[Congressional Record Volume 164, Number 188 (Thursday, November 29, 2018)]
[House]
[Pages H9732-H9738]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BIPARTISAN WORK OF THE FINANCIAL SERVICES COMMITTEE
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 3, 2017, the gentleman from Texas (Mr. Hensarling) is
recognized for 60 minutes as the designee of the majority leader.
Mr. HENSARLING. Mr. Speaker, I rise tonight on behalf of the
Financial Services Committee.
Mr. Speaker, it has been my great privilege to have the
responsibility to chair this committee for the last 6 years. I take no
pride on behalf of myself, but I take a lot of pride in the work that
has been done on this committee.
A lot of that work, Mr. Speaker, has been bipartisan. And I believe,
indeed, that the Financial Services Committee is the hardest-working,
most productive committee in the United States House. We have produced
more bills; we have had more bills passed on the floor; we have had
more bills signed into law than any other committee.
I am especially proud of the work that we have done to create more
pro-growth economic policy throughout banking and finance, and the
passage of S. 2155, the Economic Growth, Regulatory Relief and Consumer
Protection Act, has meant so much to helping create more capital to
help save our credit unions and community banks, and to really play a
part in the unparalleled economic growth that we see in our Nation
today. I take great pride in that work on behalf of all our members.
{time} 1930
I also take great pride on behalf of our Members for a piece of
legislation
[[Page H9733]]
that modernized the foreign investment in the U.S. The bill is
technically known by its acronym, FIRRMA, and it modernizes a regime
that had not been modernized in quite some time.
Mr. Speaker, so many of us know we have challenges in America today
with foreign interests that come in and essentially take our
intellectual property, that take our technology, and regrettably China
is one of the prime perpetrators of this. I have had the occasion to go
to China and meet with their leadership. And I want China to rise, I
want them to have economic growth, but not at the expense of the United
States of America and not by violating either the letter or the spirit
of the WTO, of the World Trade Organization, which we helped them enter
a couple of decades ago.
Mr. Speaker, I am proud of the work, especially, done by the
gentleman from North Carolina, who is the vice chairman of our
Terrorism and Illicit Finance Subcommittee. He was the House leader on
this legislation and worked with the senior senator from Texas, John
Cornyn, my friend, to bring this onto the President's desk that
ultimately got signed into law.
This was really a revolutionary law dealing with both export
controls, foreign investment in the U.S., and the gentleman from North
Carolina, Mr. Pittenger, was an early leader. He saw the threat before
others saw it.
I have had a number of great privileges serving as chairman, but one
of the greatest privileges is serving with men and women who have
vision, who have commitment, who have principle, and that certainly
describes the gentleman from North Carolina.
Regrettably, he and I are both departing after this Congress, and
that is a bittersweet feeling. I think we both look forward to the next
opportunity that we have.
Mr. Speaker, I want to yield him some time, because it is important
for us to hear from him about the significance of this legislation and
how important it is. I was happy to be in the White House not too long
ago to have the President extoll the virtues of this law as well.
Mr. Speaker, I will miss his company, I will miss his leadership, and
there is no one that I know of who is a greater authority on terrorist
finance who is serving in the U.S. Congress today than Robert
Pittenger of North Carolina.
Mr. Speaker, I yield to the gentleman from North Carolina (Mr.
Pittenger), my friend.
Mr. PITTENGER. Mr. Speaker, I thank the chairman for his kind
remarks. I remember the first time we met. It was across the street,
and I approached him about wanting to serve on his committee. Little
did I know that I was headed back to graduate school. He gave me a
binder about 6 inches thick and said: Go study it. I had to look up all
the acronyms, about 100 of them, and memorize those to get started.
Mr. Speaker, Chairman Hensarling's leadership and the quality of
person he is, he got out in front. He enabled us to become leaders, he
enabled us to learn, to give focus, direction on important issues
relative to the security of this country, relative to the economic
freedoms of this country, and for that, I have the deepest sense of
gratitude and respect that he empowered us as he led us.
That is a great testament and a legacy I think that he will carry
throughout this United States Congress, and the model that he has been
for each of us as we have watched, not just his work ethic, but his
character and who he is and how that translated into the public policy
for the good of the American people.
So, Mr. Speaker, let me say in my deepest heart my appreciation and
my love for him and his sweet wife and his wonderful kids. What a
tribute it was to be there with him yesterday when they unveiled the
painting that will go in the Financial Services room, to the accolades
of the Vice President and Senator Phil Gramm and so many others who
were there to pay tribute to a great leader for our country. So I thank
the chairman.
And as Chairman Hensarling spoke to the issues relative to FIRRMA,
yes, we have great challenges from nation states who seek to exploit
our laws, who have sought to secure proprietary technology for their
own interests and objectives, and particularly, as Chairman Hensarling
mentioned, China.
China, since 2015, has acquired 50 technology companies,
semiconductor companies, many of them a part of our Department of
Defense. These are critical companies for our own national security.
They have been able to circumvent our laws through joint ventures,
through minority partnerships to be able to obtain this technology.
In fact, on one occasion, Chairman Hensarling and I were coming back
from Asia, and we stopped in Anchorage and we visited our base there,
and they showed us the Stealth F-22. And as the general was showing the
incredible aspects of this remarkable plane, the greatest aircraft we
have, he said: By the way, the technology of this plane, the engine was
sold to China by GE.
Companies have been forced, extorted in a sense, to gain access to
Chinese markets. This is wrong. It is morally wrong. It is ethically
wrong. It is wrong for our national security.
The FIRRMA bill, which Chairman Hensarling recognized and helped
pass, it wouldn't have happened without his total commitment and
leadership. So this country is more secure today because of what passed
regarding the FIRRMA bill.
The rules will be written over the next year or so. We trust that all
that was done will come out and close off these loopholes that have
allowed foreign entities to exploit our Nation's national security.
So this bill and our interests are even more secure as a result of
the jobs bill that the chairman has advanced for us today. It does
continue to ensure the security against predatory Chinese investments
by modernizing our securities laws to reclaim the U.S. IPO market, all
of this as China lays out its blueprint for dominance in the tech
industry.
This package would also cut down on the regulations that burden our
small business community. This is key to continuing the innovation and
economic growth we are seeking today.
This tax relief and jobs package would continue the innovation and
economic growth and would allow investors to have legal certainty by
allowing them to interact with entrepreneurs without fear of securities
violation.
Furthermore, the cost of initial compliance for an IPO filing now
exceeds over $2 million. This hinders small businesses that are ready
to go public but can't afford these regulatory costs.
So, Mr. Speaker, I commend this bill. JOBS 3.0 would lengthen ``on-
ramp'' exceptions for IPO compliance, helping small business owners
navigate one of the most expensive aspects of securities law.
It also allows companies to test the waters before going public to
help give them time for their IPO to have a better chance of success.
These provisions are vital to encourage business growth and to
reassure the small business community. I strongly encourage the Senate,
therefore, to pass this bill.
So, yes, Mr. Speaker, what Chairman Hensarling has done through this
legislation has helped give greater financial empowerment and liberty
and freedom to the American people, that is what it is all about today,
is freedom. So my gratitude to him for the leadership that he has given
us.
Mr. Speaker, I also want to say a word of thanks to some other folks
who I have probably this last moment to address in this Chamber. As
Jesse Helms used to say, a wonderful man from North Carolina: That
turtle didn't get up on the fence post by himself. And that is true, I
think, for each of us in this Chamber, but I know it is true for this
Member of Congress.
What I have been able to do, by the grace of God and through the
enablement and empowerment of my chairman and others, will hopefully
last, but it happened because of people along the way who stood with
me, who supported my efforts.
Of course, I start with my family. I have the most wonderful family
in the world. I have ten grandkids I get to go home to, 10 years and
younger. I am Pitto to them, and that is all the world to me, and we
have a fun time chasing around.
But my team, my staff, enabled me to serve the Ninth Congressional
District of North Carolina, those people that I love, those eight
counties out
[[Page H9734]]
there that I am endeared to, but the people who really helped them were
the folks back home in my district, in my office. I speak specifically
of Linda Ferster, Chris Sullivan, Jamie Bowers, Graham Long, Robert
Becker. They were with me from day one. They stood with me the whole 6
years. Nobody flinched, nobody went anywhere. That team was so
incredible.
Robert Becker is one of the greatest leaders we have in North
Carolina for our veterans. He gets calls from all over the State and he
says: What do I do to help this veteran?
Linda Ferster has been working these issues in the bureaucracy for 18
years.
These are great, faithful people who have stood up for my
constituents in my district, and all the good that happened in that
district was because of them. And I just gave them a door to say: Go
through it and you go serve. And they served like they were
missionaries. They love those people. Every day they wake up thinking,
who can I help today? You know, whose life can I change in a positive
way today? And that is the nature of the service that my team provided,
the same type of leadership that I had up here in Washington.
My role in FIRRMA just didn't happen by myself. There are many people
on my team up here that supported that effort. Clark Fonda was a great
leader for me in that. There are other people outside Congress. Heath
Tarbert, the Assistant Secretary of the Treasury, a remarkable
individual who served this country so well over such a key part of what
we did in this national security bill on FIRRMA.
So my heart is just filled with gratitude for the privilege of
serving the good folks in the Ninth District of North Carolina; my
gratitude for the body in this Chamber; my gratitude for being able to
serve on the Financial Services Committee under the leadership of
Chairman Hensarling. It couldn't be greater. I couldn't be more
fulfilled in the 6 years that I had here. I will always treasure and
remember this time.
So, Mr. Speaker, I thank you, I thank Chairman Hensarling. He is an
absolute important friend for me, and I hope we can continue to work
together for many years to come. God bless you.
Mr. HENSARLING. Mr. Speaker, I certainly thank the gentleman for his
comments tonight.
I hope that there are a fair amount of Americans who are watching
this this evening, because they need to know that they owe this
gentleman, Mr. Pittenger of North Carolina, a great debt of gratitude.
And indeed America is going to be a safer, more secure Nation because
of his leadership.
In his three terms, Mr. Speaker, Mr. Pittenger achieved more in three
terms than many Members achieve in ten terms.
Many people, unfortunately, come to the People's House to be
somebody. Mr. Pittenger of North Carolina came to do something.
And, indeed, don't just take my word for it, but the President of the
United States thinks this is one of the most significant pieces of
legislation when it comes to dealing with the threats of those who
would take our intellectual property, who would take our technology by
hook or crook, or however they might do it.
So, Mr. Speaker, I want to commend Mr. Pittenger for his leadership.
I must admit, this was kind of faint on my radar screen, this issue,
but among Mr. Pittenger's other endearing qualities, he is persistent.
He is a very persistent individual. And I am glad he was persistent,
because it became a major piece of legislation.
Part of my job as chairman and one of my great privileges is I get to
take credit for a lot of other people's good work. I shouldn't, I
shouldn't be accorded this. And so I get many thanks, but this was a
team effort and it was led by Mr. Pittenger.
{time} 1945
Other countries are now put on notice. We are watching. These rules,
as Mr. Pittenger, the gentleman from North Carolina, has said, will be
unveiled in the weeks and months to come. But a new day has dawned for
those who think that they are going to take, by hook or crook, our
technology.
We want our global neighbors to succeed, but, again, not to succeed
at our expense. Those applications of technology and intellectual
property that have any type of national defense implications, that is
going to stop, and it is going to stop because of the leadership of
Robert Pittenger, the gentleman from North Carolina.
It has been a great, great source of pride and joy to be associated
with him. I will count him as a friend for life. I appreciate the fact
that he would come and spend time here.
I have no doubt, Mr. Speaker, that his leadership is not done. His
leadership may be done in this body, but his leadership in fighting
global terrorism from illicit finance and global terrorist finance,
that leadership is not done. In many respects, it is just starting. I
look forward to continuing to follow his career and his leadership.
Mr. Speaker, we are also joined tonight by another real authority on
global terrorist finance, a gentleman who has been incredibly active on
the Terrorism and Illicit Finance Subcommittee of the Financial
Services Committee. I have come to really appreciate his intellect, his
knowledge, and his work ethic. He is clearly one of the hardest working
members of the Financial Services Committee.
As, regrettably, the gentleman from North Carolina departs, and I am
saddened by that, we are both heartened to know that the gentleman from
Ohio (Mr. Davidson) will remain, and he will be one of the key leaders
in the entire United States House of Representatives in combating
terrorist finance. He has been such a workhorse in helping some of our
economic growth measures that have helped save community banking and
credit unions.
Mr. Speaker, I am happy to yield to the gentleman from Ohio (Mr.
Davidson).
Mr. DAVIDSON. Mr. Speaker, I rise to applaud the hard work and great
success of the House Financial Services Committee these the past 2
years in the 115th Congress.
Under the leadership of Chairman Jeb Hensarling, the Financial
Services Committee became the most productive committee in Congress.
Over 44 bills signed into law originated from our committee, including
S. 2155. It began as the Financial CHOICE Act, Creating Hope and
Opportunity for Investors, Consumers, and Entrepreneurs.
Unfortunately, the whole bill hasn't made it into law, but the core
of that bill was dealing with the unintended consequences and, frankly,
whether they were intended or not, the harmful consequences of Dodd-
Frank.
Under Dodd-Frank, we found that the biggest banks got bigger and the
smallest banks became fewer. We found that banks were not too-big-to-
fail, but some of them became too-small-to-succeed under the burden of
Dodd-Frank's regulatory framework. So much so that even Barney Frank,
whose name is part of the Dodd-Frank Act, came to support the reforms
for community banking.
I am very proud to have participated in regulatory relief that helped
thousands of community financial institutions help lend to their
communities. It is making a difference today as we watch the impact in
our economy. Indeed, it is, in some measure, fitting that the title
began with ``Creating Hope and Opportunity for Investors, Consumers,
and Entrepreneurs,'' because that is what is happening in this amazing
economy.
There is more good news that is happening in our economy than is
probably going to get covered anywhere. Some of it is out there for the
C-SPAN viewer to find.
You might not see in the news that we have the strongest sanctions
that have been imposed on Russia since it has been Russia. Post-Soviet
Union, we have never had a stronger posture toward Russia than we do
today.
The Financial Services Committee helps implement those because the
Department of the Treasury has an Office of Foreign Asset Control. As
part of the Monetary Policy and Trade Subcommittee and as part of the
Terrorism and Illicit Finance Subcommittee, we look at how to choke off
these sources of funds, whether it is Russian oligarchs, Iranian bad
actors, North Koreans, or others.
Frankly, I believe we only have tapped the surface on the potential
that sanctions have. Indeed, we may be able to apply sanctions to our
trade policy and, very targeted, deal with
[[Page H9735]]
bad actors, like those who are dumping steel, rather than just putting
a uniform tariff out there. We can be precise. Instead of maximizing
collateral damage, we can minimize it.
But that shows that there is plenty of work left to do. What we are
here to say is that there are plenty of great things that did, in fact,
happen.
With respect to trade, one of the things the Financial Services
Committee got to do was take a bipartisan delegation trip to China. We
talked with folks in Japan, in Hong Kong, in China, and in South Korea
about the importance of trade, not just in a way that draws in our
Foreign Investment Risk Review Modernization Act, but with all of our
trade policy.
The reality is that we were able to send a message to the people in
China, to the leadership of China--their Vice President down to their
leadership in the trade negotiations--that with respect to China, there
is no separation between Congress and President Trump, and with respect
to China, there is no separation between Republicans and Democrats on
trade.
Our hope is that we can continue to trade, and we can continue to
prosper together. As a former Army Ranger, I never thought I would go
to China under friendly terms and conditions. I am quite thankful that
we were able to do that. I hope that we can continue that peace and
prosperity together.
But the days of the American people being taken advantage of, whether
it is by China or any other Nation, I hope has long passed. Clearly,
today, that is the trend. Not only has the Foreign Investment Risk
Review Modernization Act, FIRRMA, passed, and that gives us this
review, but we have an administration that is aggressively implementing
a policy that puts that into effect.
There are plenty of things that did pass our House that haven't yet
made it into law. A staggering number is 115. While 44 bills were
signed into law, 115 passed our committee and haven't yet been taken up
across the building in the Senate. Unfortunately, and often despite
overwhelmingly bipartisan support in the House, many of these bills
have yet to receive the same attention in the Senate.
One example of this is a bill I introduced, the Market Data
Protection Act. This passed the House of Representatives unanimously,
and it is yet to receive a vote in the Senate. This deals with the
protection of government-controlled data by the Securities and Exchange
Commission. In fact, our EDGAR database was hacked. We are simply
asking that the SEC do the same thing and certify to Congress in the
same way they would expect a publicly traded company to certify to
them, that they have dealt with the risk and they now have a secure
network.
Just earlier tonight, we passed yet another extension of the Flood
Act. This bill has been passed by our committee for a year and a half.
It has been over a year since it passed the House with very modest
reforms.
One of the sticking points seems to be that the Senate can't live
with rebuilding someone's home three times after it has flooding. We
will rebuild it not once, not twice, but a third time, and then after
that, we are saying, you know, maybe you should move.
But that is too much to ask, apparently, for the Senate. We can't
even get a vote on it. It is time for the Senate to act.
Another is JOBS 3.0. This is a bill that provides new 21st century
framework for capital formation. You think capital formation, that
sounds like Wall Street, that sounds like a big, Republican,
stereotypical talking point bill. It passed with more than 400 votes in
this body, incredibly bipartisan, very modest reforms, commonsense, for
early stage capital formation, and it hasn't yet been voted on in the
Senate. There is still time in this Congress, and I sure hope they can
deliver on it.
There are a lot of things that we haven't been able to get to. In
spite of being the most productive committee in Congress, there are
still things that have been left undone. My hope is that we can
continue to collaborate in a very bipartisan way as we experience a
transition.
As sad as I am to be headed to the minority as a member of the
majority party today, I am very sad that Chairman Hensarling is leaving
Congress. This week, we were able to see his retirement ceremony where
a portrait was unveiled. But the most important thing that happened
there is, frankly, I think everyone in that room was inspired.
I think one of the most unfortunate things about Congress is the way
it is perceived by the American people. There are more truly good men
and women who serve in this body, in both parties, than I would have
ever believed before I got here, and one of the very best is Jeb
Hensarling. I am thankful to count him as my chairman, as a mentor, and
as a friend. I look forward to seeing how God continues to bless this
great man and how God continues to bless this body and our great
Nation. It is now time for deeds, not words.
Mr. HENSARLING. Mr. Speaker, well, after hearing those kind comments,
I would be happy to yield the gentleman even more time. I say that
tongue-in-cheek.
Mr. Speaker, I have learned that if you want kind things said about
you, announce your retirement. So, I must admit, I am humbled by this
experience, and I thank the kind words of the gentleman.
I must admit that it is a real mixed blessing that I get ready to
leave Congress, but I take a lot of solace knowing that there is a new
generation of conservative leaders who are coming to this body, who
know how important faith is in the life of a great Nation, because you
cannot have a free Nation that is not a virtuous Nation and a godly
Nation.
I know that there is a new generation of conservative leaders who are
coming up who know how important our families are, our families who
care for our elderly and nurture our youth and perpetuate our values.
They know how important free enterprise is, not just because it allows
people to sleep at night knowing the bills are paid, but how empowering
it is to finally leave the assembly line and to start your own
business; how empowering it is to send that first kid to college; but,
ultimately, how important it is to pursue happiness, to use your God-
given talents in any way that can help you and your family prosper.
I know I take great solace to know there is a new generation of
conservative leaders who know that, ultimately, liberty is an
inalienable right given to us by our creator, the Almighty, and how
precious it is and how few people on the face of the planet really
enjoy the full fruits of liberty.
I count Mr. Davidson among those people, and I will always count him
as my friend. But it makes it much easier, after 16 years, to leave
this body knowing that there is a Warren Davidson in Congress and
knowing that there is a Ted Budd from North Carolina who will remain in
Congress as well.
Mr. Speaker, I yield to the gentleman from North Carolina (Mr. Budd).
He also has become a fast friend of mine. More importantly, I count his
wife as a friend of my wife, and me as well. Not unlike Mr. Davidson,
he is one of the hardest working members of our committee, and he
never, never gives up.
Again, a significant portion of the economic growth packages that we
have passed out of the House Financial Services Committee, two or three
of them I know contain Mr. Budd's name. That is unusual for somebody
who has been a freshman member of our committee, to have so many bills
passed. It is a testament to the great citizens of his congressional
district that they would return him to office. I hope, next time, maybe
a few more will join in and make it a little less interesting. But I am
also proud to call him colleague; I am proud to call him friend; and I,
again, take great solace to know that this body will see his
conservative leadership for quite some time.
{time} 2000
Mr. BUDD. Mr. Speaker, I thank Chairman Hensarling, and after those
kind words, maybe we all should just yield back. But I am going to hang
on for a few minutes and talk about some of the great things that we
have done on Chairman Hensarling's committee that I have been honored
to be a part of for these last 2 years and look forward to continuing
on. One of the things to mention in the 115th Congress is to highlight
the need to bring JOBS 3.0 across the finish line.
But before I do that, I have to say, Mr. Speaker, that I don't think
there
[[Page H9736]]
has been a harder working committee in Washington, D.C., over the past
2 years, from our leadership all the way down to the committee's staff
level, and it shows in our accomplishments. I am proud to have played a
small role in some of these victories.
One simply cannot start a speech like this without talking about the
tremendous work that went into the Financial CHOICE Act, which
ultimately became known as S. 2155.
As we all know, Dodd-Frank was enacted in 2010 in an effort to end
the so-called too-big-to-fail financial institutions. However, Dodd-
Frank and Congress inadvertently created too-small-to-succeed financial
institutions, which punished our regional and community banks and
credit unions. It was unfortunate, but in the end, community financial
institutions were shut down, while the consumer and small business
owner were starved of the access to credit at a time when they needed
it the most.
However, with the passage and ultimate enactment of S. 2155, the
status quo that I just highlighted has changed, instead, for good.
Dodd-Frank reform was a win for North Carolina's community financial
institutions, small businesses, innovators, and the economy as a whole.
Under this bill, the consumer and small business will get access to the
credit they need, whether it be used to buy a home or finally start and
expand their businesses.
I think this bill, Mr. Speaker, is, arguably, the most important
legislative win this Congress has seen in a long time. It will benefit
all sectors of the economy, and I am so excited that we got this done.
On a more personal note, outside of Dodd-Frank reform, I have really
enjoyed the work that has gone on at the Terrorism and Illicit Finance
Subcommittee. Under the leadership of our chairman, Steve Pearce, my
bipartisan bill, H.R. 3321, the National Strategy for Combating
Terrorist, Underground, and Other Illicit Financing Act, is just one
example of this work. I was able to get this bipartisan bill signed by
the President and passed into law as part of the Countering America's
Adversaries Through Sanctions Act.
My bill directs the Department of the Treasury to develop a national
strategy to combat the financing of terrorism and related forms of
illicit finance involving all levels of government. H.R. 3321 will get
us closer to a coordinated strategy on disrupting these illicit
financial networks in the hopes that we are able to starve terrorist
groups like ISIS of the resources they need to carry out their radical
agendas.
I also want to highlight and think that we should be proud of the
balance we have been trying to strike with regard to fintech. I have my
own legislation on this front, for example, H.R. 6849, the Bank Secrecy
Innovation Act, which directs the Secretary of the Treasury to
encourage the use of technological innovations that improve financial
institutions' anti-money laundering programs.
Financial institutions currently have little incentive to invest in
innovative technology solutions to BSA compliance because of the
regulatory inflexibility. The Bank Secrecy Innovation Act will provide
financial institutions with greater incentive and certainty when
experimenting with technology to aid in BSA compliance by providing a
safe harbor against having the use of such technology be the basis for
regulatory penalty.
The application of innovative technology by financial institutions in
their BSA compliance programs will likely improve the detection of
illicit activity, leading to more efficient and higher quality
reporting of suspicious activity by financial institutions. Better,
more targeted reports likely will aid law enforcement in focusing their
limited resources on real criminal activities, while also reducing the
time that law enforcement must spend weeding out reports that are just
irrelevant.
As I said earlier, Mr. Speaker, there is still one more package of
bills that passed out of our committee and this body with strong
bipartisan backing that still needs to be pushed across the finish
line. I am talking, of course, about JOBS 3.0 and the capital formation
package that would further improve our economy and make it easier for
companies to go public.
This package included bills like mine, H.R. 3903, the Encouraging
Public Offerings Act, that I introduced with my friend on the other
side of the aisle from New York, Gregory Meeks. It passed the House,
if you can imagine, 417-0.
It allows issuers to submit to the SEC for confidential review,
before publicly filing, draft registrations for IPOs. H.R. 3903 will
reduce the risk to companies that are just thinking about going public,
in order to make listing on exchanges even more attractive, which, in
the end, will only strengthen our financial markets.
Mr. Speaker, the legislation found under JOBS will make it easier for
startups and small businesses in North Carolina to attract the
investments they need to go public, grow, and create more jobs.
I also want to highlight, briefly, title 14 of JOBS, which protects
the American insurance standards. This strong, bipartisan language
found under title 14 will give U.S. negotiators the strong legislative
backing they need when they negotiate with international bodies like
the IAIS.
Now, as we try to bring JOBS over the finish line, I am hopeful that
we can keep this strong, bipartisan language in the bill. We must keep
it in whatever version of JOBS that we pass. The American
insuranc consumer needs it and also deserves it. So let's get JOBS
done.
Mr. Speaker, in closing, like my colleagues have said before, I want
to thank our chairman, Jeb Hensarling, for his principled leadership of
this committee and for seeing us through some great wins in the 115th
Congress. He has been a friend, a mentor, and somebody I respect in the
way he leads, and leads his family greatly, and I know that he will be
missed.
Mr. HENSARLING. Mr. Speaker, I thank the gentleman for his kind
words, and far more importantly, I thank him for his leadership. He is
truly one of the workhorses for economic growth in the United States
Congress.
Again, I take great solace, as I will soon leave this august body, in
knowing that somebody like Mr. Budd will be here. He has such
principle, character, is a hard worker, and has success in actually
getting bills done that make a difference in the lives of working
people. Mr. Speaker, it is such a pleasure to serve with the gentleman
from North Carolina (Mr. Budd).
Mr. Speaker, several of our Members have spoken tonight about what we
call the JOBS 3.0 Act, Jumpstart Our Business Startups. Thanks to the
leadership of President Trump, thanks to the leadership of Speaker
Ryan, and thanks to the leadership of Chairman Kevin Brady, we have a
great economy. We have, perhaps, the greatest economy in most
Americans' lifetimes. Unemployment is at about a 50-year low. For the
first time in a decade, we are seeing paychecks rise. We are seeing
that take-home pay increase.
Small business optimism, consumer optimism, is off the charts. It is
amazing what can happen with some tax reform and regulatory reform.
And, yes, I take pride--not on my behalf, but on behalf of the
Financial Services Committee--in what we have done to help take some of
the shackles off of our community banks and our credit unions. But
there is so much more work to be done.
Mr. Speaker, as you probably know, the whole idea of capital
formation for our entrepreneurs, for our small businesses,
traditionally, that has been a bipartisan effort. And, in fact, the
very first, what we call JOBS 1.0, was signed into law by President
Barack Obama. I don't quite have the quote at my fingertips, but at the
time, he said something along the lines that we have to, from time to
time, remove the regulatory burdens to capital formation that are
preventing our entrepreneurs from accessing capital.
So the first point I would like to make, Mr. Speaker, is the economy
of today is in great shape. But can we count on it for the economy of
tomorrow? Particularly, Mr. Speaker, when I look at public companies,
what I see is that our public companies are fewer, they are older, and
they are bigger. Today, in America, we still have far too many old cars
and not enough startups in our garages.
I sometimes think--and I am the father of a 16-year-old daughter, a
15-
[[Page H9737]]
year-old son--the companies that will drive the economy when they are
in their peak earning years, they probably haven't even been founded
yet. Where are the next Amazons coming from? Where are the next Googles
coming from? Where are the next Apples coming from?
But what we see as recently as 2016, just a couple of years ago, is
that new startups' entrepreneurial capitalism was at a 40-year low.
Now, fortunately, under this administration, it is taking a turn
upwards, but we have got a lot of ground to make up.
Our public companies have been cut in half, a 20-year low, as
recently as 2016. Half of the number of companies are going public. And
so not only is that bad for America's economy, but it is bad for the
family economy because they lose out on investment opportunities.
Had you invested early in Apple, you would have made a gazillion
percentage rate of return. It would have been an incredible investment
opportunity. At the time, the Commonwealth of Massachusetts wouldn't
even allow Apple to sell their securities because they were fearful it
was too speculative.
We want to make sure that every American family has the opportunity
to invest in the next Apple. But, unfortunately, what we see is a
regulatory burden that is absolutely strangling a lot of these startup
companies.
Over the past 2\1/2\ decades, Mr. Speaker, the U.S. share of global
venture investment has steadily declined. And when we see it decline,
what we also see is that regulatory restrictions on securities and
investment have increased 54 percent in 10 years--in just 10 years, a
54 percent increase in regulatory restrictions on securities, and an 80
percent increase over 20 years.
We are wondering why there is so little entrepreneurial activity, and
we are wondering why so few companies have gone public.
Part of what we have to do is simply modernize antiquated statutes.
And so with the exceptions of Sarbanes-Oxley, and with the exception
of, frankly, the first version of the JOBS Act and the second version
of the JOBS Act, almost all of our other significant Federal securities
laws date back to the 1930s.
Mr. Speaker, a couple of these, the Securities and Exchange Act, the
Securities Act, they are foundational. But so many of these other laws
that we still labor under, I mean, there was a time that the telephone
was the cutting-edge technology. That is when the SEC was created, in
1934, and the telephone was the cutting-edge technology of the time.
So many of the security laws we have date back to that particular
era. At that time, stock offerings were part of the daily newspaper.
Well, we don't see that anymore. Pneumatic tubes and ticker tape
transmitted the news of a stock sale.
If we are going to be able to fuel the economy of tomorrow, we are
going to have to modernize these securities laws. And, again,
traditionally, this has been a bipartisan effort.
{time} 2015
The United States House of Representatives has passed JOBS 3.0 by a
vote of 406-4. Months later, the United States Senate has done nothing
on this piece of legislation. This cannot hold. This cannot be. There
is no excuse for the United States Senate back there behind my shoulder
to do nothing while, for example, we see more companies go public in
China.
We had a discussion a little earlier, Mr. Speaker, how China,
unfortunately, too often has taken our technology--our intellectual
property--by hook and crook. But a lot of it is companies are choosing
to confine their capital in China because they find it easier, and now
we are looking at over one-third of public companies are going public
in China, and we are down to 11 percent. They have an ascending curve;
we have a descending curve.
In order to successfully compete with China in a global economy, we
have to make it easier throughout the ecosystem of our small
entrepreneurial ventures to make it easier, and so that is what the
whole thrust of the JOBS 3.0 Act is all about.
Again, it is a very, very strong bipartisan measure. So often the
lead Democrat in this institution, known as ranking member, the
gentlewoman from California (Ms. Maxine Waters) and I don't see eye to
eye on much. We see eye to eye on very little. But we are joined at the
hip in wanting to see the JOBS 3.0 Act. She has been stalwart, and she
has been a good negotiating partner to get this done.
So you have one of the most liberal Members of Congress and one of
the most conservative Members of Congress come together to advocate for
our small businesses, for our entrepreneurs, to help us compete with
China in the JOBS 3.0 Act, but somehow they are still not hearing this
in the United States Senate.
Please, the gentlewoman from California (Ms. Maxine Waters), gives
every liberal permission to vote for the JOBS 3.0 Act. As chairman of
the House Financial Services Committee and one who used to chair the
conservative caucus in the House, I give every conservative permission
in the United States Senate to vote for JOBS 3.0.
Please, we need a message for all Americans who care about small
businesses. We want to make it easier. We want to make it easier for
these businesses to get funding.
The bottom line is, Mr. Speaker, you cannot have capitalism without
capital, and we want to make it easier to access this capital.
So I was very heartened by the fact that, although maybe our
Senators--and I have many friends who are United States Senators. I
still cannot understand why they haven't taken up a piece of
legislation that came out of the House 406-4, a piece of legislation
strongly supported by the administration, and a piece of legislation,
again, that is going to help our small businesses and entrepreneurs.
Why haven't they taken it up?
Perhaps the single most influential newspaper in America is The Wall
Street Journal. It is certainly the most influential economic
publication in America, and probably the world. Fortunately, their lead
editorial today was to encourage the Senate to take up JOBS 3.0. In
fact--I am kind of paraphrasing here because I don't have the newspaper
at my fingertips--they said that Congress has done yeoman's work
shepherding a compendium of bipartisan bills to access capital. They
were referring to JOBS 3.0.
Again, go online. It is their lead editorial.
They said that the Senate shouldn't scuttle what could be one of
Congress' better achievements. I agree. This will be one of Congress'
better achievements to be able to capitalize our small businesses to
make sure, again, they can access capital, they can go public, and that
they are not treated like a Fortune 500 company on day one.
Mr. Speaker, many of our biotech companies that provide lifesaving
pharmaceuticals, some of them don't even cash flow positive for a
decade. They can't be treated with the same regulatory burden on their
capital as a Fortune 500 company. If you do, again, they are going to
go to China. They are not going to stay in the USA. They are going to
go to China. As we continue to compete with them, we cannot allow this
to happen.
So we have had such great support. I alluded to the ranking member,
the gentlewoman from California (Ms. Maxine Waters). She said that this
bill is ``a carefully crafted bipartisan compromise.'' Those are her
words. She said that it is ``an example of Members on both sides of the
aisle working together to support our Nation's small businesses and
investors.''
Again, she is one of the most liberal Members of the United States
House of Representatives and most likely the next chairman of the House
Financial Services Committee. She said that this bill will help
entrepreneurs, small businesses, investors, and our economy to thrive.
In the 6 years I have been chairman, it has kind of been rare for us
to agree on the time of day, but we definitely agree that the JOBS 3.0
Act is important. It is important to America's economy not only today,
but more importantly, it is important for the economy of tomorrow.
If there is one aspect of America's economy that is somewhat unique
in the world, it is how we have ensured that entrepreneurial capitalism
can't just survive in America, but thrive. So those seeds have to be
planted today. There is so much competition worldwide, and that is why
it is important that we get this done.
[[Page H9738]]
The U.S. Chamber of Commerce weighed in, and they said that the House
amendment to S. 488--I am talking about the JOBS 3.0 bill--would remove
barriers for raising capital for America's businesses. Approximately
three-fourths of financing for businesses in the United States comes
from capital markets, but regulations have failed to keep up with the
demands of the 21st century.
The Angel Capital Association has written: ``Thank you again for your
leadership in promoting American startups, capital formation, and job
creation. The JOBS and Investor Confidence Act will help foster
innovation and job growth.''
The Biotechnology Industry Organization, known as BIO, said: ``The
JOBS and Investor Confidence Act of 2018, or JOBS Act 3.0, will
significantly improve the ability of emerging biotech companies to
access capital and invest in their potentially lifesaving research
rather than unnecessary compliance costs that do not add value to
investors.''
There is widespread support. I am almost baffled, Mr. Speaker, why
the United States Senate won't take this up. Again, this is a strongly
bipartisan package. It doesn't get much stronger than 406-4.
Again, our business startups have neared a 40-year low in 2016. Our
IPOs, our initial public offerings that allow our working families to
invest in the American economy, are half of what they were 20 years
ago.
Why? The average regulatory compliance for initial public offerings
has now doubled. It has doubled in the last 25 years. It costs $2.5
million to go public, with average compliance costs clocking in at $1.5
million.
Sometimes, Mr. Speaker, we have to take a look at regulations that
date back to the 1930s and start to ask the question: How is that going
to impact the economy of the 2030s? The answer is not too well,
particularly in a global economy competing with China.
So I just want to conclude by saying that I have so many friends in
the United States Senate. I respect the United States Senate. I used to
be a staffer of the United States Senate. But there is no excuse why
they can't do what the House did and follow our leadership and work on
a strong, bipartisan basis to make sure that America just doesn't have
the strongest economy of today but has the strongest economy of
tomorrow.
It started with men and women, Democrats and Republicans on the House
Financial Services Committee, to ensure that the economy of tomorrow,
once again, will be strong for all Americans.
Mr. Speaker, I urge my colleagues and my friends in the United States
Senate to follow our lead, to listen to the administration, and to pass
the JOBS 3.0 Act immediately.
Mr. Speaker, I yield back the balance of my time.
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