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

Mr. Chairman. I thank my colleague on the committee for yielding me some time. Mr. Chairman. I rise in opposition to H.R. 1594. I would like to ask the gentleman from New Jersey some questions. This bill comes at a time whose time has not come. The bill attacks something that is not existent. It is a straw manor a straw person in insidetheBeltway languagethat is created by the Joint Economic Committee and talks about force. In fact. I just got this report today that in its conclusion it says by forcing pension fund managers. Nowhere in the Department of Labor do they force pension fund managers to do anything. This bill was created to create a political issue and nothing else. H.R. 1594 repeals an Interpretive Bulletin that pension managers consider collateral benefits where the risk and return otherwise meet the prudent standard. Last year the Department of Labor issued Interpretive Bulletin 941 stating that it was permissible for a pension fund to invest in economically targeted investments under limited conditions. This bulletin made it clear that a pension fund may consider ETIs only if the risk adjusted return was comparable to alternative investments. The pension fund could not invest in ETIs if the return were less or the risk greater than comparable alternatives. There is absolutely no force and no mandates in ETIs. That is what makes this comrhittee report from the Joint Economic Committee not worth the paper it is printed on. If an investment meets the prudent standard. what is wrong with using American pension fund assets to invest in America and in American jobs? This bulletin goes back to the Reagan administration. It is not something that President Clinton has created. The Department of Labors position on ETIs is not new. Interpretive Bulletin 941 simply restates the Departments position for over 20 years spanning both Republican and Democratic administrations. In fact. the recommendation to issue the interpretive bulletin on ETIs was originally proposed by the ERISA Advisory Council. appointed by President Bushs administration. In a letter to Congressman SAXTON. Ronald D. Watson. a member and later chairman of the ERISA Advisory Council. states: The conclusion that ETIs can have a place in pension portfolios was reached by a cautious and instinctively conservative group of advisers under a Republican administration. It is being promoted by a Democratic administration which happens to agree with the conclusions. Tle effects of H.R. 1594 would be devastating on pension managers. It clearly discourages and may effectively forbid consideration of collateral benefits by U.S. pension managers. To avoid potential liability. pension plans would be reluctant to invest in American investments that have collateral benefits. even though they may have competitive risk adjusted returns and otherwise meet the standards of ERISA. The result would be increased pension plan investments in foreign investments that is already increasing. In addition. this bill is onesided. saying the Department of Labor must not encourage or promote ETIs. The bill is obviously an attempt to silence the Department of Labor. We need to make if they are going to be silenced on everything instead of just one thing. Let us put partisan politics aside. It is irresponsible for Congress to discourage investment in America. I would rather them build housing in the United States than build housing overseas atthe comparable investment.