account over a lifetime of savings.
To be clear, this is not some kind of esoteric issue that hardly
anybody faces. It is a very substantial drain on middle-class savings.
One estimate by the Council of Economic Advisers said that conflicts of
interest in retirement advice cost Americans $17 billion every single
year. That is where the Labor Department's new rule comes in. The rules
pertaining to fiduciary investment advisers who act solely in the
interest of their clients date back to 1975. Obviously, in the more
than 40 years since then, there have been very large changes in the
retirement world. Many more 401(k)s, fewer professionally managed
pension funds, and many more individuals and employers--especially
small employers--lean on advisers for help determining how to invest
their funds.
It seems to me the law ought to be modernized to reflect those
changes. The new rule seeks to lay out modern safeguards that are going
to help protect middle-class savers and small business owners. What it
says is that going forward, all retirement savers will be able to get
advice that is in their best interest. It is a simple principle. My
hope is, policymakers on both sides of the aisle will give it strong
support.
It is important to recognize that the Labor Department made a number
of changes based on legitimate concerns
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that were raised as this rule came together. For example, last summer I
wrote a letter to Secretary Perez with a number of my colleagues from
the Senate Finance Committee that flagged a number of issues, asking
the Secretary to ensure that any final rule would work effectively. As
I said--a group of us Democratic members on the Senate Finance
Committee--there were a number of issues that we thought needed a bit
more work.
I am pleased to see that the Secretary took many of our suggestions.
For example, our Senate Finance Committee letter highlighted the
importance of a smooth transition to the new rule, and the Secretary
actually took steps that included an extended implementation period.
Instead of finding fresh approaches to help Americans prepare for
retirement, colleagues on the other side have brought forward a
resolution of disapproval under the Congressional Review Act that
would, in effect, block these new protections. In the 20 years since it
became law, there has only been one successful disapproval resolution
under the Congressional Review Act. Under no circumstances should this
extreme tool be used to make it harder for middle-class Americans to
get sound retirement advice.
We have a situation where the rules of the road date back for more
than 40 years. The bottom line is that we ought to come together and
update those rules so we can protect our small businesses, the middle
class, and build a stronger ethic of saving in America. That is what
this is all about.
I strongly urge my colleagues to oppose the resolution of
disapproval.
With that, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. THUNE. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
IHS Accountability Act
Mr. THUNE. Madam President, if you asked Native Americans in my home
State of South Dakota how they felt about the Indian Health Service,
you would be hard pressed to find a positive review. Indian Health
Service patients in the Great Plains area, which encompasses North
Dakota, South Dakota, Nebraska, and Iowa, have been receiving
substandard medical care for years. Too often, clean exam rooms appear
to be a luxury for South Dakota's Native American patients. Dirty
facilities and dirty, unsanitized equipment are common, and patient
care is often slipshod at best.
One health service facility was in such disarray that a pregnant
mother gave birth on a bathroom floor without a single medical
professional nearby, which shockingly wasn't the first time this had
happened at this facility. Another patient at the same facility who had
suffered a severe head injury was discharged from the hospital mere
hours after checking in, only to be called back later the same day once
his test results arrived. The patient's condition was so serious that
he was immediately flown to another facility for care.
A patient at Pine Ridge Hospital in Pine Ridge, SD, was discharged
from the emergency department and died from cardiac arrest 2 hours
later. An investigation by the Centers for Medicare and Medicaid
Services found that the patient had failed to receive an adequate
evaluation before his discharge.
The situation in South Dakota has gotten so bad that there is a real
chance the Federal Government will terminate its Medicare provider
agreements with--as of yesterday--three Indian Health Service
facilities in my State.
Yesterday, my office was notified that yet a third IHS emergency
department in the Great Plains area had been found in violation of
Medicare's conditions of participation. In other words, these three
emergency departments have been delivering such a poor level of care
that the government isn't sure it can trust them to care for Medicare
patients. The associate regional administrator for the Centers for
Medicare and Medicaid Services noted that the problems at this third
hospital are ``so serious that they constitute an immediate and serious
threat to the health and safety of any individual who comes to your
hospital to receive services.'' To describe the level of care at Indian
Health Service facilities as substandard is an understatement. The
government is failing in its treaty responsibility to our tribes.
I have been working on legislation to increase accountability and
improve patient care at the Indian Health Service. Last week, my friend
and colleague from Wyoming, who chairs the Indian Affairs Committee
here in the Senate, and I introduced our bill, the IHS Accountability
Act. Our bill takes a number of important steps to start the process of
reforming the Indian Health Service.
First, we create an expedited procedure for firing senior leaders at
the agency who aren't doing their jobs. The Indian Health Service has
suffered from mismanagement problems for years. To name just one
example, the Indian Health Service settled an $80 million lawsuit with
unions that came about because IHS could not manage the basic
administrative task of dealing with overtime pay. The money that IHS
used to settle this lawsuit was, in part, from funds that should have
been used for patients. Some $6.2 million alone came from money
originally destined for IHS facilities in the Great Plains area.
Unfortunately, the Indian Health Service frequently responded to
mismanagement by shifting staff between positions and offices instead
of simply firing incompetent staff. We are not going to clean up the
agency's problems that way.
If a member of the Indian Health Service's leadership is standing in
the way of providing quality care to patients, then that person needs
to find another line of work. The bill I drafted with my colleague from
Wyoming will help make sure that happens. Our bill also streamlines the
hiring process at IHS and ensures that tribes will be consulted when
the agency is hiring for important positions. This will help IHS get
dedicated, high-quality employees on the job faster.
Our bill also addresses the problem IHS has had in retaining quality
employees. A provision in our bill gives the Secretary of the
Department of Health and Human Services, which oversees the Indian
Health Service, increased flexibility to reward employees for good
performance and to set the kinds of salaries that will keep good
employees on the job longer.
Finally, our bill directs the Government Accountability Office to
review the whistleblower protections that are currently in place at IHS
and determine whether we need to add any additional layers of
protection.
One of the obstacles to improving care for our tribes has been less-
than-honest reporting from the Indian Health Service. Time and again we
found that conditions on the ground have not matched up to information
reported to Congress.
On December 4, 2015, for example, officials from the Indian Health
Service stated that a majority of the concerns at the floundering
Rosebud Hospital in Rosebud, SD, had been addressed or abated. Yet mere
hours later, I was informed that the Rosebud Hospital emergency
department was functioning so poorly that emergency patients would be
diverted to other hospitals beginning the next day. As of today, it has
been 171 days since that emergency department was placed on diverted
status--171 days. Clearly, the issues at Rosebud had not been addressed
or abated on December 4.
In 2014, I requested a status update on the Great Plains area from
the then-Acting Director of the Indian Health Service. In her response,
she stated: ``The Great Plains Area has shown marked improvement in all
categories,'' and ``significant improvements in health care delivery
and program accountability have also been demonstrated.'' Yet we
continue to receive frequent reports of abysmal patient care.
I am pretty sure that sending a man home with bleeding in his brain
and having a mother give birth prematurely on a bathroom floor are not
signs of significant improvement. Having a realistic picture of what is
going on in Indian Health Service facilities is absolutely essential if
we hope to start improving the standard of care that our tribes
receive, and that is why
[[Page S3075]]
whistleblower protections are so important.
Our bill will help make sure that the system protects those who come
forward to expose the problems facing patients.
I am proud of the bill that my colleague and I have introduced, and I
hope the Senate will take it up in the near future. While this is an
important step, it is still just the first step. I will continue to
consult with the nine tribes in South Dakota and with others to see
what additional steps we need to take to fix the problems at the Indian
Health Service once and for all. Our tribes deserve better than what
they have been receiving, and I am not going to rest until all of our
tribes are getting the quality care they deserve.
Aviation Safety and Security
Madam President, before I conclude, I wish to take a minute to talk
about some aviation security issues that were brought into sharp relief
by the recent crash of an Egyptair flight.
Last week, 66 people died when Egyptair flight 804 from Paris,
France, to Cairo, Egypt, crashed into the Mediterranean Sea off the
Egyptian coast. With investigators still recovering evidence, it is too
soon to come to any conclusions as to the cause of this tragic
accident, but with the absence of evidence indicating an obvious
technical failure, U.S. and Egyptian officials have suggested terrorism
as a potential cause of the crash even without a credible claim of
responsibility from any group.
Given the global risk environment and previous acts of terror,
investigators are focusing their attention on anyone who may have had
access to the Egyptair aircraft while it was sitting on the ground,
including baggage handlers, caterers, cleaners, and fuel-truck workers.
At the Senate Commerce Committee, we have been very focused on this
type of aviation safety and security issue over the last year.
In December of 2015, the committee advanced legislation to address
insider threats posed by airport workers and enhanced vetting of
airline passengers. As the Senate took up the FAA Reauthorization Act
of 2016, we engaged in a constructive and open process to consider
amendments. Ultimately, the Senate adopted a number of aviation
security amendments, including a security amendment that I cosponsored
with Commerce Committee Ranking Member Nelson, Senator Ayotte, and
Senator Cantwell that would strengthen security at international
airports with direct flights into the United States.
The amendment added a security title to the FAA bill that included
legislation marked up in the Commerce Committee, as well as other
initiatives. Among other things, the amendment requires TSA to conduct
a comprehensive risk assessment of all foreign last-point-of-departure
airports--foreign airports with direct flights to the United States.
The amendment also requires TSA to develop a security coordination
enhancement plan with domestic and foreign partners, including foreign
governments and airlines, and to conduct a comprehensive assessment of
TSA's workforce abroad. It also authorizes TSA to help foreign partners
by donating security screening equipment to foreign last-point-of-
departure airports and to assist in evaluating foreign countries' air
cargo security programs to prevent any shipment of nefarious materials
via air cargo. These provisions are similar to those of H.R. 4698, the
SAFE GATES Act of 2016, and, together with the other security
provisions adopted, take concrete steps to confront the real terrorist
threat that we are facing.
I believe these provisions in the FAA reauthorization bill will help
make air travel from foreign countries to the United States safer and
more secure. The Senate passed this legislation in April, and now it is
time for the House of Representatives to act. The House of
Representatives should take up our FAA bill without delay so that we
can get a final bill with timely security and safety reforms onto the
President's desk before the summer State work period.
Every day countless terrorists are plotting their next attack against
the United States. There are measures we can take today that will help
make Americans safer at home and while traveling from destinations
abroad. Several of those measures are included in the FAA bill that we
passed with over 90 votes in the U.S. Senate.
I call again on the House of Representatives to take up this bill so
that we can continue our work to keep Americans safe.
I yield the floor.
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