blogger undeniably some bad apples, this is not a case about bad people doing bad things. the majority of folks and no-space are trying to do the right thing every day. enough of the problem is good people operating within a structurally flawed system. a market that sees personal financial interest of the advisor in the firm all too frequently missed the links in the best interest of the country. the result is what we saw happen. our goal is straightforward to align the best interest of the customer what does that the advisor in the firm. the proposed rule in the product of a significant amount of average to stakeholders. i appreciate support from so many in the industry. people are trying moynihan, ceo of bank of america is bank of america is it doing what is in the best interest for customers is absolutely the right thing to do. founder of vanguard very strong supporter will hear from the witness sure they have played in this space every day as a fiduciary work in the small investors who tells you when you put your customers first discrete for your customers and business in addition. i invite you to look at a transcript in the house. there is an interesting thing happening right now. the conversation is switching whether to have a best interest standard to ensuring that a best interest standard can be duly implemented. i am heartened by that shift and we welcome any other suggestions on how to improve the proposed rule to ensure it can be effectively implemented. we've heard and understand concerns raised about issues such as point-of-sale disclosure data retention and mechanics of implementing the best interest standard and as long as they don't decide of our northstar in a personal best interest commitment we're flexible on how to get the work done. this is providing guardrails, not straitjacket and it's important to remember is to go through the rulemaking that a substantial subset of the risers already operate under a fiduciary model. they serve a wide array of customers including small businesses, small investors and they do it well. we know it can be done because it is already being done by so many businesses. a number of folks to raise concerns will shut out the small saver from investment advice. entities such as the consumer federation of america, aarp take a backseat to no one and they are concerned about small investors and they strongly support this rule. we've consulted with several firms has as its model is working with the little guy. it was an investment firm in palo alto. they cite their success is living proof that not only is it possible to provide fiduciary service at low cost to small investors nationwide but the market greatly rewards this effort. when i talked to firms and tell them about the argument on the other side of rulemaking will make it impossible to serve the most frequented by fake at this give them my phone number. give them my e-mail. i will take their business any day of the week. i know the industry can adapt to serve the $11 trillion market and i am confident that we can work with them. we've reached out in addition to small savers and small businesses to ensure employees have access to retirement plan so they can recruit the best and the brightest. they can have access for retirement plan options for employees. as kerry conklin, small business under from tennessee told us i'm all for the proposal. i proposal. i don't know for what their in-house team that can advice me. i want financial advisors to be required to represent my interests. build a big table, invite everyone. i believe one of the most important things you could do is build a big table, listen and have a healthy dose of humility. that has been our approach. humility, good faith open mind in kenya. bring our destination and personal best interest standard is a mind of ronald reagan. trust but verify. marketing materials as a lookout for your customers best interest. standard is memorializing in the marketing materials. we are open to different routes to get an enforceable best interest standard and we look forward to continuing to hear from as many places as possible. we extend the comment period. we are coming in three a public hearing next month and we will reopen comments after republic the transcript and look forward to the engagement and so much feedback from so many businesses have come in but they get to yes attitude to their challenges. they have questions. they have concerns because they recognize that when you put customers first it is great for your customer and it didn't be great for business. this is about middle-class security and one of the pillars of middle-class security is retirement security. i look forward to working with this committee and all the stakeholders to continue the process of producing a rule that will work for american savers and will work for american business and all stakeholders. mr. chairman, thank you for your time. >> thank you on the secretary perez. if your goal is implemented as is currently contained in the stack of papers here, what would've happened differently to marlon tocqueville in the 650,000 that cashed in what was your bull specifically have done at have done with a $26000 fee which was the maintenance fee annually or the 7% early withdrawal fee or anything else he might determine the strong. >> that person abides in them would've had an obligation to look out for the best interests. what happens in a suitability standard. >> at the point i want to get to. i understand they i understand there was a i understand they went to the bank. is that correct? what if they consider to meet fiduciary requirements be required? >> the broker-dealer has an obligation, a suitability obligation which creates part of the challenges we have in the situation. the broker-dealer under the proposed deal would have an obligation to look out for the best interest of the consumer. the challenge we see in the $17 billion annual cost of conflict and advice is born out of the fact that there are multiple products suitable than the broker-dealer is totally within his or her balance to then take four or five suitable products and steer the customer to the product that generates more fees for him or her at the expense of the customer. we think that is in ride and we think you should be changed. >> how would they be able to remedy the situation for what would've been the broker-dealer's obligation under the fiduciary role to someone who brought the variable annuity? >> to but the customers best interest at first. >> how do you do that? what do you do to the broker-dealer or the person offered advice for what you consider bad advice? >> he would file a claim for excessive fees to cover losses incurred as a result of the conflict of advice. >> so it basically creates a cause of action for an individual to have it be done to date. is that correct? >> the proposed will have said they showed that the particular bank could have an arbitration clause so they could require it would be resolved through arbitration. that's one of the proposals in the red. >> the advisor would do that or the individual. >> the institution that is working with this individual code as part of the agreement working with that individual would be able to include an arbitration clause in other words, if we have a problem he can't file a claim in state court or federal court. you have to go through arbitration. that proposal we spoke to a lot of other agencies involved in this issue you fec and other regulators and that is basically parallel to another sister agency. >> he made the statement, the brother of the problem and aggro fast with ms tellme. the rub of the problem is good people operate in a flawed system. could you explain that? >> there is a misalignment between the incentive that a person giving advice has been the best interest of the consumer. for instance, if you have four or five different products under the current suitability rule that are suitable and the first product, the variable annuity generates $26,000 a year in fees and other product would have a comparable return has a fraction of those fees, you have reverse incentives to steer them to the product that generates the most fees. it is totally more permissible side not casting diversions but i'm saying that is not right. we can divide the system and i underscore what the system and that underscore what i said in my testimony. a substantial number of people who will come up on the next panel that operate under a fiduciary model already. they've demonstrated this can be done. this is being done. >> senator franken. thank you, mr. chairman. secretary perez, today is the last official day of the comment. i have heard from stakeholders who said they are participating in this process and are thankful for the department -- that the department has provided opportunities for feedback. can you share how the department has incorporated this feedback in the world that we have before us today. >> i can talk about the feedback we've gotten. we haven't made any decisions on what to do because the comment period are still open and we want to take in all the comments that week comments that we get during that comment period. what i can say to you with confidence as we've gotten some great advice. there have been a number of people who have come in from industry and talked about how we agree there should be at best interest standard. we want a level playing field as pseudoephedrine or testimony. we have concerns about things like send data retention obligation and we think you could do it differently. there is the best interests contract framework and referred feedback from folks saying it is clunky and there's a more streamlined way to do it. we have a point-of-sale disclosure requirements and people have said that is not necessary. what we've done when someone says the best interest contract is called key our response is tell us how to do it better. how do we retain the northstar at versatile best interest contract to do it better? that is the feedback we are getting and it's been really helpful. we haven't made final decisions have because we won't put out a final rule until after we've gotten all of the comments. i am quite confident that history is a guide, the final rule will be materially different than and better than the proposal because you got to be a good listener in this business. we haven't made any decisions. >> you are open to continued suggested fixes. >> not only opened, we have affirmatively reached out for it because a lot of folks know a lot about this and we want to get their insight. >> darlene miller from minnesota will be testified in the next panel in burnsville, minnesota. she will be talking about a small-business owner. she offers a 401(k) at plan on 30 employees. gardening is helping employees prepare for retirement and sat in the right example for many businesses that she has some concerns that the proposed rule will jeopardize her ability to provide the support benefit to employees going forward. can you assure us he will continue to work with business owners like darlene to make sure these rules don't have unintended consequences. >> i welcome the opportunity. i read ms. miller's testimony and she's a very successful business owner not to mention a minnesotan. we spent time at small business owners. but they tell me most frequently is that an expert at making my product. i have 10 or 15 people. i don't have the expertise and 401(k) but i know i want to offer it because i want to attract the best and brightest. what we have done in this proposal is included a number of carveouts for small businesses so they can continue to do that. what we do to help protect people like ms. miller as we are changing the status quo because the status quo right now and she had a very good x areas with her advisor. others haven't. when you have a bad experience with your advisor under the status quo if litigation ensues the defendant is the business not the advisor. under the current status quo the person providing the ice is off the hook. i think that is kind of perverse and it doesn't help people like ms. miller. i would love to explain to her the carveouts would help her and other small business owners as well as by the status quo presents challenges for small business owners. we look forward to doing that with her another small business owners. >> running out of time but somehow this database will blame it services and products to the client or limit small business employers from access to education and financial advice. how would you briefly respond? >> website to clarify. education is critical. the educated consumer is about customer. what we've done here is clarified if you want advice on how to apportion your portfolio, how much is going to be international asset allocation is totally education. you can run simulations about different asset allocation models and that is education. those are the critical nuts and bolts and what we have told people who is said to last we feel the line between education and bias is blurred or should be drawn differently. our response is how would you do it better and what ideas do you have. we heard feedback to that effect. we attempted to be responsive the first time around and are proposed rule is quite different from the 2010 will in the education of vice contacts. we continue to look forward to hearing more advice. >> for the benefit of the panelists, i will be very strict on the five-minute rule and i appreciate you hold in answers to a concise answer to get everyone's questions answered because we are in a hard stop at 4:00 and i don't want to cut or other testimony short. senator scott. >> afternoon, secretary perez. >> over the last eight years they have a regulator broker-dealers and investment advisers charge with having significant involvement in any effort to revisit standards of care that apply retail security transactions. the department has not stepped in i would suggest overstepped bustamante that the house here in. he used the phrase germanic and extensive coordination to describe the relationship between deal relationship between deal well in this rulemaking. he referred to pages and pages of documentation about meetings and calls between deal well staffed and share white staff. it is one thing to coordinate but that doesn't tell the whole story. i realize you cannot speak for chair white, but she can speak for herself. based on your coordination meetings in the sec is it your impression there is no daylight between your thinking in their thinking on this issue? >> i can't speak for chair white on this but i can certainly say the feedback we got from the career staff there has been extensive. we've been talking to the workforce committee has given that 800 pages of documents showing the extent of the coordination. in short, the proposed rule is a better proposal. i would note we have some overlap, but we are the agency that congress has charged with enforcing a risk for 40 years. while we have overlap, we have distinct touristic shawl responsibilities and that is why arisa is in our land and we continue to have that responsibility. >> you suggest because of the mind of coordination that you're on the same page or you can't suggest? >> what i have heard and she stated this a couple times that she thinks the best interest standard is in fact the right standard for the ftc purposes. the definition of best interest we use was actually taken from the 2011 sec report prepared in the follow-up and was done so because we heard a lot of feet back that we should harmonize the work we are doing between the dll and the sec and the key definition is taken in large measure from the 2011 report. >> on the fee structure on the person that had six or $700,000, what would be an appropriate fee structure and risk allocation? >> i wouldn't ask that question because i don't know what the facts about their threshold of what they had told their clients. >> you can answer the question. do you have any idea what went into the actual fee structure in the product? was it just a mutual fund? >> and variable annuity, a complex instrument. >> didn't have a lifetime income structure in the fee structure? >> a day. it was given to a person in his mid to late 70s and kept very copious records. >> doesn't have a life insurance component? >> variable annuities try to help guard against the risk and give you more reward and what i have seen in the outreach week time is we've had a number of significant challenges in this family $50,000 is what they lost and i believe the son-in-law came and testified because he passed away a few months ago. there is a hearing and it was a sad story that is preventable. >> part of the challenge i have as we know it today as i do believe what we have an opportunity today to discuss the success or failures of the representative that in the most part so many americans will be dependent on social security and my summer on funds because they'll have fewer visors in the market for them. my thought is if we find this video actually have fewer folks playing at the most important model of access which is the minimum level of access around 100 to $200,000 accounts. you will have more folks making their own decisions, hopefully on the internet or they can have a device that they are. the fact of the matter is too many people will make their own decisions not based on expertise, not based on background, but what they hope is a good decision. >> i would respectfully disagree. a witness on the next panel is doing a lot of good work. >> thank you chairman isakson for holding this important hearing. thank you to the secretary for testifying today as well as our second panel. it will be questioning the advice for the retirement account shouldn't have to be one of those things. we should be concerned workers are losing money out of pensions that they were counting on and making sure advisors work in the best interest of customers is essential for retirees as well as advisers in workers. the best standard is what is best for our economy and to have access to a secure retirement. it's important that we get this road right and i hope all sides will participate in this process and submit their comments and make sure the final rule reflects the feedback you have heard and i hope our debate can center on the final language of the rule. there's been an enormous amount of work put into this since the original version of 2010 and i've heard some critics say it's either worse than that we can learn learn from the 2010 version. i wanted to ask you can you walk us through the changes you've made since the 2010 proposal to make this better? >> share. one of the critiques as there wasn't sufficiently robust analysis. one of the concerns echoed was about a provision to regulate appraisals and we heard from a number of people that should be removed. that has been removed from the proposed rule. we heard we need to establish a vehicle to enforce the best interest required and it. the best interest contract vehicle is that vehicle that was not there in the 2010 rule. we made a number of changes in response to feedback we got from people about where the line between education and advice should be. that is another example senator. there are others, but in the interest of time i will cite those for. what we have said is give us feedback on how that works for you and how we can effectively implemented the necessary changes made we are all ears. >> senator franken asked you about what you're hearing. he cited a number of things. data chemo might come a point of sales, a lot of things. i assume you are remaining open to making a curb or even necessary adjustments to ensure it works and is workable as you get these comments back. >> we have gotten great feedback we've had 50 meetings since the proposed rule came out and i've been impressed by the dts attitude. they understand that this is the right thing to do. i have questions and turns than they've given us some great feedback. >> the current rule established 40 years ago how has retirement market change. see if you can define what's happened since then. >> in the world of yesteryear, people work 30 years at the same job and they have their pension, party, defined in a fit plan. today you have the defined-benefit world is shrinking with 20% of the market. you have between defined contributions, between iras and his an $11 trillion market in roughly 2.8 trillion in the tp marka. a year from now the disparity will continue to widen. people have to own in the modern family universe, they have to own this decision and that is why a rule established 40 years ago when 401(k) was a rural highway in the midwest. today those are part of our lexicon and that is why today's rule, today's consumer protection framework needs to reflect today's realities. >> thank you for all your hard work on this in your continued work to make the world work at the end of the day. i really do appreciate it. i would deal back my time. >> senator baldwin. thank you, mr. chairman. >> i was told he were ready. are you ready now? senator baldwin. >> thank you for yielding and i want to thank the chairman and ranking member both are convening today's discussion. secretary, you just outlined significant changes in the retirement market please. if you think about the ways in which it has changed since arisa was passed in 1975 it is quite significant. i worry about what the future looks like for those trying to achieve the american dream, living in the middle class worked hard their entire life. perhaps in the recession, needed to do so for sending kids to college. any pension plan they have that isn't available anymore. workers were not saving enough for their retirement. we know as you outlined that there has been a real shift from defined benefit to defined contribution plans and that shift puts more responsibility is on workers shoulders to manage risks and to manage the decision oftentimes that having invested in expertise. you have covered a lot of territory for my questions with you. in particular how workers with smaller accounts and those are arguably made the retirement protection the most will have access to high-quality and affordable advice. i am going to move to something a little bit more specific given some of the proud traditions in my home state of wisconsin. we actually have a history of cooperative and mutual ownership comes to names. so companies that are owned by -- >> northwestern mutual for instance. >> i got married two miles north of their headquarters. >> i had a good visit not too long ago. i would say, while tooting the horn of my state say a lot of those traditions but back to wisconsin's progressive era when people like senator robert wallace senior, fighting bob as he's known in the state, really laid the groundwork for the formation of a number of companies. a lot of them have gained incredibly valuable experience embedded into the project that they sell. i would like you to talk about what assurances you can get a shoe the third of companies that they will continue to feel that they solve their own retirement products as we go forward. >> sure. those are sometimes referred to as proprietary products. the rule is the same with your northwestern mutual that has a long and distinguished history. again i got married a mile and a half north of there had orders in milwaukee. and the rule is putting your best interest, putting your customers best interests first. part of that is making sure you have policies and procedures in place to oversee your sales force. that is true whether it's northwestern mutual. that is true whether it is abc bank. a big part of what the best interest standard means is you have those internal policies. for instance coming you are ensuring in the case of the northwestern mutual that might want to sell a proprietary product one thing i would suggest that might be a good idea to ask is about to be a product that a reasonable dependent person would recommend to the customer. one thing we've seen and i'm not saying we submitted our first mutual, but in the course of our outreach sometimes fail incentives become perverse. if you sell x number one product you get a trip to hawaii. i've even heard about trips to the masters. when that person walks in to give me advice, i don't want them looking at me thinking you are the only thing between me and hawaii with my family. that is when you have a misalignment of incentives and that is what we are trying to address by making sure we have the best interest standard in place. what it does not mean as you have to sell someone the lowest product. i don't buy a yugo because it's a car. that is why it's no longer on the market i believe. but the point is it's not about the lowest cost. the northstar is the best interest of the customer in places like northwest mutual or the abc bank for the broker dealer or the person with the small business owner, northstar is the same for all of them. >> senator warren. thank you, mr. chairman. is really hard to save for retirement. almost one third of americans on the edge of retirement have zero savings and another third have less than a year's worth of income put away. that is why it's doubly important that every dollar is protect it. americans rely on us and them advice on to save for retirement. most advisors have their savers best interest at heart said mallard advisors have their customer's interests first and that's created a whole was $17 billion a year in retirement savings. money going into investment advisors talk a status pockets of the people trying to save for retirement. thankfully the whole may soon be plugged with new rules that require brokers and advisers to put their customer's interests first. i have two quick questions about this, secretary perez. most americans don't realize their investment advisors retirement advisors are required to put the client's interests first. they think if they go to someone who advises them that their interests will be first. can you explain briefly why is it legal today right visors to your clients into products that line the advisors pockets while training away the client savings. >> well, we have folks who were operating under the fiduciary model. we go to a certified financial planner. the person is required to put their interests first. first thing he said to me as keeper thrift savings plan, keep it in the thrift savings plan. i can't do any better. that's an example of putting our interests first. he did make a dime off of that but off of thought that i referred a number of clients win because he looks out for me. that's why it's good for business. the person under suitability standard again a number of products. >> what i don't get is how did it turn out to be legal? what went wrong? >> well, it shouldn't be. i think the suitability standard is facilitating a >> when is the last time we updated laws? >> we have been updated blogs in earnest in 40 years. >> so we have outdated laws, loopholes in the laws. >> we didn't think about iras and 401(k)s and 75. we were in a defined-benefit world. the staff didn't matter. >> you propose some commonsense rules to close these loopholes to update the laws just to make sure i'll advisors are putting the customer's interests first. lobbyists for the biggest financial companies and investment advisors are fighting this proposal tooth and nail. help me out here. what is it they are so worried about? >> i will let them speak for themselves. number one, i have been heartened by the number of conversations i've had and as i said in my testimony there has been an undeniable shift towards a recognition of the need for the best interest standard and folks out there since the outset. others are coming to us absolutely wanted to get to yes. goes in a different place told me they would like to put their clients best interests first now and my response to that as there is good news for you. this will be easy to comply with if you are in fact putting your customers best interest first. it is something that can be done. i hear from so many folks day in and day out we need a level playing field because people go to their advisor. some advisers are dual headed depending what part of transaction. it's very confusing to begin with. that is stunningly confusing and we need one standard and it ought to be the best interest. >> about the standard in the best interest testbed a lot of people making a lot of money by $17 billion is going somewhere. this one seems like a no-brainer to me. hardwick and americans manage to pull together money for retirement should trust that the advisors are looking out for them. besides that thousands of honest hard-working advisers and brokers around the country who put their clients first everyday shouldn't have to compete against those unethical advisers. i understand there are people making money from keeping the game rate but we don't work. time to level the playing field. thank you, mr. chairman. >> and interested the panelists i want to introduce senator casey who will be brief in the straight to the second panel. >> good afternoon sir. >> i don't pretend to understand this as you do. let me channel by which people have asked me a period of solitude and that list that i have a client. he's pretty well-off. i go into his office and help him with this planning. he said do my speaking to employees and give them advice on how to handle money. i do it as a favorite to my clients but under this rule i have to have the employees and contract before i'd be able to give them the advice they give them. is that true or not? >> i don't think that's true for the following reasons. if you set their teleworkers what is your risk talent, here's what you need to think about to have a healthy retirement. >> i think you may have gotten to the notebook where i was. you don't think so or you know not. i say this not to be pedantic but unless he has clear idea from dll, he won't have clarity in terms of how to conduct themselves. he would say what it is securing say this is what you should do with your money. if you are younger put it in this or older that but first figure out your risk talent et cetera. thank you, that general advice to be something they would need to contract for? >> general advice that is not picked this product or that product will go into mutual funds, something like that is the days of the asset allocation. that wouldn't cross the line of education. >> next, i am told the united kingdom put into law 2013 to stop offering investment advice to customer supplies and 80 k. in assets. that may be the answer to senator warner's question is the model works for the lower moderate income people. just comment on that. i don't know whether it's true or not. >> it is not true. let me give you the facts. after the u.k. put in place their regulation by the regulation bans commissions. there were advisors start 310,000 client and 820,000 new clients came into the market. there is a net help to increase. low balance accounts could be conserved. the most interesting data point because i heard the feedback a lot. the most interesting point about what happened in the u.k. is more and more people are now getting in lower-cost fund because the problem with their system in the u.s. does incentivize his complexity and simplicity is all too frequently what is called for. it incentivizes complexity because complexity generates more fees that the variable annuity i describe. the u.k. experience i welcome further inquiry because there's a fair amount of incorrect information surrounding it. >> the last thing is dll estimating the cost of the road between 2.4 m. 5.7 billion i'm given a study by the way to suggesting tenures that could exceed $15 million. any thoughts on that discrepancy? >> i think our cost-benefit analysis is quite strong. we estimate the benefits over the next 10 years to be $40 billion. in an $11 trillion market the cost of conflicted advice with a $50,000 loss it adds up fast. these are folks who can ill afford to lose this. the benefit i am hearing from employers like one of our next panelists as they market forces are working to the advantage of small investors. i hope we'll talk to the folks at our fiduciary and doing great work. >> i get that. thank you. one of our members is atrociously late. the staffers and doing a good job of convincing me she only has two minutes worth of questions. we are for the people to testify. i recognize sheldon whitehouse who will be brief. >> very well. i have heard from companies who are major providers of service and investors who were totally on board with the have the responsibility of meeting the fiduciary standard but are concerned around the edges but the way in which they communicate with vast numbers of customers might be affected are those in ways that none of us would intend. i want to make sure you will be attentive to make sure there is not too much regulatory sprawl into areas outside of what we expect which is to keep them putting the interest of the client first. >> absolutely. we had the conversation earlier and we had constructive meetings with firms have addressed concerns similar to that and it certainly wasn't our intent. the question we always ask a show us in the proposal where you think the concern arises and give us some potentials aleutians so we can contemplate how to make sure we are getting to the right place. >> very good your thank you very much. i'm well within my two minutes. >> let the record reflect the sheldon whitehouse was brief. you don't have to make it sound like that's a novelty. >> mr. chairman, thank you for your courtesy as always. >> for the second panelists please come forward. [inaudible conversations] [inaudible conversations] >> in the interest of time, i will begin the introductions of our panelists have a good straight to their testimony. first, peter schneider president is for america to thank you for being here today. peter is the leader in financial services providing middle-income marketplace offering retirement savings options than millions americans. mr. snyder became president answered before that as executive vice president. we welcome you being here today. we also have scott abdulazeez puritz. he has been referenced previously by "the new york times" from cbs. a graduate of tapped into the master's degree from harvard university. thank you for being here. for that to turn it over to ranking member frank and to introduce mr. miller. >> is my pleasure to introduce darlene miller joining us today from my home state. ms. miller is president and ceo of transport industries in burnsville, minnesota, and manufacturing company that provides small part machines to other industries. trade was named u.s. chambers on business of the year in 2008 in a 2010 ms. miller herself was named by the burnsville chamber of commerce as the businessperson of the year. i've had the good fortune of meeting ms. miller in 2012 when we toured burnsville senior high school together to discuss the importance of stem education. i've also discussed my community college cougar fund act which would create public-private partnerships to address skills gap in manufacturing. thank you for being with us today and to discuss how you can best meet the needs of your employees. thank you, mr. chairman. thank you mr. chairman. it is my privilege to introduce an oppressive economist, an attorney. growing up in wichita rob has become a notable figure in the economics community. he brings a balanced perspective on the issue has been an executive in private, public and government sectors. his list of accomplishments on advisory boards reads more like a collection of several highly accomplished people rather than one man. as a current fellow at the brookings institution a counsel to a law firm based in st. louis and chicago chief economic adviser at patent properties i thank you for taking the time to come before the committee to provide a viewpoint that unfortunately seems to be lost if not solely ignored in the conversation. we look forward to hearing your testimony. we hope you can offer solutions on how we can maintain access for a access for middle and lower income families and businesses in regards to financial guidance and retirement planning. thank you, mr. chairman. >> of the panelists would limit to five minutes and after that eloquent introduction, you should be first. thank you, mr. chairman. thank you also for the introduction. >> turn your microphone on. a little switch there. >> thanking everybody for their kind introductions and so forth. senator roberts, i don't want you to choke on these words but i'm a lifelong democrat and a former clinton administration official. very proud to be from kansas. >> that doesn't bother me one bit. [laughter] >> i say that because i come from a background where we care deeply about the kind of goals the department is pursuing in this proposal. i want to respectfully disagree with the way that proposal has been outlined and i will make three quick points. number one, the correctly estimated benefits of labor proposed rule do not upgrade the cost. labor is absolutely no credit or assigns the value to human investment advice, namely encouraging clients to avoid the market. one of the worst decisions of investor can make and also helping rebalance portfolios over time. when these factors are taken into account my colleague came to the conclusion rather than generating $4 billion in annual benefits for investors it would produce net harm of roughly one to $3 billion annually depending how many brokers are induced by the proposal to no longer serve the ira mutual fund market. journey future market downturn dr. singer and i estimated show our comments that we submitted a deal yesterday that causing the economics to serve the role could cost investors as much as $80 billion, and double the tenure. i should also mention the connection that the 17 million-dollar number is thrown about by the cea estimate in our opinion is flawed and we show this in a report. not even labor council and the $17 billion. even that figure is incorrect. that's to keep in mind. with all due respect to bro respect to rebel advice which i think is an important addition to the market, we have to be careful about drawing too much of a conclusion for all minor text messaging. while robo advisors can help savers identified asset allocations an e-mail or text message is not an adequate substitute on the other end of the telephone remain investors are the clear evidence to stay put if you're a long-term investor. number two if you lose your broker or the only other source of human device you're likely to go to a someone who is providing advice on the basis of a rapidly which is a percentage of your account. we shall investors will end up paying more than they do under the current regime. this is for small investors. secretary perez talked to a $650,000 account. that is not a small favor account. there are millions of people that have account balances at 10 or 25 then. for those people, brokerages and less responsive form. that is the fundamental fact. third my last point the notion advisor should be held to the best interest of pipe and it is not controversial. let's just stipulate that. let's don't argue about that. should reinforce it by the class-action litigation or by a party we have established to oversee the industry. in fact my bottom-line suggestion to cut to the chase is what they ought to do is go back to the drawing board. in fact a lot of brokers will live the market. the labor have to do is go back and say let's work together and figure out a way to administer a best interest world that you can enforce. and by the way if the problem is insufficient disclosure about who's getting paid and how they get paid, there's a simple solution to that. better disclosure, simple disclosure. but a warning on the front of the document this as who's getting paid and how much. the only basis and then i'll conclude. the only basis was one study the department of labor cited based on experimental evidence, not real-world market evidence. if i were the government and i proposed to whoever it is that we have an entire industry on one debian experimental evidence i've been told to go back to my office and find another job. is no basis in my opinion for at a minimum not tried better disclosure before we go ahead. i think that concludes my testimony. thank you very much. >> mr. chairman, ranking member franken and members of the subcommittee, i appreciate being here today. the department of labor's or poster was of enormous consequence to the middle income families we serve every day in each of your stays. please allow me to tell you about pry america who are founded 40 years ago in the central mission of middle income families require someone to help focus on financial needs. that was true then and it is just as true today and we feel we made some headway. we ensure 4 million lies with our term life insurance. this year we pay $1.2 billion of death benefits to families. those checks to deliver everyday and will deliver multiple checks today keep a personal tragedy for becoming a financial one. we help clients pay $50 billion in investment accounts. most accounts a very small by industry standards but they are usually important to the families who open them. investment choices with us are very simple. inappropriate for market. we do know individuals talks. we do know options. we do know commodities. many mutual funds and annuities. you can't buy google but you can buy 700 mutual funds by top companies like our clients household income is between 30 and $100,000 a year. this usually two parents working in those homes and frankly all too often the homes are headed by single mother. we strongly believe in retirement paid savings and clients have both been 1.2 million iras with us. you can start one with primerica for as little as $50 a month. even not amount is hard to find in the families that live paycheck to paycheck but we sometimes say they have too much money at the end of the money. we provide face-to-face help from licensed representatives who live and work in the communities. this representatives begin with education. they teach fundamentals of how money works. dollar cost averaging, timing the market, emergency cash accounts. that is all important. oliver wyman study found that five individuals accumulate 30% for assets at age 65114% more. our client benefit in the financial lives. comment letter was submitted by shelley rosen 15 years ago she sat down with a railroad worker and his wife. they had a lot of dead and no savings and they were very generous. so generous a rain of credit cards buying gifts for their friends. we help teach them other ways to be generous. today they are afraid financially independent. the department of labor role full text shelley rosen from helping folks like that railroad engineer. .. help the millions stranded by the rule. we disagree. our company delays in biorhythms, not algorithms. they need a person not a personal computer to navigate the financial landscape that is unfamiliar to them. without helping hand they worried about the mistake and it will not hit the send button. in the household we serve there is a struggle going on. it's not between investment a or b. or c. it is a fight between saving and spending. a fight to put an extra $50 away. we all agree we must in a client's best interest but inadequate retirement savings is the overriding issue facing the middle-class. individual is another obstacle your don't put out a deal with good intentions but it's such an important issue, edwin needs to be involved here we look forward to working with everyone and we're glad the senate is involved with this issue. thank you very much for listening to me. >> ms. miller? >> thank you chairman isakson and ranking member franken, and thank you for the kind introduction. members of the subcommittee, on upon and workplace safety members of the full committee, i in a representing myself and my employees and also the chamber of commerce of which i am a board member, adventure this chamber small business council. front of opened in 1966 and i purchased it in 1993-94 and started with seven employees. we have almost 30. we're looking to expand. in order to expand my company must be able to compete with much larger companies for talented employees. one way we able to do so is by offering employee benefits including a retirement savings plan. and as a note of a business i am very focused on the details of my core business function, and i used outside professionals to be with supplemental business functions. for example, i use a cpa to assist me with tax issues and attorney to assist me with legal issues. and a financial advisor developing with my retirement savings plan. in 1999, premac implemented a step ira. the kind of admitted to me by an advisor who i had worked with real estate to provide medical benefits are my employees. several years later my advisor advised me i was in danger of violating the 25 employee limit. so at that point i worked with them to determine how to continue to provide retirement benefits for my employees. we decided a 401(k) plan was the best option for my company and into the night we implement that plan. we have a 96% enrollment rate in our plan. almost all of our employees participate in that plan. of the eligible and there's only one was close to retirement who does not participate or couple that are part-time are not quite yet eligible. under the 401(k) plan employees receive a matching contribution equal to 100% of the first 3%. that they can shoot and then 50% of the next 2% of contributions. also and just as important premac provides education to all of its employees. i look forward to continuing to provide competitive benefit. my current employees are like family and want to be able to help them especially with the retirement. just as importantly i want to be able to attract new employees to 82% bar association precision machined products association say that they also need to be able to provide this benefit to their prospective new employees. i am very concerned that the proposed rule will impact our ability to do so. last week the chamber submit a comment letter to the department of labor and newburn in many ways in which the proposed rule is unworkable. in my testimony i would like to highlight three issues to have it particularly negative impact to small business plans. first, sell this car but does commission against small businesses and will decrease access to much-needed guidance. under the proposal there's a carveout for the advisers that are selling or marketing materials or however that carveout does not apply to advisers a small businesses. at dol seems to believe that small business owners such as myself are not as sophisticated as large businesses and, therefore, need additional protection. when i work with my financial advisor i am aware that he is providing a service for me and selling a product. i wouldn't be able to run a successful business if are not able to understand when i'm involved in a sales discussion. second, the changes to the education carveout will restrict access to invest in education for both small business owners and their employees. my employees really truly value the investment education provided to them, specifically providing investment and recommendation in various asset classes to this information allows them to make informed investment decisions and many of my employees could not afford to pay for this investment education separately, and may be discouraged from investing in the plan at all if my company did not provide this benefit. third, the best interest contract exemption will increase the cost of services to small businesses. and possibly eliminate access. there's some question of whether advisers, small business plans are even able to use the exemption -- sorry. even assuming that there are that they are, they're certain to be additional costs associated with these changes. as a business owner who relies on outside professionals to help me manage my plan any additional costs imposed by the regulation will be passed on to me. in conclusion, i'm very concerned the proposal will not achieve the department's goals of better protecting workers and retirees. but will instead make it harder for small business employers and employees to access the financial advice and increase their retirement services. thank you for the opportunity to testify before you today not afforded to any questions you might have. >> thank you ms. miller. before you go to mr. puritz public apologist. senator roberts and i both have a hearing which, of course nobody on the dice i might add. >> assure. >> but we have to be there to join the good-natured spirit i am it also isn't a bipartisan, i will turn over the rest of her hearing to the acting chairman ranking member franken. >> unprecedented. [laughter] spill mr. acting chairman? i don't know what to say. you again? >> may i help you? >> let's just go right to mr. puritz. [laughter] >> thank you chairman isakson, ranking member franken, members of the subcommittee for this opportunity to provide rebalance ira's views of of the department of labor's proposed conflict of fascist rule. i am the cofounder and managing director of rebalance ira. but for mr. bush investment advisor with approximate $275 million of assets under management and reserve about 500 clients. rebalance ira israel to renew national investment advisor firm that combines top quality expert investment advisors, real human beings, with low-cost highly diversified retirement portfolios for everyday americans. our firms investing in english financial limited, a professor from princeton to unchain and -- rebalace ira embraces our fiduciary legal standards and we always put the interests of our clients front and center we provide retirement investment advice without commissions and without conflict. which makes it very easy to embrace the future standard. rebalace ira is part of a broad trend of investment advisor firms that seek to provide consumers with a fundamentally better set of retirement investment options. this new generation of firms is offering retirement investment advice to clients at all income levels were very modest fees or to group of innovators include new firms such as my own, rebalace ira while front and personal capital, but also includes established industry players such as vanguard and schwab. this trend of a retelling the financial service industry is about three years old and has met with considerable success in the marketplace. tens of thousands of coins have switched over. this group of investment innovators is going very fast and manages over $15 billion of client assets. imagine what would happen if there was a level playing field. imagine. these investment innovators have three common features. first we harnessed technology to make the process more efficient. second, we harnessed to business models and finally we deploy new investment vehicles, typically best of breed improved investment portfolios of low-cost. the results are considerable. lower costs pure asset allocation, superior investment vehicles, superior transparency and finally with building profitable successful business models. every balance either a client seeking a because they need advice about managing their retirement savings in a debate understand the increase the complex world of investment products. our clients come from all walks of life, nurses, school teacher to plumbers welders professors, police, firemen, government employees regular americans. we are in the market place everyday giving with everyday americans as they struggle to find the best way to manage their retirement savings. if you will we see how this is me. sometimes frequently it is not a pretty sight. over 30% of our clients come to us directly from having like a butter face a suboptimal relationship with the brokerage firm together from we sometimes her to these clients as brokerage refugees. the story we see over and over again is all too familiar. at client at a brokerage firm is done to find a so-called trusted retirement investment advisor doesn't have a fiduciary responsibility in addition as much of client are surprised, shocked to discover there's almost always a second layer of these at the investment management level which frequently as 1% or more of to that the burden. the brokerage refugees that we sit at our from average to .37% of these all in per year. that may not sound like a lot of money. but over several decades that extra burden could eat away at over half, half of the consumer's retirement nest egg. over half. when rebalace ira takes on these refugees as clients of our firm, we reduce their retirement investment destruction by an average of 68%. we put in place for this constant coverage of retirement plan and to provide our clients with best of breed and stock portfolios and finally we they're all of our clients with a highly qualified to person real heartbeat retirement investing team. american inventiveness, and entrepreneurs. no, are alive and well in the financial services industry. but for all consumers, the full benefit of this extraordinary truly, truly extraordinary surge of innovation, there needs to be three things. greater transparency, greater flow of information, particularly regarding costs and greater alignment of economic interest. we believe that regulatory level playing field will dramatically accelerate the retelling of the financial services industry and provide everyday americans with a fundamentally cheaper and fundamentally better way to save for retirement. it's time to halt all -- hold all financial professionals accountable. and establish a level playing field. this is what the dol rule can do. americans struggle to save for dignify recovery should all be subject to a competent interest that will drain their investment. and is a traditional brokerage firm cannot live by its standard and refuse to serve modest savers, so be it. so be it. other firms who embrace this client first approached -- >> i would ask you to wrap up spent all americans at all income levels prepare for secured retirement. thank you. >> since i'm i guess the acting chairman now i will be here to the end, so i will go to senator warren to ask your question. >> thank you mr. acting chairman. as we discussed it is to perfectly legal for retirement advisors to give advice that boost their own incomes by selling lousy products to their clients. and according to the best available data, data that are not paid for by the industry is bad advice cost americans about $17 billion a year. the department of labor has proposed a rule that would put a stop to this retirement saving string and all investment advisor to put their customers first. level playing field. mr. schneider, you are the seed of primerica command large investment advisory firm -- ceo. your test by today the department of labors rule is anything to our work complex and burdensome time and you said that one thing that's quote critical to your success is that primerica always operates in its client's best interest. so i was interested to read a news report this morning that outlines a lawsuit brought against her advisors in florida. according to the article held his 238 firefighters, teachers and other the republic workers who were near retirement age accused your company of providing advice that drained their retirement savings. and you did it by advising them to move their retirement savings out at a guaranteed government pension into riskier private investment. now, primerica was forced to make a lot of money but only if you could convince florida firefighters who were near retirement age to cash out their guaranteed attention. so mr. schneider i just want to understand your company's advice in these cases. do you believe that people like these firefighters in florida who are near retirement and have secure pensions with a guaranteed monthly payments should move their money into riskier assets with no guarantees just before they retired? >> first of all senator warner, i appreciate your promotion. i've actually president of the company, not the ceo. of money with the matter of which you speak and it doesn't have any application actually to the rule before the committee because in that particular case none of those individuals were clients of primerica. they paid us no compensation. but let me go -- >> wait, wait. let's stop right there mr. schneider the article didn't say the workers are you retirement clients. it's that you gave him bad advice. and exactly is the quote. once these workers retired and moved out of their government plan primerica agents stood to profit from managing their retirement assets. had they stayed in the pension programs, retirees would have simply collected their monthly payment leading nothing for primerica to manage and no commission for primerica agents to harvest. now, my question is not how you are paid. my question is whether you think it does sound investment advice to encourage public employees to move their money out of their pension and into riskier assets with no guarantees just before they retire? >> so, senator, and that particular matter, first of all regulators look at the. they found the firm acted properly and in the case of -- >> let me stop you right there. the question is legal to do and that's a problem we've got. it is illegal to do that and i think that's what the regulators say, it's legal. my question once again is about the advice. that primerica agents gave the is it a good idea for firefighters on the front edge of retirement to move out of a guaranteed benefit plan that that is going to cover them for all their lives, and move into a risky investment that would take a lot of these border agent? >> the situation is really very different. if they were in a defined benefit plan and you are sick what happens is in the state of florida, for example, were you to retire and then died two or three weeks later he would have no ability to lead the money to your loved ones. >> i'm sorry these two or three people were weeks away from dying and that's why they all got this advice? >> well, senator the court dismissed those cases and, frankly, -- >> is it -- i think we've established that, mr. schneider, that no one broke the law. the question is whether the law should be changed. >> e street one of issues. we are here to talk about the rule. one problem with the the rule is disabled in the financial services industry knows, especially after the financial crisis, you can be sued sometimes a properly but also sometimes frivolously. and under the best interest contract exemption, you ain't into the contract with the client and they can see you and you can lose the benefit of the exemption. so not just -- >> i understand you don't want to be sued. i totally get that by the question i keep trying to ask is what is generally a good idea for workers like firefighters teachers, on the eve of their retirement to move their money from guaranteed defined benefit plans into riskier investments. but let me ask you that question, mr. puritz, try for your the managing director of rebalace ira. you have a large investment management firm. would you apply judgment to clients to cash out of a defined benefit pension plan and move money into an ira managed by your company? >> as a generalrule, the answer is no. >> lineup? >> in traditional pension a defined benefit pension plan for their safety and protective build-a-bear spirit we have a defined benefit plan that guarantees these people are going to be covered for their entire lives, is that right? there's a lot of research a lot of research profound as i understand. are there circumstances in which it is a good idea for someone right on the threshold of retirement to move from a defined benefit plan that will protect them from the rest of their lives, to a much riskier plan? >> the our circumstances but very rare. >> could you bring your microphone up to? >> you would describe this is very rare. i took a look at the research on to someone to get more expert opinion on this. it seems to be the research is to declare. the director for the center for retirement research at boston college, only those with serious illnesses they believe they do not have much time left should even consider cashing out a defined benefit pension, and even that is an obvious because as she puts it, even sick people may live longer than they think it so mr. garrett, let me ask you one more question. do you think it is and what gives the correct quote, complex and burdensome to offer advice that is in the best interest of the client as primerica claims of? [inaudible] >> i didn't think so. >> by with a suggestion it is expensive to provide people with sound financial advice is ridiculous. millions of financial advisers do it every day. hard-working americans like the florida firefighters and teachers who devoted their careers to protecting the public and were targeted by primerica shouldn't have to worry about whether their financial advice dishing advisers are planning to get rich by playing roulette. hard-working advisors like mr. pearce shouldn't have to compete with the schemesters i'm glad the department of labor is working to fix this problem. and you mr. chairman. >> thank you senator. mr. puritz come in both your spoken has become written testimony, a brokerage refugee i think that's someone who fled a brokerage and had a bad experience i guess. you mentioned in your written testimony, married a 37 year-old mother of three was paying excessive fees on any mutual fund recommended by a broker she inherited from her family. do the services you provide an easier charge under your duty as a, fiduciary, differ from those that this woman experienced with her inherited a broker, by that her family had been using this broker for years or something? okay. and what does that mean for retirement investors nest egg, or the ability to retire after say 30 years of working and saving? [inaudible] >> microphone spitting she literally means raising the microphone to your lips, or to your mouth. not to your lips. >> how is that? isn't on the? >> you need to turn the light on. pushing a -- >> thank you. there we go. >> that's an excellent question, and really gets to the heart of this matter from an economic point, from a return point of view. example of compliance were talking an extra fee burden and so charlie ellis was a member of our investment community as a phrase he says the dirtiest work in finance is only to only 1%. we think of 1%, what's the big deal? we pay 15% 21st and for generous. 1% seems inconsequential. but in this scenario that we run into consistently with clients who come from brokerage relationships, that extra fee burden is 2.37%. and if you can find that out over 30 years that's -- >> that's additional of what they're paying? >> that's what they are paying per year. in the current environment with plenty of good lower cost alternatives it's really unnecessary fee burden. >> that is compounded? >> peace, just like returns, exactly. and overtime give you an example commencement $100,000 there in all growth stock which a stroke is returned, in a tax-deferred account, that the cut would double every 10 years this with a 30 year time frame $100,000 would become $800,000. real considerable wealth creation. by contrast 50 50 reduce that down to 5% which is really that the delta we see in the marketplace, at 100,000 only goes to 400,000 or half the amount. that's what's at stake. a doubling of the return spirit so how are you able to provide your service at such a low my computations 32% of a 2.37% is about .475%? >> correct. we use technology to use everything more productive. we used exclusively low-cost bts, index funds spirit as that what was called disparagement i think rowboat speak with rowboat is a phrase for a new generation of investment advisers to use technology. there are some advisor 100% computerized and that's where the term robo comes from. there's some very successful ones including well front that is the market leader and they are targeting millennials and people in her '20s and '30s for whom -- >> they are for me with a working -- >> they are for me with computers and the retirement is about to the small part of the over all life. their whole career is ahead of them. by contrast to other firms such as personal capital and own firm rebalace ira where we have some investment philosophies and some use of technology but we have real life investment advisers who deal extensively with clients, and match them with the right asset allocation low-cost underlying portfolios, very low-cost, and discipline rebalancing which is really an essential risk management and return tool. >> well, i i have a lot of question but i will and for the record and we will keep this open. i would imagine i didn't commit thinking i would adjourn to this so when i say will keep it open for a certain breed of time, i imagine, is that 10 days? anybody? 10 days, i was right. i was in the majority at one point. [laughter] thank you all for your testimony, and this hearing is adjourned. [inaudible conversations] >> be spent to bring to the best access to congress live debate and votes vote from the senate floor, hearings and current public policy that's end of the weekend its booktv with nonfiction books and authors. live coverage a book festivals from around the country and the behind the scenes look at the publishing industry. c-span2, the best access to congress and nonfiction books. >> the senate continues debate today a a what's called a highway bill. it sets the federal portion for highway bridge and mass transportation projects nationwide for the next six years. the motion is pending to begin formal debate on the bill. offer for negotiations are underway on amendments. current highway funding runs out at the end of this month.n: l us now live senate coverage here on c-span2. heavenly father, we come before you today asking you for a new touch of grace to fall on all of our elected leaders. you told us in your word to ask for wisdom. i humbly ask today for everyone who governs and makes decisions concerning our great country to be filled with your divine wisdom. please remember mercy for those who are weak and struggling. i close my prayer by asking that you protect all of our elected leaders and their families from harm and danger. this i pray in your holy and matchless name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the 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. the presiding officer: the clerk will read a communication to the senate. the clerk: washington d.c., july 23, 2015. to the senate, under the provisions of rule 1 paragraph 3 of the standing rules of the senate i hereby appoint the honorable dean heller, a senator from the state of nevada, to perform the duties of the chair. signed orrin g. hatch. president pro tempore. mr. mcconnell: mr. president? the presiding officer: the majority leader. mr. mcconnell: there are a lot of tired cliches about not giving up after an initial setback. i won't subject our colleagues to any of those this morning but i will say that last night's vote represents an important first step toward passing a multiyear bipartisan highway bill. it's the first step on a much longer road, but in my view, a worthwhile one. this bipartisan bill would fund our roads highways and bridges for longer than any transportation bill considered by congress in a decade. and the highway proposal will do so without increasing taxes or adding to the deficit. that's no small achievement. just consider what the committee for responsible federal budget had to say about the bill that we voted to move forward on last night. it's refreshing, they said, to see congress focusing -- quote -- "on a multiyear solution instead of just another short-term patch. and in general their overall view was that this is -- quote -- "a fiscally responsible bill that relies on some pretty solid offsets." now, mr. president that's from the committee for responsible federal budget. they called it a fiscally responsible bill that relies on some pretty solid offsets. positive comments like those echo the kinds of things i continue to hear from members of both parties. i'd like to thank the senator from california and the other members on her side who worked with us to prepare this bill and then voted with us to advance it last night. i hope we'll continue to work together to finally deliver a fiscally responsible long-term highway bill for the american people. now there's just one other thing i'd like to mention. yesterday i joined speaker boehner, senator cotton, and congressman pompeio in sending a letter to the administration with a simple request that the administration meet its full obligations to congress under the terms of the bipartisan iran nuclear agreement review act a law that both parties supported overwhelmingly just this spring. the law gives congress the right to review all of the elements of an agreement struck between the white house and iran and then take a vote on it. the law is clear but the administration has not submitted the side agreements between the international atomic energy agency and iran to the senate. withholding the text from both democrats and republicans in congress. and since the iran nuclear review act was signed into law prior to the completion of the negotiation in vienna, secretary kerry was fully aware -- fully aware -- of the requirement in law to submit the side deal to congress. congress cannot properly carry out its obligation to the american people until -- until the administration fulfills its legal obligation to the american people and to congress. so we're calling on the administration to do that immediately. the presiding officer: the democratic leader. mr. reid: we can tell a lot of about how a senator feels about our veterans by seeing how they vote dealing with veterans issues. you can tell a lot about a senator about how he or she treats our nation's veterans. are they committed to giving our veterans the care and help they deserve and need, or do they see american service members as political footballs to be used for partisan fights? i was disappointed yesterday to see my republican colleagues try and actually manipulate a good veterans bill, a noble bill, and it was done for political purposes. the senior senator from washington who has worked so hard on veterans issues for years now in the senate, crafted a bipartisan piece of legislation to help veterans, to help veterans do a number of things but basically to help with their families. it's a tragic reality that thousands of veterans and service members struggle with issues relating to reproductive health including fertilety some as a result of the injuries sustained in combat. senator murray's bill would give the veterans administration the resources it needs to attend our veterans reproductive health. the legislation would also help facilitate adoptive services for wounded veterans who want a family of their own. senator murray's bill was to be marked up, and what this means is that it would be fiensed in a -- finalized in a committee before it was reported from that committee to the floor. that's one of the opportunities we have to get legislation on the floor. but in a cynical duplicitous move a hand full of republicans on that committee were determined to manipulate the legislation. instead of working with senator murray and others on the committee to pass in good bill as is, the junior senator from north carolina and other republicans tried to attach a so-called poison pill amendment to the bill. senator murray, to her credit, saw immediately what this charade was all about -- it was a political stunt -- and requested the chairman pull her bill from consideration which did happen. the senior senator from washington didn't want a good bipartisan bill hijacked by a few republicans looking to get their names on fox television. this episode says a lot about today's republican party. this is an attack on families. it's an attack on the health of women. and it's an attack on our veterans. every service member who puts on the europe of -- the uniform of the united states armed services deserves everything that we can give them because they take an oath to defend our nation. it's not a pledge taken lightly by these men and women who serve. they understand what's being asked of them. they know that at any given time they may have to sacrifice everything for this country. we here in the senate take a similar role when we're sworn into office. but we have an unspoken and solemn vow to support these veterans. we aren't called upon to make the ultimate sacrifices they are, but we have to recognize they need our help. what it means is we do everything that we can anything that we can to give them the care they deserve. that means we always put their well-being above partisan politics. republicans in this ploy yesterday put fox news ahead of welfare of the veterans community. this is in fact reality and it's too bad for the veterans community. mr. president, i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: quorum call: quorum call: