appropriateness. you do oversight i hope in your agency like we do here. .. is to bring that to my attention and we will look at it. >> you have often stated, madam chair, that the securities and exchange commission is an independent agency, that is the way we wanted to be. one can expect some split votes because of the way the commission is set up, there have been many party line votes under your chairmanship. by comparison according to the

press, former chairman richard greene never agreed to the vote and former chairman leavitt rarely took the matter to a vote unless there was a 5-0 vote. are there any areas you can work on with the other two commissioners to reach a unanimous decision and if so give us some examples. >> we certainly strive for consensus. >> we know everything is not unanimous. >> i haven't figure verified it but 65% of those a unanimous but obviously it is still a percentage that has not been unanimous. i discussed with you, mister chairman and senator brown and other members of the committee as well, one thing i found as chairman, striving for that consensus, unanimity on our rulemaking, so many mandated

rulemakings have been particularly the dodd-frank act which the controversy was adopted continued into the implementation of those rules that we end up with an extra challenge reaching consensus because of that. >> in 2013 you post a comment, study on asset management in the office of financial research requested -- this allow the public a meaningful opportunity to provide feedback on the study and highlight and highlight significant flaws. given the comments on that study were you committed to posting other requested studies affecting sec regulated entities? if not why not? >> the sec and other agencies as well, the benefit of the comment process and even comment process

if you are not in apa rulemaking is enormous so getting the feedback is important. the report of ofr, they publicized it, opened the comment window because we thought it was important to get the public input if we were in another situation like that and ofr or f sock itself didn't post it study to make it easier for the public to comment, yours to consider again. >> in the area of repeated violations there have been concerns raised by the public and members of this committee about repeated violations by fcc registered entities. former sec commissioner stated with respect to the most egregious and repeated violations of security law and regulations, quote, we need to ask ourselves the fundamental question. should the violating entity retain the privilege of participating in our compromise?

question is this. in your opinion when is it appropriate for the sec to exercise visibility, to deregister an entity and if you could give us an example? >> an important power we have and should wield important circumstances to protect the market. i think you have to look very carefully at what the violations have been over what period of time, who was involved, you want an aggressive enforcement program to bring cases when they are there to bring. and the interest of strong protection of our markets. the regulated entities registered, and bring

proceedings to the license. >> some of my colleagues, there seems to be a collective amnesia on this panel in some cases and in this body, the financial crisis as a result, continue to push for the repeal of wall street reform act insisting it created more problems for the financial system then it prevented. a couple questions, are you concerned about efforts to repeal wall street reform? is that effective in improving financial stability? >> i think the reforms under dodd-frank have been enormously important in strengthening our financial system. i say that collectively. our financial system is much stronger and resilient, certainly in part because of the acts undertaken by dodd-frank. i would not want to see those

reforms repealed. >> they are self-evident with stronger more stable financial system, this reform in the opening statement. and outstanding, to finish the rules, and it is behind other agencies implement rules and similar areas. and significantly more progress than sec. and with far fewer resources than you have and the department of labor. and finalize fiduciary rules while the sec produces a study called for by the wall street reform act and neither of those cases was the process perfect nor our final rules perfect but both agencies adapted along the

way and moved forward. why is the sec slower than those agencies? what is not working? >> what the sec was given between the dodd-frank act and jobs act plus all our discretionary responsibilities, we have undergone the last few years with regulatory activity of great complexity and i said this before about dodd-frank in particular, i said it from the day i arrived and i am deeply committed to getting congressional mandates under most statutes and it was done as promptly as i can but they need to be done well and last and be adaptable, with respect to different issues on the two you mentioned on the department of labor fiduciary duty rule, the authority to dodd-frank to give the commission to decide to

exercise or not, it is not a statutory mandate. i said myself speaking for myself a year ago after extensive study i think there should be a uniform fiduciary duty rule, to the dodd-frank act. staff proceeded to develop recommendations and up to the commission as a whole to advance the rule and what its parameters should be. in terms of title vii, the derivatives market, our share of that market is less than 5% but is an important thing. it is not by meant by way of criticism. the sec decided with its title vii rulemaking, publish policy statements that set forth a sequence of the sec would final adopt and finalize those rules

before they became effective. following that roadmap victor couldn't be a higher priority among all the commissioners. three of us and the other two that left us last year into completing those title vii rulemakings. the regulatory year, very high priority, certainly to finalize and we finalize a number of those rules since i was last year but in terms of reporting and registration and regulatory for dealers i am hoping we are done with those by the end of this year. >> we know during the financial crisis how important regulators, good it shifting its business model to find gaps or areas of weakness or regulatory structure for whatever reason congress chose not to combine any of the financial agencies six years ago obviously, beyond that not really combining the mix of

cooperation with other agencies. let me ask one other question. democratic members of this committee and others have taken a close look at policies and practices and decisions surrounding the waiver applications the sec receives from financial institutions. thank you for the information you provided to us, the banking staff, i hope we can count on you and your team for additional assistance. >> and enormously important area. as you know, focused on at the outset of our tenure as chairman, made a number of changes to enhance the robustness of the process and transparency of the process to look at that, and other enhancements that would make sense particularly in the areas that we do not grant the waiver is in terms of making certain

the public knows there are many cases including those involving financial institutions where the waivers are not granted because of the nature of our process that isn't as transparent for reasons that are historical and good ones to encourage people to coming and talk to the staff about to qualify what they submit as nonpublic information but i continue to look at that aspect of our process since i became chair and directed staff to keep track of those instances that do come in assuming they are not unanimous or a number of people won't apply for waivers because they know when there are guidelines they would be denied and what the guidelines specified. >> we have particular concern about the lack of transparency and those waivers granted to the public that an institution violates the law, the sec issued short notice approving the waiver.

what do you do, how can you assure us the public and this committee, to understand what happened and how to bring more transparency when these waivers are granted? >> those that are granted are the ones you are addressing, those that are not granted, they are publicized on our website and are subject to the case of so-called bad actor waivers and some of the other waivers as well to what the criteria are that staff or commission considers when reviewing those requests and what is public on our website really does march through what those criteria are and the facts under each one. if there was some enhancements, i am open to considering it. >> we will come to you about that. senator crapo. >> modernizing our market structure is a complicated but necessary task. i appreciate the work done by

the sec and market participants, investors and academics on this issue. senator warner and i know the subcommittee hearing on this topic in march. one of the take aways was positive input and work done in this area, concern about the pace of reform efforts and what would be accomplished. one of the top market structures objectives you want to achieve this year and how to strengthen our markets admitted to investors? >> very high priority for me personally both in terms of specific short-term reforms as well as comprehensive review, the entire regulatory regime. we are building on the strongest, most reliable markets in the world, they cannot be enhanced and optimized. in terms of i always want things to be done sooner, that is my personally among other things and concentrating a lot of resources on it.

i have been pleased with the work of the m sac equity market structure advisory committee that reformed early in 2015. they are tackling core issues. you know, senator, we received the committee has received recommendation from one of its subcommittees about the possibility of make or take pilot, that is one of the core issues. we expect a telephonic meeting from the subcommittee to make a specific recommendation on july 8th. i look forward to that. that is a very important area. we have done a number of things, things that have already been done in the market structure arena. one is in the area of resiliency of the markets, shortly after i testified in 2014 we adopted sci, systems compliance and integrity rulemaking which is aimed right at the critical market infrastructure and enhancing their resiliency and

response to incidents when they occur. that rule just recently in the last few months is subject to examination for compliance. enormously important to get that done. that is already done. i expect imminently that we will propose able to provide greater transparency of order routing for institutional orders and enhancing the existing disclosures made to the retail side. very important information to our markets to ensure fairness and to see what your agents are doing as they execute your orders. those are some examples. >> you referenced the telephonic meeting on july 8th. a report from m sac. >> that will be a further discussion, there subcommittee recommendation on the make or take, and also other issues at the meeting. >> following that meeting do you

expect the commission would be in position to take the next action and move forward? when do you expect that to come forward? >> with the commission, to take in the recommendation from the committee but it will be up to the staff what to do, what the parameters should be. to do this well-designed pilot, it does touch on an important issue where we need the data. >> a feel for when the commissioner -- >> can't give you a specific time but a priority to move that long as soon as we get the recommendation. at staff and commission level. >> thank you for your past efforts to improve transparency of the financial stability oversight council process by seeking public comment on the report by the office of

financial research asset management industry. in several hearings on the financial stability oversight council focusing on ways to improve transparency, accountability and communication. in the subcommittee hearing senator warner and i held last year the witnesses agreed f sock needed to provide actionable guidance to designated systemically important financial institutions on how they could the risk and ultimately shed their designation label. what has been referred to as an offramp. to take additional steps to increase transparency, accountability and communications in the f sock process. >> that is something we are committed to going forward. something that may be completed at any time. ways to enhance the transparency process. in the existing process under the f sock rules, it was an annual process but i take your

point about greater transparency and what the factors are that may be involved in that. >> thank you. >> thank you, mister chairman. one of the most egregious things in the meltdown were firms that put together securities. the best thing since sliced bread, when securities failed. the securities they packaged, championed an end to this type of egregious conflict of interest, section 621, here we are six years later and don't even have a draft rule. why not? >> it is an enormously important rule. i know well the range of transactions intended to

address. as you know there was a proposal issued in september 2011. it is still outstanding where we got tremendous comments before the sec adopted its economic guidance, some of the comments we got, i agree with that, intense economic analysis, that it wasn't tough enough, didn't sweep in enough, and experts in the agency, in that proposal 100 questions, who is covered, what is covered, all sorts of interpretation issues including with respect to which of the exceptions is provided to recent

issue came up as late as december whether certain fannie, freddie guarantees would be handled because of the concern would not continue under parameters of proposal. staff is working very hard to get a proposal done as soon as it can. very difficult to draw the right lines. >> one of the most direct examples of unacceptable wall street behavior where congress took a clear stand, wall street desperately wants this to never happen, the sec has gone year after year after year under the argument it is just too complex. everybody in america buys that this type of conflict of interest, too difficult, instructions have gone to the sec, has allowed this type of

conflict of interest, to continue, it is unacceptable and i would have said the same to your chair, the responsibility rests with you. let me turn to the issue of political spending being exposed by corporations. 1 million public comments have been received supporting disclosure. the owners of the company the stockholders feel if the company is spending their money on political activity they have a right to know and under the concept of money is speech, if you don't know how your own money is being spent it is stolen speech. that is bad enough but it is material to what investors understand about the future prospects for that company.

what are they advocating for? what are they lobbying for? who are they lobbying for? who has which philosophies and which positions? both from the viewpoint of individuals getting to know how their own money is being spent on political speech and the view of material issue related to future performance of the company, it is imperative that there be disclosure. there was such a plan on the agenda when you took the chairmanship. in october 2013 you took it off the agenda. not even to poll the conversations to prepare the way on this, this is an issue of freedom of speech, knowing how your money is being spent, material to the future of the company and you took it off the agenda. why would you do such a thing? >> i do deeply respect and understand deep interest in this

issue on all sides and important to note if the issue is material in the context of a particular company as we sit here today, that would need to be disclosed under federal security laws and also through shareholder proposal rule 14 a, avenues for shareholders to raise this issue with their particular companies and make great use of that avenue. the average approval rates last year were 26% approval rate, some companies over the years using that avenue, a few majority votes by shareholders and they have generally gone ahead and made disclosures voluntarily. and large companies the number of them, voluntarily disclosed political contributions has grown. half of the s&p 500 now provide disclosure voluntarily which is a good thing. in terms of the complex issue

which you are raising. there was a misunderstanding what was on the sec agenda, and what i did in reviewing the agenda as i found it. what has not been on the agenda at the sec before or after i arrived is to go forward with such a rule. what was on the agenda, put on their in late 2012. the item reflecting the division of corporation or finance would research and consider whether to recommend a rule proposal on this subject. my predecessor wrote to congress in response to a congressional investigation on this issue that neither she nor the commission nor the staff had reached any conclusion about that and no one actually working on a rule at that time. what i had did, shortly after i

arrived, the reflex agenda was to, so i basically carried forward for the most part what was in the previous agenda including that item in the fall, when i had been there a little longer, i had a chance for staff to do a deep dive of all the items on the reflex agenda in the event for many years, and aspirational and what the reflex agenda instruction has you do is to put on that agenda. the items you reasonably believe you can complete in the next 12 months and so as you know i have prioritized since i arrived here completing the congressional mandates under the dodd-frank act and the jobs act as well as we went forward, certain mission-critical initiatives like equity markets. >> i am over my time. in courtesy of my colleagues i will stop you there. i can't get a full history of it but it was listed as a proposed

rule in april 2013 and taken off in 2013. you have the sole power on the commission to establish the agenda. this is an issue that goes to the core of who we are as a country that people cannot spend your money on political speech without telling you how they are spending are you as an owner have a right to know how your funds are being spent. for you to unilaterally removing the rulemaking agenda, an egregious affront to these core issues of our republic, came with political pressure, unacceptable, you should put it back on the agenda. >> that item and 20 other items that were on the previous agenda i removed for reasons that i said. it was never unfair to advance disclosed rule. >> good morning, chair white. you stated in the past that you believe there should be uniformity between fiduciary position by the department of

labor and the sec. committee on homeland security and governmental release to staff report regarding the fiduciary rule. the report found among other things that there was extensive disagreement between staff and dol over the fiduciary rule. the report found in addition to dol refusing to conduct quantitative analysis of the cost and benefits of alternative approaches to the rule recommended by the sec and required by the executive order, the staff economists from both agencies also had disagreements over the rules. the report found the disagreements reached the labor department staff writing beyond the point where your input was there for me. if you have nothing new to bring up please stop emailing me about this. chair white, you believe the sec can structure a uniform fiduciary rule when it appears there are inherent disagreements about the two agencies over the

fundamental goals. >> it is a uniform fiduciary duty rule for broker-dealers and investment advisors when they give securities advice to retail investors under our rule. the department of labor and the sec are separate agencies so our rules are not identical even before this rule was adopted in certain areas, registrants may overlap with there is. in terms of the department of labor sec staff on their rule proposal and there was a prior one as well and the comments you mention from 2012, i wasn't here then. the sec staff gave substantial technical assistance to the dol staff on the current, final

proposed rule including technical assistance on our own rules and what they provided and the likely or possible impacts on the availability of reasonably priced advice by brokers and what the impact would be on the broker model itself. the nature of those exercises with other agencies, technical assistance to reach agreement and make sure they were giving our best technical assistance and input to the department of labor which then obviously made the decision as to what the proposal should be, put it out for notice and comment, notice and comment was focused on those same issues. >> would it be fair to say that based upon the ruling which is in effect right now out of dol, would it be fair, don't want to put words in your mouth, would it be fair to suggest there would be concerns as to the availability of investment

advice made available to the small investors and perhaps limiting of some of that advice right now based upon traditional ways we provide investment services to your smaller investors in the united states? >> that is an issue, i am focused on that issue myself in connection with our work on section 913. the labor department was focused on it and is reflective in those comments periods and i think certain changes were made in response to that concern and possible impact but to some degree, you need to see what happens as the rules are implemented. we are available to provide whatever help and assistance we can to our registrants if they run into a situation of conflict with our rules.

>> as we try to protect individuals we limit the availability to them of opportunities to invest and one other area here is one of the sec's goals is to facilitate capital formation. one trend is the increase in issuance of private shares. .. has now outstrip public shares sold to retail investors in terms of new issuance. does america have a point to a trend of kind of the guys who can afford -- the guys who are

capable of investing large amounts of money are based by providing a lot of new public issuances and the smaller retail folks seem to be not in that position. is there something going on that isn't moving in the right direction? >> again, we have an obligation and we do monitor the private and public markets very close legs and continuously. as you know we have an apartheid mission to protect investors and obviously ensure the fair and efficient products in the market and facilitate capital formation. i don't see those three pieces in conflict, but they need to be taken into consideration in terms of everything we do. the point you're making a son who should be within the definition of an accredited investor that drives a lot of what happens on the private side of the market. clearly, from byron option,

dot-coms that is meant to protect investors who may not be able to protect themselves. that obviously is the core of our protection mission, which we feel obviously very strongly about. in terms of the public markets, i do think we have a responsibility and are looking at this constantly is whether by virtue of our roles, rules for the public market that is unnecessarily driving away public offerings. we look very closely at that. obviously with the jobs act, the ipo on-ramp commonsense things that make it somewhat easier to do that. i think there is a whole range of issues deserves send it getting very close attention. we recently published the staff's accredited investors study with a series of recommendations on that and that has some of the issues you're

mentioning. >> mr. chairman, thank you for your time. >> chair white, or that you bring it to the plight of the 3.5 million the island of puerto rico. this is a situation where puerto rico finds itself in 33 cents of every dollar that it has stored its debts. they have been forced to make excruciating decisions to shut down schools, hospitals with no access to power, closing the doors if the island is losing at least one doctor reached and we have one of the most significant migration side of the island to the mainland in quite some time which underlies the critical importance of a congressional solution that will allow the government to protect the people. beyond those reasonable and necessary solutions that should come from the congress, the people of puerto rico deserve to know whether it be the collectivity by advisers to

puerto rico and municipal entities control and contribute to the current debt crisis. dot frank explicitly mandated to municipal securities rulemaking board protects entities. and yet despite the way big knowledge problems on the island, neither the sec nor the msrp is held one hearing. the commission meeting they should therefore give in any particular attention to puerto rico's debt crisis. at least not to my knowledge. i want to know whether municipal advisors come up underwriters broker-dealer subject to the regulations that operated in puerto rico have done so free of conflict of interest whether they packaged and sold as worthy of a savings of hard workers and investors and whether they've acted in the best interest of the puerto rican government and people. how will the sec pursued this element of the crisis?

>> i couldn't agree more about the state of the crisis and whether government collect oubliette in my view needs to do to address that in a positive way. in terms of the sec's jurisdiction there, we have actually very closely attended with respect to investment in various fun and bonds that may be a risk in terms of investor protection. put out guidance from the investment management division. there are two public enforcement actions that have dealt with brokers who have misled investors about the riskiness of those on. >> in puerto rico? >> yes, both of them. i can give your staff the details of that.

i can't comment on specifics of any ongoing that we are looking at, but i can say that we are very focused on the issues that you raised in some of the other work we are doing. >> so you know, several colleagues of this committee and others have joined me in a letter to you and the commission, urging it to be not just a cop on the street and wall street, but also san juan and those who have contributed to this crisis are fully prosecuted. if that can take place there, you can take place anywhere. sending a message it is not acceptable is critical. i look forward to your continuing work in that regard and i would like to be advised of what is happening when it's available to the public. secondly, but to go back to corporate spending. i continue to believe transparency and disclosure to shareholders is the utmost

importance both as a matter of corporate governance and investor protection. it's not just me. 1.2 million americans have employed the fcc to act on their commentary rulemaking. it's been nearly 6 cents i along with any six members of congress wrote to you asserting the fcc retains the authority to take radical steps to prepare for a possible role on the issue of corporate political spending. as we indicated in the letter, we expect the agency to move forward with plans to prepare for a rulemaking. i know that the 2016 under this act is seen by the commission as preventing them from taking the type of action. the action specifically talks about issuing, implementing or finalizing the rule. it does not speak to prepare a rule for that moment.

i can assure you that provision will die. we need not wait for it to die when 1.2 million americans have said to you probably an unprecedented number that they want to see a rule in this regard. so i hope and i would like to get from you a sense of whether or not, if we're pending nominees, and i didn't care for the late either of them answered me on this question. are you going to at least prepare and respond to this 1.2 million americans in nearly 100 members of congress who believe we should move forward in this regard. >> you may have heard some of my answers to senator merkley's questions. i deeply respect the strong ears of those that you've mentioned. they're very strong views on both sides of this issue and i've also mentioned kind of how the disclosure is developing voluntarily on the shareholder

proposal process. the issue of the sec doing a rulemaking to mandate political disclosures by all public companies is not on our agenda. with or without the appropriations language, the priorities we are pursuing is hard and fast as well as we can and are the one that i've outlined since my early days, which are the mandated congressional rulemaking as the mission-critical initiatives being attacked about asset management and equity structure. that is the status now and i say that with a full appreciation of the deeply held views on all sides including by 2000 plus unique combat letters forgotten on the petition you reference.

>> 1.2 million americans i think very rarely has the sec seen that extensive commentary tells you the incredible importance people believe in the nature of unlimited corporate spending at a time in our national politics that determine decisions in every aspect of our lives. i think it should be a far greater level of consideration by the sec then presently is. thank you, mr. chairman. >> madam chair, before i recognize our next senator, we have 300 million people in this country will be at third of 1%. i hope the chairman of the sec would not react to generated mail for republicans or democrats, but we do what is best for the country and also

under your jurisdiction, it is my understanding under basic jurisdiction of the federal election commission, for what it's worth. thank you, mr. chairman. welcome back. you observed a few moments ago one of the responsibilities of the sec is to facilitate capital formation. this legislation that i think would be very good in the house by congressman mulvaney. but if they do a streamlined the regulations affecting business development companies and included in that is the modest increase in the leverage they would be permitted to use from a one-to-one ratio to a one to two ratio. if this were adopted, it seems to me they would better able to provide loans that they do provide to small and medium companies such by the way find it more difficult to access bank loans given the regulations of

dodd-frank. it would also allow better returns for investors potentially with some added risk fully disclose to those investors. and it is demonstrated extremely broad or partisan support in the house. i think as they'll pass the financial services committee 53-for and was concluded in legislation that passed the house overwhelmingly. my understanding is you have some concerns about the leverage ms and i'm wondering if you could briefly because it got limited time, tell me why you are learned about increasing the leverage. >> yes. let me just say that i think bbc's have been very good vehicles for growth. they were designed to be god for developing companies that might not otherwise be financed. the current reality is retail

investors have hold the majority of the shares so that always raises our protection and 10 i. we have worked over the years in this staff to facilitate operations because they have a patchwork of regulations because of exemptions from the provisions. i first got here and not to over 2013. there is some changes made that will improve it. i've recently also written a letter late last year to chairman had certainly. i still have investor protection concerns or it wouldn't have written a letter. one is leverage. >> what about the leverage? >> your upside and downside potential late multiplied over are multiple. it is a higher level of leverage dynamic counterpart kinds of science have. secondly it allows more investment and financial institutions than was originally

conceived and allows investment advisors. >> i've got very limited time here. it is true that it increases the risk profile increases at the exposure. but so does investing in a bang. a bank is a highly leveraged entity. retail investors are allowed to buy securities and his support among retail investors to buy securities on margin. >> i am certainly not opposed to that, but there are more issues with respect to this bill than just that. >> i thought the bridge was the main concern. i would observe many opportunities for an investor to take on leverage if they see fit to do so. i in options can create the equivalent of enormous leverage much, much more than the very limited increase that would be

managed by a managed company. i urge you to consider among the various ways the retail investor can obtain leverage, this would be heavily regulated, run by professionals and the absent benefit is very significant. let me touch on another item here. the sec has a proposed rule that would govern the use of derivatives by registered investment companies. derivatives are used for a variety of reasons. it is articulated. if the fcc were consolidating previous guidance letters, i rather doubt we would've seen the volume of comment that have resulted. in fact, there are some things new. one i am concerned about is the exposure used to cap the amount of derivatives is based simply on the aggregate notional amount of those derivatives one and five notional amounts are a terrible proxy for risk. they don't measure risk at all.

so why are we using the notional amount to determine the limits on this investment companies derivative holdings. >> precisely among several important issues that we teed up and the proposal that we've gotten a lot of comments on which the staff is very thoroughly going through as they consider what the recommendation will be for the final rule. that is probably one of the most frequently commented on aspects. a number for the reasons you say. >> so is it your intention there will be some modification here in a measure other than simply the meaningless notional principal amount? >> i can't get out of the process, but i can say we are very focused on the issues and the notice of our processes be very seriously consider all of

the comments and try to basically proposed a final rule that is optimal and better than our proposals. thank you, mr. chairman. senator don money. thank you, mr. chairman. it thank you so much for being here. 1982 the sec at up to april 1018 for market manipulation liability is stock buybacks. buybacks could have been considered market manipulation back then. recently in my home state of indiana, 2100 workers were let go by highly profitable company in order to get $3 an hour jobs to mexico. the ceo said returning cash to shareholders continues to be a top priority targeting $22 billion of total shareholder returns to share repurchases in dividend to 2017. at the 22 billion a 16th on the come in the form of stock

buybacks. $16 billion in stock buybacks for firing 2100 workers in indiana in order to get $3 an hour jobs in mexico to help fund the stock buyback. i will also note the savings they get from the site less than one half of 1% of the amount of the stock buyback. my question is in 1982 this could've been a better market manipulation. what is the sec think of actions like this now? >> well, the safe harbor rule that you mention does not immunize liability for market manipulation if it occurs. it is basically defined to impose some rules to at least try to prevent market manipulation. for example, if the buyback is

done on the basis of material nonpublic information, fraud action can be brought. the safe harbor doesn't deal with that at all. i am acutely aware of the whole set of issues with buybacks. i've gotten a lot of attention in a lot of situations. but the sec -- >> let me ask you this. should the sec play a larger oversight role as this has been fun and i firing american workers. >> well again, and i take your point completely. the sec has the authority to tell a company how to spend its money. what we can do and what we are focused on doing because we also have disclosure rules with respect to buybacks that provide transparency to investors and the public frankly of companies that buyback shares registered with the sec and we are

addressing that issue in our disclosure effectiveness review in our recent -- and make that disclosure. >> you think this was the conduct envisioned when they wrote was changed in the 80s? >> again, i think it is very -- the conduct that you are describing. the way you are describing it and i'm not doubting it at all is obviously in horrific set of event and obviously very significant unfortunate negative consequences. what we have decided on what we are looking at again to do more with the sec's eyes, who is the corporate responsibility to? just to shareholders? do they owe it duty to the entire corporate enterprise

including workers? what is the corporation's responsibility? or was it two? >> fiduciary duty of the board is to their shareholders. by my saying that i don't want to exit that i don't think there are duties and responsibilities. >> as the sec assume they have been a responsibility to their workers or can they fire them willy-nilly? >> that is not a subject within the jurisdiction of the fcc unless it is something by virtue of what is in our authority to do has a positive impact on not. >> when you look at this, if it part of this is corporate short-term miss them if you want -- i don't know that that's a very technical term, but it is the reality of life. i met with these workers this morning making $13 an hour. their ceo made $11.50 ceo before him at 150 million out on his

last day and they are making 13 bucks an hour on it very, very profitable plant and they are fired so that jobs could go to $3 an hour in mexico to help fund the stock buyback. do you inherently see something wrong with this business model? is this the american dream will fight for? is this what the sec expects in conduct of the corporations who will regulate? >> well, what we expect from corporations we regulate his frankly the citizens expect from those who don't regulate also is fairness to not only to shareholders in the fiduciary duty date of the shareholders, which is in our direct bailiwick, but also to their employees as well. there are studies out there on the buybacks him the benefit and the detriment that go both ways depending upon the context and

what they are doing with their funds. i take your point. >> senator cotton. thank you, mr. chairman. i want to talk about sabra and its structure defined as a safe regulatory organization. is that correct? >> yes. >> does finra opry with the federal government? >> translates as a self-regulatory organization that is certainly an organization that is primarily responsible for the surveillance and regulation of broker deals. >> does that use tools that are similar to what typical of those of an independent government regulatory agency? >> certainly on its examiner for suicide and there have tools we

don't have because it's a membership organization. the things they commit that we we can't do under authorities but certainly as surveillance tools, enforcement and axioms which are similar. >> it may make rules that would govern the conduct of members? >> many of them are subject to fcc approval. >> are there any private organization similarly structured and oriented within the securities law space. >> not at this present time. >> what input to your knowledge to finra members have been to the regulatory policy agenda? >> i don't know the specifics of that. they have a board structure and obviously are a membership organization. >> we certainly oversee finra.

we inspect finra on various issues some of their programs and we have the already over rules as well. >> you have the power to appoint board members? >> now. >> to remove or members? >> now. >> and investigate functions related to sec rules -- >> yes generally speaking. there's some exceptions, but generally yes. >> of this function executive power? >> obviously i know this is an issue people talk about all the time. they are not a government entity. the answers i gave her act in terms of powers. >> to your knowledge ,-com,-com ma does finra have paid lobbyists? >> i don't know. >> a bike to turn three separate topic of the shareholder activism. on a number of occasions you've commented on the role that economically motivated investors

play in the capital market. a speech last year in new orleans you noted that an intense debate is taking place academic communities as to whether academic positive or negative u.s. companies and the economy. you also said the sec's role in any board or public companies quote is not to determine whether campaigns are beneficial or chester mental but rather ensure shareholders are provided information they need and it all plays by the rules. putting aside any particular dispute and investor, do you believe on balance to engage shareholders with productivity management accountability. >> that's a very broad question. i certainly think they can. >> you've also spoken about the role of cost-benefit analysis that the commission.

given your views on the importance of a data-driven approach to developing public policy, are you concerned about some appeals to emotion with you from some involvement about so-called activist investing which is portrayed a short-term investing? >> well, the independent agency has always been -- i'm an independent head of that agency. it's very important for us to keep our eye on the ball and make decisions based on the merits, which i think we do. >> so when no-space coming you are committed to developing rigorous econometric data on the impact of potential disclosure rules, changes or any other limitations on marketplace participants for rules changes proposed and adopted. >> certainly any rules are subject to that economic

analysis. >> thank you for that and thank you for your appearance today. thank you, mr. chairman. thank you for being here. i appreciate the work you all do. i appreciate you taking the blame for a lot of stuff. i want to talk to you about the commission right now. how many members are active in your permission? >> we have three. >> it my understanding it's been that way for the last eight. >> the hours and minutes? the last six. >> is it true that since you've only got three, any one of those three can say they don't like a potential vote that might be staying up to come away of many don't have a quorum and you can't work. >> as a commission of three we have to have all three commissioner stuart rulemaking. >> anyone can walk away from the table.

it's pretty good power. >> they could. we are very focused on getting the work done. >> that's good. what about your staffing? how are you staffed up? >> the sec is a significantly underresourced for our responsibilities. >> would that change if he became a self-funded agency? >> it would. .. we've done analyses.

but i tried to do is i respect the appropriation's process, the congressional oversight process and try to make the best case i can for more adequate -- more and adequate resource. >> look, there's been ten people speaking ahead of me and some of them have been very critical, some on my side of the aisle have been very critical of you not doing some of the work that was assigned and quite frankly i am. the hand that's dealt is a pretty weak hand, in my opinion. would you agree that if you were staffed up, you would be more effective and more work done. >> i think the answer to that isy. certainly being staffed up would accomplish that. >> so we had a fiduciary that senator and others and got put out by the dol. i was critical because i thought this is a job you should have

done and if you would have been fully up, it would have been done. unfortunately it didn't happen. >> i'm certainly committed to getting it done. i've also made clear how difficult and long a road that is under section 19 in the dodd-frank act. >> yeah, and so fair point. and it's been documented there were some differences between the sec and doe when the rule was put out and i don't you hear you saying before the administration is out of the door. >> i'm committed to moving it as fast and as well as i can but i can't give you the commitment. it's a longer ruth than that. >> okay. so we've got the rule, so the question occurred to me docks you to enforce the dol rule?

>> we do not. >> so who enforces it on investment, adviser and broker dealers. >> they're enforcingforcing the rule and it's their responsibility. >> all investor advisers and broker dealers. they would enforce the rules -- >> traditionally wasn't that a job for the sec? >> not as to the rules. >> no, as far as investment and broker dealers are? >> it still is, not with respect to their rules but our rules. >> tell me how is it going to work? practically, how sit going to work? >> i think it's independent agency, we had before this rule, rules by dol that overlap and we have managed our way pretty well. you know, we will watch this as we go forward and if issues arise, we will certainly be available and certainly dol will

be available to coordinate if a conflict should develop and if and when, i hope we go forward with our own rule making, we will coordinate with them about any issues that might arise with respect to that. >> i appreciate it. >> thank you. >> senator. >> chairwoman thank you for your presentation today. we had a conversation in the appropriation's process and i want to continue to ask you about deals with the regulation with the national marketing system and the question i have is whether the plan and model should be reformed to reflect evolution of our markets and add additional participants as voting members, the sec, my question is does the sec have current legal authority to approve the addition of additional market experts as voting participants in the governance of nnsf plans?

>> subject to kind of our sr process. but we essentially are typically in the position of approving a rule filing but we can also issue orders to solicit rule filings. >> maybe there's more to this story than me just asking whether you have the authority. is there something in the works, x you bring me up to speed on this topic? >> it's essential a topic that the folks focused on and so is our equity market structured advisory committee and in particular i think it's called our trading venues subcommittee and that's one of the topics, indeed, that they discussed at our -- their last meeting with

the full committee, i think end of april and is or may be the subject of recommendations. >> do you have any personal thoughts on this topic or are you waiting for those recommendations? >> you know, i'm very well aware of the issues, other advisory participants have not found sufficient or satisfactory. and so it's an issue i'm focused on and continue to consider and whether what changes should be made. >> i want to follow up up on the bit of the senator from arkansas about finra oversight. i know that finra appointed a new ceo yesterday who is a former employee of the sec. i guess me question is how do you satisfy the need of congressional oversight of finra, is it a matter we have

oversight of the sec and the sec has oversight of fenra or is there a greater opportunity, we have in appropriations process there, no confirmation process, occasionally finra is before congress in a setting like this, but beyond that it seems to me that finra's role is growing, more engaged in regulatory activities and congress has little oversight in that regard. >> well, you certainly as you indicate have oversight authority of the sec who has exam authority over finra and it's an important one and it's a very important part of component of our investor protection and market safe guarding, since i've come to the sec as chair, we have enhanced our oversight of finra and continue to do so. i think i heard rick, the outgoing ceo that at least he

understands the interest by congress in giving their activities and the importance of their activities and learning about them and i don't know if oversight is quite the right word for the reasons you indicated and i know we work very well with them. obviously we oversee them but i found them to be knowledgeable and rick better than i know robert but about the markets, very committed to investor protection. that's always a safeguard. >> i think what you're telling me is that my assurance is that you're watching over finra and we need to watch -- i know you wouldn't say this but we couldn't watch over the fec. maybe you would say this. >> it'll happen anyway. no, i think that is correct and also the other part of my answer

is that i'm aware of the need and we've moved in that direction to enhance oversight of finra at the sec. >> you have made, used your position to encourage finra to be cooperative with congress, open and available to us, that would be useful. >> yes. >> thank you. >> thank you, mr. chairman, thank you for being here. as you know, the sec's mission is to protect investors in our capital markets and requiring companies to discloses information is a critical part of that mission. publicly traded companies may not like disclosing potentially or damaging information but the sec's job is to look out for investors and not big companies. there's a lot you could be doing to protect investors. there's still 20 mandatory dodd-frank rules from 2010 that the sec hasn't completed and more than a million people including countless investors and former sec commissioners

pushing the agency to require publicly-traded companies to discloses political contributions, but instead of moving forward on issues intending to help investors, you've actually had it in the office interaction. since your first year in office you've dedicated significant sec time and resources to a project you invented and called the disclosure effective initiative. according to 2013 speech you gave, your big idea behind the project that sec might require companies to discloses too much information causing investors to suffer from something you call information overload. now, i'm all for eliminating redundant disclosure or improving the ways that information is presented, but honestly i have never heard of the concept of information overload in the context of investing in stocks.

i've never heard of the idea that investors actually want less information that they're getting. so i have a pretty simple question. the sec is an investor-protection agency, so when you launched your project what evidence did you have that information overload was a real problem that investors wanted you to solve. >> it's an issue that the commissioners have been looking at really for decades among others, but the purpose of disclosure -- by the way it wasn't invented by me, it was basically in response to a congressional mandate to do a report that reviewed our -- >> i'm sorry, when was this report that you're talking about? >> it was i think presented to congress, following congress at tend of 2013. >> now, wait, are you talking about the job's act report? >> yes. >> because that when -- i

actually looked at that and what was asked of you that the sec review sun subset of disclosure to see if that subset should be modified as they apply to one subset of companies, so-called emerging growth companies. your companies have gone way beyond the boundaries identified in that law. >> a very broad slot. >> i understand that. that's not where your project is. >> we have been for decades at the sec, my point, undergoing disclosure effectiveness and i absolutely agree. >> that's not my question. [inaudible] >> this is what you identified and i want to know what evidence you had that there is a real problem that investors have come to you and said, we are worried about getting too much information, what evidence did you -- >> first of all, the review is not limited to overloaded

information. >> in the 2012 act? >> no, no, our review. it's meant to make disclosure more meaningful to investors and we have also gotten comments recently from all kinds of constituents including our investor/adviser committee to not -- >> no. >> the purpose of the review to make it meaningful. >> i started off by saying i don't have a problem with getting rid of duplication, making it more effective. the question i asked you about is whether the so-called information loafer load is a real problem identified by investors that have come to you, let's be honest about this, i cannot find and you have not produced a sickle -- single investor who has complained about receiving too much information. investors don't want less

information about the companies they put their money. in fact, i think that's ridiculous, the sec's own investor advisory committee which includes everyone from hedge funds to pension funds to retail investors say that recently that the current amount of disclosure and it was their word is appropriate. so who wants less information to be disclosed? pretty clear, the national chamber of commerce which represents the giant companies that have to do the disclosing. the changer has produced a fact-free report wining about this nonexistent information overload problem in 2014, shortly after you launched your initiative. information overload is a problem that was invented to justify a project aimed at making life easier for big companies and harder for investors. in fact, higgins, head of corporation finance division and

the lead on this project kind of let the cat out of the bag in 2014 when he said in a speech, the aim of the project was quote to reduce the burden on companies, consistent with our mission of investor protection wherever we can. now i recognize that congressional republicans switch highway bill at the end of last year that asked sec to review disclosure with eye to eliminating the ones that are necessary. of course, that doesn't justify the sec for two years before that, nevertheless, given the views if your own investor advisory committee that the current disclosure are appropriate, do you agree that the supposed information overload problem does not exist? >> well, i think if you go back to even third good marshall years ago under federal

security's laws the concern was expressed about, you know, too much information could sort of cloud the meaningful. i think you're describing our des closure effectiveness review in a way that's much narrower than its intent. one of the most important things in disclosure effectiveness review. we are also talking about adding information in this review that is needed to be added, for example, in foreign taxes and other things but is also the manner in which the information is being provided. >> we are over our time. let me stop you there. i have said three times in this brief exchange, i'm fine with cutting out with duplication, i'm fine with making the information clear and as should be clear and i am fine with providing information. what i'm trying to identify something that you specifically have targeted and talked about. i'm frustrated that at your direction the sec has

voluntarily spent two years trying to address a problem that you have no evidence exists. instead of making up work to help giant corporations, the sec needs to do its job starting with the required rules under dodd-frank that still aren't fixed six years after the law was passed. your job is to look out for the investors and you put the interest of chamber of congress and members at the top of your priority. a year ago i called your leadership at the sec extremely disappointing, today i am more disappointed than ever. thank you, mr. chairman. >> i'm disappointed in your disappointment and could not agree or disagree with your characterization of what we are trying to do to improve our disclosure regime for investors to make it better. >> when you bring me evidence of this so-called information overload that you have initiated

then we have can have more conversation -- >> i suggest reading the concept release for the range of issues we are addressing including that. >> well, i would like to see some evidence that there really is a problem here. >> senator warner. >> senator, mr. chairman, chair white, good to see you again. i want to move to another area of a concern that i have and i've seen evidence recently and i'm sure you probably have as well, rbc put together a chart that's complexity is a little overwhelming that there were 839 different fee structures and this is the make or take issue with 700 different iterations in terms of incentives and rebates within our market structure right now that quite honestly give the impression that the

system is -- is rigged, the direct trading through to those firms and entities that are going to give you biggest rebait or fee structure. there's extraordinary conflict of interest here in question of brokers and their clients. when we look at this and obviously the complexity of our markets and trying to make sure, i agree with senator warren that we have to be in a transparent way. how are we going to get through this? you talked about this back in 2014, negative outcomes of some of this structure, you know, i strongly believe we need to move quickly on the make or take pilot. i would encourage you that when

we take a look at this make or take pilot that we have all venues included both and when you look at the rbc chart and you add the dark pools behind it and enormous challenges and that we don't -- i know that the trade act component issue added a whole series of complexities to the project and my hope is that -- that we won't see those same kind of -- of great to have but potentially items that dramatically slow down the ability for us to bring more transparency to our markets and particularly in terms of this area where there appears to be an enormous amount of conflict of interest, so could you speak to that? >> first i will say and i don't think i said it at the committee meeting but i think we should

promptly perceive with a well designed pilot. the discussion -- >> how promptly -- >> no, as you know, we ended up having to order the basically the sro system, a plan that would work and i think it's enormously important that we will launch in october of this year but obviously it took a while to do that. i think you have to be careful that you're getting the information that you need to have from these pilots. i think you may not -- we are expecting a recommendation at a july 8th tale phonic meeting from the subcommittee that's in charge of this subject matter at the subcommittee level to the full committee on july 8th. frankly, i urged that to happen sooner than their next scheduled meeting so that we could move this along. it obviously is up to the commission and staff recommending to the commission what those parameters should be

but it is one that i think, again, everything is more complicated than it seems. i don't think the system is rigged but i think it's developed in a way that we really have to figure out, you know, how to deal with that and i'm particularly concern about the conflicts of interest. >> you sought to process and how any investors small or large for that matter really know where their trades are being directed based upon -- >> yeah. >> the level of fees and rebates. we need more market confidence and i really think moving aggressively on this -- >> our transparency proposals are important part of that too. >> let me last few seconds go back, senator moran raised about market governance. as more and more of these exchanges, the security change

processors and making decisions to make huge capital investments in technology, sometimes that technology which may give them that fractional second advantage over others and as i said before, i do belief at some point speed and. >> speed -- the god of liquidity is not always the correct answer. as we sort through this with all the various exchanges, can you expand what you said to senator moran in terms of governance, we have the right parties at the table sorting through these issues? >> again, i'm not sure we are talking about, you know, mns governance which we were addressing. but frankly my whole idea for the advisory committee was to

try to bring in expertise as across the range of constituents and also to make sure we had a panel at every one of those meetings that had everybody else there that had a different point of view and an expertise and i've been pleased with it so far. it's also something that focuses and i think moves along more promptly, the commissions, you know, comprehensive review of these market structure issues and it really needs to be there. in terms of the -- the speed issue, i mean, certainly you get to diminish and returns. i think you had conversation at subcommittee. you had tremendous obviously to retail investsvestors and sometimes people talk as if they are one thing and they're not, they have different strategies and so one of the proposals that the staff is working on is a

antitrading disruption rule which sort of deals when markets are particularly vulnerable liquidity being taken away by have you virtue of speed to avoid that. again, the issues are complicated. >> and my time is up. complexities in the bond market, you know, even in the treasury markets, the options markets, and my fear sometimes that some of the products and the incentive systems, i worry that the complexity has gotten so great and the effect it has on the joaferl -- overall market system and it's bleeding from one market to the other. i appreciate your comments but i would like to come back and revisit. >> senator shumer.

welcome back, i have a great deal of respect for you but i'm going to go back to the issue i care so much about. i just want to -- the money i'm involved and a lot of the races, campaigns, the moneys that are pouring in are unprecedented and undisclosed and it's a few organizations. one is the koch brother organization pouring in poisoning our politics and we don't know where the money comes from. the shareholders don't know where the money comes from, it is, i will have to tell you, it's more important than the sec . you want to know why people are so discontent, because powerful people can send cascades and ads

have nothing to do with what they care about and you are aiding and abetting it the sec, we know that our house republicans, mixmcconnell insisting that this stay, they gain from this and short-term gain because in part people become so discontent that not only goes against all establishment but the republican establishment, withinned in the last election, last primary. i just don't get it. i just don't get why corporations that give money shouldn't tell their shareholders, these are major decisions, they have effects on the corporations if exxon, i have no idea what they do, but if they put a ton of money in

the chamber of commerce to fight global warming, let's just assume, the shareholders have the right to know, they may be making a bad decision. i think you are hurting america and you can stay in the narrow box and say, well, the rules of the sec are limited, this and that. first a lot of people don't agree with, most people, second the public, i know senator 1.2 million petitions is a small amount compared to the population of america but how many other issues have you gotten 1.2 million petitioners calling you and i wish you would change your mind. i'm so disappointed, so disappointed because every one of the commissions -- they have to do what's within the law and you have made the decision not to go forward. let me just ask you this, this

is a relevant question, menendez touched on this issue but i want to talk about this john koch analyzed that the sec, the republican leadership insisted that this provision be put in the bill, shows you provision that says, you know, that says that congress can't touch what you do, but it wasn't that explicit and as i understand it only explicitly prohibits the se c from finalizing during the period, do you disagree with koch's analysis and second if you don't disagree, would you add this issue. >> you can see the rest of the hearing. we are going live to the senate this morning which will begin work on the 2017 commerce justice and science spending bill after general speeches this morning. the bill provides 56.3 billion

in discretionary spending for agencies including the department of commerce, department of justice and nasa. the white house opposes the bill citing inadequate funding levels for the 2020 census and the bureau of alcohol, tobacco, firearms and explosives which requested 200 additional agents to helps enforce laws. the u.s. senate is live on c-sp2 the president pro tempore: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. o god, who inhabits eternity, but dwells in contrite hearts, we magnify your name.

shine the light of your love, joy, and peace into the hearts of our senators today. may they make the commitment to stand for whatever is pure and true and just and good. help them to labor for the rights of the weak and the oppressed, putting principle before partisanship and others before self. lord, give them brave, true, and compassionate hearts, as they strive to live for your glory. open their ears that they may hear your voice calling them to high endeavors.

we pray in your great name. amen. the president pro tempore: pleae join me in reciting the pledge f allegiance to our flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. mr. mcconnell: mr. president? the presiding officer: the majority leader. mr. mcconnell: seven months ago isil terrorists massacred 130 civilians across the city of paris. six months ago, isil supporters murdered more than a dozen

americans at a holiday party in san bernardino. three months ago isil bombings killed and maimed indiscriminately in the heart of europe. and then last month isil spokesmen issued a chilling declaration of war against the western world. he called for attacks. specifically, lone wolf attacks, throughout the month of ram dan in europe and the united states. get prepared to make it a month of calamity for the nonbelievers, he said. on sunday, a terrorist claiming allegiance to isil took 49 -- 49 -- american lives. the next day, an isil supporter in france murdered two people, including an yofe -- an off-duty

police officer. we hope to learn more about the orlando terrorist attack and the depth of that particular terrorist's involvement with isil when senators are briefed later today by the f.b.i. director and the homeland security secretary. but this much seems clear already: i do not believe this was some random act of violence. it seems clear thi this was a gold-bin ladened murder -- coldblooded murder bay terrorist who pledged his allegiance to a group that enslaves women, to a group that crucifies children. isil is not the jayvee team. it is the pe personification of evil in our world. isil is not contained, nor can it be. the way to prevent more

isil-inspired and isil-directed heartbreak is to defeat isil this is why we've repeatedly demanded a serious plan from the president to defeat isil and done what we can to fill the leadership vacuum that he's left. this is why we've worked to strengthen law enforcement, rebuild our military, and develop counterterrorism tools designed to save lives. the terrorist attack in orlando underlines the critical importance of this work, and it presents each of us with a choice: do we want to make the tough choices to actually solve the problem and defeat isil, or do we want to use the senate floor to make a 30-second political ad? as i said, the principal way to defeat isil-inspired or directed action is to defeat isil inside syria. the president's containment

strategy which has relied primarily upon a ground proxy force of syrian y.p.g. kurds will not be sufficient to dislodge isil from its headquarters in rakka or clear and hold ground in arab parts of syria. the next president must do much more, and there are steps we can take today to help him or her succeed in that effort. the sweeping defense bill we passed yesterday represents a decisive step in the right direction. not only will it help prepare our next commander in chief, it will help strengthen military readiness, better enable service members to confront threats, and help keep the american people safer from an array of national security challenges. passing that bill sent a strong signal to our men and women in uniform. it sent a strong signal to our allies. it sent a strong signal to our adversaries. but there's more we can and we

must do. this week, through the appropriations process, we'll continue to discuss ways we can shore up our efforts to fight terrorism. several republican colleagues have already offered ideas on how we can do so. republicans have offered ideas to address the threat of lone wolf attacks like the one we saw in orlando. republicans have offered ideas to help connect the dots with respect to terrorists' communications. republicans have offered ideas to help disrupt terrorist plans. these are the kinds of things we have long advocated. they were important before the horrific events this weekend. they're all the more important today. by passing the underlying appropriations bill, we can provide the f.b.i. with more of the support it needs to follow leads generated here within our borders. in the meantime, i encourage senators to work with the very

capable bill managers who crafted this legislation. the senior senators from alabama and maryland. if they have other effective ideas, talk to them and try to make the bill even stronger. thch is clear: we can -- this much is clear: we can choose to respond after the damage is already done or we can make it our goal to prevent the attacks in the first place. i know my choice. i am going to keep doing what i can to prevent the pain and the loss of terrorism. our families and communities are counting on us. our freedoms and rights as americans are counting on it, too. we must continue to do what's necessary to seek out terrorist threats at every level and protect the country that we love. now, mr. president, on an entirely different matter, both the senate and house took decisive action to combat the heroin and opioid epidemic

that's deaf statisticked so many of our communities. we are now working to take the next important step forward. the comprehensive addiction and recovery act we passed would expand education and prevention efortsdzs, improve treatment programs and enhance tools for law enforcement. this critical legislation can bring hope to those affected by this horrible epidemic and would not have possible without the dedicated leadership of members like senator grassley, senator portman, and senator ayotte. we're currently working toward an agreement that will allow us to go to conference with the house and work out the final legislation. we've all seen the toll that this heroin and prescription opioid crisis has taken on our home states. it's absolutely heartbreaking to see the continuing impact in kentucky. getting this done is important for our country. with continued cooperation from both sides, we'll get a good bill to the president's desk very soon.

mr. reid: mr. president? the presiding officer: the democrat leader. mr. reid: here's a frightening quote from an al qaeda spokesman. here's what he's urging. he's urging would-be terrorists to buy weapons in the united states. here's exactly what he said: and this is a quote. "america is absolutely awash with easily obtainable firearms. you can come down a gun show at the local convention strrks come away with a fully automatic assault rifle with a background check, most likely without having to show an identification card. so what are you waiting for?" close quote. this is an al qaeda blueprint for would-be lone wolf terrorists. they're saying buy guns. nobody will stop you. and then go murder americans. that statement should make every member of congress think long and think hard about our nation's gun laws.

terrorist groups like isis and al qaeda are using america's gun law against america. they are using these gun laws against americans in every state. these murderers are calling on their radical followers durnl a sorry. these murderers are calling on their radical followers to exploit loopholes in america's gun laws. why? because firearms are easier to obtain in america than making their homemade bombs. but republicans need to think about this really closely. because, as adam lankford, an expert in criminal justice at the university of alabama told "the washington post" this week, "it's becoming increasingly apparent the mass shootings are just as deadly as bombings and the scary part is that it's often much easier to pull off." close quote. mr. president, republicans are in denial about the connection between terrorism and guns.

in the aftermath of the mass murders are guns at the lgbt nightclub in or l.a.n. dorks republicans are saying that these attacks have nothing to do with guns, nothing to do with guns. the senior senator from south carolina said yesterday, "this is not a gun control issue." it is a gun control issue, and that's undeniable. there's no question about this. none. terrorist leader rurnlzing lone wolves to exploit our nation's gun laws by buying assault weapons and then murdering americans. the republicans have blocked every attempt that we've tried to address the deficiencies in our nation's gun laws. last december, republicans blocked legislation that would close the so-called terror loophole which allows suspected terrorists to enter a gun store and legally buy firearms or explosives, or both.

republicans also blocked legislation that would close the gun show loophole, which allows criminals and terrorists to purchase guns without any background check. remember, al qaeda spokesman said just that. another quote. "you can go down to a gun show at the local convention center and come away with a fully automatic asiewlt rifle without a background check." that's what he said. this terrorist was talking about the gun show loophole. he was specifically pointing to a flaw in our nation's gun laws that allows convicted terrorists to slip through, and it is a big, wide hole to slip through. yet the republicans refuse to respond to this crisis. why? because the national rifle association and the gun owners of america tell them not to allow us to address this flaw in the law. this flaw in the law is leading to people being murdered. americans. by blocking responsible gun safety, the republicans are playing into the terrorists'

hands. the republicans' failure to legislate has added a new chapter in the isil playbook. as we've seen in orlando and san bernardino, deranged individuals are using the terrorists' playbook. keeping guns away from strifts one of the most important steps we can do in protecting america. how many more people must be murdered by terrorists wielding assault weapons before republicans stop their obstruction? how many more? 49 perhaps isn' -- 49 perhaps is enough. we'll find out hopefully this week with a vote here. how much longer will republicans allow killers to manipulate our laws and continue the campaign of terror? how much longer will republicans fail to protect the american people by allowing these gun loopholes to remain? democrats are going to wait no longer. we're going to demand solutions to our nation's gun law epidemic every chance we get.

on monday, i stated we would demand a vote on the terror loophole. and we're going to do that. this is our obligation. we must try at every opportunity to say to the republicans, the american people -- not the n.r.a., not gun owners of america -- should be their obligation. there is no excuse for suspected terrorists to buy guns. guns is the problem. it may not be the only problem, but it is a problem, a big problem. on another subject, mr. president, today marks the fourth anniversary of president obama's deferred action for childhood arrivals program. four years ago today president obama announced young people, dreamers, do not present a risk to national security may become eligible for temporary protection from deportation. since that day over 730,000 dreamers no longer live in fear of deportation. more than 12,000 of these young

men and women are in nevada, and they have been protected by this program. there are college students, teachers, engineers, small business owners, they have contributed enormously to our communities making america better. and because of the president's program the authorities can sensibly prioritize those who do present a threat to our safety and our country. what a shame that donald trump and his republican supporters here in the senate want to deport these kids who know no other country than the u.s.a. in my morning briefing this morning, i hear that the house is going to do something really unique today. they have a measure to not allow these young men and women to serve in the united states military. it doesn't matter what you do. you can't be mean enough using the republicans' play book. there have been efforts made, votes taken to rescind what the

president did. there's been efforts made to make sure there's no money in the immigration naturalization service to expedite the processing of these young men and women to become the legitimate add only country they know. these are the same republican senators who last year were willing to shut down the department of homeland security. stop it. why? they wanted to stop this program. these are the same republican senators who insist on limiting the constitution's guarantee of birthright citizenship, ending family immigration and deporting hardworking families. it is because of what's happened by republicans and the congress that we have -- we're now faced with donald trump. we're here because of what republicans in the congress have done. look at the senate.

who was the leader initially of birthright citizenship. obama was not born in america. he was born in africa. everybody should know that. he's not eligible to be president. republicans in congress have made donald trump legitimate to some, but not to us. so i look forward to the day when programs like daca are replaced with permanent immigration reform. it needs to be done. it's long overdue. i'm hopeful the supreme court builds upon daca's success when their opinion is rendered in the next few weeks which would extend the same protection to the parents of dreamers that the dreamers have. mr. president, i would ask that the -- there are people on the floor. i would ask the chair announce the business of the day. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will be in a period of

morning business until 10:30 a.m. with senators permitted to speak therein for up to ten minutes each. mr. enzi: mr. president? the presiding officer: the senator from wyoming. mr. enzi: mr. president, a few moments ago i got to speak to 45 students from five towns in wyoming who are here for history day competition. so it's only fitting that i rise today to recognize an historic event. that would be the 100th anniversary of the boy scouts of america receiving a congressional federal charter. on this day in 1916, president woodrow wilson signed the federal charter of the boy scouts of america, and i've introduced a resolution to commemorate that important event. the congressional charter has helped the boy scouts to become one of the largest youth organizations in the united states. in fact, mr. president, it's estimated that more than 110 million americans have served as members within its ranks.

scouting offers more than 110 million young people friendship, an opportunity to set positive goals and outdoor experiences. but above all, scouting is about building character and service. it's like that young boy in london that was doing his good turn, happened to guide an american through fog, and when he tried to pay the boy, the boy said no, that was my good deed for the day. the man took that concept back to the united states and started the boy scouts. and then a few h years later we got the federal charter. the service the scouts have performed is immeasurable but there are many noteworthy moments. during world war 1 scouts played an important role by collecting used paper and glass from homes. scouts soepld liberty bonds valued at $147 million. that was a lot of money during that time.

president roosevelt called on scouts to help the needy during the great depression and world war ii. they collected materials and sold war bonds. the call to service continues. boy scouts working on their eagle are doing projects all over this country. thousands of hours every year to earn their eagle award. but another service that will happen this year is there will be the national supreme court jamboree. that will take place 13 months from now in west virginia. and volunteers are needed for that effort. the jamboree dates back to 1937 when more than 20,000 scouts camped on the national mall right out here. on july 19 of this year 39,000 scouts and venturers will arrest becktel reserve in west

virginia. i went to one in valley forge. it was the largest movement of people in the history of the united states. it was an opportunity to get together with people from all over the united states who were fellow scouts as well as from other countries. i remember getting to meet some australian scouts at that particular jamboree. we were having a camp fire with them in the evening and somehow a garter snake happened to come through the camp. they leaped up. i said what's that all about. they said in australia we have 25 snakes and 23 of them are poisonous so we try to kill them first and then identify them. a lot of opportunities for scouts. this jamboree will provide some outstanding experience, adventures and achievement for merit badges through a number of outdoor sports like whitewater

rafting, rock climbing and zip lining. in keeping with the boy scouts slogan of doing a good turn daily there are opportunities to participate in service projects near the reserve. i'm especially excited about next year's jamboree because matt meyers is the national jamboree director, from my home state of wyoming. matt can't do this alone. thousands have to work to make the jamboree a success by serving as first responders, i.t. support, doctors and more. an interesting thing about these volunteers, they have to pay their own way to this session. they have to pay the same fee as everybody that camps there and they have to give up two weeks of their vacation. when they had the last one three years ago, i think there were 8,000 of these volunteers that came and dedicated their time to the boys that are in scouts.

scouting has meant a great deal to me and to my family over the years. incidentally, there are ten united states senators that are eagle scouts. the normal percentage would be about 4%. but you learn a lot of leadership skills and are also encouraged to participate in your community, your country and the world. and scouts do that. incidentally there are a whole lot more in this body that have been in scouts. i remember one saying that he only made it to life scout. and he wanted me to know they call that life scout because if you don't make that next step to eagle, you will regret it for life. but no matter what rank you go to in scouts, no matter how long you're in scouts, you will learn some things in scouts that you will not learn anywhere else. part of it is the merit badge

system. i have one scout in wyoming who has earned all 132 of the merit badges. what a tremendous adventure in personal finance, and safety, and career examination. you can learn about any career and find out what's involved in it, what you have to know, how you get into that profession. there have been some outstanding scouts along the years. anderson when he went to the pole took a boy scout with him. there has been a boy scout at the south pole every since. the first one got a taxidermy badge and when they went to this unknown land they wanted to have animals and have them for specimens when they came back to the united states. so he was chosen. a year and a half ago on the space station there was a boy

scout. he'd been to an academy and had been a test pilot, but after he was selected and got to see his application, there was only one thing on the application that was circled and that was eagle scout. while he was up in the space station they had a piece of equipment break loose. anything floating around in space especially if it is big can be a real hazard. so he took the thing and tied it down using a clove hitch. of course they reported back to nasa and said they've this the little problem. and nasa reported back and said they need to tie it down with a clove hitch and sent instructions. he had already taken care of the problem. you never know what you learn how tuck be used later. yesterday i got to meet with some of the upward bound trio students. those are kids that would be first-generation college students. and one of them was named

michael nadick. and he was proud to tell me during ouring meeting that was an eagle scout. now i am pretty certain that this is one that is going to go on to college and is going to complete his college. because one of the things that eagle scouts represents, even some of those people who have never been in boy scouts, they know that's a symbol of perseverance, a quest to get extra knowledge. i'm pretty sure this is one of those young people that's going to get that extra knowledge and make it through college. so, i'm pleased to meet with scouts anywhere and hear of their adventures and remember my own. and today i'm proud to recognize the 100th anniversary of the boy scouts federal charter, the values of leadership, service, character and achievement will live on thanks to the boy scouts of america. thank you, mr. president. i yield the floor. durbin mr. president? the presiding officer: the

senator from -- mr. durbin: mr. president? the presiding officer: the senator from illinois. mr. durbin: mr. president, it was four years ago that president barack obama announced a new program through executive order. it was called the deferred action for childhood arrivals program, known as daca. this was action by the president which i had asked him to consider. i had written a letter with senator richard lugar, republican of indiana, and later with another 20 senators asking president obama to consider the creation of this program because many of us believed it was the right thing to do and a fair thing to do. it was 15 years ago that i introduced the dream act. the dream act was really a response to a constituent case in my home state of illinois. a young woman, korean, had been brought to this country at the age of two, came in on a visitor's visa. when the visa expired, she and her mother and the rest of the family stayed. papers were filed for everyone in the family but her.

and now she was here in the united states undocumented and illegal at the age of about 18. she wanted to go on to college. she had a promising music career ahead of her. but under american law as written, and still written, it was very clear that thee didn't belong in the united states and had to petition for ten years to come back. it seemed fundamentally unfair that a young person brought in at the age of two would face that sort of onerous responsibility and have to leave america. so i introduced the dream act. if you were brought here under the age of 16, finished high school, no serious criminal record and you were prepared to go to college, enlist in the military, we'd put you on a path to citizenship. it was that simple. it was 15 years ago. that measure has been called and passed in the house. it's been passed in the senate. but it's never passed in the same year in both chambers. so it still is a bill waiting to become law. and yet there are 2.5 to 3

million young people who qualify, could qualify under the dream act. so we wrote to president obama and said can you give these young people some protection from deportation. if they were brought here under the conditions of the dream act. and four years ago he said "yes." and he created the daca program. the sign-up was to start in august of that same year, four years ago. and i joined with congressman luis gutierrez in offering a sign-up day at navy pier in chicago. we had immigration lawyers come in to help these young people fill out their forms, so they could qualify to stay in the united states for a few years, not be deported, and pay their fee and be here and have a future. we didn't know if 200 would show. we were worried when we heard it might be 300. in the end, there were thousands -- thousands who came signing up. and many of them waited in line all gh