As GOP Primaries Numb Your Brain, Congress is Up to More Tricks

clockworkorganbraineyedropsWhile inane campaign rhetoric lulls you to sleep, forcing you to watch reruns of shipping wars until your brain melts and flows into that puddle of lost dreams and promises, Congress has been up to some things.

Remember those outrages du jour, such as using Stimulus funds to hire foreign guest workers? Remember your hard earned taxpayer dollars being used to bring in Chinese foreign workers and Chinese steel to build the Oakland Bay Bridge in California?

A very important amendment passed the Senate and was entered into Bill S.1813, MAP-21, alternatively known as the Transportation Bill. The amendment strengths the Buy America provision by closing a loophole.

Senator Sherrod Brown on the Senate Floor:

The San Francisco-Oakland Bay Bridge is the most outrageous example of that. The $6 billion project was divided into 20 separate construction contracts, resulting in a Chinese-owned company building a 520-foot steel tower and 28 steel bridge decks. That was not what this was meant to do.

The Brown amendment looks fairly narrow. Basically there is a contract segmentation loophole in the Buy America provisions. The loophole allows construction projects be split into multiple, smaller sub-projects in order to use foreign materials and foreign workers, instead of U.S. workers and U.S. materials. The loophole closure was targeting Chinese steel and Chinese workers who were brought in to build the Oakland bay bridge when unemployment in the bay area was above 10%.

Senator Jeff Merkley:

By closing this loophole, American bridges paid for by American taxpayers will use American steel manufactured by American workers.

Below is the actual amendment text from the Congressional record, page S1601. Frankly, Congress as well as database, make parsing legislation and amendments almost impossible to follow.

On page 490, between lines 3 and 4, insert the following:

 

SEC. 1528. BUY AMERICA PROVISIONS.

Section 313 of title 23, United States Code, is amended by adding at the end the following:

``(g) Application to Highway Programs.--The requirements under this section shall apply to all contracts eligible for assistance under this chapter for a project carried out within the scope of the applicable finding, determination, or decision under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), regardless of the funding source of such contracts, if at least 1 contract for the project is funded with amounts made available to carry out this title.''.

On page 900, between lines 9 and 10, insert the following:

``(10) APPLICATION TO TRANSIT PROGRAMS.--The requirements under this subsection shall apply to all contracts eligible for assistance under this chapter for a project carried out within the scope of the applicable finding, determination, or decision under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), regardless of the funding source of such contracts, if at least 1 contract for the project is funded with amounts made available to carry out this chapter.

On page 904, between lines 6 and 7, insert the following:

On page 1314, after the matter following line 18, insert the following:

SEC. 330__. BUY AMERICA WAIVER REQUIREMENTS.

(a) Notice and Comment Opportunities.--

(1) IN GENERAL.--If the Secretary receives a request for a waiver under section 313(b) of title 23, United States Code, or under section 24305(f)(4) or 24405(a)(2) of title 49, United States Code, the Secretary shall provide notice of, and an opportunity for public comment on, the request not later than 15 days before making a finding based on such request.

(2) NOTICE REQUIREMENTS.--Each notice provided under paragraph (1)--

(A) shall include the information available to the Secretary concerning the request, including the requestor's justification for such request; and

(B) shall be provided electronically, including on the official public Internet website of the Department.

(3) PUBLICATION OF DETAILED JUSTIFICATION.--If the Secretary issues a waiver pursuant to the authority granted under a provision referenced in paragraph (1), the Secretary shall publish, in the Federal Register, a detailed justification for the waiver that--

(A) addresses the public comments received under paragraph (1); and

(B) is published before the waiver takes effect.

(b) Consistency With International Agreements.--This section shall be applied in a manner that is consistent with United States obligations under relevant international agreements.

(c) Review of Nationwide Waivers.--Not later than 1 year after the date of the enactment of the Moving Ahead for Progress in the 21st Century Act, and at least once every 5 years thereafter, the Secretary shall review each standing nationwide waiver issued pursuant to the authority granted under any of the provisions referenced in paragraph (1) to determine whether continuing such waiver is necessary.

(d) Buy America Reporting.--Section 308 of title 49, United States Code, is amended by inserting after subsection (c) the following:

``(d) Not later than February 1, 2013, and annually thereafter, the Secretary shall submit a report to Congress that--

``(1) specifies each highway, public transportation, or railroad project for which the Secretary issued a waiver from a Buy America requirement pursuant to the authority granted under section 313(b) of title 23, United States Code, or under section 24305(f)(4) or 24405(a)(2) of title 49, United States Code, during the preceding calendar year;

``(2) identifies the country of origin and product specifications for the steel, iron, or manufactured goods acquired pursuant to each of the waivers specified under paragraph (1); and

``(3) summarizes the monetary value of contracts awarded pursuant to each such waiver.''.

On page 1449, between lines 11 and 12, insert the following:

SEC. 36210. AMTRAK.

Section 24305(f) of title 49, United States Code, is amended by adding at the end the following:

``(5) The requirements under this subsection shall apply to all contracts eligible for assistance under this chapter for a project carried out within the scope of the applicable finding, determination, or decision under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), regardless of the funding source of such contracts, if at least 1 contract for the project is funded with amounts made available to carry out this chapter.''.

Of course the House has yet to pass the Senate approved transportation bill. A bill has to pass both Houses and be signed by the President of the United States to become law. Supposedly the never ending blockade called the House of Representatives won't even take the bill up for a month. This literally can cause the department of Transportation to run out of money for federally funded projects if this 2 year deal just passed by the Senate isn't approved by the House.

Other legislative efforts, such as stopping the hiring of foreigners instead of Americans in taxpayer funded jobs, no matter how narrowly defined, are shipped off to Congressional subcommittees, where they will assuredly be buried, never to see the light of day. In other words, in spite of the above amendment making it through the Senate, most common sense legislative efforts get buried and killed in committee due to the Committee chair refusing to allow an amendment or bill to come up for a vote.

 

 

Next up, we enter the land of the absurd. Firstly, we need a law banning Congressional bill titles designed to mislead and misrepresent what the legislation actually does. Such is this latest, the JOBS Act. The JOBS Act doesn't stand for jobs at all, it's about removing regulation and safeguards for private capital investment in small businesses and companies trying to start up.

The House bill is actually H.R. 3606, titled Reopening American Capital Markets to Emerging Growth Companies Act of 2011. Believe this or not, the administration has already issued a statement showing support.

The idea is to enable crowd sourcing investing in small businesses and start-ups. Sounds good right? Letting the little guy invest $100 or $500 bucks in a start-up or small business? This would literally take the power away from the elite club of venture capitalists, who often dictate terms such as hires and requiring a business offshore outsource to obtain investment funds. No longer would one have to subject themselves to the below, where on national television no less, an entrepreneur gets shot down for simply wanting to hire U.S. workers and manufacture in the United States.

 

 

Well, guess what, the bill actually removes all safe guards against fraud and accountability. What a surprise. It's dot-con all over again. Bloomberg News literally spells out the problems in Job-Creation Bill Seen Eviscerating U.S. Shareholder Protections:

U.S. legislation that would roll back securities disclosure and governance rules in the name of job creation is being attacked by consumer advocates and former regulators as an evisceration of investor protections in place since the 1930s.

The package of bills awaiting Senate action after receiving broad bipartisan support in a House vote last week would destroy safeguards dating as far back as the laws that created the Securities and Exchange Commission, according to Lynn E. Turner, a former SEC chief accountant.

“It won’t create jobs, but it will simplify fraud,” Turner said in an interview last week. “This would be better known as the bucket-shop and penny-stock fraud reauthorization act of 2012,” he said, referring to practices banned under securities law.

The AFL-CIO is on a tear about this bill. They literally call the bill a scam and point to it risking retirement funds.

Workers’ retirement savings will be in greater risk of fraud and speculation if securities market deregulation once again is railroaded through Congress. Once again our economy will be at risk from the folly of policymakers promoting financial bubbles and ignoring the needs of the real economy.

It seems the bill is really designed to do end runs around financial reform. If this bill passes, as is we will get scam city on penny stocks, ripping off investors through fraudulent investment advertising and false claims.

The Young Turks rants out what's wrong with the Jobs Act, H.R. 3606, in gory detail below.

 

 

David Johnson has a good overview on various amendments to make the crowd sourcing investment idea happen, sans the scams and fraud. One of the alternatives mention is the Senator Jeff Merkley sponsored CROWDFUND Act:

Normally, when a company seeks financing from the public it must register as a security with the Securities and Exchange Commission, providing detailed disclosures. The CROWDFUND Act would provide an alternative to this process, allowing companies to raise up to $1,000,000 annually through crowdfunding on registered internet websites.

The bill would also implement basic marketplace protections for the ordinary investors seeking to take advantage of this new marketplace. Web sites seeking to list companies must register with the regulators and provide investors the basic information about the companies they list. And crowdfunding companies themselves must provide basic disclosures to investors and regulators.

Believe me, we need the ability to get Venture capitalists out of the business of directing business to India and China. We assuredly need a platform by where the little guy can invest in businesses which are giving back to America. But the last thing we need is yet another Wall Street gambling casino scam. Let's hope this bill, as passed by the House, is stopped by the few Senators left with a conscience.

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Comments

Don't forget Senator Merkley (Oregon)

Jeff Merkley, junior senator from Oregon. Already a great statesman and a true son of Oregon.

BTW: why isn't Feinstein taking the lead on this? Like she LIVES in San Francisco and she's up for re-election in November ... and she's a Democrat ... so she must be pro-labor ... she expects and deserves support of union construction workers, not to mention the Steelworkers ... right? wink

But -- surprise! surprise! -- the California Republican Party is pretty much on record as having decided not to contest the seat .... isn't our two-party system wonderful? So much freedom of choice! wink

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"Democrat" sure doesn't mean "Pro Labor"

Honesty, I cannot think of votes, never mind co-sponsor and finally sponsor that was pro labor. She's been right at the forefront to push for unlimited guest worker Visas, enabling more offshore outsourcing, notorious to labor arbitrage STEM occupations.

California, I swear I think even a corpse running on the Democratic ticket will win, and then there is never any serious challenge in the primaries. A truly "rigged game" state, at least with the Senate.

Of course the offshore outsourcing queen Carly Fiorina was the opposition against Boxer, nuf said, there was no choice.

The one who did the hard work here is Sherrod Brown but it does seem Merkley is "coming alive" in terms of trying to do something for workers, the real economy as well as Oregon.

I didn't list the other amendments pursued since that's more regional.

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more reasons the "JOBS" Act must be stopped

Fortunately more independent economics and financial experts are examining this bill. Naked capitalism overviews the latest analysis. This is a good post and one point outlined is how start-ups are not dependent upon IPO, stock to succeed. That's a huge point, VCs are looking to exit their investment either through acquisition or IPO but it's about profit margins and the "right" connections versus operating capital, although I do beg to differ in some start-ups, in particular complex engineering/technical projects which do require teams of engineers to bring the design to 1st rev., plus very, very expensive patent attorneys to boot. Bottom line, VCs do come late to the party most often. One usually gets Angel investors at best to get off the ground. It's pretty awful, to even get enough funding to hang out in your bedroom to create the prototype is near impossible and that's where money is most needed, to get that prototype, initial product launch out the door, IP protected, nailed down. Expansion is where the VCs often come in.

Anyway, this is one rigged bill as written! I still believe a mechanism to enable more crowd sourcing, small investors, who then enable directives such as hiring locally, say hiring older workers, U.S., most importantly, manufacturing in the U.S. is important.

Frankly, even state sponsored VC funds are riddled with politics. It's who you know not what you came up with and your ability to execute, all the way to the bank. That's a problem. We all know there are probably over a million extremely talented Americans flat ass broke right now who are capable of bringing a business from ground zero to profitability and success.

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this is a huge deal

I don't know if it's realized what a "run around" financial regulation this JOBS bill is. Believe me, without doing into detail, I know, for a fact, one will see all sorts of scammers claiming they have the "next great thing" and are "starting up a company", lying their heads off to unaware suckers investors.

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Sometimes it's good to know the bad news

Ed Pawalec, of "Price Shock Trader" (Institute For Individual Investors, LLC) has sent out a pretty good analysis of the JOBS Act -- which he calls the "Boiler Room Act of 2012." You don't have to be a registered member of PriceShockTrader, just a subscriber to 'The Tycoon Report'. It's in the March 23 email.

Here's the opener --

In theory, the bill is supposed to open up access to funding for “emerging growth companies” (EGC), which are any businesses that have up to $1 billion in revenue.  Clearly there are a lot of unlisted companies with revenues in that range.

The JOBS Act (H.R. 3606) allows these companies to raise funds from the public through the internet or nearly any other form of solicitation.  

These companies can raise up to $1 million per year without providing any information other than their address and 2 years of unaudited financial statements.  Companies that provide audited statements can raise up to $2 million per year.  The caveat in the latter case is that although the statements need to be audited, the auditor does not have to approve them, which would be required for a listed company or one that was intending to go public through the normal channels.

The bottom line here is that, while Robert Oak doesn't provide investment advice and EP isn't investor oriented -- EP followers do get the important 'signals' along with the objective economic news and analysis.

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boiler room

is reference to a scam investment set up. There was a film of the same name and you can bet this is what will happen, which is a shame, for there are legitimate entrepreneurs who could really use some seed money.

If anyone is looking for "investment advice" from this site, they have to be brain dead in a lot of ways. The focus is on macro economics, with a heavy tilt towards labor, U.S. workers, middle class, i.e. the "rest of us". I don't think I've ever implied "short MSFT" or "short GLD" from the site's inception. Although the macro economic data I think one could utilize for investments, the overviews. But the real focus is on statistics and how they will affect the overall economy, the real one, production, the U.S. middle class.

Thanks for putting out the disclaimer though, I didn't even consider the misconstrue!

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