Tag: Chris Dodd

In the House and Senate, Supporters of Trade Speak Out

We happened to catch two excellent speeches in Congress this week on the importance of Free Trade Agreements.

Rep. Kevin Brady (R-TX) spoke Wednesday during the House debate on H.R. 1875, to establish an Emergency Trade Deficit Commission. The full debate started on page H6813 of The Congressional Record. Brady, who managed the Republican side of the debate, spoke beginning on page H6188, noting that the day marked the fifth anniversary of House passage of the U.S.-Central American Free Trade Agreement, or CAFTA.

Trade agreements … give us a chance not one-way trade in, but two-way trade where we have a level playing field. The world has changed. It’s not enough to simply buy American. We have to sell American. We have to sell our products and goods and services throughout this world. In fact, over 80 percent of our trade deficit today is with countries that are not trade agreement partners, that are not level playing fields for the United States. That’s why we push hard for those agreements.

For example, 5 years ago the United States had a $1.2 billion trade deficit with Central America. Last year, the United States had turned that around, because of the agreement, to a $1.2 billion trade surplus, and we’re on track to surpass that surplus again this year. Last year, the United States had a trade surplus in manufactured goods with our Central American partners of almost $2 billion. We’re on track again this year.

 Nor is CAFTA the only example of how trade agreements can improve the U.S. trade balance. This week also marks the eighth anniversary of the final House vote on the Trade Act of 2002, under which we have resoundingly successful trade agreements with 13 countries now in force. Last year, the United States had a trade surplus of over $25 billion with these 13 countries. And so far this year, we have a surplus again.

Looking at just trade in manufactured goods reveals that these agreements were even better for American manufacturing workers. Last year, the United States had a trade surplus of over $29 billion in manufactured products with these countries that we have free trade agreements. And again, we have this year a surplus already of nearly $16 billion. Without question, these trade agreements have reduced U.S. trade deficits and increased U.S. trade surpluses.

Rep. Geoff Davis (R-KY) also spoke on the floor, emphasizing the importance of trade to the manufacturing sector: “In my home State of Kentucky, nearly 50,000 manufacturing jobs are dependent on exports. The simple fact is that 95 percent of the world’s consumers live outside the United States, and the fastest growing markets are outside our borders. So success in those markets is critical to growing our manufacturing sector and creating good paying jobs.”

In the Senate, Sen. Chris Dodd spoke on Thursday, making a strong case for enacting the U.S. Free Trade Agreements with Colombia and Panama. He argued that the agreements had value for both foreign policy and U.S. domestic economic reasons, and concluded: (continue reading…)

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Shelby: With Impasse, Economic Harm in Financial Regulation Bill

Sen. Richard Shelby (R-AL) has issued a statement on the negotiations over the financial regulation legislation, “Shelby: Negotiations with Dodd Reach Impasse.” Excerpt:

This bill still contains a sprawling new consumer protection bureau that will find and force its way into facets of our economy that had nothing to do with the housing crisis. This massive new bureaucracy would have unchecked authority to regulate whatever it wants, whenever it wants, however it wants. I am aware of no other arm of the federal government this powerful, yet so unaccountable. In my negotiations with Chairman Dodd, I have consistently supported strengthening consumer protections. I have also advocated for a sensible and meaningful role for safety and soundness regulators in this new agency’s operations. Unfortunately, despite my demonstrated willingness to propose compromise solutions, this sensible step has proved to be a bridge too far.

Also included in this legislation are critical provisions relating to derivatives. These provisions, which Democrats developed on their own behind closed doors, were only very recently inserted into the bill. In fact, I was not provided the opportunity to share my views on a single aspect of the derivatives provision. While I firmly believe we must end the casino-like atmosphere on Wall Street, I also believe we must protect Main Street’s ability to create jobs and grow the economy. In my judgment, the provisions as currently drafted would have far-reaching and devastating effects on these businesses and our economy, increasing the cost of nearly every product we use and negatively impacting job growth.

 The bill is S. 3217, Restoring American Financial Stability Act of 2010.

 UPDATE (4:10 a.m.): Senate Republican Leader Mitch McConnell issues a statement, “Key Agreement Reached on Closing Bailout Loopholes.” It appears that a cloture vote will now pass, and debate on the legislation — with its many economy-damaging provisions — moves forward.

(Hat tip: Daniel Foster, The Corner.)

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Prepare to be Regulated Financially. By That, We Mean Sued

A major section of S. 3217, the Restoring American Financial Stability Act, establishes the Bureau of Consumer Financial Protection with the broad authority to enforce violations of whatever strikes its fancy. At the same time, the financial regulation bill empowers state attorneys general to embark on their own exciting adventures of enforcement.

The Section is Title X, entitled the Consumer Financial Protection Act of 2010. As the title’s Section 1031 lays out, the law gives the Bureau the authority to act against “a covered person or service provider” that commits “an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer financial product or service…”

So now “unfair” is going to be a crime? That’s a vague standard, as are all the terms used in the list of offenses. The Bureau is supposed to develop the rules that further define its authority, and one hopes those rules clarify and limit the offenses. But it wouldn’t surprise us that enough ambiguity remains to invite arbitrary enforcement based on subjective standards.

Even more worrisome is that the bill also authorizes the 50 states and their attorneys general to enforce the same provisions. From Section 1042, “Preservation of Enforcement Powers of States”:

1) ACTION BY STATE- The attorney general (or the equivalent thereof) of any State may bring a civil action in the name of such State, as parens patriae on behalf of natural persons residing in such State, in any district court of the United States in that State or in State court having jurisdiction over the defendant, to enforce provisions of this title or regulations issued thereunder and to secure remedies under provisions of this title or remedies otherwise provided under other law. A State regulator may bring a civil action or other appropriate proceeding to enforce the provisions of this title or regulations issued thereunder with respect to any entity that is State-chartered, incorporated, licensed, or otherwise authorized to do business under State law, and to secure remedies under provisions of this title or remedies otherwise provided under other provisions of law with respect to a State-chartered entity.

Alarmingly, there’s nothing in the legislation that would require the state AGs to stick to the same standards the Bureau of Consumer Financial Protection will promulgate. The state AGs will enjoy free rein to sue whomever they want in state court for a violation of this new consumer financial protection statute.

Some state attorneys general also engage in the dubious practice of hiring private law firms to carry out the state’s litigation. As Victor Schwartz, who chairs the Public Policy Group at Shook, Hardy & Bacon, explains it to us:

The primary motivation of these private attorneys is to maximize an award or settlement amount; motivations which may directly conflict with the public’s interest in ensuring that justice is achieved. This profit-seeking objective is particularly problematic when the private attorney works on a contingency basis.

It’s not hard to imagine: An ambitious attorney general deciding to file a civil suit on behalf of all the state’s citizens against some company that did something “unfair,” and then hand over the litigation to a private law firm interested in the biggest payout possible. It could be good politics, but it would be hell on the rule of law.

The Senate this afternoon again failed to invoke cloture on a motion to proceed on S. 3217, the financial regulation bill, by a vote of 57-41. The vote will undoubtedly elicit media coverage about the politics of the votes, the partisan positioning and who could be hurt for the 2010 elections. All worthy topics, but it would sure be nice if the delays were used by journalists and the public to look more closely at what’s in the bill. We shouldn’t have to wait until after the bill is passed to identify its invitations to litigation and political abuse.

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Sen. Dodd’s Financial Regulatory Plan Casts Too Wide of Net

The Restoring American Financial Stability Act of 2010 unveiled this afternoon by Senate Banking Committee Chair Chris Dodd (D-CT) raises more questions and concerns for U.S. manufacturers. For one, manufacturers are disappointed that the new proposal does not make it clear that only businesses that are “predominantly engaged” in financial activities are covered by the overall reform.

Even though the thrust of the reform measure is to restore responsibility and accountability in the nation’s financial system, broadly worded definitions in the bill arguably could pull some non-financial companies into the new regulatory regime. Covered companies are defined as those with “substantial” financial activities and the Federal Reserve Board gets to decide who falls into the definition. Manufacturers that engage in routine financial activities as a small part of their main business, e.g., a global manufacturer that manages a foreign exchange trading operation, an equipment manufacturer that provides financing for customers, are concerned that they could be pulled into the systemic risk regulatory regime, drawing needed capital from their businesses and imposing new administrative burdens.

On the derivatives front, manufacturers were pleased to see that the definition of a “major swap participant” excludes OTC derivatives used to hedge business risk. Unfortunately, because it is not clear that business end-users who do not pose risks to the financial system are excluded from the definition, some manufacturers are concerned they could be considered a major swap participant. Another concern for manufacturers are requirements that they post margin on bilateral, customized derivatives contracts. End-users like manufactures do not pose a threat to financial stability and should be able to continue to access OTC derivatives without tying up valuable working capital.

On a brighter note, there may be more changes on the derivatives provisions during the Committee’s markup session, which could happen as early as next week. In comments this afternoon, Sen. Dodd noted that Sens. Judd Gregg (R-NH) and Jack Reed (D-RI) are working on a revised derivatives section that the committee could vote on next week.

Dorothy Coleman is vice president for tax and domestic economic policy at the National Association of Manufacturers.

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Returning to the Pre-Stoneridge Standard of Suing Everybody

The Wall Street Journal‘s editorial today, “Dodd’s Lawsuit Makeover“:

We like to think of the 1995 Private Securities Litigation Reform Act as Senator Chris Dodd’s finest hour. Joining with House Republican Chris Cox, Mr. Dodd led an override of a Bill Clinton veto to end the scourge of “strike suits.” Prior to the law, trial lawyers would wage legal biltzkrieg against companies guilty only of a falling stock price. Since its enactment, lawyers have had to present some evidence of actual fraud before launching fishing expeditions under the civil discovery process.

So imagine our surprise to find, buried on page 795 of Mr. Dodd’s new financial regulation bill, a gift for every member of the securities trial bar that opposed his earlier reforms. We’ll have more to say about the rest of Mr. Dodd’s legislative opus, but his about-face on securities litigation is among the most dismaying of the flaws within its 1,136 pages.

The Connecticut Democrat would create new civil liability for anyone “aiding and abetting” those who violate the securities laws, making these new defendants just as liable as people who actually commit a fraud.

The provision is akin to Sen. Arlen Specter’s S. 1551, to extend liability for securities fraud to third parties — such as suppliers and manufacturers — not directly involved with the fraud. This is an attempt to return to the more-litigious lay of the land that existed before the U.S. Supreme Court’s 2008 decision in Stoneridge v. Scientific-Atlanta. (ScotusWiki entry.) In casting as wide as net as possible through “scheme liability,” trial lawyers hoped to catch big settlements from non-culpable companies. (The NAM was involved as a friend of the court. See our Legal Beach entry for more.)

Enacting the provision would further discourage investment in U.S.-traded companies and do nothing to create jobs — except in the law offices that specialize in these sorts of shakedowns.

Earlier posts on Stoneridge.

 

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Revoking Telecom Immunity Runs Contrary to Security, Fairness

In an editorial last Sunday, “Dont’ squeeze the telecoms, ” The Washington Times beat us to the topic of S. 1725, the Retroactive Immunity Repeal Act, introduced by Sen. Chris Dodd (D-CT) and three other Democratic Senators on September 29.

[They] are reopening a fight to make telecommunications companies liable for trillions of dollars for complying with a presidential directive to assist in a “warrantless surveillance” program against suspected terrorists. This has negative consequences for public safety, for the already staggering economy and for the cause of basic fairness and justice.

Even though the Senate just last year – after many months of debate – gave immunity to the telecoms for participating in the program, some senators want to take immunity away.

The Times regards the legislation as typical Senatorial solicitousness toward trial lawyer campaign contributors, since vitiating immunity  would revive the 46 lawsuits against the companies dismissed in June. (For more history, see our Friday post, “FISA Update: Civil Immunity? No, We Changed Our Minds.”) We tend to think the proposed policies derives more from civil libertarian absolutism and a distrust of any government surveillance; since these policies are generally unpopular and cannot be enacted in Congress, some turn to the courts to achieve the same ends.

Whatever the case, as the Times contends, removing immunity is wrong in terms of “basic fairness and justice.” It’s akin to reopening a case despite the statute of limitations having expired, or an ex post facto prosecution. The Times concludes:

The Senate last year granted immunity only after instituting a careful series of safeguards for civil liberties. There’s no need to reopen that careful compromise just for the sake of a few dozen wealthy lawyers trying to get still wealthier – especially when it would come at the expense of the nation’s economic health and safety.

UPDATE (Sunday 11:15 a.m.): Sen. Russell Feingold (D-WI), one of the bill’s cosponsors, submitted and then withdraw an amendment last week during the Judiciary Committee’s markup of the Patriot Act extension. His amendment would have re-opened the FISA debate by banning bulk collection of data; he quickly withdrew it, leaving the impression he was just making a point.

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FISA Update: Civil Immunity? No, We Changed Our Minds

Four Senators recently introduced a bill that would resurrect litigation against U.S. telecom companies that complied with U.S. government orders to assist in electronic surveillance of suspected terrorists overseas. The bill sends a terrible message that legal immunity, once established, can still be taken away by Congress in the pursuit of political goals.  The legislation also reminds private citizens who want to help fights terrorism that they should expect to be sued for their trouble.

Sen. Chris Dodd (D-CT) introduced S. 1725, the Retroactive Immunity Repeal Act, on September 29 joined by Sens. Feingold, Leahy and Merkley. The bill would “remove retroactive immunity protection for electronic communications service providers that participated in the Terrorist Surveillance Program and for other purposes.” (Senators’ news release.) Vitiating legally established immunity is disturbing in any context, but in this case, it’s especially troubling because it would allow the continuation of legal harassment of good corporate citizens.

The Senators are reviving a debate settled in 2008 when Congress passed the FISA Amendments Act, H.R. 6304, to extend the federal authority (Foreign Intelligence Surveillance Act, or FISA) to conduct surveillance of overseas electronic communications. These communications — phone calls, text messages, etc. — may have had a U.S. nexus, i.e., crossing through U.S. network or involving foreigners calling into the United States to speak to a non-citizen.  However, as applied to overseas communications, the Justice Department held that this surveillance did not require a judicial warrant; passage of the FISA Amendments reaffirmed that position.

A key issue in the FISA reauthorization was whether civil immunity should be granted to telecommunications companies that complied with federal orders to assist in the surveillance.  Lawmakers supported granting civil immunity in the wake of the September 11 terrorism attacks, concluding that companies should not be punished for helping to stop terrorism, especially when the companies are following what they understand to be legal orders. (continue reading…)

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Card Check: Members of Congress Continue to Defend Secret Ballots

We always appreciate when Members of Congress stand up to defend secret ballots, and we’ve seen more and more expressions of support for the democratic institution on Capitol Hill.

  • Just today Sen. Chris Dodd (D-CT) said that if the Senate took a secret ballot vote on Supreme Court nomination of Judge Sotomayor it might be unanimous.
  • Last week the legislative manager of EFCA in the Senate, Sen. Tom Harkin (D-IA), said that secret ballots should be used to determine Senate Committee Chairmen.
  • Earlier this year Rep. Louise Slaughter (D-NY) expressed appreciation for secret ballots after the vote to determine the chairmanship of the House Energy and Commerce Committee.
  • Also Rep. Heath Shuler (D-NC) was quick to instruct his colleagues to vote with their secret ballots for that same Chairmanship election.
  • Who could forget when Rep. George Miller (D-CA) wrote to Mexican officials requesting secret ballot union elections?

Unfortunately all of these Members of Congress support the jobs-killing Employee Free Choice Act which would effectively eliminate secret ballots for American workers. I guess this is just another case of something being “good enough for me, but not for thee.”

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Thank You, Pharmaceutical Companies! $80 Billion is a Big Deal

From the White House blog, “A Significant Breakthrough to Assist Our Seniors“:

Today, the President announced a landmark agreement with pharmaceutical companies, who pledged $80 billion in prescription drug discounts over the next 10 years. …[snip]

The President was joined by Senators Max Baucus and Chris Dodd, and introduced by AARP President Barry Rand, who called the plan a “new opportunity” for those who have been burdened by the costs of prescription drugs.

The agreement, which was reached between Sen. Baucus, Administration officials, and the nation’s pharmaceutical companies, will ultimately reduce the price of prescription drugs by half for millions of America’s seniors. As part of the upcoming health care reform legislation, drug manufacturers that participate in Medicare Part D will either pay a rebate to Medicare or offer a substantial discount of at least 50 percent on prescription drugs to seniors who fall within the infamous “doughnut hole”— payments between $2700 and $6153.75 not covered by Medicare. The deal will help close this unfair gap in coverage, providing relief for millions of seniors who have been burdened by these out-of-pocket expenses, making it easier for them to get the prescriptions that they need.

In addition to providing half-price discounts, the pharmaceutical companies will offer other discounts and savings to total an $80 billion reduction in costs.

The blog posts a photo of the President making the announcement flanked by Rand, Dodd and Baucus.

Hope the pharmaceutical industry leaders got their photo op, too. The agreement wouldn’t have been possible without their involvement, negotiation and agreement.

Here’s a statement from Billy Tauzin, President and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), on the announcement. Excerpt:

With the strong support of AARP, we believe this agreement will be looked back in time as a momentum changer in the legislative efforts to reform our troubled health care system. Our $80 billion pledge toward that goal represents a huge financial commitment by America’s pharmaceutical research and biotechnology companies. But we have a shared vision: every single person in America, regardless of their income, should have access to affordable, high-quality health care coverage and services.

More…

UPDATE: Here’s a transcript of the President’s statement. And his thanks to the pharmaceutical industry: “And I’m grateful to all those who helped make this day possible.”

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Use It or Lose It, a History…a Very Short History

It’s not a perfect measure of the seriousness of “use it or lost it” as a policy proposal in Congress, but we tried a little experiment with Thomas, the Congressional Record search engine.

Going here, we entered the search term, “use it or lose it” — the quotation marks making it a specific phrase we were looking for. Sort by date and …

2000 Congressional Record articles from the 110th Congress sorted by date on “”use+it+or+lose+it”+ “.
       52 articles containing your phrase exactly as entered.
       2 articles containing all your search words near each other in any order.
       1085 articles containing all your search words but not near each other.
       861 articles containing one or more of your search words.


Listing of 52 articles containing your phrase exactly as entered.1 . PROVIDING FOR CONSIDERATION OF H.R. 1286, WASHINGTON-ROCHAMBEAU REVOLUTIONARY ROUTE NATIONAL HISTORIC TRAIL DESIGNATION ACT — (House of Representatives – July 10, 2008)
2 . MOTION TO GO TO CONFERENCE ON H.R. 3121, FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2008 — (House of Representatives – July 10, 2008)
3 . WASHINGTON-ROCHAMBEAU REVOLUTIONARY ROUTE NATIONAL HISTORIC TRAIL DESIGNATION ACT — (House of Representatives – July 10, 2008)
4 . LEGISLATIVE PROGRAM — (House of Representatives – July 10, 2008)
5 . BIG OIL DOESN’T NEED MORE LAND TO DRILL; THEY SHOULD USE IT OR LOSE IT — (House of Representatives – July 09, 2008)
6 . BIG OIL DOESN’T NEED MORE LAND TO DRILL–THEY SHOULD USE IT OR LOSE IT — (House of Representatives – July 09, 2008)
7 . PROVIDING FOR CONSIDERATION OF H.R. 5811, ELECTRONIC MESSAGE PRESERVATION ACT — (House of Representatives – July 09, 2008)
8 . AMERICA’S BEAUTIFUL NATIONAL PARKS QUARTER DOLLAR COIN ACT OF 2008 — (House of Representatives – July 09, 2008)
9 . THE 30-SOMETHING WORKING GROUP — (House of Representatives – July 09, 2008)
10 . HOLDING THE LINE ON DEBT AND THE ENERGY CRISIS — (House of Representatives – July 09, 2008)
11 . INTRODUCTION OF THE NATIONAL GUARD TECHNICIAN RECRUITMENT AND RETENTION ACT — (Extensions of Remarks – July 08, 2008)
12 . ENERGY CRISIS — (House of Representatives – July 08, 2008)
13 . OPPOSITION TO NEW OFFSHORE DRILLING — (House of Representatives – June 26, 2008)

Etc. The list of all 52 mentions is in the extended entry below. 

The very first mention chronologically in the 110th Congress of the phrase “use it or lose it” in the context of energy leases occurs on Senate page S5566, as Sen. Christopher Dodd (D-CT) discusses the proposal. That day? June 12, 2008.

So for all the years of debate over energy policy, “use it or lose it” only appears as a policy proposal on the House or Senate floor a little over one month ago.

It’s as if someone said, “We’re losing this debate. We’ve got to come up with something. Anything!”

(continue reading…)

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