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tv   Key Capitol Hill Hearings  CSPAN  May 27, 2016 7:00pm-12:01am EDT

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>> thanks so much. i have qua question about the b concept -- >> please identify yourself. >> henry steven perez. i'm a federal physician. i specialize in helping people at an individual level grasp the concept that's staring us in the face, intelligence. the idea -- i'm a cancer doctor. we're changing the way we're thinking about cancer. for 100 years we were focusing on the cancer cells. now we're focusing on the intelligence of the surrounding environment. that's the only word we can use. intelligence. as scientists, we don't have a word for that really. my question is simply this, if you think about how scientists or thoughtful people might think about the concept of intelligence in 1916, when it started at the dawn of the industrial revolution, or 100 years before that when we were solidly in the agriculture economy. we would have certainly come up with different definitions for
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what we thought intelligence was in 18 16 versus 1916. here we are 2010 and i'm wondering if this is a good time to think about that as we start to retool the whole thing. >> terrific question. >> i think what you said was, some of the most fundamental presumptions that we've made throughout time, you only went back to 1816. you can go back 1,000 years before that. you could go back a few hundred years before that and it's called the dark ages. and nobody in their own time ever realizes -- i mean, i doubt some monk during the dark ages said to a monk, i got a great idea, and got whacked on the head. you can't have a great idea, don't you know this is the dark ages? i think today cancer, as an example, my brother is an m.d.,
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ph.d. oncologist, would say it isn't the cells. we shouldn't be treating the disease, we should be treating the patient. and by the way, it's the immune system, it's not the cell. the cell is the symptom, not -- yeah, and it took 100 years to get there. now we're starting to get somewhere. all you said, i think, was the fundamental perception of what we know and how we know what we know and how we're going to move that to use forward is even critical than ever because the world is moving faster than ever. frankly, all those other jobs -- you could make a living as a farmer in 1816. you could make a living in a production line in 1916. today, there's nothing left that if it can be done by menial lab labor, it's being done by a machine or computer or robot. so what i think you said, going forward, intelligence, how to add real value to solving real
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problems is going to be the only way humans can succeed in moving forward because everything else looks like the dark ages and it brings me back to saying, why don't we make sure kids have the most valuable tool they can possibly have, a broad-based education particularly with analytics and mathematics? >> can i go back to one quick thing? i apologize because i didn't think i had an answer. but we talked about demand. there is no shortage of supply. the big question today is demand. we have now facilitated the potential success of a commercial space industry. why potential? we now have more rockets and rocket companies than you can shake a stick at here in the u.s. so we have returned the ability to launch to u.s. shores. spacex. orbital sciences. orbital atk.
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you name it. what are we lacking? a demand, a place for those things to go and for all of these astronauts that people claim they were going to open up the world for with commercial space because everybody wants to go to the international space station. we need more platforms in orbit. on the international space station, we work with the nih, you know, we're looking -- dean mentioned the human immune system. we don't understand it. it goes through changes when you go into the microgravity environment of space. we learn -- we have learned a lot over the 30, 40 years humans have been flying. we don't fully understand. we just finished the first ever study in genomic, human genomics with the twin study. mark and scott kelly. identical twins. we will get more new knowledge from the twin study than people
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ever thought was imaginable. we have the ability to do this as a nation in an international space community but we have to respond and provide the demand and put more platforms out there. if you want to be a pharmaceutical developer, put a platform up in space where you can send the seeds for those pharmaceuticals without astronauts. astronauts are horrible when you want to do pharmaceuticals development because we got to exercise. every time we get on a treadmill, a bicycle or something, you don't know it, but the vehicle starts to shake. that just drives a materials processer berserk. now you're taking the quiescences of microgravity, of being in space and having no gravity affect your project, having no "g" and all this stuff and introducing it to the astronaut who has to exercise. now you're shaking your stuff. take a small platform away from the international space station and put your pharmaceutical development there, put your materials processing there,
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you're going to get pure semiconductors, you're going to get great drugs, you're going to get all kinds of stuff. that's the demand we don't have yet because everybody is sitting back relying on nasa to provide the international space station. that is not a demand for a commercial space industry. i've been saying that for seven years now. we have to create the demand for the supply that we're developing. >> thank you for that question. about 2/3 way back, a lady with her right hand up. i promise to come to the other side of the aisle here in a moment. >> my name is autumn lewis and i am with the national council with teacher equality, and something we haven't talked about today is the shortage of s.t.e.m. educators we're facing across the country. so how do you think states and districts can have students go back into the classroom and train the next generation? >> quit telling girls they can't learn math and science. >> a great question.
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really good question. >> i'll go with that. i'll also say let's be realistic. while the industry is willing to pay unbelievable premiums for kids that know engineering, the fact is the marketplace is saying if you have a degree in engineering or mathematics, or opportunity to make two or three or four times as much as a teacher can make says that whatever have been the challenges to get great people to be teachers, it's even tougher if they're science and technology teachers. my mom was a teacher and i hate to say this but i think an unintended consequence of preventing women when my mom was a young woman from going into business and doing all the other things women, of course, should have a right to do. unintended beneficial consequences, really smart, passionate women went out to teach. they were smart enough to realize the most valuable thing this country has is all its kids and these incredibly talented
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women became the teachers. now these incredibly talented women, especially if they learn that, might go somewhere else. so as a pragmatic guy, i would say to you it would be naive to assume you're going to be able to attract the best of the best of the world of tech and put them in a classroom. i also think they chose to be an engineer, science -- they didn't choose to be a teacher. they may not be good at teaching. i two back to my sports analogy. lebron james is not a physician ed teacher. and that's okay, he would not have as much impact on a whole generation of kids if he was in one classroom. he's there to create demand and the teachers have the skill sets to teach it. i think what we ought to be doing, f.i.r.s.t. does it very well, we have taken 140,000 world-class passionate people, many of whom are people, scientists, and engineers, and let them be the role models and work with the schools and let them be -- we called them the mentors and not the teachers and
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you get the best of all worlds. you get people to be role models working directly with the kids and you don't have to pay them. you can't buy passion. they want to do it and they do it effectively and bring into the schools the world class capability of professional science and engineers to inspire the kids and then the teachers will have no problem. if the kids are passionate to learn, the teachers will do just fine. so i think it's naive -- in the same way i said let's redefine the problem as not an education problem but a culture problem. let's find 100,000 young scientists and engineers would want to become teachers and be good teachers and we can pay them. none of those assertions are likely to happen quickly, but instead, let's say, let's create a partnership between great schools and let them have access to f.i.r.s.t. and let's get the whole tech community there cheering for these kids and be their role models.
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that we can do. >> we can do two more questions and then give time at the end for both guests to summarize quickly. yes, sir, please? >> thank you very much for coming here. my name is jeff with ivy capital management. i'm reminded of -- >> a little closer to your mouth. >> i'm reminded of sheryl sandberg and jeff bezos favorite book when they were growing up called "a wrinkle in time." i don't know if you've read it lately, but it's a fascinating book which inspires individuals at a "k" level, sixth grade level or high school level. and i am curious, if s.t.e.m. would create or if you could somehow put that type of passion where you could actually -- when you are reading
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that type of book, which is, again, maybe a 250-page book so it's a quick and easy read where you can inspire that type of passion and creativity through graphic novels, through comic books, flu through games? >> first i have to tell you, jeff bezos is pretty cool, but we formed a thing called the mothers of invention at f.i.r.s.t. and jeff bezos has a mother, jackie, and a father, mike, who i was on the phone with this morning, actually. they came to the championship. they're huge sponsors, huge supporters. based on what you said, we could figure out how to get ma'am don to spread that book among all our constituents, and i'll work at doing it. but your point, i think inspiring young kids to see how accessible and how much fun science and technology is is the simplest and most effective solution to what has been now for more than 25 years the big concern of industry and government in this country of just how much we lag the rest of the world.
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and it's, again, you can say it over and over and over again. it isn't the schools' problem and they won't be able to fix it. we need to nix it. the business of america has always been business, and if we decide as a culture we're going to promote something, it works. we're not 29th in the world in the olympics and they're all amateur athletes. this country needs to focus in a real hurry. we're in a race with catastrop e catastrophe. i don't like catastrophe to win. inspiring kids by whatever means it takes will be the solution. >> science fairs. i fell in love with science in seventh grade. i thank two male teachers. one was my seventh grade teacher who introduced me to science fair. i never did not do a science fair after that. you don't have to do a big project is what he told me, just do one. you have to.
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if you're going to get a grade in my class, you will do science fair projects. so it was a classroom science fair and then went to the school -- the president, you know, the reason he brings hundreds of kids to washington, d.c., every year is to try and emphasize the critical importance of allowing a student to participate in something that is available to every single student, and it doesn't require a lot of money, and my first one was getting a solar cell and having it ring a bell when i took a flashlight. and that's pretty basic. but getting kids into science fairs, you can do that in elementary and high school, and you won't catch everybody but some of them will be hooked. math fairs. you could go on and on and on. >> ma'am, all the way in the back, please. this will be the last question. >> hi. i'm rebecca clem, i'm oftentimes known as the numbers lady. i work to get young kids interested in invention and building and i challenge you
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all, if you're going to isti, i'm going to do two of the playgrounds. it's called building number opolis. from preschool to ph.d. level. number opolis is where all the numbers live. all the numbers plus pi and fi. all of them. i start at maker fairs. science fairs. i'm out there and i teach teachers how they can bring activities into their room. they're afraid they won't have time for the test but i show them how the kids get so engaged with my patents on puzzles and building and it's a math teacher and math is now fun. it's not out of a textbook. so i'd love to talk to you about bringing it down even lower which is the only age i have never done and i love having the parents be busy while the kids are busy so they don't do it for them. have i things for them of all ages. it's call building number opolis. i have the kids from young ages create puzzles and create houses
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that reflect numeric patterns and shapes. >> so for the numbers lady, thank you very much for that unpaid commercial. well done. no, that's very important what you're doing. let's have one more question finally. gentleman in the back with the blazer. yes, sir, please? >> thank you. administrator, last november you said the united states should include china in its human space program, but congress ban on that kind of collaboration. so why do you think it's necessary for the countries to work on the space program and do you think in the near future is it possible for the two country to start working on such kind of a program? thank you. >> i think what we do today with china as a partner in areas other than human space flight, it's a matter of law that we can't do bilateral activities with china in human space flight
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and i believe it will happen one of these days. it's not something on which i'm presently focused, but we do work with china on an incredible basis in terms of earth science, looking at glacial characterization in the himalayas, looking at things like earthquakes. even looking at some aspects of lunar science. so you take what you an get and you go. you know, that's the one thing that's different between nasa and, say, a company. government is inherently slow. and so, one, if you want to work inside the government environment, you have to be patient. and i'm -- am i happy? no. but are we making progress? yes. and so one of these days, no one would have ever dreamed, you know, before the berlin wall fell that the u.s. and the former soviet union would be collaborating in space. today, as a matter of fact, as a
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direct result of the berlin wall falling and the soviet union falling apart, it was a geopolitical decision. we needed to find somewhere for soviet and now russian scientists and engineers to go so they wouldn't do bad things. what better place to send them than to collaborate with nasa and our international partners in building an international space station? a lot of people think the international space station start with russia and the u.s. russia was the last of the five partners to be brought in and president clinton directed nasa to integrate russia, the russian space agency, into the international space station. today, they are one of our five partners and a key partner. patience is virtue. it will happen in time. and it won't happen during my tenure as the nasa administrator, because i go with the president. so when the president leaves, i leave.
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but it will happen. be patient. >> in a world where we tend to concentrate way too much on confrontation, it is with u.s. and china and russia where we can find a lot of common ground in the area of space and technology. >> it's hard to hate people, and i'll say this as a 34-year marine, we deal with a lot of bad people. general allen will tell you this, my son will tell you this. if you want bad people to become good people, you got to engage them. >> that's right. >> if you choose not to, i can guarantee you, they're going to stay really bad people. a lot of people don't like to hear that, but we spend a lot of time dealing with people who want to be like us, want what we have, but don't know how to do it and so we try to go out and teach them. that's what general allen still does today. his wife is wishing that he'd quit, but it's in his blood. >> ladies and gentlemen, there's still a forest of hands going up
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every time i ask for questions, and i think that indicates how rich this panel has been. let me just ask each of our two guests if they'd like to make a couple minutes of summary comments and we'll go from there. >> i think i've said enough. i want you to remember your space agency is on a journey to mars. we have lots of things we do that are not just human space flight. we have an incredible science program. we didn't even talk about it. it's in four areas. we look at the planets, our own planet earth, we look at the sun and astrophysics. how did we get here and is there life elsewhere? and s.t.e.m. education is our number one product. we spend $19.3 billion on it every single year. >> dean? >> you heard we have to engage our enemies, otherwise they will become a bigger enemy. two of the phrases used all of the time throughout the f.i.r.s.
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community are gracious professionalism. you heard charles bolden point out, they are competing in the two-minute rounds and in the pits the teams help each other when one as a broken axle. gracious professionalism and coopoperatation. all the teams will cooperate as they compete so we all end up with the best of the best, and it's part of the culture of f.i.r.s.t. i started by saying this and will end by saying this, in a free culture, and there is no culture freer man america, it's your biggest strength or weakness, and kids are free, and they have a bill of rights and not a bill of responsibilities. we ought to have a bill of responsibilities. >> but -- in a free culture when you get to do whatever you want, it's incumbent to inspire kids in this country to do it because they have a passion for it. if we're going to recognize it in this country of ours that we
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get the best of what we celebrate, if we want the best of science technology, global competitiveness, security, we got to give kids some vehicle. particularly women and minorities that is so appealing to them it's competing for their hearts and minds with what used to be the national pastimes and distractions that are great as long as they're in proportion. if you are policy people, all i can tell you, we created a model that's scaleable. every major tech company in this country, the parents love it, the schools love it, the teachers -- everybody loves it. you heard charlie bolden point out government moves slowly and the great irony is everything moves slowly. technology is something moving quick. you need hands-on real learning that develops passion. we have the model. you need to think about how to get government to be a catalyst to make it available to every
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kid quickly. if you don't, we will all suffer. >> ladies and gentlemen, tom brokaw not long ago used the term, the greatest generation. it's one of the first times we heard that term coined. he used it in implication for the outcome of world war ii. and americans and our partners who had stood on the ramparts and defeated an existential enemy. i would contend, though, there's a new greatest generation. general bolden and i and his son, jay, have seen them in action. when you saw the bright faces on that video here this morning, that's the new greatest generation. the greatest generation that will propel this country and our friends and sometimes our opponents who will become our friends to another level of human existence. and this kind of a conversation today is what brings that to fruition. so let's thank our panel this morning. thank you all for coming. [ applause ] >> it's a pleasure.
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president barack obama paid tribute today to the 140,000 victims of the atomic bomb topped 71 years ago on hiroshima. he became the first u.s. president to visit the site of the world's first atomic bomb attack. see the wreath laying and president obama's speech in hiroshima tonight at 8:00 eastern on c-span. with congress in recess next week, "american history tv" programs are airing in primetime on c-span3. look for our history features each night twinning at 8:00 eastern including three day vietnam war summit from the lyndon b. johnson presidential library, 50th anniversary retrospect if on the conflict. monday, the first major engagement of the war. then the soldiers' battle after the war with physical and psychological trauma. and a conversation with henry kissi
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kissinger. >> as the administration went on, a president who all his life had been known as concerned primarily with domestic policy was engulfed in a division of the country that in a way has lasted to this day. >> tuesday, authors and historians on how america was divided over the war. and then a conversation with filmmakers ken burns and lynn novick. >> by the time we got four, five decades away where the historical triangulation can actually take place, when you can have the kind of distance and perspective necessary not to just make a reactive or simply journalistic response, but something that is hopefully greater than the sum of its parts, you begin to realize that almost everything you thought you knew was not true. >> and wednesday, a look at the war from the perspective of those who fought it and u.s. foreign relations after the war and those with vietnam. thursday at 8:00 p.m. eastern, our "real america" series looks
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at the 1975 church committee hearings convened to investigate the intelligence activities of the cia, fbi, irs and the nsa. and with the national museum of african-american history and culture opening in september, friday at 8:00 p.m. eastern, an all-day conference with talks on african-american religion, politics and culture. and african-american history as american history. >> i couldn't get that out of my mind. that my students were thinking that somehow this african-american history wasn't real because it -- there was no textbook textbook as there was in all of the american history courses taught in the department of history. and so i decided to write a real textbook. >> for the complete "american history tv" schedule, go to c-span.org. vice president joe biden delivered remarks this week on the need and ways to reduce gun
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violence in the u.s. his comments came in the afternoon of meetings held at the white house with state and local officials looking for ways to reduce gun violence across the country. this is about a half hour. i don't have to fell ytell i'm not going to go through what they prepared for me here which is good, but the bottom line here is that we know that gun violence is -- gun violence is ravaging our mustn'ts. i mean, this is not -- this is not -- of all the civilized countries in the world, this is an exception. it doesn't have to be this way. there is no reason for it to be this way. and, you know, we always extend our prayers and sympathies for those who are -- who are victims
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of gun violence, and, you know, there's horrible, horrible, horrible events like sandy hook. i spent a lot of time up there. i still keep in touch with at least 10 or 12 of those parents. i mean, on a fairly regular basis. and because a lot of them are still fighting very hard. very hard for the kind of rational changes. but, you know, on any street corner in some of the bigger cities of american, you know, in a month there's equally that many people, you know, shot dead and a number of bystanders that are badly injured and/or killed. and, you know, and how many children, it's not as large, who pick up a gun that doesn't have a trigger lock on it or is not safely stored and, you know, blows their own brains out or the kid next door. and so, and the frustrating part
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for me is, and i'll be blunt with you, i mean, i -- i'm the guy who did the first real serious gun bill in the last 40 years. i mean, i actually sat down -- [ clapping ] no, no, i don't say it for that reason. i really don't. it's not like i did this. i don't mean it that way. but it took a hell of a long time. it passed in the '94 cycle, '93 cycle. i started writing this legislation as chairman of the judiciary committee back in the early '80s. and i got -- i'm so damn old, i got here right after all the guns on gun control after the assassination of president kennedy. i got here in '72 and you had guys like joe clark, senator of pennsylvania, and maryland, great senators who lost on the
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gun issue. on gun control back in the '70s. excuse me, in the '60s. so this is a perennial fight that's been going on in the united states of america for a long time. one of the things that i've learned in the effort that ultimately succeeded, and i have to admit to you, were it not the overall crime bill and had $30 billion in it to help localities, i'm not so sure we could have gotten some of what we got done on the rational gun policy side. so we're all pros here. i'm not trying to sell you a bill of goods that this is an easy thing to do. but it took a long time. so i'd like to start off by saying to you all that we don't think this is the end of the process. a lot of people keep saying, why are we still pushing the congress? you know you're not going to get anything done. i was a legislator for 36 years in the senate.
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i'm going to say something outrageous. i was a fairly successful legislator. i got a lot of stuff passed. and i don't know anything that is difficult that comes quickly. the only example i can give you in my entire career is what brought what the president did on the affordable care act. that was a bit of an epiphany that that happened as rapidly as it did. most of this stuff takes a whole lot of time. and the reason i say this is, that after newtown, as the governor said, the president asked me to put together a package and it had a number of legislative recommendations but also had 40 recommendations relating to executive actions that the president could take. and the irony is it had overwhelming support. overwhelming. it had the support of the health
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care community, had support of everyone engaged in the effort. 80% of the american people supported the proposes. 56% of homes with gun owners in the home supported the proposals. this wasn't something that was somehow -- that didn't immediate may make sense to the average america. and overwhelmingly made sense. as a matter of fact, what struck me in the polling data was, the significant number of people thought we already had laws like that. you know, it's a little bit like if i can make an analogy, you know, you can go have a same-sex marriage in about 37 states and show up at work that same day and get fired because you're gay. most people don't know that states still allow that to
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happen because don't we have, you know, there's the constitutional right to marry whomever you wish. it's the same kind of thing when you start talking about these gun issues. and, so, one of the things that i want to say to you because you've been meeting all day, the things we're talking about, universal background check, supporting gun violence research for the disease -- the center for disease control, smart guns, all the stuff you had on the agenda, domestic violence, these are things that -- the hard part is not convincing your constituents as a whole that it makes sense. the hard part is convincing a congress that is -- [ laughter ] no, because look, i served a long time. i have great respect for the
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house and senate. i really do. but where we are today politically, and the makeup of how we get elected, the gerrymandering that exists in the house seats. some states that are now all red or all blue. it's hard to get, generate consensus because both parties are worried about either the left or the right. they're not worried about the center. the rational center as some would say. and so one of the things that we have done, the president has it implemented 23 of the executive orders. you know. i'm not going to go through them. from increasing school resource officers, expanding mental health benefits, 60 million more people so there's access, et cetera. but has come up with some brit controversial in the minds of some executive actions that are helping.
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but one of the things you talked about today, background checks. the president asked me to lead this effort. i asked us to go back and take a look at how well are we at the federal level doing our job to deal with, let's say, background checks? i'm a guy with brady who actually insisted on the next system being set up. it was the compromise that was fwoin going to allow for instant purchase if instant background checks could occur, et cetera. the truth is, two things happened that aren't good. one is the demand for these background checks outran the capacity for the system to be able to handle them. so we called for 261, i think it
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is, new employees to be able to handle these calls, to be able to move quickly because right now, if you go into any one of your states and you're at dick's sporting goods, you want to buy a shotgun or whatever you want to buy, pick up a phone, they call, if they can't get an answer in next 24 hours, well guess what, we extend it to 3 days, but go ahead and get the gun no matter what your background is. is a that's partially our fault because we've had trouble getting funding for things we care about the last eight years and it's clear when we wrote the legislation, the only way we could get it passed is it would sunset. it had to be authorized. some of it like assault weapons ban. they were unable to do away with the legislation, itself, what they were successful in doing is diminishing the funding for the agencies in charge of implementing the various pieces
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of legislation. we also found out when we go back and look, which we already knew, a lot of your states aren't doing their part. a lot of the states are not actually reporting what they're required to report. when we first drafted the law, a lot of states said it's going to cost money to do this. we started seed money. to help you set up the computer systems, mechanisms by which you'd be able to transfer the information. but it's amazing what is not reported. we recently talked to the governor of a state that's very progressive on these issues and pointed out that there was only one case reported to the system relating in mental health. and they said one? that's the only one in the whole state. that's a state i'm moving to. you know, you only have one person needing mental health, you know, work. but the point is, you guys can make a big difference back at
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home. you guys can make a big difference. state legislatures, mayors, et cetera. insisting that your state steps up and abide by the reporting requirements that are written law. now, some of your states have gone further which is a good thing. and had your own background checks system and added to the exclusionary provision -- what would exclude you from being able to own a weapon. you've added additional personnel or additional categories to that. and so some states have moved on, but the generic point i want to make to you, you just had a piece -- you just had a roundtable or longtable on background checks. there's a lot more that we can do if we just report it. if the states just report it, the information that's available to them or fig wrur out how to better aggregate that information to transfer it to the system. we can save lives.
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we can save lives. and i know, quote, the system is not an anachronism and jumps to the lips of every legislator when they know exactly what it is. you all do. a lot don't know what it is. it matters. it matters if you put pressure on your systems in order to make sure the information is transferred. transferred to the system, i think it's down in virginia, and be able to get that information so when that -- that clerk from dick's calls, it's on the list if, in fact, they shouldn't -- they wouldn't qualify. and so we've extended the time to three days before you can, you know, purchase the weapon if you get no answer back, but you're going to see a lot of pressure for that to change and go back to the 24 hours unless we're actually able to get
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more -- more rapid response from the system and more information in the system that gives us some reason to believe that we are -- we are getting the cadre of people who are appropriately, constitutionally able to be permitted -- prohibited from owning a weapon. and now some of your states you'll hear that there's i think it's three to five states that have legislation saying that we can't give mental health information because it's a violation of hipaa rules. sever simply not true. department of health and human services put out a regulation saying it is not a violation. so when you hear, if it's brought up in your legislature or brought up in your community that, well, we would provide this information, we can't do it because it's a violation of the privacy rules in hipaa.
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it's not true. that is simply not true. and it surprised me, but it's understandable because i would be the same way if i was a state legislator, how many people in my own state didn't know that that wasn't true, that that wasn't true. so part of this is preaching to the choir here, getting out the information so these -- these false assertions that the information can't be shared are debunked and it's moved. and so, you know, there's 26 of your states, we've already received grant funding to support the gaps in reporting that exist in your state. to help you put together the system that will fill the gaps of what's not being reported. now, the good news is since over the past three years since we started banging away at this, 70% more records are transferred to the system than were before.
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so there's progress. there's progress. but there's a hell of a lot further to go. and look, guys, there is going to be and there has been another virginia tech where you got a guy who if you just reported this information had been reported to the system, there'd be a half a dozen people still alive. so it really matters. there's a lot more to say about the system and a lot more to say about the whole notion of having to register names that, in fact, violate the law and would not be able to own a gun and reporting requirements, but i'm not going to take more of your time. the second issue is you talked about is gun safety. and what we're trying to do, as you all know, and you've talked about it today, is keep guns from being able to be used by, intentionally or accidentally, by someone who is not qualified
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either because they can't pass the background check, or because they are a 6-year-old kid, to get access to a weapon that can be fired. and it's amaizinamazing how thed some gun owner organizations have gone ballistic, no pun intended, with the notion that we should be looking at safe gun technology. if i can reach in my pocket and take out my cell phone and my thumbprint access the code to activate my phone, the technology exists, the technology exists to be able to make sure that no one a la james bond can pick up a gun and fire it without it meeting the criteria that demonstrates it
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belonged to that person. now, there's a lot of research going on. this is totally within our wheelhouse to be able to do this, but it's amazing the pressure that's being brought by the nra and others not to allow this technology to go forward. i had -- there were two gun shop owners that i met with who said, started to advertise, they were selling rifles with this technology. and they're big, you know, 2nd amendment guys. they got so much heat. so much heat from organized opposition led by the nra that they said we will not sell smart guns. we will not sell smart guns. but the irony of this is, and i could go into detail on that, but you already know most of this. the irony of that is, the one guarantor that your 2nd amendment right will not be violated and public safety will
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be enhanced is if only you can fire -- no one is denies the purchaser the right to purchase a gun if they meet the criteria of not being a felon, et cetera. your 2nd amendment rights totally thoroughly protected. your 2nd amendment right doesn't say i have a right to provide this weapon to my 6-year-old kid. not that they intentionally do that. no one says you have a right to pass a background check then hand your weapon over to somebody who you know does not meet the criteria to be able to constitutionally own a weapon in the united states and give it to them. it's not a 2nd amendment right you have. and so there are a number of -- i won't go into the regulations we put in place to begin this process in the interest of time, but there's also an awful lot of philanthropists out there who are prepared to invest considerable amounts of money in going the research and development to be able to develop the capacity to have
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this safe gun technology cheaply available. cheaply available. that, to get to the point, one expert i met with believes they can get to the point where it doesn't cost more than a trigger lock to be able to do this. that should be a goal. that should be a goal. and we should not be intimidated by the opposition who somehow views this as -- you're going to hear all kinds of arguments. you're going to experiment with the military. it's malarky. this is totally within our wheelhouse to do this. everyone's right being protected including innocent bystanders' rights being protected by making sure that the gun is not transferred intentionally or unintentionally from a legitimate gun owner to an illegitimate gun owner. earlier this year, the president directed the departments of justice, homeland security, and
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defense to map out how we could deploy real-world smart gun technology. and so these agencies release add report last month that among many things begins the process of defining for the first time the requirements that gun manufacturers need to follow to smell smart gun technology. how gun manufacturers test smart gun technology within a safe environment at military testing centers. you don't have -- there's ways to protect all the interests here that are totally legitimate. and we should not be cowering from moving forward with this technology. it can be a game changer. and i understand senator weinberg from new jersey has been and continues -- he has been and continues to be a leader. she continues to be a leader. in her state to do more on smart guns. did you get to speak today, senator, talk to this? >> i did. >> well, you probably covered
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more than i have covered, but the bottom line is it is a rally rich environment that answers clearly to serious concerns. concerns. one, whether you like it all or not, there is a second amendment. it is real. it exists. it exists. and it must be upheld. and two, there is a need to significantly increase -- or decrease the exposure to violence as a consequence as the use of gun in american society. and this is a place that could have gigantic pay-off for us, in my view. last point, as the author of the domestic violence act, i held over a thousand hour hearings, literally, when the supreme court struck down one part of my bill they acknowledged, notwithstanding the judicial
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committee that held over 1,000 hours of hearings, i didn't keep a count, they kept a count. and it is interesting what we found out. and it is -- it should be no surprise to anybody that while some women survive being brutally attacked when we're unable to find a means to intervene, those who were attacked by any weapon from a hand to a club short of a gun had a significant higher percentage of possibility of surviving, of living. and one of the things that we found is the people who, in fact, are the ones that have stay-away orders that are repeated are the ones the people most likely to go do damage to their spouse. they should not be able to own a gun. they should not be able to own a gun. and speaking in new jersey,
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frank loutenberg was one of the guys that pushed hard for this to happen. in america, a majority of domestic violence cases are committed by a the use of a firearm. 52% of the women in america were murdered, were murdered with guns, killed by their intimate partner. in those states, that required background checks for all handgun sales, including those that are exempt -- that are not allowed to purchase those with violations of a domestic violence order or convicted of a domestic violence abuse, there is 46 fewer -- 46% fewer women are murdered by a gun an intimate partner. now you say, well that adds up to maybe only a couple hundred lives. well guess what? one life -- one life, it matters. and so it does matter if, in fact, the background check excludes -- and it is conducted,
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anyone who is in violation or has a stay-away order or in violation of convicted of a domestic violence offense should be denied the ability to own a gun. and so, look, there is a couple of things that i've learned. not a whole lot, but a couple of things i've learned. when the congress is disfunctional, and this isn't the first time, it is the worst time i think in modern history short of the civil war, that this town is as dysfunctional as it is right now. i have never seen it like this. and as was ruefully pointed out to me, there is only 1 people in the united states that served longer in the congress or the senate than i have. so i have been around a while. which is frightening. [ laughter ]
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but i've never seen the dysfunction as bad as it is now. all of you are that are in the congress and the governors and legislators, if you want to have real impact, you focus on two or things where you become known as a genuine expert and where people in your own party or others look to you. that is the biggest bang for the buck, that is usually a method by which you can increase your influence or whatever legislative body you choose or if you are an executive. so i've spent an awful lot of my time in foreign policy. this area and foreign policy. and there is no expression -- an old expression where i come from and it probably exists in your communities, an expert from out of town with a briefcase. i don't have a briefcase. but i'm considered to be somewhat of an expert in
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american foreign policy. since we've been in office, because there is no power in the vice president at all, nor should there be, for real, it is all reflective. the only power that exists for the vice president is the degree to which the people who you are dealing speak for the president. and this partnership between the president and i have worked well because the assignments he's given me and he gives me and i don't have to check and i just go do them. and because he has so much on his plate. and by the way, whoever the candidate is going to be, whoever the next president is, they're going to find that the nature of the office of vice president has changed markedly. not because of me or any predecessor, but because of the nature of what is on the president's plate. you need help. and so i get sent off on -- because i know most foreign leaders and have known them for a long time just because i've been around and this has been my
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area. for the first time in my career dealing in foreign policy, and i've traveled over 1,150,000 miles and when i get sent i get sent to meet with heads of state because even though the secretary of defense and the secretary of state and the national security adviser, they are in credibly important, no one doubts when i speak to a world leader, they know they are speaking to the president. i don't say anything that everybody knows he has signed off on. so it cuts through a lot of things. in the last five years, it is the first time in my career when i'm sitting with president xi of china or in turkey or wherever i am and i'm trying to convince the head of state to agree with the foreign policy initiative we are pushing either multi-laterally or by bi --
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bilatterly and this is the question i get asked after all of the detail we are talking about has been resolved. mr. vice president, can you deliver? hear me now. can you deliver, on what we're agreeing to? because every consequential foreign policy agreement that takes place, the other side is taking a chance as well. what they are saying is don't make me walk the limb here, out on a limb, in my country and take a chance on this compromise we're talking about. because you're going to go back to washington and the president is not going to be able to get it done because of a dysfunctional congress. folks, one of the things that i found, and we've had to adjust to, because of the nature of the dysfunction in congress today, is that we go back to you.
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you are more important in terms of national policy -- national policy than you have been in the last 50 years. why? we can raise up an issue like we have the minimum wage. we haven't been able to get it done nationally. but because we beat the drum so much and raised the awareness of the issue, you've gotten it done. many of you in your cities have made significant changes in the minimum wage. many of you in your states have done the same. so that is a long way of saying to you, just because we have not been able to get it done nationally with this congress, it doesn't mean that you can't change a lot of these parameters and these issues at home. it matters. we're going to keep beating the drum. we're probably not going to get
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much more done in the next nine months. but this is something you just got to keep at and keep at and keep at and keep at. and i think if we do our job of continuing to raise this issue up, and you are able in your job, even in localities relating to what city ordinances are and what the slate legislature is, it matters. it is a cumulative impact. and look at what i said, look at what o'malley did and look at what the distinguished governor from connecticut has done. it is gigantic. it is a fundamental change. affecting an entire state. and this can be contagious. so i guess it is a long way of saying, don't quit on this. don't walk out of here, out of washington saying, well you know, i know they won't get a damn thing done in the congress between now and then so why
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should i bother doing this. you can make some real changes and set the table for at least one of the next presidents of the united states. [ laughter ] to be able to get some of this done. so thank you all very much. [ applause ] next, the house national resources committee mark-up of legislation addressing puerto rico debt relief and then a housing hearing on how food suppliers can reduce waste. and after that, a discussion on the challenges facing women in military combat roles. on wednesday a bill addressing puerto rico's debt crisis was approved by the house national resources committee. it now heads to the full house floor for a vote. but will not be taken up until after that memorial day recess. the bill, which creates a federal over sight board to manage puerto rico's $70 billion in debt passed by a 29-10
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committee vote. this is about two and a half hours. well, this fun committee is going to come to order. as announce in the mark-up, i'm sorry, we have a quorum here and we're going to have an exciting and fun day. i haven't had this much fun since we went over red snapper. let's just do red snapper and puerto rico all of the time. i've never seen so much -- so much frivolity coming in here. as announced in the mark-up notice i'll give priority to those who filed bipartisan and amendments by the amendment deadline of yesterday at 4:00 p.m. thank you for doing that on time. please go back and tell your staff, get at mendments in by
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4:00. all right. you have received kind of an order i think that was sent out to you of which we'll take the amendments in here. there are only 32 of them that have been filed. it is going to be a piece of cake. there are going to be some of those -- i'm going to make some changes on the fly in the order in which we deal with these. some amendments will be bipartisan and some will be easy to accept. some are going to be subject to a point of order. we'll try and block them altogether in those categories. so we're now ready to start the amendment process on hr-5278. and i have to ask, are there amendments to the bill? mr. graves? >> mr. chairman, i have an amendment at the desk. >> this is the first of the bipartisan ones, this is the grave polis amendment it is 046
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and you all have it. mr. graves, you recognized to explain the amendment and without objection, the amendment is ordered read. >> mr. chairman, this is an amendment that we're doing with mr. polis and what it does is it directed the gao to conduct a study of the conditions that led to the financial crisis that we're currently experiencing in puerto rico. the idea here, mr. chairman, is that this is a crisis that has sort of evolved over a ten to 12-year process and to prevent future situations like this from happening, we need to make sure that we're extracting as many lessons learned from this as possible and it directs the gao to conduct a study that look at what led to this financial crisis and to make recommendations to congress and the administration on changes that could occur in the future to avert this type of situation. i know everyone enjoys working on puerto rico bills and everybody is really happy to be here today. but i would like to try and
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prevent us from being in this situation again. and i yield to mr. polis. >> i want to thank mr. graves for bringing forward this amendment as well. there is the old saying that says those who don't study history are doomed to repeat it and i hope in addition to working to sort out the situation in puerto rico, one of the legacies of the action that this body takes is having a quality study done by the gao to help prevent these kinds of financial crisis in the mainland or our territories by finding out what practices, what actions of the territories government and what led to make this situation as bad as it is today in puerto rico and it is my hope that other states and territories could learn from this and it will hopefully be a positive legacy of whatever action this body chooses to take. and yield back to my colleague
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mr. graves. >> mr. chairman, i'm going to reserve. >> thank you. let me take one second to give you a clarification. we have to stop this unholly graves polis alignment but they have two amendments. i said we are doing 046 and this is number one on your list. so it is still -- it is a different amendment, but this is amendment number one not the 046. and if i could give myself some time, i'm satisfied with this and willing to accept it. is there anyone else that has further discussion on this amendment? if it not, any amendments to the amendment? if not we'll vote on it. all of those in favor of this graves polis number one which is number three on the list say aye and opposed say nay and the motion carries. all right, now -- >> it is graves-fire, not graves
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polis. >> i'm sorry. >> it's my fault. [ pause in proceedings ] >> yes, i know exactly what i'm doing. we're not going to go back to the -- knock it off. we're not going to go back to the next bipartisan amendment, mr. graves you are still up. and i said it was graves polison and this is graves beyer and i'm sorry, 046. you are recognized for that one. >> so did we just passed graves polis, though, correct. >> yes. >> so now mr. chairman, we have another amendment at the desk. this is a bipartisan amount also. with mr. beyer. and what this does is this provides the discretionary authority, it doesn't require but it provides discretionary authority to the oversight board which is established in the act to -- for the oversight board to conduct an investigation into
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understand the selling practices and some of the representations that may or may not have been made with investments in puerto rico securities that may have led to or contributed to misinformation that may have exacerbated the financial situation that we're facing right now. and again, this is all about lessons learned from this disaster. so it gives the discretion of the oversight board to conduct an investigation, to look at some of the representations associated with this investments. and here is the deal. as weal -- we all know. we have pensioners and all of the districts across the united states that are invested in these securities. and we want to make sure that we understand what type of representations were made to those investors, under what auspices did they invest in these securities and make that information public to ensure that folks have been up front and honest about -- about the
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dealings with these securities and i yield to mr. beyer. >> thank you, mr. graves. mr. chairman, i proudly support the amendment offered by my good friend from louisiana. while i'm sure most of the bonds in question were marketed in good faith by brothers and -- brokers and dealers and buyers acting in the best ethical acts of their profession and there is question about possible proprieties in the sale connected with these bonds and i share the concern about the possible conflict of interest and failures of disclosure regarding the marketing and sale of these bonds. so it is in the interest of investors and a puerto rico government that seeks to regain access to the financial markets that any improper practice involved in the sale of the bonds be brought to light, to turn future improprietities and restoring future investor and i urge support for the graves amendment. >> thank you. any further discussion? >> mr. chairman -- >> let me take the time to say
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personally, we have three bipartisan amendments we just passed the one. i feel comfortable with all three of these bipartisan amendments. miss lem is. >> mr. chairman, i'll support this, but i have in front of me the bond issuing documents and if you read through them, there was full disclosure, especially if you look at the 2014 -- i have a general obligation bond of 2014, series a., it was a refunding, which is a refinancing, if you go through all of the documents, it fully discloses these were noninvestment-grade bonds. they were rated non-investment grade by moody's, standard and poors and fitch. and in all of the disclosure documents, it makes clear how risky these bonds are. and prudent investors buy these bonds because they want a wide
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variety of maturity dates, of risk profiles, and they buy lower-yielding bonds and balance it off with some higher yielding bonds and balance the risks. these are professional investors who know what they are doing. and so i haven't heard the kind of allegations that there may have been nonadequate disclosure. but if you read the bond documents themselves, it is very clear how risky these bonds were. and any prudent investor that buys these kinds of bonds would have known that: thank you, i yield back. >> is there any further discussion on this amendment? is there any amendments to the amendment. all of those in favor to the
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amount say aye. opposed? the amendment passes. we're now going to the third of the bipartisan amounts. this is mr. polis and mr. benishek. you are recognized. >> thank you, mr. chairman, as you are aware in the process of drafting this legislation, there has been a lot of discussion and i've certainly tried to drill down on the issue of economic growth mechanisms for the island of puerto rico. i have concerns that while we're addressing the issue of the outstanding debt, i think it is very important that we look at pro-growth policies for the island. a lot of those will not be -- which we'll be talking about in amendment form won't necessarily be in in order in this committee which is why i'm offering my colleague from michigan mr. bennish acan aamendment to improve the task force to come up with policy regulation that may be codified through the appropriate committees of jurisdiction to create
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pro-growth economic policies for the island. and what we're looking at with this amount is the composition of this committee expanding the committee leadership to include the committee on ways and means and the committee on fbs and not just this -- finance and not just this committee in the senate. we love this committee, of course, but it is important to buy in from committees of jurisdiction over progrowth economic policies. it has been frustrated to me that we have not been able to do the tax incentives and growth policies that are needed. so the other thing that it does, instead of allowing 30 days to appoint the task force members we shorten it to 15 days. that should be enough. this is an urgent issue. we need to get to work on in. and finally it requires a status update in mid-september which is while congress is still in session. congress is here for a couple more weeks. and it gives congress a chance to act if congress wants to. and the situation in puerto rico is dire. we want to make sure that in
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addition to whatever action this body takes now, there is at least the opportunity to look at pro-growth economic policies for puerto rico. and i hope that the committee supports this bipartisan and simple amendment, i'm happy to yield to mr. benishek. >> thank you. finally we have a bill to put puerto rico back on a path to fiscal sanity. while it is incredibly important to work out the immediate crisis that puerto rico finds itself in, we need to look to the feature and help create an economic environment that fosters growth and investment. adding members from house ways and means and senate finance will improve the work that the congressional task force of economic growth in puerto rico will be doing once this bill is signed into law. i'm glad mr. polis and i have been able to work across the aisle on a common sense amendment. i want to thank mr. duffy and the staff on getting the best possible bill out of our committee and one step closer into law.
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i urge my colleagues to support the amendment and look forward to continue to work with you to help puerto rico be successful in the long-term. i yield back. >> i reserve the balance of my time. >> or yield back. whichever comes first. >> okay, well again, i encourage the adoption of the amendment. it is very simple. it includes the committees of jurisdiction so that committees that have jurisdiction over tax policy and financial services policy could look at this and expedite the process of recommendations coming back to us and i'm happy to yield back the balance ever my time. >> thank you. any other discussion on this amendment? any amendments to the amendment? if not, we vote. all of those in favor say aye. opposed say nay. motion carries. i want to go through four amendments that i will tell you in advance i once again have no problems with and willing to accept it. two by mr. gallego and one -- no, i lied again.
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an even better amendment. it is the technical one under my name which is number one. this one -- i'm sorry, it consists -- i recognize myself. it is number one. it consists of technical amendments and typos and punctuation errors and terms used in the bill and we found two prep positions to ended a sentence. so any other discussion on the technical amendments. ? if not. any amendments? all of those in favor of the technical amounts say aye. oppose? that one passes. now to the four that i will tell you in advance i'm willing to accept. two by mr. gallego and one by mr. [ inaudible ] and we'll go to mr. gallego. let's go 046. >> excellent. thank you mr. chairman. >> you're recognized. >> thank you mr. chairman.
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i rise today to offer a common sense amendment to the bill before us that affirms the critical role of the puerto rico people in this process. section 409 establishes the congressional task force on economic growth in puerto rico to analysis the impediments to stronger economy and help identify opportunities to for revitalization under federal law. while i applaud my fellow colleagues who have travelled to puerto rico to witness the urgent humanitarian crisis for themselves, the members who serve on this task force ought to bring questions and ideas to the faups and businesses -- families and businesses on the island. my amendment stipulates that if the task force holds any hearing it must hold one hearing in puerto rico. to truly grasp the realities that communities across puerto rico are facing, members of the task force must have the chance to see for themselves the barriers and opportunities on the island for long-term growth and prosperity. mr. chairman, let's adopt my amendment and send a strong message to the puerto rico people that their voices are valued. again, i strongly believe that a
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task force should conduct hearings and one should be held on the island. i surge the colleagues to support my amendment and i yield back. >> is there any other discussion to this amendment? all say aye and opposed. it passed. you are on a role. let's do the next one. 045. >> let's do them, mr. chairman. thar thank you, mr. chairman. as we look to face the urgent humanitarian crisis in puerto rico, we must face the health care system that millions depend on. the hospital system has laid off 10% of the workforce and has been reducing services including closing beds and floors and entire wings of hospitals just to cut costs. an average of 1 physician a day it leaving the island. the government is struggling to make the medicaid payments. jeopardizing the entire medicaid
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program that thousands of families rely upon for care on the island. mr. chairman, ultimately, as we all know, it is the patients that will suffer. i believe section 409 and a congressional task force provides a meaningful opportunity for congress to reexamine the root causes of the current crisis and offer bipartisan solutions. that is why i'm offering an amendment that ensures a task force consider access to federal health care programs as part of the mission to identify impediments to economic growth in its report. health care makes up 18% of the puerto rico economy and employed 84,000 people so it must be a central part of the mission to fiscally stabilize the island. issues like the underfunding of medicare and prescription drugs and looming medicaid cliff have been identified by members of congresses irishs that must -- as issues that must be addressed to have a sustainable system. by ensuring that the task rors includes these issues i hope we could act swiftly to solve the
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long-term problems that continue for economic vitalization on the island of puerto rico. on behalf of those on the island, i urge my colleagues to support my amendment and i yield back. >> is there any other discussion on this amendment? miss dingle. >> thank you. i want to thank my friend and colleague from arizona for offering this common sense amendment. if we want to make sure this committee is not back here in a few months to deal with puerto rico once again, we must ensure that the root causes of this crisis are addressed. this means supporting provisions that will grow the economy and stop the mass exodus of people from the island. democrats wanted this legislation to ensure that puerto rico is treated just like any other state in terms of access to federal health care programs. we push for language to deal with puerto rico inadequate treatment under medicaid by removing the cap on medicaid funds for the island and increasing the federal medicaid match. unfortunately, none of these provisions are in the final
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bill. this amount would require the -- amendment would require the economic growth in puerto rico to study the inequitiable access to federal health programs as part of a report that looks at all of the impediments to economic growth on the island. if this report is going to be fair and accurate, the issue of health care on puerto rico must be examined. we have nothing to fear from studying the issue further and i hope my colleagues on the other side of the aisle agree. i urge my colleagues to support this amendment and yield back the balance of my time. >> is there other discussion? mr. labrador. >> i oppose this amendment. the root cause of the problems in puerto rico is not they are not getting enough federal money from us. their root causes are poor decisions that have been made over years and years. and i think that what this amendment does, it actually puts a -- a stamp on the bill that
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we're asking for additional monies. we have been attacked by people -- people have been saying that this bill is a pathway to a bail-out and i think if we actually encourage this task force to look at sending more money to puerto rico, it will become that and i think that this amendment should be opposed. >> mr. chairman. >> is there any other discussion. >> i move to strike the last word. >> why don't you be recognized for five minutes. >> thank you. >> i rise in support of this amendment. when you look at this bill, what we're trying to do is to improve puerto rico -- the government of puerto rico fiscal condition. and it is undisputable that the lack of fair, equitable access to federal health programs is having a huge impact on the fiscal stability of puerto rico. if you just simply take a look
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at the medicaid program and you basically provide puerto rico with equal access up to 100% of poverty level, not medicaid expansion, simply treating the american citizens of puerto rico falling below the poverty level equally, the same as their fellow american citizens in the states. puerto rico -- the government of puerto rico would be receiving in excess of $2 billion extra additional each year. right now the government of puerto rico is struggling to deal with the medically indigent. and if you are going to be creating a task force to look at ways in which puerto rico can do better, the government of puerto rico can do better, the economy of puerto rico can get back to a growth path, definitely you should be looking at the way
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that puerto rico is treated under the feral health programs. this is not preordaining a result. it is simply adding this subject matter to the scope of work of this task force. the task force will make its recommendations, but the members of congress will be the ones with the last say. excluding federal health programs from this review, from the work of the task force, doesn't make sense if the objective of this bill is the one that i just portrayed. getting puerto rico back in shape. fiscally in the first place and then economically as a result. so i urge my colleagues to support the amendment offered by mr. gallego. i yield back. >> let me yield to myself for one second here. this is the easy stuff. this is a study. actually on the base bill of the study, it allows them to go into other areas.
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it specifies an area. that is why i'm willing to accept this. because it still once again doesn't mandate anything, it is a study. if you want to still keep talking on this, we can keep talking on it. anyone else? any amendments to this? all those in favor say aye. opposed say no. >> no. >> let's do a roll call. >> mr. bishop. >> aye. >> yes. mr. grijalva. yes. miss napolitano. mr. board alleya. mr. lamborn. mr. whitman. mr. sublan. mr. fleming. mr. fleming votes no. miss tsongas. voting yes. mr. mcclinton. voting no. mr. pierluisi.
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yes. mr. thomas. voting yes. mr. huff mab votes yes. and mr. llamas. and mr. ruiz. and mr. benishek votes yes. and mr. lowen thal. yes. mr. duncan. no. >> yes. >> he votes yet. mr. gosar. mr. beyer votes yes. mr. labrador. voting no. miss torres. mr. la mafla. no. miss dingell votes yes. and mr. gallego. he votes yes. mr. cooke votes no. miss caps. she votes yes. mr. westerman. mr. polis votes yes. mr. graves. he votes no. mr. clay. mr. knew house. mr. knew house votes no. mr. zinke. mr. zinke votes yes.
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mr. hice. mr. hice votes no. miss rad wagon. voting yes. mr. mcarthur. voting yet. mr. moony. mr. hardy. mr. hardy votes no. mr. la hood. voting no. >> the clerk will report. >> the ye a's are 19 and the nays are 18. >> you all won. do you really want to? motion accepted. amendment passes. turn to mr. hice. number 22. you're recognized for five minutes. >> thank you mr. chairman. i'm offering an amendment this morning that i believe will address an issue within this whole debate about puerto rico that has long been overlooked
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and that is the influence of private market competition. unfortunately for far too long there has been way too much reliance on the public sector within puerto rico. in fact, in the energy and mineral resources sub-committee hearing this past january that was held on preppa, we saw an incredible example of why the puerto rico government has failed, the 3.5 million american citizens on the island. mr. chairman, instead one of the key objectives that i believe should be part of this legislation is to ensure that we promote and encourage free market competition in order to improve the over all economy of puerto rico across all industries. and so my amendment will achieve just that. i believe that it is critically important that we give the
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oversight board the ability to promote the very private sector competition that has been so long lacking on the island. and so with this amendment, i believe that the oversight board can provide the needed support and spur the economic growth that is needed. and so i just simply want to ensure that in the future that the puerto rico government can serve as a facilitator of the private sector and not an in hinter of it. so mr. chairman, i encourage all of my colleagues to support this amendment and i yield back. >> thank you. any discussion to the miami. seeing none. all of those in favor of the amendment say aye. opponents say no. it is adopted. now to the mcarthur amendment, 050. that has to be passed out. there was a technical change. it has been revised so there was a technical changes that had to be made to it. so i'll take a second and if the staff will pass those out.
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[ pause in proceedings ] >> they'll come out to you quickly. mr. mcarthur, while those are being passed out to members, let me recognize you for five minutes for the amendment. >> well, thank you mr. chairman. this bill, i think, in its current form, does a suburb job i think of creating structures that resolve the debt and fiscal crisis in puerto rico. and it sets the stage in the form of this growth commission for addressing the future growth of the island. i think we could do a little bit more on that. and that is what this sense of congress is for.
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if you look at a chart, which i have in front of me, of puerto rico's growth from 1969 until present, you'll see the island enjoyed pretty healthy growth until about 2000. there was some changes in tax policy that year and in the subsequent five or six years you saw puerto rico's growth go down and down and down. and then by 2006, puerto rico's growth has been under water every year. so what this amendment does is try to address the need for growth policies. i want to read a quote from forbes magazine, an article last night and want to read it because they quoted me. and what they quoted me saying was it is vital that we help resolve puerto rico's debt crisis, but the island will not enjoy enduring prosperity until with you include growth
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initiatives. we have a unique opportunity to have energy zones and other tax policies which will allow this island paradise to become an economic miracle. what this amendment does is simply offer a sense of congress that the growth commission must -- and congress must look at pro-growth policies, including the ones that i just referenced. i want to add that it is supported by the puerto rico manufacturing association. i was visited by their president last week and represents 1200 puerto rico companies that account for about half of puerto rico's economy. coca-cola came out this morning and endorsed it. forbes magazine i just read. i introduced it with representative gosar. it has been sut pored by -- supported by americans for tax reform, the national taxpayer union and citizens against government waste. so it has a broad support.
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and i'll leave you just with this. when the president of the puerto rico manufacturing association visited me last week, he applauded all of the things that we're doing to resolve the debt crisis in puerto rico. he said this kind of amendment will do more to give hope to the puerto rico people than anything else because it gives them a sense we're paying attention to their future and that this isn't just about resolving debt issues. so i urge passage of the amendment. >> mr. mcarthur, i'm glad you got coca-cola endorsement of this but if you wanted gom ert and my support, you had to have it endorsed by dr pepper as well. >> i'm working on that as well. >> is there sni discussion of the revisement. >> mr. chairman. on behalf of the people of puerto rico, i commend mr. mcarthur for presenting this amendment and i support it. i yield back. >> thank you. any discussion? any amendments to the amendment.
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all of those in favor say aye. opposed. it passes as adopts. all right. we'll go through four amendments for which i will actually ask a -- have a point of order against all four of these. so let's just do them all at once. i give the people the ability to speak on it if they wish to. we'll start with miss torres number 23. i reserve obviously the point of order against the amendment. you are recognized for five minutes. >> thank you, mr. chairman. >> or less. >> the legislation that -- as it is currently written allows the minimum wage for workers 25 and under to be lowers to a business mal $4.25 for as long as the oversight board is in place. my amendment will strip this provision from the bill. mr. chairman, when i first entered the workforce in the early 1980, i was paid the minimum wage at $3.35.
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and now we're asking the young men and women of puerto rico to make just 90 cents above that. in fact, the last time the minimum wage was this low in the united states was 25 years ago. but in today's dollars, workers haven't had a minimum wage this low since 1940s. the young men and women of puerto rico are american citizens and they don't deserve to be treated like second-class citizens. this -- the workers being affected are not high school students with a summer job. they are young people setting off their careers, many of them struggling to pay student loans, payments to become self-sufficient. i am also concerned that there is nothing in this bill that would prevent an employer from laying off older workers the first chance they get just so
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they could bring cheaper labor. the people of puerto rico are already dealing with an increasing, challenging economic environment. lowering the wage would only add an in sult to this injury and sends the wrong statement about whether we value puerto ricans as equal american citizens. during our april 13th hearing on this issue, one of the witnesses, antoina wise from the treasury department testified that one of the puerto rico's biggest problems was the declining population. this provision only magnifies this problem. the island is already experiencing a mass exodus of young people. lowering wages will only compel more young people to leave, having a detrimental impact on puerto rico's current and future workforce and its tax base. if you are a young person in puerto rico, college educated
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and anyone english speaker, what would compel you to stay on the island and build a life there. the minimum wage provision in this bill is bad for these young workers and it is bad for the people of puerto rico. this provision does not fix puerto rico's problem. and in the long run it may worsen them. there is no question that puerto rico will need to make sacrifices. but it can't do so on the backs of 25-year-olds. i urge my colleagues to support my amendment so that puerto rico's recovery doesn't come at the expense of young, hard-working americans. >> thank you. i'm going to have to insist now on my point of order, this amendment violates rules ten -- i'm sorry. is there discussion to the amendment? >> yeah. >> you really have to? all right. >> well i wanted to thank the gentle lady from california.
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i think it is important. for the discussion on this legislation, the major point of convention for our side of the aisle has been this particular point, the gentle lady brought up. and some will say that, you know, low wages is a pro-growth strategy that will help in the growth. well, all it will do is grow poverty and continue to grow the rate of departure of people from the island and grow discontent and it will grow family situations and domestic issues and grow premature debts and illness and grow the wallets of the certain corporations, but it will not -- it will not grow the economy in puerto rico, in this gesture. i want to thank my friend from california, it is an important one. regardless what occurs on this, it is an issue that we'll have to deal with again. thank you. i yield back. >> is there anyone else before i
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do the point of order because that isn't going to change? mr. beyer. or mr. cartwright. >> thank you, mr. chairman. mr. chairman, i spoke on this issue as well at the april 13 hearing. look, we're all good capitalists here. we understand how the mashlrket works and we understand if you pay people much less in one place to work than in other places of the united states, they are going to move to the other places in the united states. i commend representative torres for this amendment. i associate myself with the remarks of the ranking member and i yield back. >> any other discussion? mr. denim. >> thank you, mr. chairman. i realize this is going to be ruled out of order. but for the sake of discussion, the hard-working 25-year-olds in puerto rico are no less americans than the hard-working californians in california that are going to make $15 an hour, just a question to the author of
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the amendment, shouldn't the puerto ricans receive $15 or more and if we are going to have that discussion we should take a look at how that will affect the puerto rico economy the same way we look at california's economy. >> was that a question to mrs. torres? >> if that is your amendment, sir, i would absolutely second your amendment request. given the fact that these 25-year-olds parents are being asked to relinquish their pension, therefore $15 an hour i believe is a good, liveable wage for the citizens of puerto rico. >> thank you. >> did you yield back, i'm sorry? >> is that the denim amount. >> there is no amendment. [ laughter ] >> yes, i will yield back and look forward to a longer discussion and certainly the economic analysis behind this.
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maybe $15 is not enough. maybe it should be $20 or $25 since we are talking about living wage versus a minimum wage. >> yield back? thank you. and i'm sure there is going to be a further discussion on this just not in this venue because it violates rule ten. it is out of the scope of the jurisdiction of this committee. i rule it out of order. the amendment falls because of that. let's go to the next one, then. which is mr. polis, 168. once again i reserve a point of order against this amendment. nothing personal and you have three of them coming up and it is the same dialect. you are recognized for the amendment even though i have the point of order against it. >> i want to confirm, this is the one with regard to the fair standard labor acts waiver. >> i have tax treatment. >> oh, tax treatment. okay, excellent. yes, this amendment is one of the many ideas that would actually promote economic growth on the island. and i'm glad that a number of members have talked about
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including mr. mcarthur, the need for pro-growth economic policies. one tool for development is in 1996 congress decided to phase out what are called revenue code section 936 tax credits over a ten-year period which is when the recession began. my amendment is a tax policy that seeks to bring back some of thes and -- the jobs and would provide economic growth and opportunity for -- for development on the island. it provides an in sentive for companies that invest in puerto rico to repatriate and come back to the u.s. mainland by granting 85% exemption against the second layer of u.s. tax and eliminates the lock-out effect that many companies believe that their income could be trapped in puerto rico and they can't reinvest it back on the main land and incentivized u.s. companies to manufacture in puerto rico knowing that their income could stay anywhere in the united states. and this amendment is consistent
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with bipartisan recommendations by department schumer and the white paper and the bowl's simpson report and matches the structure that many other developed countries have implemented. in order to reduce any impact to the u.s. treasury, and ensure proet posal -- the proposal doesn't allow companies to gain the tax system, the proposal is only about active income and contains limits on the use of foreign tax credits. effectively, that would prevent u.s. companies from using credits against taxes paid in puerto rico to reduce taxes owed on income from other countries. this kind of bipartisan economic growth tax proposal is what the island needs to help get their economy growing again as we indicated, of course, through a sense of congress, which i strongly agree with and i hope we could put some meat behind it through this amendment and i yield back. >> thank you. any other discussion of this? then i will insist on the point of order this one again violates rule ten and deals with issues
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not in the jurisdiction of this committee, but in the jurisdiction of ways and means. the amendment falls. mr. polis, i'm not picking on you, but you have 69. i once again reserve a point of order but you are recognized for five minutes. >> this is the hub zone amendment? >> yep. hub zone. >> mr. chairman another great idea. and i think, again, i think what -- one thing that has frustrated all of us and certainly frustrated me during our hearings and also during our mark-up is what the limited jurisdiction of this committee. i think ideally we could have seen something through both ways and means and financial services but i do want to highlight one other type of economic incentive that i hope the commission recommends and i'm sure they will look at and this is essentially a concept of hub zones which we could go beyond the study. adjust the definition of hub zones for the entire island of puerto rico qualifies as a historically underutilized business zone.
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that would affectively give small businesses in puerto rico easier access to contracting opportunities, unfortunately only 24 businesses on the island currently enjoy the benefits of the program. given the very complicated way the current hub zone formula applies to puerto rico, it is very limited. many severely distressed areas on the island are excluded from the benefits of the program because of the way they are calculated and our point here is saying the entire island should be subject to these kinds of in sentives. my amendment would allow many more businesses across the island to get the benefit of hub zones. with the proper adjustment such as my amendment for a hub zone i believe hr 5278 could help puerto rico lift itself up by bootstraps and complementing tax policy and regulatory forbearance and this is the type of policy that could help prevent a future need for a bail-out or a costly solution. i hope that the chair and the committee will support myments
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and i yield back the balance of my time. >> thank you. any other discussion to this amendment. >> mr. chairman. >> yes, mr. labrador. >> i understand there is a point of order raises on this but i would like to join mr. polis in supporting this amendment. i hope we could find a way to doo this and -- to do this and instead of talking about sending more money to puerto rico, maybe there is more ways to incurage -- encourage economic development on the island. thank you very much. >> further discussion? if not, i will insist on the point of order, this is, you are correct, not a bad idea, but for here it is. because it violates rule ten. it is out of the scope of the jurisdiction of this committee so i will insist on the point of order. the amount fails. mr. pole is, nothing personal but 170. striking the over time rule once again, i reserve the point of order. >> and this is the fair labor standards act amendment. >> the overtime rule. >> so this is my final amendment. and again, i think what i try to put out in the other two amendments are a little bit
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about what a proactive growth agenda might look like for puerto rico. there are many other ideas but those were the low-hanging fruit. but i think many democrats, myself included, have a problem with miss torres highlights, the reduction in minimum wage and this, which is exempting puerto rico from an overtime ruefle. and as you know, the rule is long overdue for fair labor standards and sets a new salary for overtime at $47,000 a year and a worker that makes less than the new threshold is eligible for paid overtime above 40 hours a week. we've debated this rule expensively with regard to the continental states in hawaii. i know members have varying opinions on it. i believe that it does not lead to any additional economic growth in puerto rico if somehow workers are not compensated for working 50 or 60 hours as week.
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a manage at a fast food restaurant may earn $25,000 or $30,000 but they might work 50, 60, 70 hours a week. that is fine. but they deserve their overtime pay. and that doesn't change just because of fiscal mismanagement on the government of puerto rico. the overtime provision coupled with separate language that miss torres talks about that undermines minimum wage and drives productive people from the island, the exact opposite of what we want to do because for comparable jobs, remember, they are american citizens, they could move to florida or texas or california at the exact same fast food restaurant managing in puerto rico, they will not get the overtime. but if they simply move to california or florida, they would get the overtime. so it create this is incentive to leave. which i don't think is what we want to do. i don't think that is in the
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long-term interest of puerto rico. so i would encourage my colleagues to consider this amendment. whatever they believe about the virtues of the executive action with the fair labor standards, it is very important that puerto rico have the same policies as the rest of the country. obviously the next president can take a stab at whether they want to change it again or not. but to create this -- this delta between puerto rico and america with regard to items like overtime can create some perverse incentives that lead the most productive puerto ricans to leave the island which i believe is the opposite of what we want for the economic growth of the island and i yield back the balance of my time. >> so further discussion on this amendment? i will insist on the point of order one more time, good conversation but out of the jurisdiction of this particular committee. and amendment falls. all right. go on to the next section, the
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amendments which present more problem and may take more time. starting with the first one, mr. fleming, number 76. >> thank you. >> mr. fleming, you recognized for five minutes on your amendment. >> mr. chairman, i would like to submit to the record an article from politico on may 9th, 2016 and the article states and i'm quoting, law enforcements say they absolutely positively will not bail out puerto rico. but here is the thing. the federal government already is bailing out puerto rico. it goes on to say this. the obama administration effectively has been providing the beleaguered island with billions of dollars in aid through a little noticed and convoluted tax arrangement with the help of a washington law firm puerto rico in 2010 created a special corporate levy aimed at getting money out of the u.s. treasury and the u.s. has refused to rule on whether it is legitimate. end quote. those are not my words.
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those are from politico. my amendment requires a ruling before the rest of the bill's provisions could go into effect. first a bit of history. the government of enacted a new tax through act 154 that took effect in january of 2011. this was an excise tax, not an income tax. an excise tax on american companies without operations on puerto rico. the tox was structured to qualify for the foreign tax credit so that companies would pay the same amount. here's how it works. u.s. tax law allows foreign tax credits to be claimed to prevent american companies from being double taxed on the same income. because we tax american companies no matter where they operate, most companies operating abroad would be subject to both u.s. taxes as well as a tax of the foreign country. u.s. tax law allows american companies to claim a credit of
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the foreign taxes they pay so they won't overpay. this can create a perverse incentive for foreign countries and we see this here to raise their taxes only on u.s. companies so the tax law has a number of limitations that prevent a foreign country from creating a, quote, soakup tax, end quote, which is a tax that woo not be imposed if there were not -- if not for foreign tax credits. with the assistance of a k street law firm, puerto rico was able to concoct an excise tax that skirted all of these restrictions but otherwise would not exist but for the u.s. tax credits. the result is a pass-through of u.s. tax dollars to the puerto rican government where american companies pay this novel excise tax to puerto rico and the companies are in turn made whole by the u.s. tax dollars. so, again, in summary of that,
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the companies pay the tax, the excise tax, they get fully reimbursed by the u.s. government, but the taxes are being paid to puerto rico. puerto rico gets to keep those taxes. in march of 2011, the irs released a preliminary ruling saying they were stud yying the new tax scheme and that they would not challenge claims that companies could claim the tax. recently a treasury spokesman said, quote, as treasury and irs have previously stated, we are evaluating the excise tax. the provisions of which are novel. it remains under review and reare not yet in a position to provide permanent guide aps on the credibility of act 154. all my amendment does is say that we need a tax ruling from the irs before we go forward. i'll be happy to yield back. >> is there any other discussion on this amendment? >> mr. chairman, people of puerto rico are suffering in
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businesses, schools and hospitals are closing. and young people and professi professionals are leaving the island by the hundreds every day. they need our help to reverse this trend. while the bill before us is not perfect, it is a carefully crafted compromise which seeks time prove the quality of life for families on the island. this amendment should be defeated because it will significantly lengthen the time it takes for the bill's provision to take effect by requiring the secretary of treasure to issue guidance regarding the eligibility of companies to take a foreign tax credit in connection to taxes that are imposed on the island. people of puerto rico waited long enough for some action by congress. this amendment is not necessary and all it will do is create harm and lengthen the process of doing some actual relief. i oppose the adoption and urge my colleagues to do so as well. and i yield back. >> further discussion?
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>> first of all, this excise tax mr. flemming is referring to in his amendment is in lieu of income taxes. it's not a typical excise tax. and treasury has taken the position that the tax, the excise tax, may be credited against income reported by american controlled foreign corporations doing business in puerto rico. it is true that treasury hasn't given a formal ruling on it, but this bill is all about puerto rico -- the government of puerto rico's fiscal condition. and the fact of the matter is that this excise tax is generating close to $2 billion in revenues for the government of puerto rico. so to hold this bill haas taj
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until treasury issues a formal ruling does not make any sense. to even question this tax in this hearing is also not reasonable. congress has the last say in terms of the way puerto rico is treated for tax purposes. right now because it is congress' will, american corporations doing business in puerto rico as controlled foreign corporations do not pay taxes, federal taxes, unless they repatriate their earnings in puerto rico. they repatriate them to the states. that's congress' will. and puerto rico has every right to have its own tax system. this american corporations, by the way, are paying anywhere between 2% to 4% in income taxes to the government of puerto rico, and those are creditable and the government of puerto rico imposed this excise tax in lieu of additional income taxes
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from them and there being the taxes is creditable. so this is something that is critical for the fiscal health of puerto rico, and we shouldn't be questioning it here. in fact, i myself believe it could be out of order, but that's the chairman's ruling, not mine. and we have to be very careful. as with we all know, we're talking about a fiscal crisis. and how does a fiscal crisis happen? it is a function of revenues and expenses and when i'm telling you that $2 billion are coming through this excise tax to puerto rico, it is a -- it makes a huge difference. the total revenues of the central government of puerto rico roughly amount to $9 billion. $2 billion are coming from this american corporations doing business in puerto rico and by the way they're paying little because of the tax decrease they have in puerto rico and because
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of the way congress has decided to treat income generated in puerto rico. so i urge the gentleman to either withdraw the amendment and in the alternative i oppose it for the sake of the fiscal health of puerto rico, which is what we are all trying to deal with. i yield back. >> thank you. let me also yield myself some time on this particular one. seeing several thing that's are already done. originally i thought this could have tax credits which could be be in the ways and means but i think as i read this carefully we can argue with the parliamentary this could be made in order of this committee. if it was argued on the floor it would be much cleerp with that. however, i'm going to be voting against the amendment because of the line that -- verbiage that starts in line 5 which was already mentioned here, that it wouldn't take effect until the secretary of the treasury does
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something. in essence, this would allow administration to slow walk the implementation of the entire bill waiting for them to do something. it empowers the secretary of treasury, and i'm not willing to go that war. so i'm actually goinging to be voting no on this particular amendment. further discussionor mr. whitman? >> thank you, mr. chairman. i'd like to yield to the gentleman from louisiana, mr. flemming. >> i thank the gentleman. my colleague on the other side of the aisle willingly admits out of $9 billion or so revenue of puerto rico $2 billion of that is coming from taxpayers on the mainland. so this is clearly a tax scheme and congress had nothing to do with it. nothing. this came completely out of an agreement between some k street lobbyist and the administration to turn a blind eye to this beginning in 2010. this is very recent. so the bailout the cash taxpayer
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bailout has already begun. to say that this is not a bailout and hasn't been a bailout simply is not true. this has nothing to do with the income tax. we know about the foreign income tax credit. that's prevalent everywhere. this is novel. this is an excise tax and the way it works is it's to the territory's benefit to gradually increase that tax over time and that sucks more and more dollars out of the u.s. treasury at a time that we have a national debt of $19 trillion. and i'll be happy to reserve. >> mr. whitman? you yield back? >> i yield back. >> any other discussion on this amendment? any amendments to the amendment? if not, we'll vote. all those in favor of the amendment, say aye. opposed say nay. according to the chair, the nays have it. >> yes. i'm sorry. i do request a roll call. >> call the roll. >> mr. bishop. >> no.
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>> mr. bishop votes no. mr. grijalva. >> no mr. young mr. ball thanh know. mr. gohmert. mr. gohmert votes no. ms. vidalia. mr. lamborn. lamborn votes yes. mr. costa votes no. mr. whitman votes yes. mr. salam. mr. flemming. >> yes. >> mr. flemming votes yes. >> mr. thompson votes no. mr. huffman. >> mr. huffman votes no. mr. reese. >> no. >> mr. reese votes no. mr. van i shack votes no. mr. lowen thaul. no. mr. duncan. >> yes. >> mr. cartwright. >> no. >> mr. gose art? >> mr. goe sar votes yes.
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ms. torres votes no. mr. la mauve fa votes yes. ms. tingle. mr. denim mr. denim votes no. mr. gallego. no. mr. cook. yes. >> mr. cook votes yes. ms. caps? ms. caps votes no. mr. wasserman. no. >> mr. pol is votes no. mr. graves votes no. mr. clay. >> no. >> mr. clay votes no. mr. new house. >> no. >> zincy. >> mr. mcaur their. mr. mooney? mr. hardy. >> no. >> mr. hardy votes no. mr. lahood. >> mr. loo hood votes yes. >> anyone not voted? mr. gohmert has not vote. >> mr. gohmert -- >> i change my vote to yes. >> mr. gohmert votes yes.
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>> anyone else? the clerk will report. >> mr. chairman, on this vote, the ayes are 12 and the nays are 26. >> motion is not -- the amendment fails. mr. flemming, we got seven amendments. we're going to go through several of them right now. start next one is 079. >> thank you, mr. chairman. mr. chairman, we have to be very with the precedence we are setting in this bill. promesa represents a brand-new approach that's never been tried before. and we are in many ways in unchartered waters. one of the most glaring examples is the stay on lawsuits. never mind that this concept was first introduced as legislation from the minority leader nancy pelosi. just looking at the policy without consideration of the politics, the stay deprives
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american citizens of access to the judicial system with respect to defending their private property rights. that should give my republican colleagues quite a chill. unlike those who advocate for sociali socialism, we believe in private property and the american zint should have a means to defend their property in court. to my knowledge, the automatic stay in this bill has never been before attempted. let's be clear. this stay would be the first ever federally imposed stay on creditor actions outside the couldn't text of an actual bankruptcy case. if you vote for this stay, you are telling the bond market that you as a member of congress are fine with changing the rules in midstream. that is dangerous. let's also be clear this stay is bond holders only. in other words, the senior citizen in louisiana who financed his or her retirement with puerto rico bonds is under the stay. but the union worker on a puerto
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rico government pension is not. that's why i'm offering an amendment to strike section 405, the stay on lawsuits from bond holders. in my mind, congress is not exercising due diligence when it passes legislation that is very likely to be ruled unconstitutional. we should carefully consider the constitutionality of a bill before we pass it and exercise restraint when the bill runs afoul of constitutional principles. frankly, i'm surprised section 405 which provides for an automatic stay upon enactment survived this long. even before the first draft of promesa was released there seemed to be a recognition by this committee that this section had serious constitutional questions and needed to be dropped. in fact, it seems that only -- that the only reason the provision survived is the democrats insisted that it remain. and the administration insisted as well. those are not good reasons to pass legislation that runs
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counter to the constitution. the solution is to support the flemming amendment to strike this language from the bill. i urge an aye. i yield back. >> thank you. any other discussion? >> mr. chairman, one of the main drivers behind doing this bill at all is to provide an orderly debt restructuring process that can go hopefully relatively smoothly and quickly. the opposite is a situation which all the creditors rush to the courthouse to fight to determine who will get the most of a very limited pot of money. and it's very messy. it's expensive. it's rarely equitable and it can drag on for years. that's exactly what we would have without a stay in this bill. it's also exactly what we can't have this puerto rico. the department of treasury has said it would take ten years to untangle the lawsuits if the creditors were able to start fighting in court. a stay on litigation in the case of puerto rico gives time for
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voluntary restructuring -- orderly restructuring. without a stay, quite frankly, there is little point to this bill which may be why it was introduced. if this amendment passed, it would kill the entire bill. for that reason alone, i strongly oppose it and urge a no vote. >> is there further discussion on this? mr. labrador. >> mr. chairman, i move to strike the last word. >> you're recognized. >> i am not -- i have some troubles with this stay as well as a lot of people do, but for -- but i want to -- i decided to ask my staff to do some research on the constitutionality of the stay. so for purposes of education, i want to just talk about that without taking a position on the amendment. first of all, this alleged taking is not a taking. you can argue about the stay based on whether it's good
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policy or not, but it's not unconstitutional. it is only a stay on creditor litigation, not a deprivation of substa tiff rights. based on longstanding u.s. supreme court precedent, a moratorium or stay on creditor rights limited in duration and scope, which is what this stay does, would not give rise to a claim to a takings claim. there's a series of cases in the 1920s and 30s where the supreme court has recognized that in response to i financial emergency a government's enactment of legislation temporarily staying creditor rights does not constitute a takings under the fifth amendment. there's a 1921 supreme court case which is block versus hersh. i'm not good to bore you with all the information about the case. there's a second in 1934 case homebuilding and loan association versus blazedell. in both cases, the court found that as long as you had a short
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stay for a specific purpose that there would be no stay -- no takings in place. lastly, in 1937, the court rejected constitutional challenges to an act of 1935 which among other things stayed foreclosure actions against a property of a family farmer. the court found that the imposition of a three year stay -- so we're talking about a three year stay as opposed to a six month stay -- of the right to foreclose on the mortgage did not deprive the creditor of property without due process of law. that's a case of wright versus vinta and branch and mountain trust bank of row noe noeanoroa. there were other cases apdz we did some extensive research on this and we asked some experts to do research on this. you can have i think a pretty valid claim against the stay on policy grounds, whether we want to have that policy in the bill or not, but i don't think we should reject the stay as a matter of constitutional law
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because the supreme court has made it pretty clear that we have the authority to do this. and i yield back. >> is there further discussion on this amendment? >> mr. chairman? the amendment proposed by mr. flemming would dismantle a core provision of the bill. section 405 shouldn't be viewed in isolation. the reason why this bill provides for this automatic stay is precisely to encourage, incentivize creditor negotiations, negotiations between debt issuers in puerto rico, public debt issuers, and the creditors. this is something that is done in every chapter 9 case in america, wherever you have to -- whenever you have to reorganize a public entity, a public instrumentality in the u.s., you file a petition before the bankruptcy court and there's an
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automatic stay. so that there's no chaos, there's no litigation all over the place disrupting the process. here, this bill actually provides for collective negotiations with creditors. it even provides that if two-thirds. creditors of any pool of bonds in any public entity of puerto rico agree on a potential restructuring, you can go to court and then enforce it on all the creditors. this bill shouldn't be viewed as an anti-creditor bill. the opposite. this is a good bill for all concerned. bond holders, government of puerto rico, citizens at large, ibs constitutional bond holders, individual bond holders because the bill, what the bill tries to do is restructure a lot of the
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debt that the government of puerto rico owes and its instrumentalities in an orderly, legal way. the stay is of limited duration, and it basically allows to have a conducive environment for the negotiations to work. not having the stay is going to be chaotic. it's not going to work. and what we want is to have puerto rico back in fiscal order with access to the financial markets, the sooner the better. in fact, i think the stay is too short. i'm concerned about the length but this is the result of a negotiation between leadership from both sides of the aisle, the white house, and treasury. i irnlg urge my colleagues to l this provision as is for the benefit of all. and i oppose the amendment. i yield back.
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>> is there further discussion in mr. mcclintock. >> thank you. i would remind my colleagues that a bankruptcy stay freezes both sides. true, creditors cannot enforce claims but also the debtor is forbidden from spending down assets. this is a one-sided freeze that forbids the creditors from enforcing their claims but leaves puerto rico perfectly free to continue to spend and in fact that's exactly what is currently going on. the budget announced by the governor for 2017 provides that spending for nondebt service is actually going up about $250 million. they're spending everything except for servicing their debts. the problem with this bill is this provision perversely encourages the puerto rican government to spend down its resources knowing that bond holders are legally powerless to stop them. and i yield the remaining time
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to -- >> would the gentleman yield? >> no. i am yeeling my remaining time to mr. flemming. >> thank you. my colleague across the aisle interesting loy enough referred to this as a chapter 9 bankruptcy. you know, we were told in the beginning that this was anything but a bankruptcy. but we know that bankruptcy law chapter 9 bankruptcy law is lifted right out of the code and set down right in this. and interestingly enough, the word "bankruptcy" as far as i know is seen nowhere in this document. but the plain truth is and mr. mcclintock has this correct, this is picking winners and losers. this is not a stay on all involved. what it does is allows people to move assets, spend assets, spend resources while the people who have the highest priority, the bond holders, are held at bay. and with regard to encouraging
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negotiatio negotiations, negotiations were ongoing until this promesa bill came up and it shut everything down. so things were actually on a correct pathway to begin with. and then as to my good friend mr. labrador arguing the constitutionality, obviously this is not the supreme court. we're not going to decide today whether this is constitutional. but at best, it's a controversy, and that decision cannot be made today. >> would the gentleman yield? >> yes, for a question i'll be happy to. >> all i want to clarify is any payment not made by a government entity in puerto rico during the stay is a payment owed. this is not relieving the government of puerto rico or its instrumentalities from any debt. and in fact the board is encouraged to require at least interest payments from the government issuers in puerto
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rico. so i clarify the record because this is not an easy way out for the creditors. >> reclaiming my time, look, notes payable, what does that mean? right now the territory is not able to even perform on its notes payable today. so saying that they will continue to owe, look, we know that there's going to be a reduction in principal here, and we know that there are going to be some group that's are going to be treated more equal than other groups. again, government picking winners and losers. that is a bad precedent. for what's going to happen downrange for states and other territories. and i yield back. >> i thank the gentleman. he yields back. >> did you yield back? further discussion? >> mr. chairman, while this provision causes me some heartburn, too, i want again to read from bond documents that were -- gave full disclosure to purchasers of bonds that were
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issued in 2014, this is a particular paragraph out of the bond disclosure documents. in the future, new legislation could be enacted by the united states congress or by the legislative assembly that would entitle the commonwealth to seek the protection of a statute providing for restructuring, moratorium, and similar laws affecting creditors' rights. this could affect the rights and remedies of the holders of general obligation bondss and notes of the commonwealth, including the bonds and these bondss. and the enforceability of the commonwealth's obligation to make payments on such general obligation bonds and notes. these bonds were sold with full disclosure that that could happen even almost anticipating that this could happen. so mr. chairman -- >> will the gentle lady yield
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for a question? >> i will. >> were there not bond holders before 2014? >> yes, there were. >> did they have the same disclosures? >> i do not have all the bond documents here. >> okay. so i think we can agree that perhaps some bought their bonds understanding this possibility, but there were plenty of others who did lend money understanding that this would not be a likelihood or even a possibility. >> mr. chairman, that is entirely possible. >> yield back? >> i yield back. >> is there further discussion? let me yield myself some time here. and i appreciate the comments that have been made so far, especially the tutorial by mr. labrador. i appreciate that. look, this is the practical purpose of this particular bill, the stay language in this bill has a reason for being there so that the oversight board can get up to speed and be running before the lawsuit starts. there is another provision in the bill that allows the oversight board to intervene in lawsuits, but without the stay the time for that intervention
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would be expired before they could be up and running in this act. the stay is a very short duration. there are other provisions in this bill that allow aggrieved parties to seek relief from the stay. if there is no stay, it would simply be a race to the courthouse and a frenzy that would add chaos back rather than trying to bring some kind of order which is the purpose of having the oversight board in the first place. whatever the intentions of it, this simply gives some of the litigation funds the ability to do nothing more than go into court very quickly and without the ability of organizing before that simply happens. i have to poet vote no on this particular amendment. and i yield back. to me, myself. for what i had. is in there any other discussion on this? if not, we'll vote on amendment. all those in favor of this amendment say aye. opposed say no. opinion of the chair the nos have it. roll call again. [ roll call ]
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[ roll call ] [ roll call ]
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[ roll call ] [ roll call ] # . >> anyone else not voted? mr. duncan? >> mr. duncan has not been
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recorded. mr. duncan votes no. >> anyone wants to change or set? clerk will report. >> mr. chairman, on this vote the ayes are 6 and the nays are 33. >> amendment is not approved. we're going to go to mr. zincy's amendment number one now if we could. this is one -- is that with you? this is one that was allegedly late. does it need to be circulated? no. we've got it. but i want to know, it's not really late because you printed it on time. we just ask you to redo it. so let me have you introduce -- you're recognized to introduce zincy number one. >> thank you, prosecute mr. chairman. i offer my amendment to address an issue facing the natural
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products industry nutritional supplements, et cetera, in puerto rico. what occurred on february 9, 2016, is puerto rico's department of health issued an order in the form of a tax specifically aimed at the supplement industry without going through the legislature or even with public notice. and so obviously it hurts that industry. the industry is growing. with that, it requires a number of burdensome regulation that wrir mirrors what's already required by the fda. and also it's duplicative. it goes on what the amendment does is it just will allow the congressional task force on economic growth in puerto rico to submit recommendations. it's not binding, but recommendations to congress on how best to make the reforms to this order. it should not be controversial. i think it's a good step from talking to a number of
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manufacturers, they would like to grow in puerto rico. they think this is an opportunity to manufacture. they think it's an opportunity to -- the industry itself is growing. and it was somewhat arbitrary in how it was placed. again, it doesn't require anything other than a recommendation and i yield back. >> any further discussion on this amendment? i'd like to simply say i speak in favor of this particular amendment. all right. any amendments to the amendment? if not, all of those in favor of the amendment say aye. opposed say nay. amendment passes. let's go back to mr. fleming, number 79. i'm sorry. we just did 79. 091. >> i'll be happy to do 79 again.
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>> 79's up to you. i mean be, 91. you know, whatever i say, you're didding 91, okay? just listen to what i think, not what i'm saying. you're recognized for 91. >> mr. chairman, i have two amendments that complement each other, and i'll bring members' attention that we've passed this out. it says section 201 and it has red lining and also some green lines. and the shorter bill refers to the green lining, the changes in green. then i'll have a second amendment that is in red. so just to sort of help you in a visual way. anyway, i have two amendments that complement each other. the first is very short and simply amends promesa to require the oversight board to give priority to bond that's have been issued with the full faith and credit of the puerto rican government through their
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constitution. this priority is already the stated goal of the bill, and my amendment merely strengthens the bill to eliminate my wiggle room by the oversight board to interpret or reinterpret the phrase, quote, respect the relative lawful priorities, end quote. instead, my amendment requires the oversight board to comply, quote, with the lawful priorities end quote. so that's the difference between respect and comply. my fear along with many on this side of the aisle is that we will see a repeat of the general motors bailout in which unions were placed ahead of bond holders. it is vitally important that doesn't happen here because we are dealing with full faith and credit constitutional debt. a message to owners of that debt, that your contract is not valid, is a message to bond markets that constitutional bonds are not sacrosanct and can be renegotiated at the
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government's convenience. that will increase costs for everyone including my home state of louisiana at a time when we can least afford it. so again we've got to watch the markets. if we change rules in midstream, future bonds, future debt and the interest that goes with that will have to be factored in, will have to be built in. and what that means is those that are doing the rite thight those being good citizens and paying their debts and they have good, solid fiscal and economic policies, they will be punished for the acts of others because they will have to pay higher rates and that will over the long term increase the risk for many others. i urge my colleagues to adopt my amendment. >> is this any other discussion on this amendment? >> mr. chairman? as a former attorney general of puerto rico, i have always advocated for strict compliance
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with our constitution. in fact, when this crisis began and when the government of puerto rico approved a local bankruptcy law, this was back in june 2014, the first thing i did was to introduce legislation giving puerto rico access to chapter 9 of the bankruptcy code. i was simply asking congress to treat puerto rico as a state for purposes of bankruptcy. that bill was a signed to the judiciary committee. it didn't get traction, it got a hearing. there were some reservations giving puerto rico access to chapter 9. the long story short is that matters continued deteriorating in puerto rico to the point where the u.s. treasury department comes and submits a proposal to congress saying
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puerto rico's not a state. puerto rico's a territory. and under
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this would give priority to groups who may not deserve that priority. that's the biggest problem with this amendment, which is why i'm voting no and yielding back. is there any further discussion in mr. labrador >> mr. chairman, thank you. i appreciate the spirit of the amendment. this is my language in this
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section and i was trying to do exactly what the gentleman from louisiana is trying to do to make sure that the board and the court respected the priorities. i am open to -- fu want -- this is just me speaking. if you wanted to amend your amendment, if the committee feels that the word "comply with" is better than "respect," i am open to that. i do think that the rest of your amendment kind of gets into the we're making the judgment, then we're deciding who gets the priority instead of letting the courts decide according to what the puerto rican constitution. but if this committee felt that the word "comply with" is much -- that phrase is better than "respect," i am open to that amendment to the language that i put in there because if there are better words i'm always willing to use them. but i'm not open to the rest of
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the language because i actually think the rest of the language confuses what we're trying to accomplish, which is we just want the court to look at the constitution of the territory and determine what the priorities are. i don't want to prejudge what those priorities should be. >> is there further discussion is? mr. gohmert. >> i don't want to be changing the priorities of the bond holders from what they currently should be and so i will not be voting for this. but i don't think for a moment that the judge, the board is -- can be considered as doing for sure the right thing because we saw what happened when the obama administration got involved in the auto bailout, they rammed
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through in violation of a myriad of bankruptcy laws a bankruptcy plan for car manufacturers. it violated bankruptcy law. it violated the constitution. that's why ginsberg put a 24-hour hold on it. and when i was speaking with the late justice scalia, i said, you know, i'm not a big fan of ginsberg, but i was so proud of her. she put a 24-hour hold on that outrageous, unconstitutional, illegal bankruptcy plan regarding our automakers. and he said, well, you know, actually, the white house was feeding information to the court back channel, which would be unethical, that if we allowed the stay to go more than 24
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hours everybody in any way related to the auto industry would lose their job, and that scared five judges and so the illegal, unconstitutional bankruptcy plan went through. so even though i'm voting no, i don't have the kind of faith that this administration will necessarily be pushing for the right thing and for -- i know all of this confidence is being placed in this board, but having witnessed what this administration did to the auto industry, even forcing the sale of chrysler to a foreign car manufacturer, i mean, so much damage done to the law, to the constitution, to american interest, that forcing secured creditors in violation of the bankruptcy code and the constitution to become unsecured, taking unsecured creditors and making them
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secured creditors, it was outrageous what happened. but when we look at the constitution of the board and we have all of this faith the board's going to do the right thing, the board has the power to force the cuts from the 30% or so working for the government, bring that size down like -- did and then got fired at the next election, yeah, they're going to do these things. we have a board of nine people unless it's changed since i read it last. four of those will be selections of reid and pelosi as recommended to the president . r they'll pick eight. he'll pick four of the eight choices. then the tie-breaker will be totally selectedly the president. so this administration basically will have five of the nine and if anybody open this side of the
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aisle thinks that that board will actually cut the government workers, cut potential government union workers, then i would encourage them to relook at the issue. but on the particular amendment itself, i'm not prepared to sit in the place of judgment. >> would the gentleman yield for a second before you yield back? just a small correction. the board's only seven, i believe, and four are picked by republicans, three are picked by the president, which is important. i think that's a very important point. i yield back. >> louie, are you done? yield back. >> okay. >> there anyone else? mr. duncan. >> thank you, mr. chairman. now, i agree that we probably need to tweak this amendment.
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i like "comply with" versus "respect." following up with the gentleman from texas' comments about the chrysler bailout, from what i remember, the pensioners, the pensions themselves were held harmless while the shareholders took a haircut. i think the big we hafear we ha with the puerto rico issue is that the pensions will be held harmless and the bondholders will have to take the haircut. and that is in my understanding in direct conflict with the puerto rican constitution which we don't have the power to change. the puerto rican constitution which gives general obligation bonds preference over pensions. i think it's a slippery slope if we try to change that and so i've got -- i've had concerns about that portion ever the bill all along. i like parts of this amendment. i wish we could change the word.
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with that, i'll yield back. >> further discussion? if not, any amendments? >> i just want to make a comment that i don't think there's anybody here that lived through the auto bailout more than i did and there's a lot of misinformation out there. i can tell you i lost all my stock, my pension was impacted and things did happen. and sometimes you come together to save the country or to save a place. so let's just be careful with misinformation with one of the biggest nightmare times i remember in my life, and we saved this country from total economic collapse. and we have another territory with people living in fear, people not being able to get medicine, people fearful of what's going to happen to their future, and that's what today is about. and all of us are having to make compromise on things we're concerned about because we care
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about people and their humanitarian issues at stake here. so i just had to say that, mr. chairman. and i thank you for your leadership in trying to bring us together on a very tough, difficult issue. >> it's okay. i brought my cruiser before the bailout so i was fine. any other discussion? the vote is on the amendment. all those in favor say aye. opposed say no. amendment fails. now, we have -- look, we're about two-thifrds of the way through this sucker. we've still got about ten more to go. i think we can move very quickly through here. let me go to mr. graves. you have an amendment which is graves number two. that will be passed out. why don't you go ahead and explain it while it's being passed out. >> mr. chairman, this amendment very simply just states no federal funds should be authorized to the pavement my
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liability of the territory or territorial instrumentality. so here's the deal. mr. careman as you know this bill even before it was introduced was alleged to have been categorized as a bailout. look let's be clear in the future there could be an effort to directly bail out the territory. that's not what this legislation does. it's designed to avert a bailout. so this provision is designed to make it clear that this legislation does not put federal funds on the table to address the liabilities of the territory. it does not preempt in any way future actions of this congress or the administration and attempts to put directly federal funds on the table which i would oppose. but all it does is directly clarify that this bill cannot be labeled as a bailout. and i reserve. >> would the gentleman yield? for a question? >> just for a question. >> no federal funds shall be authorized by this act.
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what about future funds in say a srr omni bus? does this prevent any federal funding to go to bail out puerto rico? >> it does not. but let's be clear this pertains to this bill, the allegation before the bill was even filed before any of us even read the text was that this bill was a pailout. i'm trying to make that crystal clear and prevent that from happening. we're not preventing and in the future we could be given an opportunity perhaps to vote up or down on efforts that could be made in the future to directly appropriate funds to bail out -- >> would the gentleman yield for further clarification? we've heard from republican leaders that there would be no taxpayer dollars used to bail out puerto rico and that's what you're trying to do with this right? >> i'm trying to prevent this bill -- i'm trying to make it clear that this bill does not -- is not a bailout. that this bill does not provide does not authorize any federal funds. i can't control what people in this room may do in the future, what other members of congress
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may offer amendments on in the future. but i want to make it clear this bill is not a bailout. >> would the gentleman yield for another question? >> sure. >> unless this has changed there was going to be thousands and thousands of acres that were owned by the department of interior that were being sold and the money which would be federal money from that massive sale was going to be going to puerto rico. would your amendment -- >> i believe that was -- >> would -- i believe that was removed. can i get an amen, mr. chairman? i believe it was not included this in of n this legislation. >> i guys know how to go to my heart, don't you? stab it directly. yeah, that's no longer part of this bill. >> thank you. >> will the gentleman yield for morrow question? >> yes, sir. >> i agree with the intent of it and i think you're stating a fact that this is not a bailout. but the oversight board itself
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is a responsibilis i recall the responsibility of the territory and yet it has to be funded up front. and this could have the unintended consequence of not allowing the supervisory board to do its work. >> thank you. that's a good question. as i recall from reading this i believe that the text was changed to actually require that puerto rican funds effectively be used to fund the oversight board. i'm getting a head shake from my good friend. an amen. >> i think so. >> now, in previous versions of the bill it was different where federal funds did seed the oversight board. this version does not have that. the board is to be paid with territorial funds effective ly. >> is there further discussion? if not -- do you? >> i'll be brief.
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>> please. >> my concern, mr. graves, is that this could affect the board's ability to perform its work. the truth of the matter is when you look at this bill it doesn't provide any authorization for federal spending in puerto rico. it doesn't. there's no provision here assigning funds. but the way the board works, it can be staffed internally using puerto rico funds but also federal agencies may assist the board open a reimbursable or nonreimbursable basis. >> will the gentleman yield? >> i'll be quick. i wouldn't want to discourage that from happening. so my intent here is simply to make this work and i see where you're coming from. obviously this is not a bailout and you want to send that message loud and clear. i join you there. but i'm concerned that i don't want through this language to
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make the board's work more difficult than necessary. i yield. >> and i am certainly very sensitive and respectful of the efforts to ensure that we get puerto rico on a sustainable trajectory and perhaps for different reasons. i don't want louisiana taxpayer funds to bail out puerto rico i'll be very honest with you. if you read the provision what it says is that no funds authorized for the payment of any liability of the territory or territorial instrumentality. it doesn't talk about funds that could be used by federal agency to look at something that puerto rico's doing or not doing while if someone did offer that amendment i probably would vote for it that's not what this one does. this is designed to make it crystal clear that this is not a bailout. it doesn't preempt in the future if someone does want to offer up an amendment to attempt to bail out, which again i would oppose. but this is designed to make it crystal clear that this is not a bailout within the four corners
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of. >>. >> i reclaim my time. actually, would you agree to changing or tinkering with your language so that it says for payment on so that it says for payment on any existent bonded indebtedness so it is more precise? >> if the gentleman would yield, no. because there could be future debt that is incurred and that would effectively be a bailout and would raise concerns. >> what if we strike the word existing and then for payment on any bonded indebtedness. >> can i -- will the gentleman yield? >> no. >> i will. >> look, everything you've been saying so far is correct. this does not -- the board is not paid by federal funds. and yes, this does not impact the board. this impacts liabilities. and if this amendment were to be adopted and we try to refine it i'd be more than happy to pledge to work with the aisle to try to refine it if it goes to the floor if it's adopted. >> i certainly would as well.
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i think the intention has been -- i've tried to convey it very clearly. i just in response to your last statement, bonded indebtedness is certainly the majority of the debt that we're dealing with here. but as i think the gentleman would acknowledge, there is other debt as well. and i just want to ensure that i can go home and tell the folks that i represent that their dollars are not being he diverted. but i certainly would -- if you can agree to adopt this, i'd love to work with you. >> i yield. >> yield. further discussion. all those in favor of the amendment say aye. opposed say nay. amendment passes. it's adopted. let's go back to mr. fleming. number 90. that's been passed out to you. we've had it before. mr. fleming, you're recognized. >> mr. chairman, i'd like to submit for the record a letter i recently received from the former governor of puerto rico, mr. colon. in this letter he expresses his concern that the oversight board will overrule the democratic
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will of the people of puerto rico. now as mr. pelosi -- excuse me, pierluisi, excuse me, has helpfully reminded this committee many times, this crisis has come about through decades of fiscal mismanagement. in some ways this debt crisis does reflect the will of the people of puerto rico because they have repeatedly voted for representatives and governors to give them liberal social policies and generous benefits, which is why we're here today talking about an oversight board. at the same time i am sympathetic to the governor's argument about self-governance. fortunately the promesa bill already contains the answer. it was written broadly so its provisions could one day apply to any of the five u.s. territories, but it creates special circumstances that apply only to puerto rico in this bill. to paraphrase section 101, "except for puerto rico an
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oversight board is established only if the territory adopts a resolution signed by the governor requesting the glishts. in the case of puerto rico the oversight board is deemed established by this bill, end quote. i think that's a mistake. the oversight board would have much more legitimacy if the people through their elected representatives asked for the tough medicine in this bill. it's also a test for the people of puerto rico. if they're not willing to accept a balanced budget and necessary reductions in the size of government, then they should not gain access to the debt restructuring ability in title 3 of promesa, which is intrinsically tied to the functions of the oversight board. i'm pleased to be joined on this amendment by mr. mcclintock as a co-sponsor. and i yield back. >> oversight boards, control boards have a long and nasty
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history of impoegz extreme austerity on people. for that reason i've been clear my opposition to an oversight board from the beginning. this amendment would make the establishment of an oversight board in puerto rico much less likely. getting rid of an oversight board, while appealing to me, is probably also appealing to my colleagues on this side of the aisle, but we are concerned about the effects that i mentioned about extreme austerity of the families in puerto rico. but i strongly oppose this amendment. because it is a poison pill. if this amendment were adopted, it would remove most of and all support from the majority, and it would therefore kill the bill, which is the sole purpose by friends of this amendment. i urge my colleagues to join me in opposing it and yield back. >> is there other discussion on the amendment? >> mr. chairman. >> mr. pierluisi.
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>> i personal ly am under extree political pressure in dealing with this issue. and i don't want my fellow elected officials in puerto rico to have to bear it as well. it is very difficult to accept oversight over the government of puerto rico. the only reason i'm doing it is because i am convinced, as are so many others, that puerto rico needs a broad debt restructuring mechanism. and the will of my colleagues here in congress seems to be that the only way that we will be afforded this debt restructuring mechanism is through a federal oversight board. now, puerto rico's in crisis. and we do have a responsibility
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here under the territory clause of the constitution to watch over the well-being of the american citizens living in puerto rico. it is our responsibility, whether i like it or not. i'd rather have puerto rico as a state. and we wouldn't be considering this legislation. but we are because puerto rico's not a state, it is not treated like a state, and frankly part of the problem is caused by the current status. as a result of the current status. but again, this is our business. as provided in the u.s. constitution. when congress enacted or created a board for the district of columbia, the district of columbia did not have to opt in. so if we look at a precedent, and that's a precedent we have been looking at in creating this board and providing this debt restructuring mechanism, then we shouldn't be asking the
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political class in puerto rico to consent. i agree with mr. grijalva. i think this is simply another way for you to try to dismantle or -- this bill to poison the well for this bill. and i tell you, mr. fleming. let's not play with fire. we're talking about the well-being of 3.5 million american citizens. >> will the gentleman yield for a question? >> i will yield in a minute. >> sure. >> i represent the people of puerto rico. i am very confident that the vast majority of the people of puerto rico get it. they want congress to intervene in a fair way. the political class, that's a different story. because by the way, in puerto rico they're saying hey, why are you running for election if there's going to be a federal oversight board? i am running for governor. and i'm saying, you know what? we have to accept this reality. we have to take this board the way it is. because we need debt relief in
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this orderly legal way. i will yield to you now. >> so if i understand what you're saying, is you can't find even a small group of good men and women who want to do the right thing and take the tough medicine and have the sort of austerity and the reforms necessary to get away from the liberal progressive policies that have so damaged the economy of puerto rico. you're saying you can't find just enough to do that? >> i'll reclaim now my time. i'm saying that it's not worth the risk. that we need to act. we need to act. we have the power to act. it is our responsibility. as provided in the u.s. constitution. and we should do all we can so that the government of puerto rico stabilizes itself, doesn't collapse. and so puerto rico is put back on a growth path. >> if i could just ask one more question, what happens after the
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emergency is over? will the leadership in puerto rico, will they return to the same policies that caused this problem to begin with? >> there will be elections in puerto rico in november the same way there will be elections in the u.s. mainland in november. democracy works its way. we'll see who gets elected for the governorship, for my position as resident commissioner as well as in the legislature of puerto rico. it's total speculation to try to anticipate what future office holders in puerto rico would do. but this crisis is unprecedented. and we shouldn't be assuming that the government of puerto rico will do the twloing. no. on the contrary, what i would do myself, and i promise to you that i will, if i'm elected governor of puerto rico, is work with this board. so we get the house back in order, fiscally in order, and we get puerto rico to grow again. i yield back.
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>> is there further discussion? mr. gohmert. >> thank you, mr. chair. i greatly respect my friend from puerto rico, and i really appreciate his sincerity and his effort on behalf of his constituents. the point continues to be made that puerto rico is not a state, puerto rico, it's happened, and i've missed it, has not voted to ask to become a state. but that's also the reason that puerto rico, guam, samoa, virgin islands, actually every american entity except for the district of columbia that does not elect a full voting member of congress does not pay federal income tax. which is why i filed a bill to allow the district of columbia
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not to have to file, or pay federal income tax. but one of the things i've not really heard anybody address, we talked about in here the need for the minimum wage to be raised. and when there was an article written recently that indicated for an individual who just accepts the available federal welfare payments, they may be looking at $1,700 a month take home whereas under the current minimum wage it's about $1,200 take-home. well, the incentive there is obviously not to work. but i know my friends at heritage have encouraged as a solution lowering the minimum wage. obviously, that would even increase the disparity between
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what you take home if you don't work and what you take home if you do work. if you lowered the minimum wage. so that's obviously not going to fix the problem there. but if the minimum wage is raised in puerto rico, since as my friend from california's indicated they have a higher minimum wage, then people would be tempted to go from puerto rico to california to get those higher minimum wage jobs except for the fact that people are leaving california in droves coming to florida and texas because we don't have as much regulation, we don't have the higher minimum wage, we have less litigation and it's more -- more of a helpful environment for creating entrepreneurism and creating jobs. so when -- i keep thinking of the beauty of puerto rico and all that puerto rico has to
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offer and could not understand why in the world puerto rico has not already become the united states hong kong that's just flourishing and growing since there's no federal income tax until i saw that there's a 39% corporate tax, not for federal but just for local. there's a 6% to 7% sales tax from last i saw. and in addition to the corporate tax being higher than the federal corporate tax, there's also a 30%, 33% flat income tax rate. texas has no income tax. we have a sales tax. puerto rico has all of the above and a 6% excise tax. and it appears that really is going to have to be one of the things addressed, lowering the number of people in the government, lowering tax rates so it becomes that attractive hong kong and businesses want to
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flood in. but i'm not hearing those things addressed. but i didn't want people to think that it was all disadvantaged in puerto rico by not being a state because when that was found out that none of the territories pay federal income tax, i've had many constituents ask if we couldn't apply in texas to be a territory. >> would the gentleman yield? >> i would certainly yield. >> briefly. i just want to set the record straight. in november 2012 a plebiscite was held in puerto rico and 55% of the voters rejected puerto rico's current status and 61% of the voters supported statehood. actually, among the options given more people voted for statehood in that plebiscit than any other option. and i have introduced a bill in this congress, it has 110
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co-sponsors. my party's co-sponsorship. providing for the admission of puerto rico as a state. once there is an up or down vote on statehood. like we had in hawaii and alaska before they became states. ? . >> my time's expired. >> mr. macarthur. >> mr. chairman, just briefly, my next amendment i'm going to be asking that we remove the other territories from this bill. but as it stands now, wiping out this requirement that the legislature and the governor sign off on an oversight board, we would be in the position of imposing an oversight board on any territory for any reason, whether they were in fiscal difficulty or not. it's -- it seems to me it's a complete erosion of any kind of self-determination in the territories. puerto rico will sign this because they need the relief that they're getting in exchange for this.
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and therefore, i oppose this amendment. >> thank you. let me also yield myself that i oppose this amendment as well from the practicality of it. the opt-in would make this entire bill moot. and what i'd actually ask them to do is have the government of puerto rico pass a resolution of their own malfeasance, which is -- i don't think in the reality of it is something that we should actually impose on somebody to try and do. is there other further discussion for this amendment? any amendments to it? if not we'll vote on the amendment. all those in favor say aye. opposed say nay. t in the opinion of the chair the nays have it. record the vote. >> mr. bishop. >> no. >> mr. bishop votes no. mr. grijalva. mr. grijalva votes no. mr. young. miss napolitano. mr. gohmert. miss boredio. mr. lamb-born. mr. lamb-born votes yes. mr. costa. mr. whitman.
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mr. whitman votes yes. mr. soblan. mr. fleming. mr. fleming votes yes. miss stongas. hiss songas votes no. mr. mcclintock. mr. mcclintock votes yes. mr. pierluisi votes no. mr. thompson. mr. thompson votes no. mr. huffman. miss lummis. miss lummis votes no. mr. ruiz. mr. ruiz votes no. mr. benishek. mr. benishek votes no. mr. loan that'll. will lowenthal votes no. mr. duncan. mr. duncan votes no. mr. cartwright. mr. cart rite votes no. mr. goesar. mr. goesar votes no. mr. beyer votes no. mr. labrador. mr. labrador votes no. miss torres. miss torres votes no. mr. la malfa votes no. miss dingell votes no. mr. denham. mr. gallego. mr. gallego votes no. mr. cook.
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miss capps. miss capps votes no. mr. westerman votes no. mr. pole polis votes no. mr. clay votes no. mr. newhouse votes no. mr. zinke. mr. zinke votes no. mr. heiss votes no. miss rat wagon votes no. mr. moony. mr. hardy. mr. hardy votes no. mr. lahood. mr. lahood votes no. >> those who have not voted -- mr. gohmert has not been roar recorded. >> mr. cook has not been recorded. mr. cook votes no. mr. costa votes no. >> mr. denham. >> mr. denham votes no. >> it was hard to hear that, i know. >> mr. young votes no. >> mr. yungs votoung votes no. is there anyone else who has not voted or wishes to change?
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the clerk will report. >> mr. chairman, on this vote the yeas are 5 and the nays are 33. >> the amendment is not adopted. let's go to mr. -- we're coming down on this thing. i think we've got six more minutes still to go. let's go as quickly as we possibly can. six or seven. mr. macarthur, number 55. you've already had that passed out. you're recognized. >> thank you, mr. chairman. this amendment addresses an error, i think, an error in the bill that came from an
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overabundance of caution. the bill as it stands authorizes an oversight board with the same extraordinary powers for each of the nation's territories, except that none of the rest of them face the kind of looming crisis that is facing puerto rico. no territory other than puerto rico has asked us to get involved. the u.s. virgin islands has expressly asked not to be part of this. and in fact, i worked with representative plaskett on this amendment. my concern is it could have the unintended consequences of eroding other territories' access to capital markets and the costs. if a control board can simply be brought in at any time p i have the written opinion of not one but three constitutional lawyers that this is unnecessary language, that we can focus this entirely on puerto rico and not the others. and what my amendment does is simply restores the bill to its
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purpose of restoring fiscal stability to puerto rico alone and not apply it to the other territories. and i ask for its adoption. i yield back. >> is there further discussion? mr. grijalva? >> this amendment would limit the scope of the legislation to puerto rico only since it is the one facing the crisis. the bill as introduced provides a process for restructuring and fiscal responsibility for all territories should the other territories request it. the other territories, quite frankly, are included because leaving them out could lead the bill to be declared unconstitutional. as well intentioned as the amendment is, all our efforts over the last months would be wasted and more importantly, puerto rico would be left with no solution if this amendment were to be adopted. in fact, certain creditors' attorneys have already stated publicly that they would
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challenge the legality of the bill if it covers only puerto rico as a violation of u.s. constitution in affirmative clause. i oppose the amendment because it is litigation bait and urge my colleagues to vote against it. >> is there further discussion on the amendment? let me yield myself on this one. this hurts. this is an amendment which i will be voting no in committee. but i want you to know that i understand the premise of it and i want to still keep working as we go to the floor to see if we can work some of these details out to adopt it at that particular situation. the treasury department, as has been stated, is very leery of this type of an approach, thinking that they could be opening it up on a constitutional challenge, which would threaten the entire bill. they said that in our testimony. at the same time there was another professor who disagreed with that. i think there's a question there that should be explored at some time. i don't know what the correct
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answer is right now. and if indeed this could threaten the constitutionality of the entire bill, the entire bill would go down on and yeah, litigants have said they're willing to go to court on this particular issue. i do think they can work that out. there has to be a way of working out so the substance of what mr. macarthur is trying to accomplish here can be done without throwing into question whether there is a constitutional issue or not. since i'm not ready to do that i'm going to vote no on this particular amendment, recognizing that i still would like to try to go forward working to see if we can follow some language that will be comfortable to everybody including the treasury department and the white house on this particular point. going forward. because i do understand the premise of what you're saying. and i actually agree with the premise of what you're saying. is there any other discussion? any other amendments? miss radewaggen.
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>> thank you, mr. chairman. i'd like to yield my time to mr. macarthur. >> mr. chairman, i understand your concern. i don't agree with it. i think it's -- to me it's crystal clear the only entities who would challenge the constitutionality of this are the ones who aren't interested in it. and so i think it's a false fear. but i would be happy to work with you outside of this process. and if this can be improved for a floor amendment i'd be happy to bring it up there instead if that would be a more productive use and withdraw it at this time. >> i actually think it would be. >> then i'll withdraw the amendment and bring it back to the floor. >> and my intention is to actually get something that we can bring to the floor. >> okay. i'll withdraw then. >> the amendment's withdrawn.
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and thank you grour cooperation in working that way. i understand you're involved in this issue a lot. you've been involved in this legislation. you have a lot of ideas that maybe we can still work on coming toward the floor. mr. mcclintock, you have 094, which is the next one up. >> thank you, mr. chairman. this amendment simply exempts from this act that portion of debt issued by puerto rico that was backed by its constitutional pledge of full faith and credit and taxing power. now, the commonwealth, $72 billion of outstanding bonds, this would exempt roughly $18 billion of constitutionally protected debt. and lest we forget, only about 12% of puerto rico's general obligation bonds are owned by hedge funds. 40% are held by puerto rican residents. i laid out the reasons for this amendment in my remarks yesterday. i agree there's no reason to treat san juan's municipal debt any differently than san jose's. but constitutionally issued debt
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is fundamentally different and it's reliability must be maintained. this is important to every state that relies on constitutional full faith and credit pledges. the federal government has until now never threatened or even considered undermining constitutional full faith and credit guarantees by allowing chapter 9 provisions to be provided to sovereign debt. whether that debt is issued by a territory or a state. if congress is willing to undermine the commonwealth's constitutionally guaranteed bonds today, there is every reason to believe it would be willing to undermine state guarantees tomorrow. this in turn invites credit markets to question any constitutional debt guarantee as no longer secured on constitutional bedrock but rather dependent on the shifting whims of congress. and if they do, the value of those bonds is devalued and interest rates paid by taxpayers on that debt will increase.
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the governors of six states have already issued this warning that, quote, granting puerto rico such unprecedented bankruptcy authority would likely raise the borrowing costs of our states, reducing our ability to invest in vital services in eroding in investor confidence and the whole notion of full faith in credit debt. i suspect that's why virgin islands desperately wants out of this. economist brann of capital policy analytics has noted that, quote, there is evidence that the mere introduction of this legislation is already having adverse effects on the market. the cost of credit default swaps on illinois general obligation debt, which essentially function as insurance against a default, has gone up nearly 100% this year, signaling a burgeoning uncertainty over the protections afforded to full faith and credit debt, unquote. he estimates that even a minor 10 to 15 basis point increase in
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financing costs will cost american taxpayers an additional 4 billion to 8 billion dollars. now, promisa could have respected the $18 billion of constitutionally issued debt while applying chapter 9 to the remaining $54 billion of municipal debt. its supporters claim this is their intent. they point to language in title 2 of the bill instructing the control bill to "respect the relative lawful priorities in the constitution other laws or agreements." well, the problem with this is among these other laws is the government's repudiation of its debt. further, the same section instructs the control board to provide adequate funding for public pension systems and includes other contradictory instructions. the only possible interpretation of these conflicting provisions is that the sanctity of the sovereign debt is subject to balancing and therefore subordination to junior claims by the control board. this amendment removes any
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ambiguity by protecting the constitutionally issued debt from the effect of this bill. if the supporters of this bill are sincere in their stated objective of wanting puerto rico's constitutionally issued debt to be protected, then they should have no objection to this amendment. if they are not sincere, then they should oppose the amendment but at least openly admit their true intentions and accept responsibility for the billions of dollars of increased interest costs that taxpayers across the country will have to pay on their state debts as markets adjust to this new world in which full faith and credit depends upon the whims of congress. that's not only in the interests of high debt states like california and illinois and new york to protect the full faith and credit guarantees. it's also in the interest of the people of puerto rico to uphold the full faith and credit clause in their constitution because they will desperately need that credibility in order to re-enter the credit market once their affairs are put back in order.
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>> is there further discussion? mr. grijalva. >> thank you, mr. chairman. mr. chairman, treasury officials estimate it would take a decade at least to untangle the competing creditor claims that puerto rico is unable to restructure its debt and the situation leads to competing litigation. years of litigation and intercreditor disputes will further stifle economic growth on the island and accelerate the departure of puerto rican families. the amendment will make these things more likely by exempting certain categories of puerto rican debt from the carefully crafted compromise from the voluntary restructuring of all debt that is provided in the underlying bill. i visited the island earlier this month to witness for myself the impact the crisis is having on their lives of our fellow citizens. as i indicated in my opening statement on this markup, this is not the bill that i or the members on my side would have
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written. but when measured against the worsening crisis in puerto rico, it is legislation that is necessary. we should not let the narrow interests that this amendment seeks to protect undo the hard work and careful consideration of competing interests that went into drafting the legislation. i urge my colleagues to oppose this amendment and yield back, mr. chairman. >> is there further discussion on this amendment? mr. graves. >> mr. chairman, i share the concerns with the gentleman from california in regard to the precedent it sets, the effect it may have on debt of states, and any future effort to potentially bail out any states in irresponsible financial decisions. but if the gentle lady from wyoming just wants to ask you a quick question earlier you were reading bond issuance documents and you referred to a statement in there that said the investors needed to recognize there was a potential for congress to come back in the future and
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potentially change the law. is that accurate? >> that is accurate. >> mr. chairman, i want to ask you a quick question. as i recall i think it's the tenth amendment to the constitution significantly distinguishes the status of astate compared to that of a territory, and in effect we would be prohibited by the constitution from carrying out similar actions here in regard to sovereign state debt. is that an accurate understanding? >> yes. >> thank you, mr. chairman. yield back. >> is there further discussion? >> mr. chairman. >> mr. pierluisi. >> i rise in opposition to this amendment. first, in terms of the impact that the potential restructuring we're authorizing could have in the municipal markets, there's no such negative impact. there has been testimony before this committee, coming from john miller, managing director of nuvene asset management. mr. miller, who oversees over
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$113 billion of tax-exempt municipal investments in america, this is one of the largest holders of municipal debt. testified that -- to the contrary. approving this legislation will be generally viewed positively in the markets. it will stabilize puerto rico itself, the government of puerto rico, but it will also have a positive impact elsewhere. traditional mutual funds like alig aligns, burns, and pimco have also stated there's not going to be any impact in the municipal markets at large if we approve this legislation as is. "wall street journal" and bloomberg have also issued editorials supporting this
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legislation and saying that it's not going to have a negative impact in the municipal markets at large. to the contrary, if we don't do anything, that could have an impact in the municipal markets because the bonds of puerto rico are held by thousands of investors. institutional, individual. all over america. and we need to get the house in order. now, in terms of the status of puerto rico, again, i have to say, this is not going to set a precedent for the states. i hate that that's the case because i would love puerto rico to be a state. but puerto rico's a territory. and as a territory we can do -- we can treat puerto rico differently than the state so long as we have a rational basis for doing so. that has been the position of the u.s. supreme court for ages now. when we talk about constitutional debt coming from
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puerto rico, it's not the same as constitutional debt coming from the states. because puerto rico's constitution is subject to the u.s. constitution and particularly the territorial clause in the u.s. constitution. that's why we have the power to treat general obligation bond holders differently than they're treated elsewhere in america. lastly, i am not promoting being unfair to any class of creditors. all i'm saying is that all of them should be part of the solution, not part of the problem. we cannot simply be listening to one particular class over the others. we should be encouraging them all to engage in negotiations. and once, for example, 2/3 of them agree on a potential restructuring of the debt of any government entity in puerto rico, then this bill allows the
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board to take that deal to court and enforce it on all the creditors. that's going to be good for any debt issuer in puerto rico. lastly, when we talk about chapter 9, well, i introduced chapter 9 -- puerto rico to the chapter 9 bill so puerto rico would be introduced as a state. it was in congress's will to do so. so that's not what we're talking about now. we're talking about something similar but again is in the hands of a board that wouldn't happen in any state. it's happening only in puerto rico as a territory. i oppose this amendment. >> is there further discussion? mr. fleming. >> well, let me say first of all that the fact puerto rico is a territory and not a state does not in any way prevent these actions from being taken for a
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state as well. there is no constitutional or legal barrier to doing that. this opens the way. psychologically and in every other way to do that. with respect to the general bondholders deciding to sell out to other funds on the way because they heard rumors of congress beginning to intervene, that's the whole problem here. if congress -- if word gets out there that congress is willing to intervene and to create a retrogresive chapter 9 bankruptcy system, then of course all of that's being eroded. the full faith and credit is being eroded and no longer applies. because if it can be reversed at any point then what is it worth to begin with? and i yield the remainder of my time to mr. mcclintock. >> thank you. mr. chairman, i want to address the argument that while the states are different than territories and this can't
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possibly apply, that chapter 9 can't possibly apply to a state, well, of course chapter 9 can be applied to states. chapter 9 was specifically written for municipalities, which are subdivisions of sta s states. the only reason that chapter 9 has not applied to the states is because congress has never threatened to do so because doing so undermines the full faith and credit guarantees of their state constitutions. this measure makes clear that congress has now changed that status quo, that it is now willing to breach that faith. and once we have done so, full faith and credit is no longer an ironclad guarantee that your bonds will be back by the full faith and credit of the issuing entity. claims this couldn't possibly happen ignores the fact that it is already happening. as i stated, we're watching the insurance instruments for state general obligation bonds already
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increasing just on the prospect of us taking this action. six state governors have already issued warnings that this will affect their states. and as i said, i think the virgin islands clearly understands the threat to their own debt of this measure and the spiraling interest costs that it will mean. so again, if you don't want to protect the full faith and credit of the states, vote for this measure but accept responsibility for the aftermath. >> further discussion. mr. macarthur. >> mr. chairman, i know we've been at this for a while but i think this is important enough that i want to speak on it as well. this needs to fail for the same reason the similar prior amendment failed. we're trying to play judge and jury. we're trying to decide among 20-plus classes of bondholder
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here. and i understand the intent, but we simply are not equipped to adjudicate all the different claims of all the different bondholders sitting in this room today. for example, very briefly, let's take a widow who happened to buy the very first general obligation bond that was issued in excess of puerto rico's constitutional limit because some bonds were sold in excess of what they were allowed. that widow bought her bond -- it's one bond after it was constitutionally guaranteed, she thought she was buying a general obligation bond. and let's compare her to a hedge fund. i have nothing against hedge funds. i've been involved in them. but a hedge fund who bought four times removed a general obligation bond from somebody else. it was bought from puerto rico and then sold and sold and sold. and a hedge fund buys it. mr. mcclintock wants to adjudicate the rights of those parties here and now by just --
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by declaration. it's a mistake for us to do that. let the control board apply the letter that we've laid down here in the bill that the respective rights of the parties have to be honored, and let them adjudicate. let them certify claims that go to the court for further review. but let's not try to exclude nearly 20% of the bonds by fiat here in the committee room. i yield back. >> is there further discussion? let me reiterate i have to vote in opposition to this as well for the reasons that mr. macarthur just said. it goes toward exempting a class that may not or may not have been legally done and does not allow us to make the oversight -- not control, oversight board to actually make that kind of adjudication for which they're in power. is there other discussion? any amendments? if not we'll vote.
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all those in favor of the amendment say aye. opposed say nay. in the peasant chair the nos have it. roll call please. >> mr. bishop. mr. bishop votes no. mr. grijalva votes no. mr. young. mr. young votes no. miss napolitano. miss ma nah politano votes no. mr. gohmert votes yes. mr. vordalia. mr. lamb-born votes yes. mr. costa votes no. mr. whitman votes yes. mr. soblan. mr. fleming. mr. fleming votes yes. miss songas. miss songas votes no. mr. mcclintock votes yes. mr. pierluisi votes no. mr. thompson. mr. thompson votes no. mr. huffman. mr. huffman votes no. miss lummis votes no. mr. ruiz votes no. mr. benishek. mr. benishek votes no. mr. lonethal. mr. lowenthal votes no. mr. duncan.
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mr. cartwright. mr. cart rite votes in. mr. gosar votes no. mr. labrador. mr. lab roh dor votes no. miss torres. miss torres votes no. mr. lamalfa votes yes. mr. dingell votes no. mr. denham. mr. gallego votes no. mr. cook. mr. cook votes yes. miss capps. miss capps votes no. mr. westerman votes yes. mr. polis. mr. polis votes no. mr. graves. >> no. >> mr. graves votes no. mr. clay. mr. clay votes no. mr. newhouse. mr. newhouse votes yes. mr. zinke votes no. mr. heiss. mr. hytes votes yes. miss radewagen votes yes. mr. moony. mr. hardy. mr. hardy votes yes. mr. lahood votes yes. >> is there anyone here who hasn't voted or wishes to change votes? the clerk will report.
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>> mr. chairman, on this vote the yeas are 12 and the nays are 27. >> amendment does not pass. going to ask at this point for the clerk to pass out all of the remaining ones that were filed late specifically fleming 8 0rks fleming 92, bishop 2 and fleming 91. as revised. the revised fleming 91. and then as soon as that's done mr. labrador i think you're the next one in line. and labrador 043. no, no, no. that's the next one we'll be doing. just pass the crap out.
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>> will labrador -- i'm sorry. >> this memorial day weekend on american history tv on c-span 3 saturday evening at 6:00 eastern on the civil war. >> sherman could not have agreed more. and by the time he captured atlanta in september 1864 his thoughts on the matter had fully matured. once again, a rebel army had been defeated and another major city had fallen and still the confederates would not give up.
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so rather than continue the futile war against people, he would now wage war against property. >> georgia historical society president todd gross on union general william tecumseh sherman, arguing that sherman's march to the sea campaign was hard war rather than total war and that his targets were carefully selected to diminish southern resolve. sunday evening at 6:00 on american artifacts. take a tour with senate majority leader mitch mcconnell. viewing some of the oldest rooms in the capital like the republican leaders' suite, conference room and his private office. >> and i had the good fortune to actually be here on august 28th, 1963 when martin luther king made the "i have a dream" speech. now, i confess, i couldn't hear a word because i was down at this end of the mall. he was on the lincoln memorial. looking out at throngs. literally thousands and thousands of people. but you knew you were in the presence of something really significant. >> then at 8:00 on the presidency, former aides to
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lyndon johnson and richard nixon talk about the role of the presidents during the vietnam era. >> lbj anguished about that war every single day. and that is not an overstatement. the daily body counts. the calls either to or from the situation room, often at 2:00 or 3:00 in the morning to see if the carrier pilots had returned. >> historian h.w. brand is joined by former lbj aide tom johnson and former nixon aide alexander butterfield to explore the president's foreign policies during the conflict. monday afternoon at 1:00 p.m. eastern on real america our five-part series on the 1975 church committee hearings convened to investigate the intelligence activities of the cia, fbi, irs, and the nsa. the testimony by cia director william colby, the fbi's james adams, nsa director general lou allen, fbi informants, and others.
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>> we are here to review the major findings of our full investigation of fbi domestic intelligence, including the co-intel program and other programs aimed at domestic targets. fbi surveillance of law-abiding citizens and groups, political abuses of fbi intelligence, and several specific cases of unjustified intelligence operations. >> for the complete american history tv weekend schedule go to cspan.org. on wednesday food security scholars, produce growers and non-profit leaders testified before the house agriculture committee on efforts to reduce food waste by suppliers and consumers. and maine representative she willy pingree discussed her proposed legislation called the food recovery act. this is about two hours.
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>> good morning. this hearing on the committee of agriculture, food waste from the field to the table, will come to order. i've asked david scott to open us with a prayer. david? >> dear heavenly father, we come before your throne of grace to first of all give thanks. we thank you for so many blessings you bestow upon us, blessings we sometimes do not even know. we thank you for your holy spirit that intercedes for us on our behalf. we thank you, dear heavenly father, for this hearing, for what could be more important than the food that we get on the table for needy people, and in this case, dear heavenly father, as we discuss the issue of food waste we hope that you will
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implant within this committee our resolve to do as much as we can to eliminate the food waste, to help our farmers be able to have the labor to get food out of the fields and into the hands and at the tables of those people who need it most. and father, we ask this in your name in the name of your son jesus christ, amen. >> amen. thank you, david. well, good morning. since i became agriculture chairman we've held more than 70 hearings and invited a broad range of experts including people in the field to share their knowledge of everything from the futures markets to the farmers markets. the committee doesn't agree all the time on every issue but one of the reasons we're able to work in a bipartisan manner is that we remember well-meaning people can have different ideas about how to achieve the same goal, whatever the issue may be. because we have a different way of getting there doesn't mean one of us is wrong and that this is sometimes -- and this is
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something we lose sight of in america today. good public policy is not a zero sum game. if advocates, members, whoever they maybe, are closed-minded and aren't open to compromise, it all but ensures retention of the status quo regardless of the issue. an example of where we engage in a variety of stakeholders is in the review of food waste. i commend my colleague from maine she willy pingree for putting this on the congressional radar. today's hearing maybe the first time the house agriculture committee is publicly engaging on this issue but it will not be our last. 40% of the food grown in the country is wasted. that amounts to 133 billion pounds of food wasted. that's billion with a b. considering we have about 45 million people consuming -- or 45 million people receiving food stamp assistance through snap, i believe this is a tremendous opportunity for to us take a closer look at our food chain and figure out a way to ensure that food grown in this country reaches the dinner table and not the trash can. speaking two weeks ago at the food waste summit, secretary
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vilsack commented that avoiding food waste loss could save u.s. families on average $1,500 a year and limiting food waste globally could help prevent hunger and malnourishment in 825 to 850 million people worldwide who are not getting adequate food. tackling food waste in this country is and should be a non-partisan issue that would be most successful by engaging everyone in the food chain from the field to the table. it will take the collaboration of all stakeholders to be successful. as we begin this review we'll undoubtedly identify issues that seem easy to resolve yet are more complex than they appear. we will likewise identify other issues that have already been addressed but simply require collaboration and what amounts to a public releases campaign to raise awareness. two such issues that congress has acted upon that we should highlight today are the recently enacted permanent tax deduction for food donations and the good samaritan food donation act. the permanent tax deduction for food donations was identified in recent legislation and was enacted as part of the last omnibus.
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the second issue is one we hear an awful lot about yet was addressed years ago by our former colleague and vice chair of the committee the late bill emerson. many business when's given the opportunity to donate perfectly safe and wholesome food are reluctant because of liability concerns. the bill emerson good snare tann food donation act enacted in 1996 fully addresses this concern. i wish to place into the record a memorandum of opinion drauft drafted by the department of justice for usda general counsel that not only spells out the direct protection of the emerson act but also prescribes a pre-emptive effect on state laws that may not provide the same level of protection. we'll begin preparing for this hearing -- when we began preparing for this hearing, we reached out to representative fingerling who i am happy is here with us today, will shortly offer her introductory comments of her own. witnesses that are invited represent a broad range of perspective and expertise but in no way represents the entirety of the community addressing this challenge. while this hearing is just one element of our review, we will also invite members of staff as well as other interested stakeholders to attend an
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evening -- an event later this afternoon here in this hearing room on the balcony to see what some of the organizations are doing to address food waste. that event will begin at approximately 1:30 today. i will now recognize our ranking member for any opening remarks he may have. >> thank you, mr. chairman, and welcome to today's witnesses and congressman pingree, appreciate your leadership on this issue. welcome to the committee. i'm probably not the only one who finds the term sell by and best by confusing. this confusion leads to a lot of food waste we see in this country. and i'm glad that we're look at this issue today. american consumers are increasingly less connected to the farm and to where food comes from. and i think a lot of people no longer view food as valuable. when i was growing up, my mom used every part of the animal. but that's no longer the case. food waste has increased. producers have done such a good
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job of creating an abundant food supply that a lot of folks don't think twice about tossing out food that may not look perfect or has surpassed a best by or sell by date stamped on the box, whatever that means. this is the challenge but i also think it presents a great opportunity for production agriculture. while many have no problem throwing food away, many americans are still struggling to feed their families. there's a role for farnellers and ranchers to play in this. and they can and should step up to the plate and help meet these needs. again, i'm happy we're beginning to explore this issue and look forward to a constructive conversation. i think this is an area that we can work across party lines and have a diverse coalition to tackle food waste in this country. i look forward to the testimony and yield back. >> thank you. the chair requests other members submit their opening statements for the record so that our witnesses may begin their testimony to ensure there's ample time for questions. i'd like to welcome our first panel to the witness table.
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the honorable shelly pingree, congresswoman from the great state of maine. miss pingree, you can begin when you're ready. >> thank you very much, chairman conaway and to rank member peterson. i really appreciate that you're heeleding this hearing today and giving me an opportunity to say a few words about it. and i particularly appreciate you remembered to call it the great state of maine. so obviously, this is an issue that people have been increasingly concerned about, and i've been very grateful to have a chance 20 work with it and as all of you said work across the aisle and with a whole diverse group of interests that are concerned with the fact that 40% of the food as you mentioned is wasted in this country. particularly people on the agriculture committee know how much work goes into growing food, how much water is lost in the process of growing food, how long it has to be transported around the country and just that gives you a sense of how much we are wasting besides the food in terms of energy and other resources in doing this. the other big concern is that we
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do have 50 million people in this country going hungry and when there's confusion around date labeling or how food can be disposed of or the good samaritan laws that we've talked about, it just makes it that much more difficult for restaurants and retail stores to find out how to make sure that uneaten food and beyond the label food gets to those food banks and to those people in need. that's part of what we're proposing to look at in the bill that we submitted called the food recovery act. it's wonderful to see that the usda and the epa together have announced a food reduction goal. they did that last year. and their goal is to reduce food waste by 50% by the year 2030. so an ambitious goal. but i think also showing that there are great opportunities there. i'm fortunate enough to serve on the agriculture appropriations subcommittee. we've been looking for ways to work with them on funding areas that could make a difference in solving this problem. and also work on some of the same things with the fda.
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there's certainly no single way to go about solving this prosh. and i know as we dig deeper into this today and we hear from the wonderful panel you've chosen you'll start to hear that it's something we have to face on all fronts, from helping consumers to understand differently, giving opportunities to farmers who want to make sure food gets into the right hands and helping retailers in particular and restaurant owners to reduce that waste or to make sure it goes places we want. in my own state we have a supermarket chain that is also committed to zero food waste, which makes sure everything gets sold in the store that possibly can, even if some of it looks a little ugly or misshapen. then making sure it gets to food banks and places where people are in need. and footbally making sure that food can tha can't go anywhere else either goes to a compost facility or an aerobic digester. most food waste ends up in municipal landfills. and for those of you who've served on municipal government you know that's one of the increasing costs. it also produces methane gas,
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which is much more toxic than many of the gases we already worry about. whereas if it's converted to compost or an aerobic digestion we're either left with wonderful-looking soil or producing energy with that food waste. making sure federal funds are available to municipalities who want to do this is another part of this and something that i think can certainly be dealt with in a variety of committees. just in closing i want to mention the one thing that ranking member peterson and i were just talking about. i'm sure all of you on the committee and most of us have experienced this problem perhaps in your own household where you look at a package, it's got a label on it, and think, okay, this is probably still good, we should eat it. yet someone else in your household looks at it and says oh, no, look at that date, we've got to throw it away. we actually submitted a bill last week with senator blumenthal about date labeling to try to bring some sensibility into this. and because we hear so much about the domestic disagreements that go on we thought we should call this the domestic harmony bill to reduce some of those
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issues that people face. but basically, manufacturers have joined us. we were endorsed in that bill by campbell's soup and nestle's and a variety of other companies have already come forward because they find it confusing too. basically, they may represent something to that individual company, but it really doesn't mean you can't eat that food. so our idea is to ask the usda and the fda to create a label that says expires on for those foods that do have a safety issue and you should know when it is too late to eat it and the other one says best if used by. the bag of crackers is best if you use it by a certain date but nothing will happen if you eat it a month later or the next season which you return -- when you return to your summer cabin or find it in a box you never unpacked. chances are that is perfectly good food. we would like to bring
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sensibility and great for manufacturers and takes the stigma out that food is donated and there are 20 states that prohibit food donations if that date has passed. and if you think about it, we are keeping 20 states away from giving food to people in need and it is completely arbitrary date. so it seems like that is one of the ones that is extremely cost effective. it would create much less waste. something that most of us agree on and you'll find most of the manufacturers and others agree on it as well. so thank you very much for giving me a moment to open this up today. thank you for taking on this topic. i look forward to working with you in any way i can and thank you for giving me a little bit of the nostalgia to return to the committee which i served on in my early days and i enjoyed working with you and being in this room. >> thank you for being here and appreciate your comments this is morning and for your leadership in getting this initiative started. and we'll look forward to pitching in with you on -- i shouldn't say pitching in. but nevertheless helping in with reduction of food waste. >> bee careful about that baseball stuff.
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>> we'll transition to the second panel. shelly, thank you very much for being with us today. i appreciate it. i would like to welcome the second panel of witnesses to the table. dana gunders, a senior scientist, national resources defense council, san francisco, california. we have mr. jesse fink, the director of mission point and in norwalk, connecticut. mr. john oxford, president and ceo of l and m companies in raleigh, north carolina. meghan stas, senior director and grocery manufacturers association here in washington, d.c. and diana aviv, ceo feeding america in chicago, illinois and emily leib, the director of food law policy clinic, harvard law school, jamaica plains, massachusetts. i'll let everybody get to their seats. all right. miss gunders, if you will begin when you are ready, ma'am.
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>> ranking member peterson and members of the committee thank you for inviting me to testify today and be willing to explore this issue. any name is dana gunders, i'm a senior scientist at the national resources defense council and the author of a widely cited report on food waste and a book called "the waste-free kitchen handbook" which is a guide to wasting less food. imagine walking out of the grocery stores with five bags in the parking lot and dropping two and not bothering to pick them up. it seems crazy but that is what we're doing when we are wasting 40% of our food. we're leaving entire fields unharvested and eliminating produce for looks. serving massive portions, throwing out food just because it is past the sell-by date and eating out instead of what is in our frig. now imagine a farm that covers
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three quarters of the state of california and uses as much water as california, ohio, and texas combined. when you harvest that farm, it is enough food to fill a tractor-trailer every 20 seconds and then it drives all over the country and except instead of going to people to eat it, to goes straight to the land fill. that is essentially what we are doing today. food is the number one product entering our land fills today. this is expensive. all tolled, america spends up to $218 billion or 1.3% of gdp each year on wasted food. beyond money, we're wasting nutrition. more than 1250 calories per capita every day. that is three times the caloric requirements of the entire food in the secure population of the country. and we have not always been so wasteful. in the u.s. we waste 50% more
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food per capita than we did in the 1970s. this means that there was once a time when we wasted far less and therefore it gives me hope that we could get there again. wasting less food is to the food sector as energy efficiency is to the energy sector. the cheapest and easiest way to meet growing demand. the u.n. projects increased demand will lead to a 60% growth in food production by 2050 and almost a quarter of that predicted demand could be off-set by addressing food waste. there are far too many causes of food waste to address in a few short minutes but i think it is important to note that wasting food happens to the best of us. as individuals and businesses. we've all had to toss moldy strawberries or clean out the science experiment in the back
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of the frige and good news is that unlike many of the thorny issues that i'm sure you deal with, this one feels solvable. no one wants to waste food. and people strangely love diving into this topic. i have been amazed at the -- amazed at the energy and enthusiasm people have when they come up to me and tell me they found a way to used the wrinkled tomatoes in a sauce or something like that. and because there is direct savings to be had, this enthusiasm has extended to the business and entrepreneurial communities as well and even modest savings can make a difference. i was asked to give an over view of the problem but in the last minute i would like to suggest a few solutions. i would like to note that the epa has prioritized prevention solutions and food donations over things like animal feed and composting. first address consumer waste. from the limited information we do have households appear to be the largest source of food waste. we recently launched a national media campaign with the ad counsel to address this called
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save the food with a goal of providing consumers both the inspiration and information to waste less in their homes. if the government were to embrace this campaign and provide additional funding it could vastly extend the reach and the impact of the campaign. second, standardized food date labels as we've already heard. because they misinterpret date labels consumers are unknowingly and unnecessarily tossing perfectly good food and other witnesses will address this. third, reduce waste within federal government agencies. how much is the federal government spending to buy food that ultimately never gets eaten? this could -- addressing this could both reduce agency costs and also incubating model solutions that others could follow. fourth, address data needs. right now there are some very basic questions that we can't answer. and lastly, support the food recovery act. introduced by representative pingery. it attacks food wastes and includes solutions for many of the discussions in my written testimony. wasting less food is something
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everyone could get behind and in some cases there is even money to be saved. i suspect should you pursue solutions to the movement there is a broad base of support behind you. thank you. >> mr. fink. five minutes. >> thank you, chairman conaway, ranking member peterson and the entire agricultural committee for the opportunity to testify today. i'm honored. my name is jesse fink and i'm here as a representative of the refed multi-stakeholder food waste initiative. i would like to dedicate my testimony to my wife betsy fink, a farmer like many members of congress who have committed their lives to growing food. i would like to dedicate the testimony to the 50 million americans who struggle with hunger. in a resource endowed country like ours we should conquer hunger and conserve fresh water and create new jobs thrugh the food waist innovation.
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my journey has been long and shaped by my career as an entrepreneur and farmer and a investor and a philanthropist. i helped fund priceline.com powered by the internet with consumers looking for cheaper tickets. for the past decade betsy and i have learned firsthand how challenging and rewarding it is to be a farmer. similar to price line, we see valuable perishable products going to waste. two weeks ago we asked a team at mission point partners to address a strategy to address the food waste systematically focusing on the cost effective and scaleable solutions. the huge gap in data was apparent. what resulted was the creation of refed, a nonprofit initiative that recently released a road map to reduce u.s. food waste by 20% in conjunction with detroit consulting and rrs. we've built an advisory council committed to solving food waste. and this includes farmers, manufacturers, retailers, waste profiters and government leaders, many of which are here today. and addressing this could address three of the nation's
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largest problems. first and foremost is hunger. our research found that solutions could double the amount of food donated from businesses to hunger relief organizations. second is economic development. reducing food waste boosts the economy with a conservative estimate of 15,000 jobs created from innovation. in addition, solutions available today could create $100 billion of net economic value over the next decade. this includes $6 billion in annual savings for consumers, $2 billion in annual potential for profit for businesses, and a reduced burden on taxpayers, including lower municipal disposal costs. much of the economic development will go toward food recovery and composting and digestion. and food waste solutions will conserve up to 1.5% of the country's freshwater and this is lost on farms. in addition reducing food waste will decrease methane emissions from landfills and increase the soil through composting. four cross cutting actions are needed to quickly cut 20% of
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waste and put the u.s. on track to achieve the broader usda epa goal of a 50% food waste reduction by 2030. first education for consumers and for employees of food businesses. second, innovation. refed has an in ovation data base of over 200 companies and large companies are supporting entrepreneurs. the results are an opportunity for government mechanisms to support their ingenuity. right here in washington, d.c. companies like misfit juicery and fruit cycle and hungry harvest are start-ups that utilize food that would go to waste. the road map highlights a full spectrum of capital including grants and government incentives and private investment to accelerate the transition to a low-waste economy. financing innovation is required to galvanize the $18 billion
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needed to achieve a 20% reduction in food waste nationwide. there are opportunities to explore public-private partnerships innovative impact investing to support local companies infrastructure or composting facilities or government funding for early stage technologies. lastly is policy. food waste is a complex issue but three federal policy priorities stand out as a highly impactable and achievable today. first, make it easier for food businesses to donate food for the hungry. second, standardize date labelling through legislation or voluntary industry action. and finally strengthen and incentives for food waste solutions at the local level such as tax incentives for composting and anaerobic digestion. the time is now for our country to embrace the solvable problem and by working together turn it into an opportunity. we can take ten steps to aleve -- take steps to alleviate
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our economy and boost our natural resources. i thank you for the opportunity to testify and i look forward to your questions. >> thank you mr. fink. mr. oxford, five minutes. >> chairman conaway and ranking member peterson and members of the committee i thank you for the testimony to testify today on the food waste. i'm john oxford, president and ceo of l&m companies based in raleigh, north carolina, founded in 1964 we are a family agricultural business that grows markets and distributes fresh produce. our products in our crops include a variety of vegetables, potatoes, onions, melons, apples, pears an more. in addition to my day job, i'm with the marketing association that market fresh fruits and vegetables. pma represents more than 2700 member companies in 45 countries. in the united states, our members throughout the supply chain from growing processing and manufacturing distribution and wholesaling and retail and food service handle more than
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90% of the fresh produce sold to consumers. my testimony today comes from the perspective of a grower. dealing with food waste is a complex issue that requires a suite of solutions. when fresh produce goes to waste, we lose the fruits or vegetables and the inputs, labor, energy and water and fertilizer and if the product has been harvested, cooled and transported, we lose even more. thus, the inventive for producers to minimize waste and loss is significant. our first preference and our goal is that fresh produce reaches its highest and best use, feeding people. at l and m we employ a range of options for produce that is unmarketable and fresh for the consumer. we use outleted not sold through the intended channel. we try to find alternative markets or used and in addition and we supply hundreds of thousands of pounds of healthful fresh produce every year to charities including farmers feeding flo, feeding america,
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operation blessing and a host of others.r, feeding america, operation blessing and a host of others.i, feeding america, operation blessing and a host of others.d, feeding america, operation blessing and a host of others.a, feeding america, operation blessing and a host of others. in my role as chairman elect of pma i'm excited about the innovative approaches some of my colleagues are taking to further reduce food waste. in fact, most of you probably have one of the earliest examples of innovation to reduce food waste in your refrigerator at home and we provided some at your desk this morning. baby carrots. they were born from a concern over food waste. misshapen carrots were cut and shaped into the now common baby carrots. in fact, today baby carrots represent 70% of all carrot sales and according to a recent washington post article, this effort to reduce waste is now doubled carrot consumption. recently cisco's produce distributor fresh point introduced the unusual but usable program. though fresh point is a food
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service distributor it partners with produce growers and taking ugly or imperfect produce that goes to waste and find consumers interested in utilizing this. this reduces the waste caused by cosmetic imperfections and the customers get what they want at a better price point. red jackets in new york like many apple and pear processors takes the residual after juicing and uses them to feed livestock. this reduces what goes to the landfill and is an additional supply chain for the grower. and we've provided samples of these cakes at your seats today. and gill's onions, a california based producer and processor installed an advanced energy recovery system that converts 100% of its daily onion residual such as juice into renewable energy and cattle feed. instead of the disposal cost for the 300,000 pounds of annual onion waste, gills onions
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actually saves approximately $700,000 per year on energy and disposal cost and has significantly reduced its environmental footprint. a final area i would like to address is the importance of a strong industry and government partnership to address food waste. encouraging innovation such as new variety development through traditional modern breeding practices can bring us traits that enhance the crop's ability to with stand stresses due to climate and pest. likewise, food and vegetable shelf life making them more durable for the transportation process will reduce waste. and we need the federal government in the partner of research. the research programs have done great things for our industry and specialty crops in general. and last but certainly not least, we need help on labor issues. many growers are across the u.s. find difficulty finding farm workers and produce is too often left to rot in the field. i recognize this is a difficult
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issue to tackle politically, but we need congress to take action. significantly preducing our nation's food waste is a challenging endeavor. l and mvp and the produce marketing stand ready to partner with you and my fellow witnesses today to move us closer to a zero waste system. thank you again mr. chairman for holding this important hearing and this committee's attention to the critical issues, thank you mr. oxford. miss stasz, did i butcher your name. >> you are recognized for five minutes. >> members of the committee, thank you for giving me the opportunity to participate this morning on this important issue. my name is meghan stasz, i'm the senior director for the grocery manufacturers association representing the food bench and consumer products industry. today i'm speaking on behalf of the food waste reduction
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alliance, 30 leading companies formed in 2011 by gma, the food marketing institute and the national restaurant association. fwra commends committee for holding this hearing and for your interest in finding solutions. i'll make four key points today. first, we know that food waste is a very real problems and we have a national goal of having it by 2030. everyone has a role to play to get there. second, the food industry has already stepped forward and made considerable progress. fwra brings together manufacturers retailers and food service companies around three goals -- reduce food waste generated, increase food donated and recycle unavoidable food waste. gma members are working hard to minimize waste as well. in 2014 our company recycled nearly 94% of the food waste from manufacturing and in 2015 donated over 800 million pounds of food. third, we know that more needs to be done and our industry is
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taking new steps. gma and fmi are taking the lead on date labelling and reducing the consumer confusion. date labelling is important and we're addressing it. but context is important and that is my fourth point. date labelling is not the solution to food waste. there is no silver bullet solution here. it needs to be tackled in a range of ways. an industry can't solve this problem alone. consumers are responsible for 44% of the food waste in landfills. if we're going to make a serious dent, we need to help consumers. but reducing food waste is a priority. that is why we created fwra. co chaired by on agra and said you canno and wegmans, we have four areas of focus, assessment, best practice and communication and policy. from this work we've seen really tremendous innovation. conagra who makes potpies found they could change the way they were placing pie dough and reduce the amount trimmed off the edge. this change saved them over 230
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tons of pie dough in a year. that is food waste that never happened. retailers increase food donation by over a billion pounds in the last decade. kroger is turning their food waste in energy. restaurants are working to reduce waste. yum brands alone donated over 184 million pounds of food since 1992. but let me talk about date labelling. in january gma and fmi board worked to address confusion around date labelling and 25 companies met here last week. it is crucial to provide consumers with the clarity they need. 40 states have laws regulating date labelling. this products in some parts of the country is contributing to confusion but more needs to be done. date label can tackle 8% of the total over all food waste going to landfill. this doesn't mean we should do nothing but clearly more solutions are needed. and businesses are facing challenges to food waste. supply chain challenges and food safety is paramount so if a food
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bank has maxed out refrigerated truck space, food winds up in a landfill. similarly, diverting food waste away from landfills require infrastructure that makes sense. food waste is heavy and it is wet and it requires freak went pick up. if you have to put that material on a diesel truck and drive it hundreds of miles to the next facility, you have lost your environmental benefit. it also has to make business sense. ad can cost millions to build and operate and composting facilities could face permitting challenges. so even when a company thinks they've found a solution, the composting facility can be shut down and the a.d. could go out of business and the business is back to square one. we're also seeing conflicting regulations at the federal state and municipal level. in some states food waste is banned from landfill but there is no infrastructure. and finally consumers, they are the single largest contributor and our save the food campaign is a great example of what we need to see to move the needle here.
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so in closing, while challenges do exist, the opportunity is enormous and we look forward to working with the committee and our industry partners and others to reduce food waste throughout the supply chain. thank you for your time. >> thank you. ms. leib, five minutes. >> mr. chairman, ranking member peterson and members of the committee i'm honored to testify before you today. each year we waste 70 billion pounds of food suitable for donation. at the same time people in every community across our nation struggle with food insecurity. to help end hunger, feeding america works with 198 food banks, 60,000 local food agencies, and 148 corporate partners. together we provide 4.5 billion pounds of food to more than 46 million americans each year, including 12 million children and 7 million seniors. of the food we distribute, more than half of it. about 2.6 billion pounds, would otherwise go to landfill. and yet this still does not meet the need. significant gaps remain between the food low-income people need and the resources they have to buy it. diverting excess food to donation provides a triple
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benefit. it reduces hunger, it protects our environment, and it helps businesses with sustainability. but perishable food must move safely and quickly from the donor to the people who need it. doing so requires innovative practices, technology know-how and costly physical infrastructure like refrigerated trucks and cold-storage capacity. i want to share with you two examples of innovative platforms that we have developed to divert more excess food to donation. produce matchmaker is an online portal and ordering system that helps produce donors connect with food bank. it is available 24 hours aday and it is a last food -- allows food banks to accept donations in real-time, moving produce to hungry families more quickly. food banks can order produce donations by the pallet rather
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than the truckload. this saves transportation costs and allows cost-effective rescue of smaller amounts of produce. produce matchmaker is already being used by more than 150 food banks and state associations in fy 16 and collected 125 million pounds of produce with food banks across 40 states. it will help us recover and distribute significant amounts of produce that is currently wasted. meal connect is our new online platform to facilitate the easy, safe and fast donation of fresh food from grocery and convenient stores and other locations. donors engage online when they have product and are matched to the local food bank. it is the only matching donation software that fully vets donors and recipients to ensure that proper food safety protocols are followed throughout the prose.p.
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using meal connect on a smartphone or pc simplified the logistics with a near pantry that could accept it. this is local food rescue in the sharing economy. meal connect is enabled starbucks to launch food share which will provide an additional 50 million meals ore the next five years as the program rolls out to 7600 starbucks stores across the u.s. but produce matchmaker and meal connect won't solve the problem alone. additional investment in technology and physical infrastructure are needed. the improvements to the enhanced tax deduction for donated food enacted last december will also have a significant impact on food recovery. but expanding the deduction to include farmers and growers, in making it permanent for -- excuse me, for all businesses,
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we expect that nearly 1 billion additional meals that would have been wasted now will be donated. thanks to you and your colleagues for passing this critical legislation. without it, we would be worse off. to continue food -- increasing food recovery, additional investments to identify and scale promising program models are definitely required. policy changes such as standardizing date labels on food and providing usda grants to small businesses and nonprofits to facilitate food recovery would also have a significant impact. as you examine this critical issue and begin preparing for the next farm bill, we stand ready to work with you. i encourage you also to visit your local food bank to learn about food recovery within your district. and thank you very much for the opportunity to testify. >> well, i thank our witnesses for the testimony. >> there is one more. >> oh, i'm sorry miss leib.
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i jumped right on the end. >> that is okay. for five minutes. >> did my time pass so fast? >> yeah, it did. my apologies. i'm so sorry. miss leib, five minutes. >> thank you chairman conaway and peterson for the opportunity to speak with you. my name is emily leib and i direct the harvard law food clinic. we've worked on reducing food waste for many years and we've come to see intimately the challenges to food reduction and food recovery and i want to highlight a few issues. first you've heard confusion over date labels is a major cause of food waste. the refed report found that standardizing date labels is the most cost effective of 27 of the different solutions they examined to reduce food waste and could divert 398,000 tons of food waste. we've identified two key challenges with date labels. first, in the dating game which
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we published in 2013 with the nrdc we showed that there's a dizzying array of state laws created to fill the void in federal regulation on this issue. 41 states and d.c. regulate date labels but no two states have the same law which is evidence that these laws are not based in science or sound public policy. new york, for example, does not regulate dates on any food products, but its neighbor massachusetts requires dates on all perishable and semiperishable products and then heavily restricts sale or donation after the date. second, we found that consumers are confused. on most foods date labels are not intended to communicate safety. instead, they signal a manufacturer's estimate of how long the food will be at its best taste. but consumers toss past date food because of safety fears. in a national survey my clinic conducted this april with the national consumers league and the johns hopkins center for livable future we found that over one-third of consumers always throw food away after the date and 84% do so at least occasionally.
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interestingly, a third of the consumers also believes the federal government regulates date labels. through our work on date labels we've also learned that safety is a risk for certain food products such as deli meats or unpasteurized dairy if they're consumed after the date. that also isn't communicating clearly to convict assumers. moving forward, we could align with what most other countries do and as representative pingree discussed require a standard quality label on foods where freshness is a concern and a standard safety label on food that carries a safety risk aft date. we've been excited to see sow port for standard date labels from companies like walmart, general mills and nestle and campbells. standardizing the labels could
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help consumers make decisions, facilitate donations of past date food and a win for companies. moving on, i'd like to talk about food donation. several of my for examples and the chairman mentioned the fear of exposure to liability which hampers food donation. but strong liability protects already exist. in 1996 congress passed the bill emerson good samaritan act which provides a very strong federal floor of civil and criminal liability protection to both food donors and the nonprofit organizations that distribute food to needy individuals. these organizations are
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protected as long as they don't act with intentional misconduct or gross negligence. but 67% of manufacturers and 54% of retailers still say that the main reason they don't donate is because of fear of liability. food recovery organizations report that many donors don't know about this legislation or that if they do know they're concerned about the lack of authoritative interpretation of some of the key terms. the act has not been challenged in court so there are no judicial interpretations of it, and it was never assigned to any agency so there are no agencies that provide federal guidance or fill in these gaps or provide education about the act. congress could call on an agency to provide guidance and raise awareness about the act to help address these challenges. closely related to liability is the issue of food safety regulations. in our federalist system, regulations of grocery stores and restaurants takes place at the state level. state health codes vary, but they're mostly based on the fda food code. however, the food code does not inner corporate language around food donation so states lack federal guidance around safe food donation. including food donations and the
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food code are other federal guidance could help states clarify their safety laws and better prioritize food donation. lastly, i want to mention the opportunity for innovation, organizations have begun to test different entrepreneurial approaches to food recovery. several of our client organizations are testing technologies that connect donors and food recovery organizations that convict virtue nonconforming fruits and vegetables into new products or apply retail models to provide surplus food at a low cost. as often happens, these innovations could not be predicted with when the laws were first passed so several existing laws like the emerson act actually posed barriers to the viability of some of these innovations. this committee could address barriers like this and create a friendlier climate for innovations. liability protections and food safety guidance and supporting of food waste and increase the amount of healthy safe food recovered. thank you. >> thank you. and good recovery from my rudeness. members will be be recognized in
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order of arrival and i appreciate everyone's understand understanding. minutes. sitting here listening to you i suddenly realized that i was among some early adopters of this issue of not wasting food in the sense that as a young mp at ft. hood we would race across ft. hood with sirens blaring and red lights flashing to get to the mcdonald's at 2:00 in the morning to get all of the unsold big macs that we would then take back to headquarters and pass around to our colleagues. so early on i was an early adopter, in addition to growing up in a family where nothing was wasted. ms. leib, would you talk to us a little bit about the differences or challenges differences between rural food banks and urban food banks in the sense of produce, how they get it, access to it. we've heard some of the retailers here a week or so ago talking about particularly small retailers in rural america have a hard time getting produce. could you talk to us about how food banks in urban and rural areas are approaching those challenges differently. >> the challenge facing rural banks are different than those in urban food banks just transportation alone is probably one of the biggest challenges.
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recently i had the opportunity since relatively new to feeding america to go around the country and have listening sessions, and in the sessions that brought together most of the rural food banks, the number one challenge that they saw that they faced was transportation. in fact, they asked for us to find donations for replacement of their tires because they had to get to such far distances. but it's not only on the side of the distribution of the food. it's also with regard to the people who are facing hunger. their ability to be able to get together and come to a central location to receive the food is also a challenge. i don't think it's a challenge that we've solved. also because most of the people facing hunger or more of them are in cities and in concentrated areas, there may be an inclination to want to go to where most of the people are, but yet the needs in the rarely communities are just as great. so we have a balance issue when there are limited resources. >> we did have one retailer talk about the idea of setting up centralized points within the rural communities where they could take the donated produce. ms. stasz, you said i think we had some 40 different state rules or regulations with respect to labeling. you and your team would be
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supportive of a federal presentation of all of those various state rules and regulations? >> yes, i think a national standard is really crucial. i think emily did a really good job of pointing out the complexity that's existing now and i think that as we think about if there have going to be regulation then federal preemption would be really critical to streamlining that process and reducing consumer confusion. and we thank mrs. pingree for all of her work on this really important issue and really starting the conversation. >> well, thank you. i do believe the statute of limitations has run out on anything i might have just confessed to with respect to my conduct at ft. hood. with that, i'll yield back and recognize the ranking member for five minutes. >> thank you, mr. chairman. do all of you agree that to get on our goal here we need a federal preemption of state laws? do any of you disagree with that? silence.
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it's going to be hard for the stenographers to write that down. >> i'm happy to agree with that. i think as we've discussed -- when we started looking at state laws on date labels we looked at a handful in new england. they were all different. the more we zoomed out and looked across the country, it's very clear they're not based on some sort of standard safety information. so i think it makes sense to have one standard that everyone can follow. >> so you'd have to have a federal preemption in order to accomplish that. >> i think so. >> and i'm, you know, a little bit concerned about how this would work because we've got so many people involved in trying to use the labeling and marketing of food. they've got the consumers to the point where they don't know what the heck is going on. you know? it just concerns me, you know, like this gmo issue, you know, they're opposing preemption of
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that because some people think that it's a good thing for the states to have these different laws. you know, which goes completely opposite of what we're talking about here. and then you've got these folks out there doing these dietary guidelines and trying to push all of that stuff, and we've got a bill that's been introduced that puts the food police in charge of the ag committee i guess. you know, that are pushing all kinds of ideology there, whatever it might be, confusing the heck out of people. you've got people labeling things "natural" and using it to create stores and so forth. and so i'm just concerned that if we pass this bill that says you're going to have two dates. one is best by and the other is
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expires, you know, i agree that we need to get -- this is a good thing to do and this is -- if we could accomplish it, it would probably be the best solution or one of the main thing that's could change things. but in the bill, it says "expires on" is the date for not the quality by the i guess safety date. i think that's -- i don't think consumers would understand what that means. you know, i think you almost have to say "do not consume" after this date. to get them to understand. i'm just -- you know, we're putting so much stuff on this label, all of these labels, that i'm not sure it's going to break through, you know. so i don't know what you all think about that. do you think -- am i off base trying to be concerned about all of this -- >> sir, i have two answers.
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one in terms of this question about the information being out there. if you go to any store right now, even in the states that don't regulate date labels like new york, almost every product, particularly in the center of the store, has a date label on it. everything from bottled water to vinegar to canned goods, whatever. so i think what's great about this, it's not taking information away. consumers are used to seeings those and they want to see them. it's just trying to make it clear so that they don't see a million different ones. i think you're right that no matter what the labels are education is going to be needed. the problem is right now that because there's so many different labels it's impossible to educate anyone about what they mean. i've tried. i'd love to say, this is what you should glean from these. then last the term "expires on" was actually in the national survey that we did last month that i mentioned. we checked six different label languages and "expires on" 54% of people believed that was a
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safety label, that higher than any of the other ones and the lowest percentage of people who thought it was a quality indicator. again, 54% isn't a lot but it's a start and i think with education it could be built upon that. >> yeah. go ahead. >> just if i may really quickly, i think you really hit the nail on the head that we want to get this right the first time. we don't want to further contribute to consumer confusion so we want to make sure that we are testing consumers to make sure they understand what we're trying to convey, coordinate with other labeling changes that are coming down the line like the nutritions facts panel and really have industry flexibility to truncate the phrase, make sure it facilities on small packaging to make sure we're harmonizing our standards and language and conveying the right information to the consumer. >> i would say amen to that and if you've read this bill, i am concerned about -- i agree with the goal, but i'm concerned about the way this thing is structured, that you're going to get these different agencies involved in this and by the time you're done you're not going to recognize what you tried to
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accomplish. you know, i've seen that with the farm bill when i passed the farm bill, by the time it got done with regulations i didn't recognize what we had passed. so i think we have to be careful about how we do this. i agree about what we're trying to accomplish. but if you get too many agencies involved and allow too much whatever, you're going to end up potentially with a worse situation. yield back. >> mr. kelly five minutes. >> thank you, mr. chairman and ranking member and i thank you, members of the panel. first of all, i just want to say we have a lot of food pantries i'm from mississippi and we have a lot of rural areas. and our food pantries do such a great job and so any kind of reduction, second i rarely do this and she'll probably kill me but my wife volunteers for meals on wheels all the time to take meals to the elderly or people who can't travel and those things and she's -- you know, she never gets recognized.
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we've been married for 25 years and it seems like she's always behind the scenes. by my wife sheila does a great job and we need more of that because there's a lot of people who really want to help people and get this food in the right hands. as a child growing up, my mother used to go to the stale bread store in town and would buy up the doughnuts and things that we necessarily couldn't afford or bread or other buns and those kind of things. then she would freeze them and we'd eat them all year. as kids we didn't know any different. it was still good food. the thing that's most people threw away we got to eat. so i thank y'all for doing this. ms. stasz, i think i got that right, to what extent is the industry engaged in coordinating efforts to promote uniform labeling? >> we're very engaged. this is a gma and fmi board level initiative right now. we have 25 companies who are working on this to make sure that we really get this right the first time, to make sure the information that we're conveying
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to consumers is accurate and it's the right kind of information. but this is a really important issue for us and it's something that we're taking very seriously. >> and just -- you know, as a follow-up on that, when we create things here, we don't always get the right results because we don't have the baseline of knowledge that is necessary. we're not the professionals in every area and we have such a broad range of things. so when you guys create the right things for yourself, it prevents us from doing the wrong thing with good hearts and good minds and trying to do the right thing but we sure appreciate your input. how do your manufacturers in your organization now work with different date labeling laws in each state and what limitations does it put on you because of these laws? >> it's certainly own russ. i mean, our member companies are obviously complying with state law. but it does tend to create a lot of unintended consequences. i think ms. aviv really highlighted some of the
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confusion around at the food bank level and there's different foods that wind up getting thrown away unnecessarily. there are certainly a call for and a reason for a national standard that the industry is working towards to reduce consumer confusion and prevent some of these unintended consequences of these laws. >> and ms. aviv, to what extent have potential food donors raised liability concerns to you about a reason to withhold donations? >> thank you. congressman, i think that the issue that we see is lack of knowledge where people new to the space who want to help and want to contribute argue that they can't because they won't be protected. and that it's almost a one by one by one education. unless we can create a systemic way to engage in this kind of work. i was most recently at a conference organized by ohio state university with all of its alumni and so on, and the alumni sitting there talking about food insecurity, people sitting at
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the front table said that they were reluctant to get involved in this because they thought they were liabilities. these were people who were leaning into this area. so i don't think we should underestimate the degree to which people are not engaging because they think they're not protected. >> and final question for mr. oxford. so-called ugly fruit and vegetables in many cases have less value in the so-called marketplace. what other opportunities -- you talked about some, but if you can just talk about what opportunities the industry is exploring to add value to these products. >> well, you mentioned the ugly fruit. that's been a growing movement across the industry, one that we participated in and a lot of retailers are helping to do that and i mentioned the food service side is getting involved with it as well. one of the things you have to keep in mind on that is, you know, how things are positioned in the stores or at the food service level.
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we believe there's great opportunity and it's a huge waste from our standpoint as a grower, we hope every fruit stem and leaf ends up on someone's plate. so just trying to do anything we can to make those products available is what we're trying to do. >> and just a final antidote, my dad growing up wouldn't eat white corn. he didn't like it. so my mother put food coloring in it and he said, this is the best corn i've ever had. so sometimes price pointing and other things make it better. "yield back, mr. chairman. >> mr. davis scott for five minutes. >> thank you, mr. chairman. you know, this is a very serious problem here, and i appreciate you chairman pulling this together. but it seems to be two fundamental areas here that we need to address. the first one is, how do you change human behavior? that is the big issue here.
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the second big one is, how do we address this issue of where the food waste starts on the farm? i represent georgia, and we are the leaders in the nation perhaps the world of growing blueberries. the problem is that so much of those blue wer berries are left, wasted, rotting in the fields because we have failed to address the number one issue that we here in congress can do to address food shortage, and that's to make sure our agriculture and our farmers, those who are producing our crops like blueberries, have the adequate supply of labor to be able to harvest them. so we've got to do something about that first.
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second point is on that, how do we coordinate a better relationship with that if it's an oversupply our farmers would gladly add a much reduced cost rather than to see those crops rot in the field get them to our food banks, like the atlanta food bank which is one of the more premier food banks with over 75 million pounds of food put out each year. that takes good management resource allocation. now, the other one is on, how do you get to the real? because about 80% of the problem, if we solve it at the first end of helping stop the food shortage of food rotting in the farmers because they can't get the labor because we failed to address immigration from an economic, agricultural, supply, labor standpoint, when we get to
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the changing of the human behavior, we've got to get into a coordinated partnership with the media. with television. with radio. to be able to change human behavior, educate the public. now, we did this with smoking so it can be done. we changed that human behavior. remember people said, you're not going to be able to get people to -- but there was a coordinated effort with the leaders in the media industry to help with the kinds of public announcements, commercials that we could. so i'd like to get y'all's response to that. first, let's address -- am i right on this labor issue, mr. oxford? >> without a doubt. that's one of the biggest challenges for us as growers, is not having adequate labor to harvest the crops at times. and when we leave crops in the
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field, sure, we can dish them in for nutrients for the soil, but that really means the crop is not going to the highest and best use, which is feeding people. >> and how about your ability? am i right in assuming that you would be able to work with food banks in a much better resource allocation way to be able to get that food so it gets on to the needy people rather than rotting in the fields? >> absolutely. and we already do, as i mentioned in my testimony, supply hundreds of thousands of pounds to food banks annually ourselves, probably that doesn't meet specifications for the customers that we have and so forth. but i think distribution is a big part of the equation that has to be figured out and it's -- there's no silver bullets here. it has to be a collaborative effort from all parts of the supply chain. >> right.
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now, the reason i mention the human behavior as i looked at this, clearly 45% of food is wasted at the dinner table. mr. chairman, i think it might be helpful if we begin to address a way in which we can coordinate some resources at the federal level to help get public service announcements to get and work with many of our partners in the media and engage them much the same way as we did in changing the human behavior of smoking. thank you, sir. i yield back. >> gentleman yields back. chris gibson, five minutes. >> thanks, mr. chairman. i appreciate this hearing. just want to come in behind mr. scott and concur with his statements, and i appreciate the chairman. i know he's been looking at this too. we have a number of members on the committee who have been concerned about ag labor, serious issues there. i have introduced a bill on
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this. i certainly don't claim that it corners the market in any ideas here. in fact, i think perhaps at this time maybe what we should do as a committee is just to have a hearing and look into it more. i know the committee is looking at that, and i appreciate that. the second is, and i apologize i was a few minutes late, but i did learn from the testimony that i did hear from ms. leib, i was interested to hear your comment, really your analysis, of the emerson act which is, from what i hear of you, very helpful in its intent but perhaps needing some refinement, some amendments. and i thought you were very clear in what could be done. you know, i certainly would be supportive of an effort on that score. i just want to make that comment. and then third -- and this is really the question -- i'm curious for the panel, in your
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experiences, have you seen any best practices as far as information is concerned, a not for profit that maybe is a clearinghouse in a community where, you know, all restaurants and farmers can provide information about what they have so there's sort of in a community a place where people can go and say, well, here's our inventory of all that's the perishables and perhaps the nonperishables about what's available. has anybody seen anything like that? >> yes. there are in addition to what feeding america is doing with their new platform, there are a few other local start-ups that are doing it. there is a small company based in boston that's doing it for new england right now that is creating a platform that has knowledge of tractor trailers that are being rejected at particular places and are not
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going to find their intent and then matching those with locations that could use that. so large organizations like feeding america and there's a lot of innovation that's happening at a local level as well. >> i would say that there are lots of efforts by feeding america to try and get to the very issue that you've raised. obviously, part of the challenge that we face is to make sure that the food -- this whole food labeling issue is not an unimportant issue because we want to be sure that the food that gets picked up is then put if it's perishable in a refrigerator truck, is transported to a safe place, is housed in a safe place before it's distributed. so that even as we are very encouraged by efforts of small groups to do the same thing, we
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want to be able to be sure that we have a safe, protected standard because if we have stories that come out of somebody getting food poisoning or something as a result of this, that might be perceived by the public as the tip of the iceberg when in fact it was an isolated incident. so we have to proceed here quite carefully. our effort with starbucks that we are now going to do over the next five years with hundreds and hundreds of stores will give us an opportunity to test this effort because it's a small amount of food from each store, but they are incentivizing us through providing us with enough financial support to be able to purchase refrigerator trucks so that the food banks can go by and pick that food up every single day. multiply that by every store in the cities, in the variety of cities that have food left over. we have to make sure that the infrastructure or the people who pick it up are picking it up and carrying it safely to the place
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where it then can be distributed to people who need food. so it's a logistics in transportation and safety issue. it's not a lack of will issue. >> just to add to that, there's quite a bit of innovation on that front. there's an organization, a start-up in chicago, that's been training uber and lyft drivers in safe food handling practices and then allowing restaurants to broadcast via text to a number of food pantries until someone accepts it and then they bring it over very quickly so that it can, you know, get to people quickly. and i would say that there's a long tale to the food. there's big organizations and sometimes they have large quantities but there's also a lot of small restaurants and such that have small quantities but it's still worthwhile to donate. and i think, as mr. fink mentioned, really encouraging the innovation there can serve that sort of long tail.
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>> i thank the panelists. my time is expired. thanks, mr. chairman. >> mr. walz, five minutes. >> thank you, very critically important topic. thank you to my colleague ms. pingree who i've had an honor of sharing a meal at her home. she takes this to heart and takes food as an important part of our cultural life. which kind of takes me back to mr. scott and mr. kelly saying. this issue of by training a cultural geographer, this is an attitude issue as much as it is logistics. as far as labeling and that, it's interesting when you hear people up here talk , those of us of a certain generation
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there's the pride in the thriftiness around food. i come from a family until i was 12 years old i thought head cheese was cheese my mom was making. when we found out, we still ate it, but it was the idea of that sense of waste that was probably generation where food insecurity was a real threat to them. you see this around the world. and so i do think getting at that because there's some really interesting phenomenas here. we take great pride in southern minnesota that we feed and cloth and fuel the world. and we have the most efficient producers of food the world has ever seen. so because of that and then working in conjunction with all of you and ms. stasz your oh, you have become so incredibly efficient at delivering foods from all over the world to our local grocery store and to our homes that it has changed that cultural perception. not that we've gotten lazy or whatever. we don't have to be -- about it. i'm amazed looking at it this week when i go to shop for bananas it's a fine art because i don't want them green because i want to eat them that night. but when i buy them yellow they're bad the next day almost. it's really that supply chain
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along there that we're trying to get at. so i'm curious. >> i think mr. scott was talking about putting things out in the public, public awareness and all that. but i think ms. gunders you did this right and if anything i've learned from this job as a school teacher, too, maslow's hierarchy, appeal to the bottom of the hierarchy first, how it impacts their safety, pocketbook and things like that then they'll eventually self actualize this is the right thing to do, it saves the planet saves those types of things are we he getting at the heart of the things that is making a difference is the food labeling one of them and maybe throw it out to each of you for your points on this. mr. fink you talked about the data which i think is incredible what you've been able to do to gather data on this. but i think it's very hard. maybe the last one to you, ms. aviv, how did usa food inspectors interact with food banks and some of these on large exiles.
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i've got fantastic ones in minnesota that do incredible field to plate type of things. you know that's broad and general, but the rest of the country is maybe catching up where all of you are at. and there's win win wins in this if we get this right. this is one of those issue that's is incredible positive, economically, health wise, reducing government spending on things we'd like to see done. i'll leave my last two minutes for points on. that i know it's very generalized but we've got to get at this. >> yeah. so as i mentioned nrdc has partnered with the ad council on a campaign to try to shift the cultural paradigm around food waste. it's absolutely correct that if i walk down the sidewalk right now and i throw half a sandwich on the sidewalk people will think i'm crazy because i'm littering but if i throw it in the garbage can people won't quite think much of it. and that's really the paradigm that we are trying to shift there was over 12 months of research that went into the campaign and found things like people don't know they're wasting food. if you ask somebody if it's okay, nobody will say yes. but nobody realizes they themselves are doing it. it's kind of flying under the radar. and the other thing is that it's
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a by-product of sort of people's good intentions much you want to host a good dinner party, you want to feed your kids healthy food. and there's this by product of waste. we're trying to create a wake-up call that yes, this is happening and also create a positive message that this is something that people can get on board to do better and trying to shift that culture. and so i think we're trying to get at some of the motivations behind it through really positive messaging and empowering people to make changes in their kitchens because a lot of it is happening right there. >> i think your question had to do a little bit about the data and what do we do with it. the intent of refed was actually to comb the data that was out there and to create this advisory council of the 30 experts from all the different industries and nonprofits to understand the data and to create a road map which essentially is an action plan of
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what are all of the areas where food is being waisted and what are the solutions and how can investment be made in one case to accomplish that. and that's where we came up with the 27 solutions and there are investment opportunities for private investors, for philanthropic organizations like foundations that can make grants to feeding america and other nonprofits. and for corporations to make investments in their own infrastructure. so the first step was collecting the data and creating the road map. now it's an opportunity for individual organizations to figure out how they can invest in the solutions. >> thank you. maybe if we get a second round i'll wait. my time is up to come back around. i want to explore that, the economic potential that comes from this and how you're already doing that. >> mr. moolenaar, five minutes. >> thank you, mr. chairman. i want to thank you all for being here. just this number, 40%, is pretty
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staggering. and i wonder if -- i think most people wouldn't be aware of that, and if there was one take-away that you wanted me to be able to communicate back in my district from each of -- as you've been thinking about this today and throughout your work, what would that one take-away be that you'd want me to be able to communicate? because i think that number is pretty staggering. then when you look at the supply chain aspect of it, it becomes a much more complicated issue in terms of how to resolve. but is there one thing that you would want me to be able to communicate in my district? and maybe just go right down the panel. >> i think it's that this is very addressable, and it just takes easy steps to do it. it can be overwhelming when you think too much about it, but ultimately if everyone care about this and we all think food
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shouldn't be wasted it won't be as much. >> i would say that most people are not aware of how much food they waste personally, and that this problem can be solved starting so much by the consumer and then the consumer can push that to restaurants and to retailers. >> what i would say is that i think there's a misperception with a lot of consumers that if the fruit or the vegetable doesn't look just absolutely perfect in the store when they're picking it out then it can't be good, and that's simply not true. so support for and encouragement of some of the imperfect or the unusual looking fruits and vegetables, that those are still very healthful products for consumers would be terrific. >> and i'd say the number one take-away is the importance of measurement, whether you're a business, whether you're a
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household, a city, a state, understanding that getting some numbers behind how much food you're wasting, you immediate find opportunities to improve. i for one need to stop buying grapefruits. i just don't eat them. but i can understand how much money i save as soon as i track that every week. and i think that measurement is far and away the best practice. >> i think there are no silver bullets here because we can't solve all of it doesn't mean that we shouldn't try and solve some of it. one step at a time will get us all the way there. one of the great successes in regard to this area that we think is helpful was the passage of the tax legislation that made the donation of food by small businesses possible, incentivizing them to give. so instead of that food going to waste, now because of this charitable tax deduction, they can donate that. if we can educate our farmers and our small businesspeople in the communities about this
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opportunity, we can save a heck of a lot, and that will be the first step of many that we can take. >> and i'd say sort of two. one on date labels that for the most part, foods are indicating quality to you and hopefully you can say you're working on trying to make them clear. and then i think the other on the liability, i mentioned the emerson act is incredible. i mean, it's an enormous amount of protection and the biggest challenge is that businesses don't know about that and having representatives from congress say to them, we have this legislation you're really protected, this is a priority for us could go miles in getting more people to feel comfortable donating food. >> thank you very much. appreciate it. i yield back, mr. chairman. >> ms. fudge, five minutes. >> thank you very much, mr. chairman. and thank you all so much for being here. mr. chairman, let me just take a point of personal privilege. today is congressional foster youth shadow day. and today i have a foster student with me.
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her name is ragene jordan wells who was in the system for five years and is now a student at cleveland state university. so let's welcome her. >> can she stand up and wave at us? >> ragene? >> oh, there she is. welcome. glad you're with us. >> thank you. and now to my questions. first, let me again thank you all. this has been most enlightening and very timely, mr. chairman. thank you for this hearing. certainly i do represent the city of cleveland and akron and 20 cities in between. i represent one of the poorest districts in america so this is extremely important to me. as i work closely with my food banks on a fairly regular basis and have my staff go on a regular basis to assist and volunteer. so it is good, ms. aviv, to have you here as i wanted to just remind you that earlier this year mr. rodney davis, my colleague from illinois, and i did in fact request that the
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appropriations committee provide an additional -- a $100 million for the cost of storing, transporting and distributing food. we know that refrigerated storage, we know that moving food is very, very important to making this whole thing work because a lot of times if it's difficult for them to donate the food, they won't do it. so i just want you to be aware that they did it and thank you for your assistance. feeding america's assistance in helping us do that. and i'm happy that my colleagues have heard today how important it is to make sure that we have the transportation and the refrigeration that we need. ms. leib, we've been talking about the emerson act for some time this morning. but unlike other statutes, there is no -- there has never been a federal agency that really is over this particular act. would it help if in fact there was some kind of guidance by a federal agency that would make
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persons who come under this act feel better? >> i think so. i mean, i think, you know, one issue is really that there's a lack of awareness which can also be addressed by having an agency that's really tasked with putting guidance out, telling people about it, sharing information. then the other question, there's -- i mean, it's intended to be incredibly strong if you read it you can get that but i think as attorneys as an attorney myself i can imagine if i were advocating on behalf of a company looking at it and saying there are few terms in here there are unclear apparently wholesome food what does wholesome food is something past date wholesome or not.

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