Date: 1995-09-12
Speaker: GENE GREEN (democrat)
Chamber: H
State: Texas

Mr. Chairman. as we heard earlier in the debate on H.R. 1594. this is a bill that is unneeded. because there have been no mandates. but this amendment. if we are going to pass an unneeded bill. would make sure for those investment managers that it is clarified. The amendment that we are considering seeks to accomplish one simple action. This amendment ensures that domestic investments are not prohibited under H.R. 1594. It ensures that American pension managers will not be afraid to invest in America and in American jobs. The amendment was read and it is in the RECORD. so all we are saying Is that nothing in this amendment shall be construed as prohibiting the investment by an employee benefit plan in domestic investments. as distinguished from foreign investments. Mr. Chairman. I am vested in a private pension plan. I am sure when I am 65 it is not going to provide as much as I would like. but I am one of those people who invested in it. And I do not want them to take chances with my money. I want to make sure they maximize the investment so I have as much as I can when I am 65. However. I also want to make sure and I want them to have the encouragement to invest in the United States. instead of going overseas. My concern in this bill. if given a choice with the same risk. if this bill passes. someone who is a prudent investment manager may say. "I can get 15 percent in building houses somewhere overseas and maybe 15 percent in the city of Houston." they will go overseas because of the restrictions of this bill. I want to make sure that that is not the question. I want them to build those houses in Houston. TX. or Cleveland. OH. or anywhere else if the risk is the same as going overseas. That is why we need to adopt this amendment. H.R. 1594 repeals an interpretive bulletin that says that pension managers may consider collateral benefits where the risk and return otherwise meet the prudent standard. In doing so. H.R. 1594 clearly discourages and may effectively forbid the consideration of collateral benefits by U.S. fund managers. In fact. this bill. if read the way it could be interpreted. could ban pension fund investments in mortgage pools. such as those guaranteed by the Federal National Mortgage Association. holding the trustees legally liable if they authorize such investments. so we would hope they would encourage investments in mortgages in the United States. To avoid that potential liability. pension plans may be reluctant to invest in these American investments that have collateral benefits. Everything has a collateral benefit. Mr. Chairman. When the State of Connecticut. and I notice the other side did not mention that. invested in a firearms industry. because that is a major job producer in Connecticut. I am glad they did. but I notice in their talking and discussing about it. they did not talk about that investment. They talked about some other investments that did not pan out. I wish I could say that every investment all of us individually or as fund managers invested in was good. Some pay a higher percentage because they have a higher risk. That is what we want. is to take a little higher risk. but for higher benefits for those of us who are the ones who are going to benefit from it. For 20 years pension fund managers have been building up solid portfolios in these economically targeted investments that diversify their holdings and provide a competitive rate of return. They create those jobs locally and incur no unusual investment risk. My amendment provides once and for all that nothing in H.R. 1594 prohibits that employee benefit plan from investing domestically. As it is. pension plans have been increasingly investing overseas. and as Members will see from this chart. U.S. pension funds are increasing from 3.7 percent in 1989 to 8 percent in 1994. It is projected to go to 12 percent foreign investment in 1999. What I do not want us to do is to encourage that by passing this bill. That is roughly $800 billion of our money that is being invested overseas when it could be invested here at the same rate of return. Let us make it clear. if this bill is enacted. a pension fund manager. faced with two choices of equivalent investment. one in the United States and one abroad. the safe course would be to invest abroad. because of 1594. Let us correct that by passing this amendment. The failure of this amendment today would only encourage litigation. cost more for those of us who are vested in these pension plans. and call into question whether we are going to invest in creating American jobs in our country. This bill would throw a legal shadow over a decision to invest in a hometown or State. but would not affect a pension fund if it is doing the same thing in foreign securities or foreign countries. It is irresponsible for this Congress to talk about Social Security when Social Security cannot invest in anything but Government bonds. If we want to do it. let the majority come up and say "We are going to do that." but let us invest our pension fund in our country at a competitive rate. Let us keep American investment here at home. Let us vote yes to create more jobs. and vote for the Green amendment.