▶ 0:04:46Good afternoon. The committee will come to order. Without objection, the chair is authorized to declare recess at any time. Today, the rules committee is convening to consider four separate measures. S1582, HR1 1919, HR 3633, and HR 4016.
▶ 0:05:11the bipartisan Genius Act, establishes a progrowth regulatory framework for payment stable coins. This legislation is historic and it will help propel responsible innovation within America and lead us to securing an even stronger foothold within the global financial system. The aims of this legislation are simple.
▶ 0:05:33To increase regulatory clarity, reinforce consumer protection, and ensure that the security of our financial system remains sound and not S1582 also affirms the dominance of the US dollar, something we can all agree is incredibly pertinent.
▶ 0:05:53HR1 1919, the anti- CBDC surveillance state act would amend the Federal Reserve Act to prohibit the Federal Reserve banks from offering certain products or services directly to an individual and to prohibit the use of central bank digital currency for monetary policy.
▶ 0:06:15Insure HR19/19 expresses the sense of Congress that the board of governors of the Federal Reserve currently does not have the authority to issue a central bank digital currency and will not have such authority unless Congress grants it under con Congress's article one section 8 powers. The federal government has absolutely no business whatsoever in creating mechanisms that allow for financial surveillance.
▶ 0:06:46Doing so would lead to flagrant abuses of consumer privacy. That's an unacceptable outcome that simply cannot be allowed to happen. This legislation would prevent the federal government from exercising unilateral authority in using the financial system as a cudgel against American consumers. It's critical that Congress passes this legislation so that the financial privacy of American consumers remains protected and free from undue influence.
▶ 0:07:16HR 3633, the Digital Asset Market Clarity Act of establishes a set of functional, concise requirements for participants of the digital asset market while also spurring innovation and putting consumer protection first. This is another strong piece of legislation that will help cement America's leadership and standing within the global financial system.
▶ 0:07:46To dispense with the regulatory ambiguity and regulation by enforcement that has ultimately stifled innovation, HR 3633 works to establish a clear framework for digital asset markets while closing regulatory gaps.
▶ 0:08:05It is true that digital assets and other related forms of blockchain technology can help unlock a new era of innovation, but that can only happen when there's a clear roadmap for everyone, entrepreneurs, developers, consumers. This legislation offers cons common sense solutions that will help encourage innovation and lead to even further opportunities within the global financial system for America.
▶ 0:08:37the Department of Defense Appropriations Act of 2026, provides for appropriations for the DoD for the fiscal year ending on September 30, 2026. The bill provides a total disc discretionary allocation of $831.5 the same as the fiscal year 2025 enacted level and adheres to the discretionary budget topline put forward
▶ 0:09:07in the president's FY26 budget request. It provides $189 billion for active reserve and national guard military personnel, which is 6.6 billion above the fiscal year 2025 enacted level.
▶ 0:09:26In addition to the continuation of historic pay increases in FY2025 for junior enlisted service members, this legislation includes a 3.8% 8% increase in basic pay for all military personnel effective January 1, 2026.
▶ 0:09:47It makes key investments in research and development, procurement, operation and maintenance and other critical areas throughout the Department of Defense. Funding is also allocated for the Golden Dome for America for strengthening the industrial base and for other strategic priorities of the DoD. Congress's most important duty is to provide for the common defense and general welfare of the nation.
▶ 0:10:14It is abundantly clear that this legislation must be passed so that we can continue to uphold that duty. As always, I s certainly welcome our Democrat colleagues to join us in voting in favor of these four separate measures. With that, I yield to the ranking member, Mr. McGovern, for any comments he wishes to make.
▶ 0:10:35Well, thank you, Madam Chair, and uh let's just be honest about what's going on here. Fresh off ramming through their big ugly tax scam, a shameless handout to billionaires, Republicans have decided that it wasn't enough. huge tax giveaways to the rich and powerful weren't good enough. Now they want to give even more to those who already have the most. They're calling three bills they are putting forward this week um uh as crypto reform. But let's be real, this is a rigged game.
▶ 0:11:05Uh it's the GOP's crypto giveaway written for those at the top. These bills set in stone weak and ineffective crypto regulations with loopholes so big that you could drive a Mac truck through them. Loopholes for the rich, which seems to be the favorite pastime of my friends on the other side. I have not had one person in my district come up to me and say, "Please, please, Jim, make it easier for crypto millionaires to get richer.
▶ 0:11:32Please make it easier to con people." Yet, that is exactly what is going on here. Democrats tried to include protections for consumers, bans on fraud, even rules to stop elected officials from profiting off the laws they write. These common sense amendments were rejected by Republicans. Why? Follow the money. This isn't about innovation. It's about corruption. Get this. Trump and his family are making boatloads of money on their crypto schemes.
▶ 0:12:02And these bills even carve out special treatment for Trump's personal crypto ventures. Literally, that is like the definition of corruption. I remember a time when presidents actually divested from personal business interests to avoid even the appearance of corruption. That used to be the standard around here.
▶ 0:12:23Now, we've got an administration openly using their power to pad their own bank accounts, cutting deals, cozying up to crypto backers, and inviting paidtoplay schemes and foreign influence operations to come in right through the front door. They aren't even trying to hide it. Again, this is corruption, plain and simple. Now, also on our agenda is the defense is the defense appropriations. And I'm going to say this until I'm blew in the face.
▶ 0:12:51We should not be writing massive blank checks to the Pentagon when they can't even pass a simple audit. This bill will continue shoveling millions uh and millions and millions of dollars to defense contractors who charge exorbitant prices after Republicans just snuck an additional $150 billion for defense spending into the big ugly bill. This is the fleecing of America's taxpayers. And it's also uh and it's also defense contractors can continue to make an extra buck.
▶ 0:13:21If Republicans were serious about waste, this is where they would start. But they won't because they're not serious about legislating at all. Now, let's not forget the last time we were here. Uh Republicans jam through their one big ugly bill, a trillion dollar smash and grab that punishes working people and rewards the richest of the rich. That bill is now law thanks to Republicans in Congress and to Donald Trump. A law that will kick 17 million Americans off their healthcare.
▶ 0:13:52Shutter hospitals and assisted living facilities. Take food out of the mouths of the hungry. Raise energy costs for families while big oil cashes in. Give the biggest tax cuts to the rich while hardworking people get scraps. And oh, by the way, adds nearly $4 trillion to the debt. Why? Why cut health care and food assistance from hardworking Americans when you still got to add $4 trillion dollars to the debt? Who is this helping besides the the very rich in this country?
▶ 0:14:22I mean, you've got to admire the G. Rob the poor, reward the rich, explode the debt, and then come in here with a straight face talking about responsibility and reforms. It's outrageous and it is cruel and it's going to catch up with you. So, here's the truth. Republicans have the majority and they they used it to pass the most extreme, reckless, corrupt agenda in modern history. But the American people are watching.
▶ 0:14:47They're going to feel the pain brought to them by this Republican government when grocery bills go up, when the hospital down the street shuts its doors, when grandma loses her Medicaid. And they're going to remember it in November 2026. Democrats aren't going to stop fighting. We believe in govern in a government that works for the people, not just for hedge fund managers and crypto bros and Mara Lago donors. So, no, we're not going to let Republicans change the subject.
▶ 0:15:15We're to keep calling out the corruption and chaos. And we're going to keep standing up for the people who sent us here because they deserve better than this mess. And with that, I yield back.
▶ 0:15:27Thank you very much, Mr. McGovern. Without objection, any prepared statements that our witnesses may have will be included in the record. I now welcome our first panel, Representative Calbert and Representative McCllum from the Committee on Appropriations, McCllum, I should say it right. Your full statement will be submitted for the record and we ask that you summarize your statement in five minutes.
▶ 0:15:52Representative Calbertt, I welcome your Thank you, Chairwoman Fox and Ranking Member McGovern. And it's good to be here with my friend and ranking member Petty McCullum. It's a pleasure to appear before this uh appear before this committee today in support of HR 416, the fiscal year 26 Department of Defense Appropriation Act. I know our time is relatively short, so I'll try to be brief. HR 416 provides 80 831.5 billion for the Department of Defense and Intelligence Community.
▶ 0:16:22While this is a flat uh bill relative to discretionary funds enacted in fiscal year 25, coupled with relatively uh our recently enacted reconciliation act, it provides nearly 1 trillion to modernize and sustain our armed forces. Today's threat uh environment continues to grow more complex. Russia remains an aggressive actor. China's values continue to clash with our own and they advance their military capability.
▶ 0:16:50Now more than ever, the United States requires strategic investments to defend and protect the American people. Preventing harmful actors aggression amplifies the need to develop and field capabilities that provide America the military advantage we need. First, this bill champions America's military superiority in a variety of ways. It enhances investments in fifth and sixth generation aircraft such as the F-35, F-47, and the FAXX.
▶ 0:17:20This bill pri prioritizes modernization of the nuclear triad through investments in the B-21 Raider, the Colombia class submarine and Sentinel. This bill also provides 13 billion for missile defense and space programs in support of the Golden Dome effort. Innovation and our defense industrialbased workforce remained cornerstones to providing America's competitive edge.
▶ 0:17:45The bill uh builds off successful prior initiatives through a combined funding of 1.3 billion spread across the DIU, the Office of Strategic Capital, and AppFit. Furthermore, 1.5 billion is provided to support the maritime industrial base by investing in critical supply chain and workforce training. Drug trafficking, including fentanyl, remains a very serious crisis across the United States and poses a national security threat. This bill protects the homeland.
▶ 0:18:16With this in mind, it combats international actors who facilitate drug trafficking and manufacturing by investing 1.515 billion in counterdrug programs, including increasing funding for the National Guard efforts. Following the administration's lead, this bill leans forward on shaping a more efficient and effective Department of Defense by reducing 6.5 billion and almost 45,000 civilian full-time equivalents to capture workforce acceleration recapitalization initiative efforts.
▶ 0:18:46Critically, this bill also requires detailed reporting on the department's allocations and reconciliation to ensure funding is spent how Congress intended it. This bill continues to care for our troops and their families by including a 3.8% basic pay raise for all military personnel. It also continues historic pay raises enacted in fiscal year 25 for junior enlisted service members.
▶ 0:19:11These investments are neither duplicative or uh superseded by the important provisions enacted in the reconciliation package but rather complimentary by design through close coordination among committees through the last several months. However, this bill was drafted under unprecedented circumstances without the benefit of timely and complete justification materials that typically accompany the president's budget request.
▶ 0:19:36But nevertheless, the bill is reflective of key department requirements and problematic priorities while still maintaining a fiscally responsive stance. This passage of this bill is the next step to provide critical funding for the Department of Defense for the year 26. We cannot slow down. Dynamic global threats require us to continue to press on, which is why we uh seek support today. With that, I thank you and I look forward to the committee's questions. I yield back.
▶ 0:20:06Gentleman yields back. Now recognize the gentle lady, uh, Miss McCullum for her five minutes.
▶ 0:20:13Thank you, Mr. Chairman. Uh, thank you, ranking member McGovern. I want to, uh, thank Chairman Calvership, uh, Calbertt for his leadership on this subcommittee, and I'll tell you why. He was put in a very difficult position of having to write the defense appropriation bill without the full budget request. As he just pointed out, this is an unprecedented situation, and it is not the chairman's fault. The responsibility lies with the Trump administration. They have damaged the appropriations process by failing to get us a budget request on time.
▶ 0:20:43Fiscal year 2026 Defense Appropriation Bill Act totals 831.5 billion. It is the same level that DoD is currently operating at under a fullear continuing resolution. As I said, the bill was written without having the full fiscal year 2026 budget request in front of us. This is a huge problem. The budget, the Defense Budgets Appropriations Act is our committee's largest discretionary funding bill.
▶ 0:21:13It is a complex piece of legislation dealing with a wide range of national security issues. DoD's programs require detailed annual review by appropriators because they evolve over time. The only way for us to analyze this information is to write a thorough and thoughtfully informed bill. We do that by reviewing the full budget request.
▶ 0:21:38Unfortunately, the Trump administration failed to submit the congressional budgetification books called Jbooks before we marked up this bill and we still don't have all the books yet. These documents represent critical granular details that the subcommittee needs to properly evaluate DoD programs.
▶ 0:22:00They show us not only what the request is for for the coming fiscal year, but also what is expected to be spent over the next five years. That detail the next five years is how we can see if programs are on target to complete the previous year's information or if it is impossible for them to do so because we don't have audits clean audits from the DoD except for the Marines.
▶ 0:22:30These documents are the only way we can track the money. The submission of these documents is part of the normal budget process that every administration and Congress has operated under. So this year, because the Trump administration failed to submit a full budget request, what do we have to write this bill? Only topline numbers with none of the detailed program analysis to back them up.
▶ 0:22:58The fact is the Trump administration gave us no information to make decisions on programs funded in this bill and that's completely unacceptable. This bill is an incomplete product because we did not have the president's plan for the DoD's priorities when the bill was written. For example, Golden Dome at this point is merely a concept, not a plan.
▶ 0:23:20None of briefed in detail on how the administration intends to spend $175 billion or deliver in three years because the analysis of the DoD is incomplete. We don't know how the money for Golden Dome will impact future defense bills. Another example is the cost to deploy National Guard around the country. To do so is Homeland Security's job.
▶ 0:23:44But in June, we found out that the cost to deploy 4,000 California National Guardsmen and 700 Marines to Los Angeles was $134 million. But now, Secretary Hagath is reviewing a request from the Department of Homeland Security to deploy more than 20,000 National Guard troops across the country.
▶ 0:24:07Setting aside the legal questions about utilizing military for immigration enforcement purposes, the deploying of troops of this magnitude has a serious budgetary impact. But Secretary Hagath has still not given us a complete budget. So we do not know what thought went into it, the duration of these employments, how much they will cost, where the funding will be pulled from to pay for them.
▶ 0:24:34The president Congress disposes and that's the way our system is supposed to work. There are consequences for following this process. We may end up buying too many of one platform, wasting precious tax dollars, or we may end up buying too little of another, leaving a gap in our defense capabilities. When we write this bill without seeing the full budget request, we fail to maximize the buying power for the taxpayers.
▶ 0:25:04So, it's deeply unfortunate that the Trump administration and OMB in particular has put the committee in this position. I also have strong objections to many of the same poison pill writers that were in previous House versions of the defense bill. These partisan social writers should never become law. But they lead us down a road that may once again result in a fullear CR. Our national security could not afford to lose another year.
▶ 0:25:35Once again, the bill limits the ability of the service personnel and their families to receive reproductive health care they deserve. Women make almost 20% of the military services and many women service members live in states that have limited or banned altogether reproductive health care. So once again, there are provisions that disenfranch lesbian, gay, and transgender service members. These poison pillers will go not unnoticed by our troops.
▶ 0:26:02they will notice in them and they will impact recruitment and detention. Regrettably, I cannot vote for the passage of the bill or recommend it to my colleagues to support it. We all know what needs to happen for this bill to become law. When Congress has received all the justification books, we need to work with our Senate colleagues and find the right balance of funding our national security priorities. Then the bipartisan writers need to come out so we can get to a bipartisan support.
▶ 0:26:30We've done this many times before and we have the blueprinted to get it done. Let's work together responsibly to fund the Department of Defense and not waste another year on a fullyear CR. And I looked forward to working with the chairman not to have that happen. It's exactly what our adversaries want us to do, have another second year fullyear CR. Mr. Chairman, I thank you for the patience you gave me with my voice with the extra minute or two. I truly do appreciate that. And with that, I yield
▶ 0:26:58Gentle lady yields back. now recognize a gentle lady from Minnesota, Miss Hishbach, for her time.
▶ 0:27:04Thank you, Mr. Chair, and and thank you both for being here. I appreciate it. And uh Mr. Calbert, I was just wondering if maybe you could maybe talk a little bit about if you can't remember all of them um about what this really does for the lives of servicemen and women um and and the good things that are in this bill that are positive in in their daily We're focused. The military today is a lot different than it was 50 years ago. We have an all volunteer force.
▶ 0:27:34So, not only do the men and women join the military, but their entire families. And so, we're focused on taking care of the families in the in providing for child care, education, uh obviously worldclass health care uh for our military members across the globe. And certainly that's expensive. A significant part of the cost of the United States military is personnel because we pay our people and we pay them a decent wage and give them a fine career.
▶ 0:28:04So a significant amount of this of this bill is toward that
▶ 0:28:08and and just you know you mentioned the pay increase and that's along with what we've done very recently in the past and reducing the frequency of station moves and not only does that save us money but it also is it better for the family because you said not only the servicemen but the family
▶ 0:28:25it's actually a better outcome too because they understand their role and the places where they serve uh and we move around a lot of our people too
▶ 0:28:35And and then I also have there's money for housing and youth programs and things like that. And I know that we've I've been on various tours where the housing is is not great and we need to make sure that our our servicemen and women have decent housing and and and then um so I just I I'd like to I wanted to just mention some of those because there's a lot going on with the bill, but plain and simple
▶ 0:28:57say this is, you know, bipartisan effort. We both agree that the the quality of life for the men and women who serve in the military
▶ 0:29:04uh is extremely important. It helps with our retention. And I also like to add that our recruiting is uh is doing very well. We met all our recruiting goals for all the services in record time. So we're doing quite well.
▶ 0:29:17And then thank you very much for that. And I just but I do like to just kind of focus on some of those because we are doing things to improve those lives uh the lives of the servicemen and women. And I think that's important for us to make sure that we are talking about too. And and just in a little bit of a side note because I have the the uh note here, but the National Guard equipment, the increase in funding there and helping to do that, too. So, there's some very important things. Um and I know sometimes we we talk about, you know, that high level kind of stuff, but these are important things that are very critical to this bill.
▶ 0:29:47And um with that, I yield back.
▶ 0:29:51Gentle lady yields back. I'll recognize the ranking member, Mr. McGovern, for his time of question. I again I want to thank you both for coming to the rules committee. Um look um you know we we we all can find some good things uh in this bill but there are also some things that quite frankly I think are bad. Uh and I want to associate myself with uh the ranking members uh testimony. I mean I I I think the process is lacking.
▶ 0:30:15It's not any fault of yours necessarily, but the way this is moving forward um uh and um and and also there are specific things um contained in this that I have strong objections to. Um I I and so I will I will join uh ranking member in voting no on this bill. But uh I I like you both too much uh so I will spare you questions and I will yield back.
▶ 0:30:41I thank the gentleman. Gentleman yields back. And now recognize
▶ 0:30:48gentleman from Georgia, Mr. Scott.
▶ 0:30:50Thank you, Mr. Chairman. And u I intend to vote yes on this bill. And Mr. Coward, I want to just the global situation right now. NATO has agreed to push towards 5%. Is that
▶ 0:31:04That's uh that's correct. Hopefully they meet that goal. And uh Canada who has not been one to spend much on national security has agreed they want to go to 5% as well. They made an individual very public statement which I I was surprised to hear candidly. I mean they've kind of depended on the United States to cover their back.
▶ 0:31:28It's all good for a long time. Uh so when when we talk about Golden Dome um people tend to focus on the name maybe a little too much I think instead of what what what what we actually have to do. I mean the the weapon systems today are significantly faster the weapons that our current systems were built to defend us from. Is that
▶ 0:31:58Yes. and much more complex.
▶ 0:32:00They're also smaller.
▶ 0:32:02But more powerful.
▶ 0:32:04And so what we have is a system that's designed right now to protect America. It's designed to protect us from World War II era uh weapons basically. Maybe a little more advanced than World War II, but they're not designed to um protect us from hypersonics and other things. Is that safe to say?
▶ 0:32:26That's correct. And you have to look at the threat in various ways too. Both theater systems and strategic systems
▶ 0:32:34and but hypersonics exist today. They've been used on the battlefield.
▶ 0:32:38Not not often, but they have been used um in in the threat picture today. And I'm just asking your opinion. Would you agree that it's very different than it has been even as short as five years Absolutely. Especially you mentioned hypersonic missiles. The Chinese have probably developed about 1,200 operational hypersonic missiles.
▶ 0:33:04We have And and in order to defend ourselves from a hypersonic, we have to pick up that launch way. Hopefully, we're able to see things moving before the actual launch. But if we don't pick that weapon system up when it launches, uh how likely are we to be able to defend ourselves with the current systems that we have?
▶ 0:33:33That's the reason why we're developing the Golden Dome because the systems we have presently are not adequate to protect the protect the homeland.
▶ 0:33:42I just um we're not building things just for the sake of building them or spending money just for the sake of spending money in this legislation. I mean the the advancement that has occurred in weapons in in speed and power uh it requires us to um put in additional systems to to protect the homeland from uh from those the and and I do want to give the secretary
▶ 0:34:12of defense credit for this the removal of the bureaucracy with regard to drones and the development of drones can you speak to the issue of drones and the differences today with drones versus uh and and their impact and what we're doing with regard to drones, both offensive and defensive, with drones, since we've seen how the Ukrainians have been able to take uh a drone worth a couple of thousand dollars and destroy a Russian tank that
▶ 0:34:42cost millions.
▶ 0:34:44Well, you you mentioned Ukraine. That's the laboratory. in effect that we're looking at. Ukrainians today are developing up to 200,000 drones per month. The Russians approximately the same. The beginning of the war started um the the p the primary ordinance and still a significant ordinance was was artillery 155s and 152s.
▶ 0:35:11Uh today it's drones and drones are are across the battlefield on both sides uh and have become more and more sophisticated as the war continues and changes with software development and other developments uh in munitions that has changed warfare forever against uh against what our old legacy systems that we have. And so we have to change that immediately.
▶ 0:35:37There's uh no time for us to waste because uh drones have changed the battlefield both large drones and small drones.
▶ 0:35:46It's it's space, it's spectrum, it's drones, it's uh the speed of the new weapons, the the the size of them. They're they're harder to pick up when they're smaller. It is the ability to have a system in place that can calculate where that weapon is going to be at the speeds that it's traveling at. I mean the these are the reasons that there is the plus up in the military spending. It it's not uh it's not just to spend the money.
▶ 0:36:15And so I commend both of you for the work you've done on on this. These things have to be done. We're not spending money because we want to spend it. We're
▶ 0:36:24I make a point. You mentioned uh our allies. Germany has also made a commitment to go to 5% GDP. That is a very significant commitment on their part. uh the Europeans are seeing the threat in their own backyard and so they're finally picking up a significant part of their own defense and that's a good thing and uh we see that also in Japan we see that in Australia we see that in New Zealand
▶ 0:36:50we see that with all of our allies who recognize that these threats are real and we need to counter it
▶ 0:36:55Russia, China and Iran are not going away. I will tell you one thing that I do think that we all recognize going forward. When we look at Ukraine, we also have to look at uh how good of a job they've done with a very small amount of money. And we can't afford to u more than the weapon system's worth. And so and so we have to hold our contractors accountable.
▶ 0:37:19And I hope that we get to to uh using smaller, more competitive contracts as we go forward. and we're doing that.
▶ 0:37:27But I appreciate both of you and uh the threat is real. Russia, China, and Iran are are not going away and they do want to do harm to America and Americans and our friends, whether you're a Democrat or Republican or uh whatever party you're in. Uh the threat is real. And with that, Mr. Chairman, I yield.
▶ 0:37:46Gentleman yields back. Now recognize the gentle lady of Pennsylvania, Miss Ganon, for her time for question.
▶ 0:37:51Thank you. Um, I have voted for the DoD appropriations bill in the past. I've voted for the NDAA in the past, but since taking the majority in the House, our Republican colleagues have loaded up these bills with inappropriate culture war writers uh that make a mockery of any effort to be able to have bipartisan bills. And I'm afraid that this bill is the same. The FY26 defense spending bill seems to have misplaced priorities.
▶ 0:38:20We owe it to our troops and our national security to meet in the middle and put forward common sense defense legislation. I'm afraid this this bill doesn't cut it. Look, at a time when our Republican colleagues have slashed spending on basic human necessities like food and health care, they seem all too willing to ignore the potential for fraud, waste, and abuse in the Department of Defense.
▶ 0:38:47Uh, and that's despite the fact that every year we spend nearly a trillion dollars on defense and every year that amount goes up. But Congress never conducts meaningful oversight on that spending and the people who spend it at the Pentagon. And as the ranking member mentioned, the Pentagon has failed to pass seven audits in a row, being unable to account fully for how it's spending nearly a trillion dollars.
▶ 0:39:11So look, I want our service members to have every advantage against our enemies, but how can we continue to uh trillion dollar checks and not ask where the money is going or if we're getting good value for what we're spending. Um even if Congress isn't willing to make that effort, I'm really concerned that this bill is going to cut funding for the Department of Defense Office of the Inspector General. Going to cut that funding by over $22 million. Who thinks that's a good idea?
▶ 0:39:39The Office of Inspector General is usually in the forefront of figuring out where the contractors are misspending money, where there has been fraud, waste or abuse. So, why are we turning our backs on that? Um, with all the pressing global challenges that we face, I think we can do better. Um, ranking member, I am very concerned about the continuing efforts in this bill to restrict the freedom of service members to obtain the full range of reproductive health care that they may need.
▶ 0:40:09Um, we know that what I think the figure that was given is that 20% of our service members are now women and 40% of them are assigned to serve in states where they may not have access to abortion care if they should need it or desire it. Can you talk a little bit about that?
▶ 0:40:27When um someone offers uh to put their life on the line for the service of our country um as woman uh she doesn't have a a choice on where she's going to be
▶ 0:40:39And I would even include the family of a service member. If a woman finds herself in a situation um where her reproductive needs need to be addressed with with abortion care and she finds herself in a state that does not allow it, my state does. Minnesota would would would allow her to receive a full full menu of of health care.
▶ 0:41:02Um they find themselves having to um find uh the time to get the time to make the time to leave their their duty station uh to access uh reproductive health. And I think in a in many situations sometimes, you know, um it isn't planned to terminate a pregnancy.
▶ 0:41:24Sometimes a woman's received the worst information of her life that things aren't going to go right, that her life might be in jeopardy or future fertility might be in jeopardy. Making a difficult decision, but then to put more um uh obstacles in in that family member's way of receiving their health care to me just seems wrong.
▶ 0:41:46And I think if we're going to support the women of the military, we need to support them in being able to access their free reproductive choices that every woman in the United States of America has the right to do so. So we shouldn't be putting obstacles up in in in the way of women to receive the health care that they need
▶ 0:42:04and to be able to serve in our armed
▶ 0:42:08Okay. Thank you. I yield back.
▶ 0:42:11Lady yields back. Now recognize the gentleman from South Carolina, Mr. Norman for his time of questioning.
▶ 0:42:20U thank both of you for taking the time to come. Um Miss um McCollum, you mentioned, you know, the fact that there's no plan, no thought given to the amount that funds for the defense, no platform, no wasting, you know, was wasting precious tax dollars and no justification. Is that pretty much what you said?
▶ 0:42:48You're paraphrasing a lot of the things that I said together with explanations with them. So, yes, I did say some of those statements, but being taken out of context, I don't agree with the context in which you put it in.
▶ 0:42:58What context should I put them in?
▶ 0:42:59Well, I can read from um my um my
▶ 0:43:03Um I without the gel, I had nothing to do with
▶ 0:43:06Was that for national security?
▶ 0:43:09I that was state department and other things. So, that wasn't in the defense So, it was outside of the defense bill.
▶ 0:43:16Yes, it was.
▶ 0:43:17And was that meant to secure safety for Americans given to Iran?
▶ 0:43:22I believe that was the president's uh idea at the time. Kent, what uh you want to respond to that, Mr. Calvin? Well, you know, obviously I didn't agree with with President Biden's policy at that time and I don't think any of us did.
▶ 0:43:46Uh and it made Iran stronger in a time when they were weak and unfortunately eventually it led to what what's happened recently.
▶ 0:43:56What didn't deter them making a nuclear weapon, did it?
▶ 0:43:59They were moving toward a nuclear weapon for some time. And uh so hopefully that uh that progress that they've made has been severely hampered and that we put them in a situation where they will not develop a nuclear weapon.
▶ 0:44:12So instead of uh instead of frozen boney, frozen assets, whatever you want to call it, that was the B administration's opinion that that helped the country, kept the country safer uh to a enemy in Iran versus what the President Trump did to obliterate uh on this um understand the money does not uh provide funding for they call it women's
▶ 0:44:42right health care but abortions killing a child there's no no fund funding in there for that is that right
▶ 0:44:51that's correct
▶ 0:44:52no funding for diversity and inclusion programs and no funding for advancement of critical race theory
▶ 0:45:00that's correct Uh pay raise for the troops, border security, uh things that help our military, which by the way under the Biden administration, the enlistments were down 30 to 38%, they're up now well over 38%. This covers all of that, doesn't it?
▶ 0:45:21That's great. We we've met all our recruiting goals for the year so far.
▶ 0:45:24Okay. Uh defense health pro programs for our military. Uh, I appreciate you working on this and bringing this forward and I think the record speaks for itself. Thank you. I yel back.
▶ 0:45:39Thank you, gentlemen.
▶ 0:45:40Gentleman yields back. Now recognize the gentleman from Colorado, Mr. Noose, for his time of question. Oh, all right. He defers and we'll recognize the gentle lady from New Mexico, Miss Ledger
▶ 0:45:51Thank you uh very much. Uh, and you know, I think that the the efforts that the committee, the appropriations committee has been doing in defense to improve the working conditions uh of our military men and women is really important and I've really appreciated in the uh now five years that I've served uh the fact that you have come in uh I've only been on rules for three years, but uh you've all come
▶ 0:46:21in and you've talked about the importance of increasing salaries, of uh the the money that goes to make sure that our servicemen and women uh are treated with the respect and with the pay that they deserve. Uh and and and that's been a bipartisan uh effort. Am I correct, Mr. Chairman?
▶ 0:46:43That's correct. And and so I think that as I think about this bill and what what we're looking at now, uh we also need to recognize that our service members live and work in a context and their family members live and work in a context.
▶ 0:47:04And so I am very disturbed by the fact that we have voted or Republicans voted on a partyline basis with two voting no for what we call the big ugly bill because of its impact to Medicaid. Um Chairman Calver, do you know how many of the families, military families actually utilize Medicaid?
▶ 0:47:30I'm sure there are a number of people on in the military that have utilized Medicaid.
▶ 0:47:36It's actually 850,000
▶ 0:47:40However, all anyone who has a job that works more than 20 hours a week, which would include our United States military, would be covered under
▶ 0:47:49So the 850,000 military family members,
▶ 0:47:54they will not be affected.
▶ 0:47:55We will be affected. No, they will not
▶ 0:47:58because there are many ways in which those Medicaid cuts hurt the ability of people to receive health care. One of the biggest issues that I am concerned about is the impact in rural hospitals because when you look at what's going to happen to rural hospitals, they're going to start closing across the country. In fact, we've already have had one close in Nebraska in anticipation of these cuts.
▶ 0:48:25Now, in my district, I have a Royal Hospital that serves an Air Force base, Canon Air Force Base, and that is one of maybe eight of the rural hospitals in New Mexico, mostly in my district that I have gone and met with.
▶ 0:48:45So, chairman, when you say nothing's going to happen, I have met with the people at that hospital who serve our military families, and I can tell you they are terrified because they know that the are going to kick people off even if they're qualified. And they know that the fact that they get assistance from the states is going to be bad for them. And in fact, Mr.
▶ 0:49:13Chairman, I'd like to enter into the record two articles. Uh, one of them is uh, actually from the National Military Family Association and it's called the big beautiful bill is now law. Here's what it means for military families. And the date is it's not on here. I'll have to get you the date in a I appreciate that.
▶ 0:49:44Uh, and then the other one is from Georgetown University, the McCart School of Public Policy, Medicaid Important for Military, Families, and Future Readiness by Alexa Gardens, Steven Doster, and Joan Alco.
▶ 0:49:56And do you have the date on that one?
▶ 0:49:58You know what? It's not on these two pieces of paper. And I will remind uh myself to reme to remember to always have that available. But and and in here uh Mr. chairman. Uh what what struck me is this is from military families themselves reacting to the bill that you voted for. Uh and they know that most while most military families, I'm going to quote rely on Tri Care for their health needs.
▶ 0:50:24We are concerned about the impact of Medicaid cuts on special needs military families who often rely on Medicaid to obtain services. Um, now I think that these are serious concerns and to simply say it's not going to affect anybody, ignores what hospital associations have talked about across this country. We were in this committee.
▶ 0:50:51Uh, and we heard from the Tennessee Hospital Association, the Texas Hospital Association, the Louisiana Hospital Association. We are putting this information in the record about how they were saying this was a bad idea. And we know in California um people are very concerned in California because there are so many rural hospitals that are now at risk.
▶ 0:51:10As a general lady pointed out the the military is covered by triricare and as far as I know the department of defense is not we don't uh our jurisdiction doesn't cover Medicaid. Well, see, but this is precisely the problem is what I just entered into the record pointed out that for example the children who are covered by triricare
▶ 0:51:34covered by triricare
▶ 0:51:35they are covered by triricare medicaid coverage provides children with special health care needs access to a wider range of services that are not covered by triricare. Are you are you aware of that Mr. Chairman? Uh I'm I'm only aware of what you've told me. Uh I do know that the military and their families are covered by Triricare and there's a hospital at Canon Air Force
▶ 0:51:57Uh the hospital does not cover all of the needs of the families.
▶ 0:52:02I'd have to check with the Canon Air Force Base
▶ 0:52:05and and the other problem with what's at Canon Air Force Base is that we have and I I would hope that you would be very uh uh sympathetic to that.
▶ 0:52:14I've been I've been to Canon Air Force Base, Mr. chairman. Uh there are not enough specialists in the area. And so what we're having to do at Canon is they bring in circuit writers where they'll bring in specialists to be able to serve those children and those family members so that we can actually have people show up at Canon and serve. You would agree that would be a good
▶ 0:52:39Yes. And and those specialists are being paid for by Triricare,
▶ 0:52:41right? those specialists being cared for fair, but the issue is they're not available in the community because they're not available in their community. We're having to bring them in. And this is the issue is that is important. 840,000 family members rely on Medicaid.
▶ 0:53:04And when something happens and something goes wrong in these bases that are far away, having access to that care is important. Ranking member um uh is there are these concerns that you think bubble up among the communities?
▶ 0:53:21Well, I think we'll learn more about um the challenges that the bill that has been signed into law by the president is going to present for a lot of families, a lot of rural hospitals, and for those uh children and families who t sometimes have to cobble together. In my state, it would be um we have a a program called TERA that not all all states use. Uh quite a few states in the United States have that.
▶ 0:53:46And so how that's going to affect our children, specialty hospitals and all that yet remains to be seen. So it is something that um I think a lot of people have warned us that we have to be very guarded about protecting especially uh children as as these cuts go go
▶ 0:54:04Right. Another thing that this these mil this military families news this is not us making this is up. These are the military families who are raising the concerns and they're raising the concerns as well with what was in that veil with regards to striking the Consumer Financial Protection Bureau and the Office of Service Member Affairs because we know that oftentimes service members are subject to predators and when you don't have their
▶ 0:54:34services available to help them out that is a concern and I think that that's why we cannot look at this in isolation. Uh, and so it's not just this bill, it's what you're doing to assist the service members in that area. Um, they're also concerned about what we're doing for SNAP benefits because they're not just thinking about themselves, they're thinking about what happens when you leave and you become a veteran.
▶ 0:55:01And we know some of those SNAP cuts are going to hurt veterans a lot. Is that correct, Ranking Member? We'll see if the pay raise uh took took care of all the needs of all the families and how the snap cuts in certain uh areas will affect families.
▶ 0:55:18And you know I think that in this in this uh Georgetown study said one in 10 children 10% of active service members with triricare also have Medicaid coverage. So when you are taking boats that impact negatively Medicaid, you are also impacting negatively our um our military families.
▶ 0:55:42Um and uh the the other thing is that I think we have to be concerned about impact on on women. uh in this bill and New Mexico shares a boundary with Texas.
▶ 0:56:07And I think that when a woman signs up and is willing to fight for our freedom, it is important that she have the freedom to access full reproductive health care and be able to travel from Texas to New Mexico. I mean, is that asking too much to allow a woman to travel to New Mexico ranking member. I don't believe so. Yeah.
▶ 0:56:36I mean really just to travel what kind when when if it's going to be denied her where she chairman when somebody uh in enrolls to serve in the military they don't get to say no to where they get assigned. Am I correct on that? They might have some where they would prefer, but basically if you get assigned to Texas, you get assigned to Texas. Is that correct?
▶ 0:57:03That's correct.
▶ 0:57:04Yeah. So it's it it is we are imposing on somebody who is willing to give their life for our freedom restrictions that don't make any sense. Ranking member McCullum, I know it looked like you had wanted to respond to something else that was mentioned earlier and perhaps that was uh and I I just wanted to get give you that opportunity.
▶ 0:57:27Well, I just, you know, when it came comes to our gay, lesbian brothers and transgender um siblings, and I say this as a child of God, um that that take the oath of office to service, I believe that they should be treated with the dignity and respect that we all deserve of one another. And um some of the some of the things in this bill right now do not uh treat uh women as we were just discussing with with their rights with respect.
▶ 0:57:57But there's there's improvement to made be made in this bill that we recognize everyone who put takes the oath of office to put their life online deserve deserves our appreciation, our dignity, and our respect. And it just is ridiculous that we need to be prepared for war. So why are we engaging in culture wars against each other and Americans against Americans?
▶ 0:58:24I mean there is a there is war that we need to be prepared for and that's what your committee tries to do. And so why do we declare war on each other? I simply don't understand that. Uh with that uh Mr. Chairman I yel back.
▶ 0:58:38General yields back and without objection we will submit the two documents. The reason I always like to have a date uh is that it it lets us know if it's on the most current version of the bill or on a previous version of the bill or on what people speculated the bill would have. So that's why I like dates. But uh
▶ 0:58:54completely understand.
▶ 0:58:55Yes, ma'am.
▶ 0:59:02Thank you very much. Um and now um I will recognize myself. I'll recognize myself to uh ask some questions. So, um Chairman Calbert, uh it it sounded like we we left DoD approaches and got into energy and commerce. I serve on energy and commerce.
▶ 0:59:24And so, you would agree with me that children with special needs are under Medicaid and where the work requirements and all that came in, that was that was under Medicaid expansion. Wouldn't you agree with me on that?
▶ 0:59:35That's correct. and and I share some of the uh concerns about specialists in any rural area, but that's not really that wasn't affected by the bill. That's a a a fact that has been going on for several decades now, which is one of the reasons why I'm a big proponent of tele medicine. And I would hope that even in our hospitals on military bases, we would be utilizing uh tele medicine because that way we can get the specialists into a lot of areas.
▶ 1:00:02We're using more and more tele medicine, especially on foreign bases. where obviously specialists are not available at all.
▶ 1:00:09Well, and I appreciate that. Um, yeah, it's um I I understand that our colleagues don't like the bill, but we're talking about a different bill today. Am I correct?
▶ 1:00:22I am correct. We I lost track of things.
▶ 1:00:23I have enough responsibility with the Department of Defense without taking your job.
▶ 1:00:27I appreciate that. And and today we're doing the Department of Defense appropriations uh bill. Is that correct?
▶ 1:00:32That's correct.
▶ 1:00:33That was my understanding, too. All right, with that I will I will yield time to uh Miss Fishbach.
▶ 1:00:39Thank you, Mr. Chair. I just wanted to um um ask if I could have something entered entered into the record. It's a Washington Post article um dated yesterday, July 13th. Um and it says, "A clinic blames its closing on Trump's Medicaid cuts. Patients don't buy it is the title. Ask." I would ask that that be entered into the record without
▶ 1:00:59Without objection.
▶ 1:01:00And and so ordered. And I just wanted to mention that that actually says that the hospital was closed July 2nd. So two days before the bill was even signed. Um and it was inferred that it was that they were blaming that the Medicaid cuts were devastating, but this was two days before. So thank you, Mr. Chair. I yield
▶ 1:01:18Yeah, I do would say to the gentle lady, I do fear that there may be others that will use the bill as an excuse for financial action they were already taking under the previous law. All right, with that I yield uh back and now recognize a gentleman from Colorado, Mr. Noose for his time and question.
▶ 1:01:35Thank you. I thank the chairman and uh thank you uh so chair Calvert and ranking member McCullen for being here and for your testimony. One question I guess Chairman Calbert, you might be able to help me understand. As I understand the budget proposal that's before this committee, the appropriations committee has directed the defense department to cut roughly $7.75 billion from the DoD budget.
▶ 1:02:05Is that fair? The
▶ 1:02:08department is reviewing all expenditures within the department and reassigning that to priorities. that for the war fighter
▶ 1:02:17such. Yes. I mean essentially the bill before us
▶ 1:02:20that money is not going away. It's being re redirected to different areas.
▶ 1:02:24Got it. So you're saying that essentially you've inserted a provision into this bill that asks the defense department to reallocate 7.75.
▶ 1:02:33We reallocate funds from time to time and every administration we call that reprogramming. But uh nonetheless, yeah, that some money is being rep prioritized within the department
▶ 1:02:44and that's at their discretion.
▶ 1:02:46They have a limited amount of discretion. Yeah.
▶ 1:02:49Well, let's test that. So, for example, if they decided that they wanted to take the bulk of that out of uh procurement and modernization of weapon systems, they could do that. There's nothing in this bill that limits their ability to move $3 billion out of that line item, right? Or two billion or 1 billion or whatever they decide. There's no limitations in this bill.
▶ 1:03:10Well, that doesn't happen in reality, but that's
▶ 1:03:12What do you mean that doesn't happen?
▶ 1:03:14That that we haven't had a $3 billion
▶ 1:03:17Okay. So, what would be $2 billion?
▶ 1:03:19We haven't had a $2 billion
▶ 1:03:21Well, you've put you've asked the defense department.
▶ 1:03:23There there will be reallocations based on what this previous testimony was about the drone technology and how it's changing very rapidly. So that would be
▶ 1:03:32how we have how we have to change
▶ 1:03:34within the department sometimes very quickly to meet the threat
▶ 1:03:38and I'm sure you would agree that it's important that we keep our people safe and that and we have to make decisions sometimes uh during a normal congressional calendar to make sure that we have weapon systems that are necessary at the time we need them.
▶ 1:03:52Sure. So again these actually really are not I have some other questions where there might be some heated exchanges here. This is not that. Put yourself in the shoes of the defense secretary. $7.75 billion. I'm just trying to get a sense of where that money is going to be reallocated within the defense department. You're telling me three billion will
▶ 1:04:13they will let us they will let us know
▶ 1:04:15and there's no limitations on how they do that,
▶ 1:04:19Well, in reality, there are limitations because uh because depends on where they're pulling the money out of and depends on where that money is going. So, we're talking about a hypothetical situation I'm not aware of.
▶ 1:04:32Okay. Let let me ask ranking member McCullen because I'm more confused than when I started this question. As I understand this bill, it essentially is asking of the Defense Department to reallocate upwards of $7.75 billion within its budget. There are no restrictions within the language of this bill as to how those reallocations ought to be conducted.
▶ 1:04:57So if Secretary Hegsth decides that he wants to apply that across the board, let's say he he says, "You know what? I want every line item within the Defense Department budget to ultimately be a part of this reallocation." He could do that. There's nothing limiting his ability to do that. Or am I is am I misunderstanding this provision of the Defense Appropriations Bill?
▶ 1:05:17Well, you're referring to page 138, section uh 8154, and I'll read from it. The total amount appropriated or otherwise made available by this act is hereby reduced by the 300 billion dollars that you referred to to refer to reflect savings and efficiencies attributable to the proposed appropriations set forth in title two of HR1 and it says that such reductions may not be derived from amounts appropriated by this act for the national intellig
▶ 1:05:48program or the military intelligence program. So it it just it just uh to DoD. So what what I'm hoping happens with this language and this is a hope and I think what the chairman and I both expect together the way that it has happened in regular order but nothing appears to be always regular with this president and with this department of defense is that they come to us for reprogramming or reallocating and we have discussions about it.
▶ 1:06:17We look at how it fits into the total bill uh picture and what we believe uh with our obligation under the constitution of article one uh of making sure that we are making sure that the taxpayers funds are being spent wisely and effectively. So there are program
▶ 1:06:36of course they're impounding funds as it
▶ 1:06:38which is which is illegal and I have a a dis a strong disagreement with with what they're doing with that. And then we also have the bill that is um um in the Senate right now um looking at um impounding I'll use the term impounding funds. So it is the chairman's and my wish that this be a dialogue that this be open that this be transparent and that um that the regular uh ways in which we go about reprogramming dollars would happen.
▶ 1:07:08But this gives us no guarantee of that the way the bill is currently written. And that's why I share your concerns because to me this provision particularly in the context of where we find ourselves with respect to this administration and its conduct over the last seven months around empowerment is very clearly a blank check.
▶ 1:07:24There's no restrictions on the administration's ability to say, you know what, we're we're going to do the bulk of this in health programs or troop pay or troop readiness or it can pick the category and it can proceed on that course, which is why I think that this language ought to be fixed and I know there's an amendment that attempts to do so. But in any event, different subject, I want to talk a bit about amendments. So, Mr.
▶ 1:07:48Calvert, my understanding when you all marked up this bill, there was an amendment that was made to prohibit the United States from receiving an airplane that is a gift from a foreign government. This is in reference to the Boeing 747 fromQatar that uh President Trump is apparently accepting uh which will be rendered into the new Air Force One and then be given to his presidential library at the conclusion of his term. You voted against the amendment.
▶ 1:08:15I'd like to know Well, this uh this the VC25B program which you're referring to, which is the presidential jet, is severely behind schedule. That contract was let in 2018. Uh Boeing put out an initial response to an inquiry that the plane would not be done until 2031 2032.
▶ 1:08:36And so in light of that, you're okay with them accepting the plane from
▶ 1:08:39the existing planes that we have operating are old. And so the president made a determination that he uh wanted a another plane and one was offered to him. Uh there's some legalities. Is that a decision you support?
▶ 1:08:52There's in the courts now trying to decide that. I'm that's not the decision from this committee. But we
▶ 1:08:57Well, you voted against the amendment.
▶ 1:08:59I voted against the amendment because we need a replacement for the VC25.
▶ 1:09:02Do you believe that this is a suitable replacement? I guess is what I'm asking. Clearly, you voted against the amendment. So you
▶ 1:09:07I think there needs to be another plane. By the way, the discussion for a third airplane has been going on for many years, not just the years that I've been chairman of the
▶ 1:09:14Could you point me to the article about cutter offering President Biden a plane last year? I guess I missed that. I don't know if
▶ 1:09:20Well, the the plane was offered and and received and is being reconditioned at this time.
▶ 1:09:26I What What are the limitations that you would impose? I guess let's say for I don't know, North Korea offers President Trump a plane. Would that offend your sensibilities? If there was an amendment offered specific to that, would that be enough for you to say, you know what, this is a bridge too far for
▶ 1:09:43North Korea didn't offer the plane.
▶ 1:09:45Oh, okay. So, I'm glad. So, we're making some progress here. So, North Korea, if if we made an amendment on that, we'd get your support. What other countries
▶ 1:09:52the fact we would never sell a Boeing aircraft to North Korea?
▶ 1:09:54What other countries what other countries would uh would meet your test? I mean, I get apparently this is the idea, right? is that essentially if President Trump says I'm going to accept a a plane from just about any country in the world and I'm going to convert that into Air Force One and my presidential library is going to keep it once I'm done with my term that that meets your approval, your seal of approval or the approval of the majority of the Republicans on the House Appropriations Committee with the exception of North Korea. We could I could give you other examples.
▶ 1:10:24Maybe there's other
▶ 1:10:25Well, one, the plane wasn't given to the presidential library. It was given it to the Department of Defense. The Department of Defense is reconditioning the plane.
▶ 1:10:31Yeah. And you understand that it will be at least report suggest without not without an act of Congress. It cannot
▶ 1:10:39Well, I'm sure I look forward to uh you know to to standing in that void with you and uh and and perhaps enlisting your support uh when that act of Congress is proposed. I'm sure the president is going to respect that that particular limitation. There was an amendment that was offered during the markup by my colleague uh and friend Lauren Underwood, Miss Underwood from Chicago.
▶ 1:11:00And the amendment was to prohibit the Department of Defense from using funds to take down educational material or public material about minority and female service members such as the Tuskegee Airmen. You voted against it. Would like to know why.
▶ 1:11:13There's a number of amendments that were offered in committee that were uh that were that were accepted and not accepted. And this was not that was uh that that by the way was rescended and that those individuals uh that that was a mistake and that that was fixed.
▶ 1:11:32You're not talking about the amendment, you're talking about the examples,
▶ 1:11:34the the some of the examples were given were removed from the website and then the department and they were put back on
▶ 1:11:41after the outcry from members of Congress and the general public reversed
▶ 1:11:45but they were put back on. It was a mistake. We are now so essentially be left to the vagaries of the defense department deciding if and when they believe that a story about a minority a black service member or a woman service member is they deem offensive will take it off their website and we'll rely on the public and members of Congress Democratic members of Congress to uh register sufficient opposition such that the department will reverse. There
▶ 1:12:09were opposition from both sides and that that was removed.
▶ 1:12:12Well, I appreciate that opposition. Why not pass this amendment so this doesn't happen again? because it wasn't necessary. We already fixed the problem.
▶ 1:12:19So you're suggesting to me, you really believe, Mr. Calvert, that in the next week, in the next month, in the next six months, in the next year, the Defense Department is not going to do the same thing that they've been doing for the last 6 months, which is every two or three weeks, finding something objectionable about a minority service member or a woman service member and taking it off their website and then rinsing and repeating this process over and over again. Miss Underwood had a reasonable amendment that would simply say the defense department should stop with this nonsense and leave it alone.
▶ 1:12:47The Tuskegee airmen, the other stories and about various service members who've bravely sacrificed for our country. Leave it alone. Focus on the the task.
▶ 1:12:57Mistakes were made and they were fixed.
▶ 1:12:59Well, uh, Mr. Calver, I I look forward to I mean, I I hope I hope the Defense Department uh doesn't make the exact same mistakes that they've been making for the last six months. I have no doubt that that's going to be the case and I I'll be sure to forward you I perhaps by the end of this week I'm sure we'll have another example of a mistake and and hopefully you'll join me in calling on the defense department to reverse it. A much easier way to do this would be to put it in the bill which is what Miss Underwood tried to do and I wish that my colleagues would have supported her in that effort. With that, Mr. Chairman, I yield back.
▶ 1:13:29Gentleman yields back. That concludes all of the questions uh to our witnesses. We appreciate our witnesses being here. Thank you both. And we will now uh suspend for a minute or two as we clear the room and bring in the next
▶ 1:13:45Yeah, that's all right.
▶ 1:14:23How's Ralph Norman? That's a good thing.
▶ 1:16:30All right, we will unsuspend and come back to order. Appreciate our witnesses being here. Um, I now welcome our second panel, Chairman Hill and Ranking Member Waters from the Committee on the Financial Services, as well as Chairman Thompson and Representative Davis from the Committee on Agriculture. Your full statements we will be submitted for the record and we ask that you summarize your statement in five minutes. Chairman Hill, you will begin. I welcome your testimony. Well, Mr.
▶ 1:16:58Chairman, thank you and thank Ranking Member McGovern for having us today. It's a real pleasure to present to the committee the joint work on digital assets between our two committees, House Agriculture and House Financial Services Committee.
▶ 1:17:13Let me start first with HR 3633, the Digital Asset Market Clarity Act of Chairman Thompson and I were pleased to introduce this landmark legislation along with our colleagues, Ranking Member Angie Craig, Tom Emmer, Dusty Johnson, Don Davis, Brian Style, Richie Torres, and Warren Davidson. For too long, America's digital assets regime has been delivered in the worst possible world.
▶ 1:17:40regulation by enforcement that stifles responsible uh and an existing commodity and security regulatory framework that's plagued by gaps that leave consumers unprotected and investors confused. This broken status quo has exposed Americans to disasters like the catastrophic collapse of FTX in 2022. It's past time for Congress to act.
▶ 1:18:06American consumers deserve protections and innovators need clear, workable rules to build and grow projects here at home under common sense standards. Absent regulatory certainty through bipartisan enacted legislation, we will continue to face unacceptable risks from regulatory interpretations that can be undone by the stroke of a pen.
▶ 1:18:30Market participants will remain wary of operating in the United States, fearing enforcement actions and lacking durable guidance. If we fail to lead, America will seed the future of capital markets and the next generation of the internet to other jurisdictions, leaving consumers with a far less functional and less responsible marketplace. Who does that who does this hurt most? Our constituents.
▶ 1:18:55The Clarity Act alleviates these concerns headon by leveraging the existing capabilities at the Securities and Exchange Commission and the Commodity Future Trading Commission. I'm proud to say this bill is the product of countless bipartisan discussions between members of, as I said, at the top financial services and agriculture committees. It builds on the years of worked in the past two Congresses that produced our bipartisan framework bill in the 118th Congress called FIT 21.
▶ 1:19:24a bill that earned 71 Democratic votes in this house. Over the years, we've incorporated significant amount of feedback from the relevant federal agencies as well as members of Congress and market participants. The fact is this bill imposes strict consumer and market protections. When it comes to digital asset firms, we impose high standards. We do not allow co-mingling of customer funds. We impose capital, recordkeeping, and other vital operating requirements.
▶ 1:19:54And we include provisions to mitigate conflicts of interest. While market participants wait for the rules to be finalized, we include a provisional registration period subjecting registrants to oversight of a federal regulator Again, some of my Democratic colleagues may argue that the status quo is preferred and that the SEC has all the authority that it needs. Let's consider the status quo for a moment.
▶ 1:20:23We have a multi- trillion dollar industry, the majority of which is subject to limited, not fitfor-purpose federal oversight. If the existing ad hoc process remains in place, I'm convinced we'll continue to see future FTX- like situations because consumers are not afforded the careful protections included in this legislation and America will fall further behind in advancing the use of blockchain application developments in finance.
▶ 1:20:53This bill does not create a loophole or deregulate crypto. Quite the contrary, this framework recognizes the unique characteristics and life cycle of blockchain networks so consumers can receive similar protections that they have today in our traditional financial markets. We accomplish this through a rigorous and functional framework.
▶ 1:21:15First, we provide clear and specific definitions of a digital commodity, a digital asset whose value is tied to its underlying block underlying blockchain. Next, for projects that wish to offer and sell digital commodities to raise capital, we create a fit-for-purpose exempt offering regime under the rigorous scrutiny oversight of the SEC. It requires comprehensive disclosures regarding the specific attributes and risks of those proposed instruments.
▶ 1:21:46Furthermore, we protect retail consumers by imposing carefully calibrated resale limitations and reporting obligations on project insiders. Regardless of what some critics claim, this bill does not create a free-for-all for crypto crooks or prevent federal regulators from being able to police the market.
▶ 1:22:06The CFTC, which is already an expert in overseeing markets and complex financial derivatives, as well as enforcing against fraud and market manipulation in the commodity markets, is given new authority in this legislation to oversee the centralized exchanges, brokers, and dealers in digital commodity spot markets. I want to re-emphasize, we are not creating loopholes. We are closing regulatory gaps.
▶ 1:22:34It's high time for us to fix a broken regulatory structure that's failed American consumers and innovators and failing to enable the future uh that we deserve. A vote for clarity is a vote to unlock the full potential of American markets and ingenuity. Now, let me turn to highlight the need for whip Tom Emmer's bill HR1919, the anti-CBDC surveillance state act.
▶ 1:23:03This bill is simple but important. It prohibits the Federal Reserve from issuing a retail CBDC to the public. Fortunately, the United States Constitution expressly grants to Congress the sole authority to coin money and regulate the value thereof. However, over the years, vague statements by senior Fed officials about the legal authority to issues issue CBDC's necessitate this legislation.
▶ 1:23:30We must make it completely clear that authorization must come directly from Congress. Claiming that a CBDC is needed for faster payments further ignores private sector innovations. CBDC's put the government in place where it does not belong. The only new feature a CBDC possesses is increased surveillance and control over Americans financial lives, which flies in face of Americans rights to privacy and property.
▶ 1:24:00Lastly, let me comment on Senator Bill Hagerty's Genius Act. Global payment systems are undergoing a profound transformation driven by technological advances that are reshaping how value moves in the digital age. These innovations are not only modernizing financial infrastructure, they're also lowering barriers to entry, cutting transaction costs, and bringing more people into the financial system.
▶ 1:24:27Over the decades, America has witnessed a steady innovation led by the private sector in convenience, accuracy, and flexibility in payments. from cash to credit cards to debit and ATM cards to the automated clearing house to peer-to-peer platforms like Vinmo or Zel and now to realtime payments.
▶ 1:24:50In each instance, the private sector has been the driving force behind this payments evolution and Congress must act to ensure that the regulatory environment fosters innovation while protecting consumers. Payment stable coins, once seen as a niche product within the digital asset space, now are being adopted for everyday transactions, international payments, and commercial uses worldwide.
▶ 1:25:15Each day, dollarback stable coins facilitate billions in transactions, reducing delays in crossber settlements, increasing transparency, helping underserved communities access digital digital financial services, and promoting the dollar status as the world's reserve currency. recognize this potential.
▶ 1:25:36Members of the House Financial Services Committee have worked over multiple Congresses to craft legislation providing guard rails for stable coin issuers while supporting their continued development. In this Congress, Chairman Brian Style and his team on our subcommittee have debated and marked up stable coin legislation which has heavily influenced the Senate proposal that we consider today.
▶ 1:26:02With the Genius Act, Congress has the opportunity to provide regulatory certainty, protect consumers, and ensure that US dollar remains the foundation of the global financial system. The stakes are high and getting this right is essential to safeguard America competitiveness and the future of payments. I thank the committee for the time and I look forward to your questions.
▶ 1:26:24I thank the gentleman and went a little bit over, but I know you had a lot of bills to cover. Uh that said, I now recognize Chairman
▶ 1:26:39Well, chairman uh and ranking member, thank you for the opportunity to testify on behalf of the House Agriculture Committee in support of the Digital Asset Market Clarity Act or Clarity Act. Before I start, I want to to share my thanks to Chairman Hill and his team and echo his appreciation of Ranking Member Craig and Ranking Member Davis, their respective teams and all the co-sponsors of the Clarity Act.
▶ 1:27:03This is a unique piece of legislation, one developed through the close collaboration of both our committees, and one that has earned bipartisan support because it tackles this complex issue fairly. Mr. Chairman Hill testified to Clarity Act establishes a regulatory framework for digital assets to protect consumers and foster innovation in the United States.
▶ 1:27:26Most notably, it grants the Commodity Futures Trading Corporation or CFTC new authority to address the existing spot market gap. Consumer Protection and Innovation are championed by the CFTC and at the core of the AY's principlesbased regulatory approach. The Commodities Commodity Exchange Act's final purpose is quote to promote responsible innovation and fair competition end quote.
▶ 1:27:56Unique among the federal financial laws, Congress unambiguously set out the expectation that new ideas, new products, and new services should be welcome at the CFTC. This focus on innovation makes the CFTC the natural regul regulator for these new markets. The Clarity Act creates a comprehensive framework for the regulation of these markets. But I'd like to focus on three specific changes here today.
▶ 1:28:22First, the Clarity Act establishes a framework for the productive proactive regulation of digital commodity exchanges, brokers, and dealers. This regulatory framework is tailored to the unique aspects of the digital commodity spot market but imposes the same rigorous standards we expect of financial exchanges and intermediaries in the United States.
▶ 1:28:46This new proactive authority complements the CFTC's existing backward-looking authority to bring enforcement actions in the event of fraud and manipulation in digital commodity markets. Second, the Clarity Act requires firms registered with the CFTC to segre segregate customer funds in the same battle tested manner as firms holding customer funds in the futures markets, including membership and oversight of the National Futures
▶ 1:29:16Association. Segregation of funds is a bedrock principle in the regulation of financial markets. It ensures that customer funds cannot be misused by the firm holding them and that they are able to be identified and quickly returned quickly in the event of bankruptcy. And third, the Clarity Act provides new funding and hiring authorities to the commission to ensure that it has the financial and human resources it needs to regulate these markets.
▶ 1:29:46The Clarity Act will bring common sense fitfor-purpose regulatory requirements to the digital commodity markets. But the point of the Clarity Act is not regulation for regulation's sake. It is to promote innovation here in the United States. Clear regulations will establish a foundation of certainty. From that certainty, developers and users of digital commodities will be able to use these tools to create new solutions to age-old problems.
▶ 1:30:14Uh, thank you again for your consideration of the Clarity Act and I look forward to answering any questions that you may have and I yield
▶ 1:30:22Gentleman yields back. Now recognize the gentleman from North Carolina, Ranking Member Davis for his time of opening
▶ 1:30:30Thank you so much uh Mr. Chair and to Ranking Member McGovern and actually to all of the members of the rules committee u for allowing me to come forward to uh testify before you today. While I believe improvements can be made to this legislation, I also believe that HR 3633, Digital Asset Market Clarity Act of 2025, also known as the Clarity Act, is a step forward
▶ 1:31:01in regulating digital assets. Um, this legislation impacts the Commodity Futures Trading Commission, the CFTC, which is under the House Agriculture Committee's jurisdiction. So, most of my remarks will be limited to those parts of the bill.
▶ 1:31:19But to be clear, millions of Americans, millions are holding cryptocurrency, exchanging it and financial transitions and using other digital tokens as a part of new innovative technologies and services.
▶ 1:31:40there is no market structure in place to protect consumers or establish rules of the road for businesses and innovators seeking to work in this space. In other words, whether we accept it or like it or not, it's the wild wild west. The CFTC is hamstrung in its ability to protect consumers.
▶ 1:32:05While the CFTC already has been effectively and robustly policing derivative markets that trade futures in digital assets, its authority in the spot markets for many of these digital assets is li limited to only policing for fraud and Digital assets are here. They are here. We cannot put this back in a Pandora's box.
▶ 1:32:33Nobody is waiting on us before forging ahead into new digital the new digital frontier. And my friends, Congress once again is playing catch-up. That's where we are. So the question that's before all of us today is how and when are we going to begin to regulate the sector? That's the question. When and how?
▶ 1:33:02Well, the Clarity Act gives Congress an opportunity to provide protection to customers who trade and hold these digital assets. Further, it provides clarity to innovators of this technology. One of my concerns around this legislation, and let's just deal with the elephant in a room, is the lack of of conflict of interest, guardwells, and especially as we're talking specifically with the executive branch.
▶ 1:33:33Regardless of who the president, if I can be clear, we need to have standards in place so that no person in any administration is using their office to personally benefit from crypto as any president. There are several good ideas and amendments that deal with this conflict of interest standard.
▶ 1:33:56And this committee can either incorporate those ideas in the bill or at least make the amendments in order to allow the house to work its We must focus at the end of the day. We must focus on the millions of Americans, those customers, innovators, and that should be the focus of this discussion. the millions out there.
▶ 1:34:27That is why we need a market structure. That is why further delay would only hurt US customers and innovators. I'm supporting this legislation because Congress has a responsibility to the millions of Americans investing, using, and trading cryptocurrencies. American customers, I believe they deserve consumer protections. and they deserve those protections.
▶ 1:34:56Today, today we have the opportunity to bring the United States to the center stage and to be the world leader on digital asset market structure. That's what's before us. And the longer we wait, the greater the risk to this key industry of going abroad and sitting and setting up shop in foreign nations rather than right here in the United States. And I can tell you so many have come to me as the ranking member here.
▶ 1:35:27So many have come to me and said they want to do it right here. They want to do it here. Doing nothing leaves American businesses, customers, and the CFTC and the SEC with the status quo, a lack of clarity, a lack of security, and a lack of The risk of inaction is too significant and at a minimum with this legislation, any president activity would come under the regulation.
▶ 1:36:00Is the Clarity Act without shortcomings? I cannot come and sit here and say that it is. Is there room for improvement? But nevertheless, I still believe this bill is a step forward and deserving of support. And that's why I'm here. And thank you.
▶ 1:36:25Thank you very much, Mr. Davis from North Carolina. uh and the other panel members who are here. Uh I know Miss Waters um is planning to be here but is not and I'd like to go ahead with questioning if you all don't mind and then we'll recognize her when she gets here. Okay.
▶ 1:36:46Chairman Hill, this the legislation and uh related subject matter can get a bit technical, but let's set the landscape on why we're here. What is the ultimate purpose or value of digital assets and why should Congress wade into this digital asset debate?
▶ 1:37:10Well, thank you Madam Chair and again thanks to all the members of the rules committee for being with us tonight. digital assets are you're seeing change because uh in the in the world of the internet you're seeing uh new ways of doing computing than we grew up with whether you might have had an operating system on your computer that was a DOS operating system or you might have had a you might have been a Macintosh person back in the 80s and if you're if you have a cell
▶ 1:37:40phone you might be an Android person or you might be an iOS Apple personate yourself.
▶ 1:37:46Yeah. Yeah. Well, I haven't mentioned VHS and Beta. Uh, so an open network that we've all grown up with since the '9s due to the decisions of this Congress in 1996 to not tax or regulate the internet, but instead tax and regulate the use of the internet. That is an open all open permissionless network that you and I sent emails on and then we created websites.
▶ 1:38:15And what's happening now is that permissionless system is coming to uh finance. It's coming to uh our peer-to-peer transactions both in the United States and outside of the United States where we program a blockchain operating system which is like an operating system you've had on your phone or on your computer but it's a blockchain decentralized operating system and our rules don't fit that use.
▶ 1:38:43We used the word in the last Congress fit for purpose. We're not trying to deregulate anything. We're trying to make law for both commodities and securities and for things that are neither uh commodities or securities so that consumers are protected. So that investors know how to raise money and start businesses. So that programmers and developers know how to write applications to facilitate peer-to-peer transactions. Let me just give you a quick example and I'll stop.
▶ 1:39:15Right now, if we use a traditional uh system to make a payment in a foreign country, we're going to uh take cash out of our bank, we're going to electronically move that through the bank or through Western Union or we might write a check or we might uh send a wire transfer to that person in another country and it would be in dollars and that person in the other country has to go to their bank and translate it into their currency and those costs of the wire
▶ 1:39:45transfers or writing the check or the mail or sending that wire or the currency translation between the dollar and that other currency. All those have huge costs. And what you'll see in the future is on a blockchain operating system, you'll see that payment made internationally and you'll take out the bulk of that cost. You'll increase speed. You'll increased accountability, increased fraud protections and the like. So a blockchain system is an operating system like we've grown up with.
▶ 1:40:15It's now being programmed. There are uses in financial services and our existing intermediary rules governing commodities and securities don't fit that form of transaction. And that's why we are here today and why we're working together to rectify that gap of regulation. And by the way, we appreciate how well the two committees have worked together on this. So, let me follow up.
▶ 1:40:43Is it true today that it's unclear which digital assets the SEC considers to be securities and that at times the same digital asset is claimed to be a security by the SEC and a commodity by the CFTC and what's the result of that confusion?
▶ 1:41:08Well, it's been significant and in fact, it's the work that's really guided the a committee and the financial service committee in the last congress and during the Biden administration, chairman Gary Gendler, who chaired the SEC ruled that effectively all tokens were securities and that they should all be governed by the securities laws. And yet, the federal court struck that down.
▶ 1:41:30They declared that Bitcoin or Ethereum were in fact decentralized commodities on and did not meet the definition of a security. And yet Mr. Gendler in that capacity as chairman tried to put a square peg in a round hole. And what we've tried to do here is define in law how is a token a a commodity in law and how is a token to be considered a security.
▶ 1:41:57And that is the clarity delivered by the Clarity Act. And of course, we can use examples, but I'd yield to Don or GT if they want to comment on that. Basically, most tokens are in fact commodities and will be governed by the CFTC rules and that's why this part of their part of the bill is so robust.
▶ 1:42:18Well, thanks, Chairman. Absolutely. It's uh true today. Um and it's unfortunately been true for some time. Chairwoman, our committee has heard testimony on this point time and time again uh from market participants, current former regulators and lawyers with subject matter expertise in this space.
▶ 1:42:38And so uh um you know all the confusion that uh chairman Hill had uh talked about under SEC chair Gensler um creating a whole mess of confusion uh under clarity the lines of authority between the CFTC and the SEC are clearly delinated based on each agency's expertise. The SEC oversees capital raises involving digital commodities including both disclosures and resale obligations on project insiders.
▶ 1:43:08CFTC oversees the intermediary intermediary that hold customer funds and allow trading in the digital commodity spot market. So that uh it truly do um I mean it's my belief that looking at u at this legislation uh it lives up to its name of providing clarity over what has been uh very confusing in the past.
▶ 1:43:32Thank you all again very Mr. Davis did you want to add something? I I would add briefly, madame um chair, because much has been covered, but again, going back to the testimony, um there's ambiguity and obviously that has resulted in lawsuits. That's what we've seen ultimately has also led to, which I really just want to elevate, I believe, as a result of that, less consumer protections.
▶ 1:44:01Thank you very much, Mr. McGovern.
▶ 1:44:04Thank you. Um uh I think Chairman Hill, you mentioned the Genius Act and the Genius Act bans the use of uh I guess do you want to go to Maxine?
▶ 1:44:18Well, let me let me let me let me just ask the questions then we'll go to Chair Waters. Virginia act backs abs the use of deceptive stable coin names that could deceive a reasonable person into thinking it is American currency or related to the government such as United States or USG I'm correct right is that am I correct in in that
▶ 1:44:44I'm sorry no I'm sorry would you repeat
▶ 1:44:47yeah so the Genius Act bans the use of de of deceptive stable coin names that could deceive a reasonable person into thinking it's American currency or related to the government such as United States or USG. Right? Am I correct on
▶ 1:45:02I believe so. Yes.
▶ 1:45:03Right. And that makes sense because these are private companies um issuing crypto not the United States government and there is nothing guaranteeing that they will actually stick to the value of the US dollar. And so, which leads me to my question, which is why is there an exception on page 36, lines 3 through 7, which states that stable coins with the specific abbreviation USD are allowed?
▶ 1:45:32Well, I I take your your premise about US dollar, but let's go back to the assertion you made, which is that there's no guarantee that it is backed by the dollar. And that's the whole essence of the law's proposal is it is backed one for one by the dollar. It's only backed by and it's audited and their monthly attestations to the effect that it's backed by short-term US treasury bills, insured deposits or less than 90day uh 93day treasuries.
▶ 1:46:02Right. But my question is that you know there are certain you know prohibitions about um how these how this can be labeled and there's an exception and I and I I I asked a question because I wonder whether it has anything to do with the fact that President Trump has his own stable coin named USD1. Um I'm not sure if you're aware of that, but that's what what it's called.
▶ 1:46:24And so there's there's a specific exception um in the Genius Act that allows u for him to continue this and I because when I hear USD
▶ 1:46:33but you say that his is USD1 and that says USD
▶ 1:46:37right okay but it's inclusive I mean he basically he he's allowed when I hear USD I think of the U I think of US dollar um I I think any reasonable person would think that um it's the official standardized abbreviation for our currency worldwide. And so I guess the question is why does the bill include a special handout to President Trump and his family's uh crypto
▶ 1:47:03Well, I don't I don't view that as a handout to the Trump the Trump family. It says USD. I I take your purpose on that, but I don't connect that with any one entity personally. What what I think it's important for you to recognize is that this is an extension of the US dollar and the reserve currency status of the dollar by having a US dollarbacked payment stable coin available as a payment method under the laws of the United States regulated by the United States to benefit uh
▶ 1:47:34the US dollar being used as a transaction mechanism around the world.
▶ 1:47:37Yeah. No, I appreciate but but that's really not the question I'm I'm asking here. You know, on March 25th of this year, a company backed by Donald Trump and his family called World Liberty Financial launched the USD1 stable coin. President Trump, Eric Trump, Donald Trump Jr., and Baron Trump are listed as co-founders on the company's website, and Eric Trump serves on the board of the holding company.
▶ 1:48:02As of April 29th, 2025, a Trump business entity owns 60% of World Liberty Financial and has entitled 75% of the revenue from coin sales, which can be converted into cash. So, according to President Trump's financial disclosures, which he filed with the US Office of Government Ethics on June 13th of this year, President Trump has already made 57.4 million in personal income from this crypto business alone.
▶ 1:48:30So Trump's stable coin is just the tip of the iceberg when it comes to self-enrichment. Trump and and Melania Trump have issued their own cryptocurrencies called dollar sign and all capital letters Trump and dollar sign all capital letters Melania and promoted them on social media.
▶ 1:48:48Trump hosted an exclusive dinner at his luxury golf resort with the top 225 largest holders of his Trump coin in which attendees including foreign investors spent millions of dollars to secure a seat and several of the attendees said afterwards the entire go the entire goal was to influence the president. So Trump's family also started a Bitcoin mining firm called American Bitcoin, which lists Eric Trump as a co-founder.
▶ 1:49:16And the Trump Media and Technology Group has created a true social Bitcoin ETF. And my personal favorite, Trump is even advertising and selling virtual NFT non-f fungeible token trading cards that sell for $99 each and feature AI modified versions of Trump.
▶ 1:49:36So, according to the trading card website, if someone buys 75 digital trading cards in a single transaction, which is over $7,000, quote, you'll get both dinner with the president at his private country club and a piece of the actual suit from his famous debate. So, I guess my question is, would President Trump still be allowed to sell digital cards in exchange for exclusive meetings under these bills? There's a lot there.
▶ 1:50:06Uh first in this legislation would make you're describing a memecoin and this bill would regulate meme coins for anti- fraud and manipulation and that all public officials including the president and vice president in the rule of construction on this bill and ingenious are fully subject to all the government ethics laws. Currently digital commodities are now extended to that.
▶ 1:50:30And in the digital commodities uh edition section 412 uh in the clarity act makes meme coins for example or digital commodities subject to the full power of the CFTC for anti-manipulation and fraud. And then finally Mr. uh finally Mr. McGovern let me add a final point.
▶ 1:50:53This idea of a memecoin was created by Gary Gensler, the chairman of the SEC in the last administration who said that things like nonfgeable tokens or memecoins were not securities and therefore he greenlighted the creating of these things. If you if we have clarity and we have a dollar back stable coin, we will limit and regulate the access to that kind of.
▶ 1:51:18I I assume that that answer means that Trump would still be allowed to sell digital cards in exchange for exclusive meetings,
▶ 1:51:26but that is not covered by this bill. It's not a digital it's not a digital commodity or digital uh security by virtue of Gary Gensler and the SEC's decision that nonfgeable tokens, NFTts or collectibles aren't covered. And instead we we capture that concept even in clarity by virtue of if someone were to list that on an exchange it would be regulated under clarity
▶ 1:51:56and those listing standards might prohibit that kind of behavior and any anti-fraud or anti-manipulation activity would be captured as well.
▶ 1:52:03Do you know how much money Trump has made from his crypto scheme since becoming president?
▶ 1:52:08Uh so I have the numbers in front of me. In total Forbes estimates that Trump has made $1.2 2 billion so far on crypto. Uh, and I guess the question is, do any of these bills before us today block a president from creating, selling, profiting from, or promoting his own This bill in section 412 says that anyone who engages in a digital commodity is in in is subject to antifraud and ant any manipulation rules
▶ 1:52:39and blocks uh also is subject to any aspect of of the campaign finance laws
▶ 1:52:46So the I so I guess the answer is no. Um and and do you know how many foreign governments or foreign entities have bought or invested in Trump's crypto? No, these rules, Mr. McGovern, are for every American, president, vice president, member of Congress, anyone
▶ 1:53:03But it was reported last month that a statebacked Emirati investment firm based in Abu Dhabi used Trump stable coin to settle a $2 billion investment in another crypto exchange called Binance. U and it's hard to count how many red flags that raises.
▶ 1:53:19And during Trump's special private dinner, more than half of the top holders of Trumpcoin use foreign exchanges that are closed or very limited to US residents, making it abundantly clear that foreign entities are funneling millions into Trump's own ventures. I mean, do you believe anybody believe that it is in the public interest of the United States for a president to be able to enrich himself from crypto even from foreign buyers?
▶ 1:53:45I mean, what if Kla Harris were president and she and her family were using the power of the presidency to make billions of dollars on crypto business businesses? I mean, I I think this would just be astonishing.
▶ 1:53:57Well, Mr. McGovern, I think what's in the public interest is that we have rules of the road and we have regulations and we have enforcement in an environment where right now there is none. And this will
▶ 1:54:07I I know but but I I I guess what I'm just I'm what I'm explaining here in in from my point of view is corruption. Um and you know and going back to my first question about you know uh the exemption um in the Genius Act uh which basically um you know allows for there to be an exception that uh with with the word with with the with the uh with USD uh the US dollar um given
▶ 1:54:38the fact that Trump has his own stable coin named USD1. I think that that should sound alarm bells. Ranking member Waters, do you have any comment on any of this? I mean, or any risk posed to our country um uh you know by Trump and his family's various crypto um ventures.
▶ 1:54:56Mr. McGovern, can you hear me? Yeah, just get
▶ 1:55:01is it
▶ 1:55:02um as I came in just getting off the airplane here, I heard you uh describing uh perhaps uh in a most detailed way what is going on with crypto and the president of the United States of America. First of all, I have been urging that the president of the United States, his cabinet and family be excluded from ownership of crypto.
▶ 1:55:28The president of the United States has brazenly shown uh that not only is he creating his own crypto, his wife, he's creating his uh meme, um they absolutely are in the ownership of crypto now. And in addition to that, the Suns are in ownership of Bitcoin.
▶ 1:55:53uh they are literally mining uh bitcoins right now as we speak. And you described um you know all of this ownership and you asked some questions about whether or not uh they are excluded. No, they're not. And that's what I've been pushing for that they should not be able to do what the president is brazenly doing.
▶ 1:56:18that little dinner that he had uh with all of the billionaires that showed up who want to be next to the president who are seeking to be favored by the president, that was an effort by him to spread his ability uh to get the investment from all of these very rich people who want to be close to him. And you asked about Abu Dhabi. Abu Dhabi put two billion dollars into um his stable coin which is going to be invested in Binance.
▶ 1:56:47And so no uh they are not excluded. The president and vice president for example are carved out of the ethics laws in the clarity and the genius act. In addition to that what is so unseenly about all of this is the president has made it very clear that he is in charge of the independent agencies. He said to the SEC, which is our cop on the block, that you are not going to make any rules.
▶ 1:57:17You're you're not going to get involved with decisions until you come by me. And so here you have the president of the United States who's enriching himself openly and brazenly uh with crypto. And now he's in charge of the very agencies that if we can ever figure out and if we can ever get the Republicans to understand the role that the SEC plays instead of all of this struggling that's going on by trying to keep the SEC out.
▶ 1:57:47If we can ever get it straight, it doesn't make any difference because the president of the United States is going to tell them what they can and they cannot do. And so crypto is being undermined by the president of the United States of America.
▶ 1:58:04And if we allow if we do not stop him, if we do if we allow him to continue to do what he's doing, he will have so much riches in crypto. Nobody will be able to match that. uh because he's shown already how he can enrich himself. That's all I've asked. And I've worked hard on stable coins.
▶ 1:58:30I worked for two years on stable coin trying to work out what we could do. Not only recognizing the SEC, but perhaps there's a way that we could have figured out how some of what we're looking at are commodities and some are securities. And maybe we could work out both in some ways. But we cannot move forward with what we see happening with the president of the United States.
▶ 1:58:55I cannot get any support from the opposite side of the ill hill uh the the bill opposite side of our committee. They continue knowing what the president is doing and how harmful and how dangerous it is.
▶ 1:59:10And so I would like you as you have basically went over what is going on with these bills to understand that the greatest obstacle impediment dangerous thing that we have with crypto at this point.
▶ 1:59:29It's not even you know what we have not been able to do to get the guard rails in the bills in the way that we want to and particularly market structure but what is the most danger to this country and to our nation with the international involvement without any oversight as you've seen Abu Dhabi do is what this is all about and that's what everybody should be focused on.
▶ 1:59:55Thank you. Let me just close with this and that is I it is it was a pretty straightforward question and and I and I appreciate you answering it responding ensuring my concerns miss waters but to my Republican friends um you know I mean I no one ever answered on the Republican side why in this bill Republicans carved uh the abbreviation USD out of this bill which essentially is a corrupt giveaway to the
▶ 2:00:25president and his family. I mean, they don't allow USG or US, but they allow USD. Um, I mean, the corruption here is just shocking. And it is, it is, it's just a stunning level of selfdeing from this administration and another way for this president to monetize his office.
▶ 2:00:43And I, you know, I mean, most presidents when they get elected try to distance themselves from financial investments so that they are above reproach, so that there aren't all these conflicts of interest um and all these questions. This is just the opposite with this White House. And I would just urge my friends, I mean, that I mean, we all have to reel this in the rank.
▶ 2:01:06Oh, I'm sorry. I didn't I didn't see.
▶ 2:01:07No, that's okay. I'm just waiting my turns. Go ahead. I appreciate the ranking member. Yeah, the logic of what I'm hearing doesn't make a lot of sense though because we're damned if we do regulate, damned if we don't regulate. Um, and it seems like the rank member just wants us to do nothing. No customer protections, no disclosures, no segregation requirements. I mean, she wants the status quo and respect. That was not my question. You're answering you're not answering my question. Still what he's doing.
▶ 2:01:35My question was why is USD why is USD
▶ 2:01:38bill? So the question is why is USDA put into this Senate bill?
▶ 2:01:42No, that was my question
▶ 2:01:46That's a that's a Senate bill that passed with with bipartisan support.
▶ 2:01:49My question is why why is there a car out of the Senate? So
▶ 2:01:52that was my question. Well, I think you know I know that's your question, but I also I also know that the financial conduct of federal officials, including the president, vice presidents already addressed as referenced before by federal laws such as the stock act, the the ethics and government act, not to mention federal campaign finance laws and in the amuance of the clause of the constitution.
▶ 2:02:13So, um, you know, if we take a step back, selling collectibles with a leader or candidate likeness, slogan, or logo is, it really is a long-standing feature of American politics. And we have rules around fundraising and disclosures already apply to candidates for for federal office. And so, if there's a concern that there's a conflict of interest where the president in his or her official capacity has a role in regulating businesses that involve his or her family members, that's true.
▶ 2:02:41Wherever a family president's family member is in gainful employee in any line of work that is subject to federal regulation and I'm hardressed to think of many that aren't in some way touched by federal law be it tax law environmental regulation or the like and again federal law already addresses situations where government officials participate personally and substantially in decisions relating to their family members or business associates. Again, I I appreciate your response, but it's kind of an inadequate answer to my question.
▶ 2:03:12I
▶ 2:03:13uh Mr. Governor, just uh I wanted to look up, so I I took a moment and thank you for the indulgence. Uh all the stable coins that are functioning now, many the ones in the United States that are under US law in New York, for example, have USD as their pre pred their uh primary identifiers. USDT is tether. That's an outside the US item. USDC is circle who just went public on the New York Stock Exchange.
▶ 2:03:41USDC uh is also used by Ethereum. US uh
▶ 2:03:48why are we exempting these coins that
▶ 2:03:50No, no, it's it's just that it's now the colloquial name that the city that the state of New York for the for the ones in the United States have just used and they're it's a common identifier. Circle just went public on the New York Stock Exchange. Uh, US dollar coin, USD, that's circle. It's a publicly traded company. USDP is Paxos, which is a commoditybacked stable coin up in New York, too. I'm just I'm not arguing with you. I'm just telling you it has nothing to do with the Trumps per se.
▶ 2:04:20It is a colloquial identifier for US dollarbacked stable
▶ 2:04:25Well, let me just follow back. Let me just follow with Miss Waters. Do you believe for a minute that this was done for any other reason than to protect Trump's millions and millions of dollars that he's making off this scheme?
▶ 2:04:34I think I just demonstrated to you that the majority of the top stable coins in the world have USD in them because they're backed by Treasury bills. I just heard the uh question and the response to it. The president of the United States is using the presidency in our country to enrich himself. And the more he can identify with this is what is happening that everybody is agreeing to.
▶ 2:05:05It is the United States of America, that's what is happening.
▶ 2:05:08It's time for him to move the portrait of Richard Nixon in a more prominent place in this White House because this guy makes Richard Nixon look like a boy scout. I yield back.
▶ 2:05:18Thank you, Mr. McGovern. Um, Miss Fishbach, you're recognized.
▶ 2:05:24Thank you, Madam Chair. I just I just want to thank the chairman for take undertaking this. This is not um, you know, one of the easiest topics and so I appreciate both of you working very hard on this and bringing them forward. And with that, I yield back.
▶ 2:05:38Thank you, Miss Fishbot.
▶ 2:05:44Miss Scandlin, you're recognized.
▶ 2:05:46Sure. I think first I don't know that Miss Waters has had the opportunity.
▶ 2:05:50Miss Waters are
▶ 2:05:51I have a statement I'd like to read.
▶ 2:05:54You want to read your statement?
▶ 2:05:55Okay. Yes, ma'am.
▶ 2:05:56Thank you very much. Uh thank you, Chairwoman Fox, Ranking Member McGovern, and members of the committee. Earlier this month, Republicans pushed through Trump's big billionaire bailout that strips health care from 17 million Americans, shutters hospitals, and stars 12 million people by taking away their food assistance. These cuts to vital programs for America's most vulnerable add up to 1.3 trillion.
▶ 2:06:25The exact cost of the tax cut Republicans are handing out to the richest 1% of Americans. I'm honestly not surprised that the Republicans next order of business is a billion dollar handout to the president himself. Late last year, despite President Trump previously calling crypto a scam, he and his family have launched a multi-billion dollar crypto umpire.
▶ 2:06:55Trump has sold hundreds of millions of so-called meme coins, offered access to a dinner with him, and private tours of the White House for those people who own the most coins. Even the first lady has her own coin. It was reported that Trump has made 350 million in March on the trading fees alone for these meme coins. But his family's crypto empire wasn't stopped there.
▶ 2:07:25It hasn't stopped there. His crypto company, World Liberty Financial, launched a stable coin that you mentioned, Mr. McGovern, called USD1 in April. And shortly thereafter, the Abu Dhabi backed in investment firm MGX bought 2 billion of Trump's coin to make an investment in Binance.
▶ 2:07:48Trump and his family will make tens of millions of dollars on that transaction alone from the interest earnings. Trump's family has also launched the Bitcoin mining operation, crypto exchange traded funds, a crypto exchange, and reportedly even a digital wallet for consumers to hold their crypto coins.
▶ 2:08:12And of course, all of this comes at the same time that Trump administration has taken away the independence of the financial regulators, as I alluded to, like SEC, the Fed, and the bank regulators. He fired independent directors at the credit union regulator just because they were Democrats.
▶ 2:08:33and he issued executive order 14255 which now requires all rules written by the financial regulators to be reviewed and approved by the White House budget office. And this week, the House will consider three crypto bills that would literally hand over to the president the ability to write the rules he wants to oversee his stable coins, his meme coins, and other crypto operations.
▶ 2:09:03Surely each of you can see how this is a blatant conflict of interest, right? Well, Democrats do. It is why I introduced the Stop Trump Corruption Act to ban the president, Vice President, and members of Congress from issuing, trading, or owning crypto.
▶ 2:09:22I and many of my Democratic colleagues have also offered amendments to all of these bills to ban the president and all elected officials from crypto while they're in office. If we do not ban elected officials, including the president or vice president, from owning crypto or issuing their own coins, each of us will be complicit in these conflicts of interest and potential corruption.
▶ 2:09:49And yet, even if we adopted my amendments to stop the crypto con, there's still several other problems with these bills, which I will now discuss. HR 3633, the so-called Clarity Act, but which should be called the CLA the Calamity Act and which is ironically called the Genius Act, create giant loopholes in our federal financial laws that would put consumers
▶ 2:10:19and investors at risk. They both handcuff the very regulators we rely on to protect consumers and investors and increase the chance of another costly financial crisis like the one in 2008 that led to trillions of dollars of wealth being wiped out and millions of Americans losing their homes, their jobs, and their retirement savings. I was here.
▶ 2:10:44I served on the conference one of the conference committee and I tell you we should never want to go through what we went through with that. It is notable that 15 years to the month after Congress passed the DoddFrank Act to prevent another financial crisis, House Republicans want to lay the foundation for the very next one. Let me explain how the Clarity Act clearly harms investors.
▶ 2:11:08First, the definition of digital commodity, which is the lynchpin of the entire bill, is profoundly flawed. On first blush, it seems to exempt securities. But then the bill includes a so-called rule of construction quote rule of construction which is an instruction to courts and agencies how to interpret the law that says no presumption shall exist that a digital asset or
▶ 2:11:38a digital commodity is a security merely because it offers voting rights could appreciate with the effort of the decentralized governance systems. are rising in value because people actually use the blockchain network. In other words, the characteristics of a security that the Supreme Court has long recognized all stripped out here.
▶ 2:12:02A crypto company can call what would have been a security today a quote digital commodity and walk away from the disclosure and a fraud liability and corporate governance protections that investors have relied on for 90 years. And it goes the other way too. a blue chip company like Apple or Google could decide to issue tokens instead of stock on the blockchain and exempt themselves from the securities laws.
▶ 2:12:32In fact, it was just last week the former chairman of the CFTC said under this bill, companies would be free to do just that. Second, an isser may selfcertify, jam the SEC, and then escape all investor protections enforced by the SEC.
▶ 2:12:52SEC staff have called the timely time line to review these so-called unworkable given staffing levels and complexity of these arrangements. Third, does anyone not remember FTX and that fraud? This bill allows crypto exchanges to redirect their customers funds for the benefit of the exchange.
▶ 2:13:27Madame Chair, I think um Chairman Hill spoke for 9 minutes and 24 seconds. So, Miss Waters is still well under that. Okay. We'll use that as the
▶ 2:13:38We'll use that as the benchmark.
▶ 2:13:41Go right ahead.
▶ 2:13:43Yes. Go right ahead. Thank you. Okay. Third. Does anyone not remember FTX and that fraud? This bill allows crypto exchanges to redirect their customers funds for the benefit of the exchange.
▶ 2:14:02Moreover, an exchange can co-mingle customer assets and engage in proprietary trading under vague exceptions for convenience or operational needs or risk management. These are practices that enable FTX to commit billions of dollars of fraud and which are banned by the US securities laws.
▶ 2:14:23Fourth, there's a new exemption that allows anyone to rise raise up to 50 million bit $50 million per year from the public by issuing crypto without audited financial statements or even being required to use the funds for the crypto project. The last point I'll make on this bill is this.
▶ 2:14:43If Congress truly wanted the CFTC to regulate crypto, then we should at least give the agency the resources it needs to enforce the law instead of the Clarity Act gives only four years of funding to the CFTC to implement the bill. And no freestanding authority to go after fraud, market manipulation, or other investor harming practices similar to the authorities the SEC has today.
▶ 2:15:08Likewise, the Genius Act creates the appearance of a federal framework for stable coin, but does not provide the federal government with the authority to ensure all stable coin issues comply with the law. The bill also creates risk for consumers who will be stuck in a lengthy bankruptcy process if a stable coin ever fails.
▶ 2:15:29Without these protections, there will be devastating losses, not just for crypto consumers, but also for non-crypto investors who are trying to save for college, home ownership, retirement, and other milestones. Additionally, these bills endanger our national security.
▶ 2:15:45The Clarity Act does not address the illicit finance and other crimes commonly seen in the crypto space since it does not provide nearly enough direction to agencies for the level of financial crimes and non-compliance expected for companies that bring significant risk of money laundering, terror finance, and fraud. Nor does it provide the funds for federal agencies to examine and enforce our national security laws.
▶ 2:16:12And the Genius Act leaves the door wide open for foreign firms. Foreign firms that present a major national security threat, including targets of sanction, all to appease those in the Trump family's inner circle, which has ties to those shady entities. That is why I along with other House Democrats have submitted many amendments to these dangerous bills.
▶ 2:16:36One interesting point is that even chairman Hill himself inserted language at the end of the so-called clarity act that actually amends the Senate passed Genius Act. You may be asking why he would do that when both bills are before us today. He would just offer his amendments to the Genius Act. Thank you very much.
▶ 2:16:55Thank you. If I may, I will discontin.
▶ 2:16:58We will accept your written statement.
▶ 2:17:00Thank you very much. Thank you very
▶ 2:17:03Thank you. I I think we all are in agreement that Congress needs to pass meaningful crypto regulation, but uh we have some differences of opinion about uh whether or not the three financial services bills before us today meet the needs of the American people and I don't think they do.
▶ 2:17:24Um, we've seen repeatedly that the crypto in industry is all too susceptible to financial risk, to fraud, to money laundering. And while investors should be allowed to invest where they want, including by owning crypto assets, the demonstrated potential for corruption and fraud and crime with crypto assets as presently uh configured and the companies that facilitate crypto markets require that we establish some reasonable guard
▶ 2:17:54rails. I understand the pressure to wrap this hearing up before this evening's vote, but there's a pretty lengthy list of major scandals, crimes, and meltdowns in this industry. And I think it warrants us asking some tougher questions and not just accepting the bills before us, which bear all the signs of really having been written by the industry that they're supposed to be regulating.
▶ 2:18:17So I I know our colleagues here are at least passingly familiar with some of the defining features of the crypto industry in recent years. So, I would ask those considering whether to vote for these crypto bills whether you're comfortable giving a free pass or free reign to an industry that routinely facilitates money laundering for Mexican drug cartels and terrorists, an industry that is the source of billions of dollars of investment fraud and an industry that threatens the stability of our financial markets.
▶ 2:18:48Um, Ranking Member Waters, if these crypto bills were to become law, what risks would investors face? uh for that question. investors will be suckers in the way that Trump has already shown us they can be.
▶ 2:19:11He made money uh on his first um was it memecoin and um the market makers I believe helped to drive up what looked like you know the growth in the profits but then they pulled the rug and guess who left got left hang the investors you know investors who actually believe that because the president of the United States was involved that they were going to make money and that it would be legit.
▶ 2:19:42Let me just say I do not blame everybody on either side of the aisle because they have not been explained. They really don't know these bills. They have not been explained what they're all about.
▶ 2:20:00many of the huge resources that have been invested in the crypto owners having their way didn't even describe to those who were beneficiaries what the bills were and what they do. And so investors stand to lose.
▶ 2:20:16As I said, I've been through what happened in the United States when we had the big meltdown uh when all of the fraudulent or um bills came through the bank system and people thought they were going to own a home without the increase in interest rates rising on them, etc., etc. I know how dangerous this can be. And so, it is investors who will lose uh in their investments.
▶ 2:20:45They will lose their 401ks. They will lose their homes. They will lose everything messing around with this fraudulent, corrupt administration that is bringing before the Congress of the United States brazantly. Something that only allows the president of the United States in connection with foreign companies to do what we see happening now. I just explained FTX. You all remember FTX.
▶ 2:21:13Well, you think that's bad, you watch what would happen if, in fact, we let these bills be passed. So, I hope that answers your question.
▶ 2:21:21I think so. Thank you. I appreciate that. Um, I also appreciate the work you've done to highlight um the the meme tokens, the cryptocurrencies that are being sold or traded by individuals associated with the Trump White House and his family and the opportunities for self-deing and corruption that those ventures could f could facilitate.
▶ 2:21:45Um, how does it appear that crypto is being used to act get access to this administration? Can you tell us a little bit about what's going on there and why that is troubling?
▶ 2:21:56Well, um, just as I referenced and I think Mr. McGovern referenced Abu Dhabi, uh, with $2 billion, uh, why did he have to go to the Trump stable coins? Because they want the relationship, they want the identification.
▶ 2:22:17Um and so Trump knows that being identified as something that appears that this government is in support of uh that he can get all of these billionaires and entities from foreign country countries um coming to him and investing in um his memes and the uh bitcoins and all that his family is involved in.
▶ 2:22:44And so, uh, again, not only will investors lose, um, not only will this country lose, not only will, um, we all perhaps be faced with a day of regret if these bills pass, they're dangerous and they should not be supported. I know that my colleague here, Mr. Hill, he said, you know, look, we've got to have disclosure. What is that after the fact?
▶ 2:23:14I don't know what that is, but I know that he's trying. He's tried his best even with the amendment that I alluded to, but it's not good enough. It won't work. It won't save us from the corrupt administration and what they're doing.
▶ 2:23:29Well, I I appreciate that and and I think uh the ranking member, Mr. McGovern has already pointed out the fact that the Genius Act actually um has a special carveout for uh Trump's stable coin um in the section that prevents the use of misleading names. So um I I think we've we've noted that. I did want to ask one other question.
▶ 2:23:53We're also looking at HR1 1919, the anti-CBDC surveillance state act, which tries to prevent the federal government from even um considering the idea of a digital currency.
▶ 2:24:08Um and that seems to be from some fear of um the government being able to track movements through digital currency despite the fact that we've we've heard that a digital currency could be very useful for small businesses, for individuals who then won't have to pay credit card companies and other companies as they each take their cut at every step of the way.
▶ 2:24:30But I do find it odd and I was wondering what you thought about the fact that our colleagues are paranoid about a digital currency leading to a surveillance state. But at the same time, they're not showing any concern about the Trump administration contracting with Palunteer to consolidate people's data and privacy.
▶ 2:24:50I mean, we've heard that this is supposed to help protect privacy in our financial work, but we're seeing this administration make huge inroads in privacy by collecting data from the IRS and Treasury and Social Security, etc. Can you speak to that at all?
▶ 2:25:07Well, you know, I'm having a bit of uh airplane ears, but I think uh what you just alluded to is the impact of what is happening with this administration on other aspects of our society and government and you alluded to social security and uh the taxes and all of that. Well, this is huge.
▶ 2:25:31This is big and that's a very good question because in addition to the corruption uh that we're so aptly identifying here all of the fallout could happen in so many different ways. I am absolutely worried about the fact that the president of the United States does not have any respect for any independent agency whatever.
▶ 2:25:56He can interfere and it appears that not only does he have a cabinet uh that is not equipped in any shape form or fashion to do um and carry out the responsibilities that they have. Uh but in addition to that, there is fear. There is so much fear in this country right now.
▶ 2:26:20Fear from those he's appointing, fear from members of Congress, fear that they are going to somehow be victims of the revenge that he has promised. He has promised revenge. He is going after the Department of Justice right now. He's former justice leadership is being undermined, being followed, being by this administration.
▶ 2:26:49And Trump makes no uh excuse. He doesn't try to hide it at all. So, it doesn't matter. I expect that he's going to know everything about our bank accounts. He's going to know everything about our property. He's going to know everything about our taxes, nothing is protected from him anymore.
▶ 2:27:12all of government, all of the ways that we conduct our lives between here and Elon Musk where there's still some concerns about Elon Musk and what happened in Pasadena. I mean, not Pasadena, but in Pennsylvania, where the president himself alluded to the fact uh that they won because Elon Musk knew all about how to deal uh with this technology. I'm afraid of them.
▶ 2:27:42Everybody should be afraid of them. And it doesn't matter whether it again is social security, whether it's your taxes. What is your privacy in any way? I hope that gets to what you were alluding to.
▶ 2:27:54I think people do have reasonable expectation of privacy in their data. And that's something that Congress should be protecting every day and not allowing this data to be used and abused and and misused for for purposes for which it's not intended. Um, certainly one might call that the weaponization of the government and and I also take to heart your your comment about the fact that people are now in fear of our government.
▶ 2:28:20That's not a position that we've had in this country before, but it's certainly something I hear every day when I'm home that people are afraid of the actions of our government and and that's not how the US became a shining light uh to the rest of the world. So, I do share that concern and I thank you for your testimony. I yield back.
▶ 2:28:42Thank you, Miss Scandin. Uh, Mr. Norman, you're recognized.
▶ 2:28:47I think it's interesting to sit here and listen to all these attacks on a man that made his money in the private sector. He didn't make it by getting a government paycheck. Uh, man who saved this country from rogue country like Iran. when you had a president and Joe Biden who gave cash to a a country like Iran. I think it's funny that no questions were asked during minus during the Biden administration. What about the LLC's? What about the money from China?
▶ 2:29:16What about the checks from his brother? You talking about corruption? What about the three houses with pools that he owns? We all make 174,000. And how did he do that? I mean, it's it's really hypocritical to you would this my good friends on the left would not support Donald Trump if he cured cancer, Alzheimer's, and and and gave life to people. They would not uh give this man credit for what he's done for this country.
▶ 2:29:45And it's it um you know, it's getting old. The only fear, Miss Waters, and I like you, you're and I good friends. The only fear Americans had was that Joe Biden or Kla Harris would be elected and 77 million people said, "No, they're not. It's not going to happen." That's the only fear the Americans had.
▶ 2:30:05But, uh, it's so hypocritical, uh, to to jump on a man that's doing what back and you criticize him, he deserves a lot more credit than y'all are giving him, but it's not going to change. So, it is what it is. Uh, Chairman Hill, do you want to respond to some of these
▶ 2:30:22Be happy to, Mr. Norman. Thank you for the opportunity to do that. First, uh, there was an assertion made by Ranking Member Waters that somehow the vice president, the president were carved out of these bills for ethics purposes. That is a constitutional issue that affects all government ethics laws. And let me be clear about that. Ethics and Government Act 1978 among other federal ethics statutes requires executive branch officials including the president vice president to publicly and annually disclose their financial interests which we've talked about here.
▶ 2:30:52While not all ethics remediation regulations apply to the president and the vice president in practice activities related to the issuance ownership and transaction and digital commodities that would involve reportable activities will be required under this bill. Two ways in clarity.
▶ 2:31:09First, just like 68 people voted for in the Senate, a similar rule of construction uh that was ingenious is inclarity, which confirms that all existing federal ethics requirements imposed on public officials continue to apply to activities in digital commodities.
▶ 2:31:27And then in clarity, we added section 412, a new prohibition on trading digital commodities and other tradable assets which include meme coins, NFTts, and other collectibles which violate the ethics or campaign finance obligations of public officials. Plus, on top of that, both the CFTC and the SEC have the full ability to investigate people for anti-manipulation in the markets and fraud.
▶ 2:31:55So, this bill is about protecting American citizens, no matter who they are, and allowing investors and innovation here, to come back to the United States. And and I would say that's the way Congress should work. And Mrs. Waters has very uh I think persuasively talked about the dangers in the '08 financial crisis and Congress's reaction. And she was our chair of the financial services committee during the FTX crisis.
▶ 2:32:23This bill directly responds to the challenges and regulatory gaps in FTX. In fact, the former general counsel testified before the House. If we had clarity, this was before your committee, Mr.
▶ 2:32:37Thompson before if we had had Clarity Act in place, we would not have seen the FTX collapse because we have strict regulatory guidelines that we close the regulatory gaps that exist now under SEC and CFTC procedures. And I would yield to my friend Mr. Thompson if he wants to add to that point.
▶ 2:32:57Yeah, let me just uh broaden that uh point just a bit. Mr. Miller, who uh is who Mr. Hill was making reference to to was uh actually leading the u US uh FTX u uh portion. It was actually that portion of FTX that was registered in the United States specifically.
▶ 2:33:20It was uh FTX, US FTX derivatives and um and so that was that portion US FTX derivatives uh was regulated and had oversight by CFTC. No problems, no co-mingle money, no stealing of money. And FTX did they robbed a lot of people.
▶ 2:33:43Uh over $8 billion dollar um that was lost because FTX the rest of FDX was parked offshore in a Caribbean uh island. And so uh you know this that makes FTX makes the case why these specifically clarity is so important to do to provide that clear definitions, clear regulatory oversight. Um you know uh we we hear people talk about what was dangerous.
▶ 2:34:13What is dangerous is being stuck in the past uh when it comes to uh financial services and quite frankly digital assets. Uh it is not the future. It is here today. I don't I guess we could debate the number. It's about my understanding is about $3 trillion around the world uh in terms of digital assets and every country in the world wants a piece of that.
▶ 2:34:34China wants to be able to take uh to be the home of what I refer to what we refer to as internet 3.0 or web 3.0 which is the internet of value. The United States has always been in really sitting in the leadership seat. Uh internet 1.0 which is the internet of knowledge, internet 2.0 which is the internet of things. Internet 3.0 is what we're talking about today. and to do nothing is really to surrender.
▶ 2:35:03Um and most countries around the world are trying to to to secure this position. We cannot allow that to happen. That is what is dangerous. Not taking action, not recognizing that uh digital assets are here. Um and really the these bills and specifically in our jurisdiction it's the clarity act is first and foremost principle is protecting consumers and we do that with this bill.
▶ 2:35:32Um the whole USD is really kind of an interesting discussion when when chairman Hill really pointed out nicely that that is a term that is it's a general term that is used all across the world. And so this is not about the uh the president. This is about a standard use of of language. And I I appreciate the gentleman yielding.
▶ 2:35:53Yeah. I I I would also, Mr. Norman, suggest that there was an assertion made that somehow the bank secrecy act and anti-moneyaundering laws are not contemplated in these bills. Again, absolutely false.
▶ 2:36:07under both the CFTC and the SEC, they're treated any entity, an intermediary operating in digital commodities uh or digital tokens under the SEC or the CFTC would be treated as a financial institution and they're treated to the same standard of the anti-moneyaundering laws. And there's another assertion that somehow there's no uh disclosure or audit standards for someone raising capital around a token uh provision.
▶ 2:36:36Uh that's also not true. The bill contains full SEC oversight for issuing the amount of financial disclosure, the type of financial disclosure, the requirement for auditing, and how the exemption in fundraising would work. So, let me uh Mr. Davis, anything you'd want to add on these topics before I yield back to Mr.
▶ 2:36:58I I would simply say that in clarity uh the clarity act it would clearly put in place and again going to the commodity side with CFTC uh the registration process with the registration process itself um it would then bring forth um the bank secrecy act um we're talking about even going through
▶ 2:37:28the process of um reporting. Um so these are the things I'm looking at and these are provisions. I believe one thing we really maybe didn't touch on specifically but it addresses co-mingling of dollars.
▶ 2:37:46So I just want to bring forth in what we must agree on is and I think I've heard this some sort of structure is needed and I'll just uh quickly u members bill anti-serveillance CBDC want to comment quickly on that chairman Hill.
▶ 2:38:08Well, just look uh the payments innovations in our country have been driven by the private sector over decades and decades and uh we already have enough of a fourth amendment privacy concern of American citizens with data collection from the federal government. Now you and I have seen that in our work on the financial services committee about the stock trading and all stock portfolios under cat at the SEC or collection of everyone's credit card information and all transactions by the CFPB.
▶ 2:38:36This puts Americans data at risk and that's why Whip Emmer has proposed we don't want a central bank digital currency which is where you uh an individual citizen of America would actually bank at the Fed. The risk of your data being seen and exposed to the government directly on how you're conducting your private affairs is obviously exposed there. And that's what people's concerns are about, privacy.
▶ 2:39:04When the best place is to have the private sector innovate here, a dollarback payment stable coin is a tokenized payment issued by a private sector entity and fully regulated under the laws we're talking about today to protect privacy, to protect consumer interest, to protect illicit finance, and have the private sector is the way to go. And we don't need to have uh the government going into the bank, direct banking business for consumers. Well, thank each one of you, Maxine. Thank you.
▶ 2:39:33Thank you all for taking the time. I yel back.
▶ 2:39:37Thank you. And I I appreciate the responses uh from our um members um particularly clarifying as clearly as you possibly can any false statements that are being made. Thank you. As we cannot conclude before votes, we're going to recess until the end of the last vote. My understanding is they're going to close the first vote after 20 minutes.
▶ 2:40:05Let's see if they're going to do that correctly.
▶ 2:40:10No, I mean, yeah, I'll make a bet they won't close it after 20 minutes. If you want to bet the other way, um,
▶ 2:40:18just Okay, but thank you all very much. I asked the panel if they would please return at the end of the last votes.
▶ 3:21:10The committee will come to order. Mr. Nagus, you're recognized. Thank you uh Madame Chair and thank you to all the witnesses for your testimony today on this important subject and the bills that uh the House will be considering here in the coming days. Chairman Hill, welcome back.
▶ 3:21:33The last time you were here, I think we were uh verbally jousting at 4 in the morning on the the markup of the the reconciliation bill about a month and a half ago. So anyway, welcome back. Uh, good to see you. Uh, safe to say there are a lot of the American public regarding cryptocurrencies, meme coins, stable coins, the like.
▶ 3:21:56If if a constituent back in Arkansas came up to you and said, you know, I I think that these meme coins are they're highly volatile or they're they're based on thin air. That would not be a view you would share. I assume
▶ 3:22:17I think generally that a memecoin or a NFT or a collectible is literally that it is something that's not expected to make a profit. It's not a security. It's not considered a commodity. This was a decision that the SEC made under Chairman Gendler's chairmanship. And therefore, I wouldn't offer any view of a value on it. nor would I like a magazine cover or a limited edition art print somebody bought many many years ago.
▶ 3:22:48It's not covered by the securities laws. But in this bill, we do add uh in the commodity title in section 412, we actually capture digital commodities and non tradable things or collectibles or memecoins for purposes of two things. one, if a intermediary exchange wanted to list that, they'd be under strict regulation. They'd have to have listing standards.
▶ 3:23:16They'd have to have a high degree of confidence in what is the the mission of that memecoin or the purpose of that memecoin to even make the listing. That does not exist today at all. Period. Full stop. And secondly, it would be captured under the CFTC's uh anti- manipulation, anti- fraud provisions as well. So that is a big step
▶ 3:23:38forward on disclosure and consumer protection in my view.
▶ 3:23:41Thank you. Thank you. Um what if kind of similar question if a constituent just described cryptocurrency in general using those same that same language that I described to you about you know based out of thin air very volatile that you wouldn't agree with that sentiment?
▶ 3:23:55Well, I think this is the whole issue. It's why you don't ever really hear me frequently in public talk about um cryptocurrency or crypto generally. I use the word digital assets because I think it captures something like something that could be considered a cryptocurrency which some would consider Bitcoin which is a commodity determined by the federal courts to be a commodity regulated by the CFTC or a US dollarbacked stable coin uh which could be called a cryptocurrency because
▶ 3:24:25it's a tokenized payment in dollar form. Uh and that's why I use the term digital assets when I talk to constituents and ask questions like why do you what do you when you say crypto to the constituent what do you what do you mean what are you referring to because in our
▶ 3:24:42not that generalization
▶ 3:24:43our colloquial generalization across our society all these things are crypto per se and many are called cryptocurrency even if they're not even performing a a currency or transaction
▶ 3:24:52the reason I use that language and we and I want to talk a bit about the central banking digital currency uh But those aren't my that wasn't my language. So I want to be very clear. President Trump right in July of 2019 is quoted as describing cryptocurrency as quote highly volatile and based on thin air. And there are similar quotes that he had made uh in the ensuing years about digital currencies and a variety of those that you've described. He his tune has clearly changed on that.
▶ 3:25:22And I believe that the reason that he has changed his views with respect to uh cryptocurrency more broadly is clearly he is financially benefiting to the tune of hundreds of millions of dollars him and his family uh which we'll get into.
▶ 3:25:38And so that I I asked you that particular question because I just wanted to kind of get your sense as to whether um you had been sort of following that that the change of of approach, change of mind, evolution if you will that President Trump clearly has adopted in the last several years. Central uh digital currency or central bank digital currency I should say.
▶ 3:26:01I and I want to give you an opportunity to kind of explain here because previously in response to a question that was posed, I got this distinct sense from you that you were very against a central bank digital currency, right? That's why you're supporting Mr. Emmer's legislation. And
▶ 3:26:18well, I think uh really going back to 2018, I began doing research and exploring this. Bill Foster, a good member of our Congress from Illinois and I wrote uh the IMF. We've written uh several central banks about this over the years explaining how would it work, how would they use it, what's the purpose of it. Uh we actually I went to the Bank of England many years ago to talk to them about the research they had done on a central uh bank digital pound.
▶ 3:26:47U we reviewed all those IMF records. Um, ranking member Waters was then the committee chair in those years and we had testimony during the Libra uh situation where Facebook tried to create their own um Facebookbased stable coin.
▶ 3:27:06We didn't use that term then, but their idea was it would be a digital And it's really uh over that time that I found in my due diligence and and as I say, I won't speak for Dr. Foster, but we've carried on this.
▶ 3:27:21We met extensively with the Fed, both chairman Pal and former vice chairman Leo Brainard about it and it's come to my conclusion that it's best to do have the private sector be involved in this new payment rail, a dollarback payment stable coin. That will be the way to see how our market economy here in the US adopts that payment rail and that it's very premature to think about a central bank digital currency. number one.
▶ 3:27:50Number two, I don't know in a big developed economy like ours that it's even necessary based on my due diligence. So over the years since 2018, I've come to the conclusion as I've seen the private sector market move that it's in a much better position and you have less Mr. chairman on that
▶ 3:28:07surveillance risk uh in the in the
▶ 3:28:09I want to give you full opportunity to be able to answer so I'm not interrupting you but
▶ 3:28:14and I do think I I think at least I'm getting the sense that you are conceding that your views have changed and that's I guess what I was
▶ 3:28:20No absolutely not the letter that Bill and I wrote.
▶ 3:28:23Okay. So let me I'll read
▶ 3:28:24I know what you're I know what
▶ 3:28:25I'll read you a quote and then you can respond. So okay this is from that hearing with Mr. Zuckerberg right this is posted on your website. This is in
▶ 3:28:34Quote, "Let's talk about digital currency." Dr. Foster and I also sent a letter to Chairman Powell at the Federal Reserve about the idea of a digital dollar. My interest in that was actually raised by Mr. David Marcus in his testimony. Wouldn't it be easier if there was a digital token that was a US dollar for that to simply be the digital token that you're looking for and is noted here that you don't go and try to create something separate? Now, again, that's the end quote. I'm not
▶ 3:28:55that's not remotely contradictory with the point of view I've done. an example of watching Marcus attempt to create that and it's not one way or the other and it's not whether my views are evolved or not the whole market has changed since 2018 and 29 in including the work of the smart work of Facebook
▶ 3:29:14I hear you I guess are you against a central bank digital currency today is that am I wrong
▶ 3:29:20because I don't think it's necessary in our economy to pursue that having
▶ 3:29:24I I understand your rale I I I recognize and understand your rationale, but that quote that I just read does not sound like someone who is dispos that was at the first time we were meeting with central banks and others talking about it and we were discussing
▶ 3:29:43that's me doing due diligence Mr. We'll we'll characterize u your views respectfully in different ways. The bill today that we're considering, the Genius Act, I should say, one of the bills we're considering under the Genius Act, is it your position that a member of Congress can issue a payment stable coin during their time in public service? The answer is no. Right.
▶ 3:30:11I would say no because of the House On page 57 on page 57 of your bill,
▶ 3:30:18it says,
▶ 3:30:19this is the rule of construction that you all have included, right?
▶ 3:30:23Quote, prohibit any member of Congress or senior executive branch official from issuing a payment stable coin during their time in public service. So, this isn't a trick question. That's the language in your bill. You agree under this bill, your position is a member of the House can't issue a payment stable
▶ 3:30:41That's true. True. And a member of the United States Senate can't issue a payment stable coin. Correct.
▶ 3:30:45That's correct.
▶ 3:30:46Okay. And the Secretary of State, Secretary Rubio, he can't issue a stable coin. Correct.
▶ 3:30:52I believe that's I'm not an expert in that area. Senior executive official.
▶ 3:30:56She's a senior executive official.
▶ 3:30:58Correct. So the only people in the federal government of the United States under your bill who can issue a payment stable coin are the vice president of the United States and the president of the United States. Right.
▶ 3:31:13Uh may I answer the question this way which is you weren't here when we discussed this earlier about uh the
▶ 3:31:20I was here.
▶ 3:31:20Okay. I'm sorry I missed I missed that you were here.
▶ 3:31:23So is it your position that it's unconstitutional? My position is that in the ethics and government act of 1978 while not all ethics remediation regulations apply to the president the vice president in practice activities related to the issuance ownership and transactions in digital commodities that would involve reportable activities would be reported
▶ 3:31:43correct and that it's I'm not asking about reporting activities
▶ 3:31:45but this is the way this is government ethics rules and laws
▶ 3:31:49they exist today correct so I'm not asking you about reporting
▶ 3:31:53I'm asking you is it legal legal for the president of the United States to issue a stable coin under this legislation? And it's it's one of two things. Either the answer is yes, it is legal for him to do it under this bill because this bill does not preclude him from doing so or it's your position that it is illegal today under existing law.
▶ 3:32:18So I one of those two answers is the answer to this question. that Mr. McGovern was posing previously that I'm trying to understand if you can just tell us in this committee the rule pertaining to whether or not the president or the vice president of the United States can issue a payment stable coin. I know that you can't issue one. Miss Waters can't issue one. Mr. Davis can't. Chairman Thompson, he can't either. No member of the Senate can't.
▶ 3:32:47No senior executive official can. But under this bill, the president of the United States can and the vice Yeah, I just uh I was I don't I hesitate to repeat myself, but all this
▶ 3:33:17bill does is state out current law.
▶ 3:33:21As it relates to all players and the current law does not make any does not make the representation you're talking about and that's why.
▶ 3:33:28Okay. So that so that that's a helpful claratory point or that clarifies. So your position is that under current law, French Hill can't issue a payment stable coin as a member of Congress, right? because that's the laws of the existing rules of the House of Representatives. Correct. Prohibit that.
▶ 3:33:44And a member of the Senate can't issue a payment stable coin under current law,
▶ 3:33:48Because the ethics rules of the Senate.
▶ 3:33:50Okay. And senior executive officials with an executive branch can't issue a payment stable coin today
▶ 3:33:55because of the ethics and government
▶ 3:33:57Correct. But the president of the United States can
▶ 3:34:00that's because the the US government law does not apply these kind of
▶ 3:34:05And the question is why don't we that's I'm not asking I understand your point. The point is, if we're saying that every other member of the federal government can't issue a payment stable coin, wouldn't it be prudent to say that the person who is affiliated with the owner ownership of one of the largest stable coins in the world that he should be procluded too? I don't understand why
▶ 3:34:26he's not issuing it. He is an owner in a company that is
▶ 3:34:29he's an owner exposing that under the house under the government ethics.
▶ 3:34:34I'm not asking about disclosure. I recognize I hear your point about disclosure laws, but my point is clearly we've decided that members of Congress that it's not in the best interests of the constituents that you serve in Arkansas and that I serve.
▶ 3:34:47So, these are decisions made by previous
▶ 3:34:50Correct. And I am saying that in previous congresses, they made the decision that it isn't in the best interest of the people of Arkansas or the people of Colorado for you or I to be issuing payment stable coins. And you are reaffirming that. You've decided to include the rule of construction in this bill. I presume because you agree because you think it's not a good idea for Maxine Waters to have her own payment stable coin. I agree with you.
▶ 3:35:13And my point is, why are we not doing that for the one person in the federal government who seems to actually have a real ownership interest affiliated with a stable coin? Isn't that convenient? Why wouldn't we add him? Why wouldn't we say the president and the vice president? Just add four words to this. I I'll make one other comment and ask Mr. uh Thompson if he'd like to comment. This was thoroughly debated in the Senate as a part of the genius debate.
▶ 3:35:40And 68 uh senators agreed to the rule of construction you've just outlined.
▶ 3:35:44Yeah, that's fine. I'm entitled to disagree with them.
▶ 3:35:47This isn't about partisansship for me. This isn't about whether how many Democrats or how many Republicans voted for it. that I'm talking about the substance what I am saying. Do you know how what how large a market share stable coin that President Trump is affiliated
▶ 3:36:04Do you know what the market share is?
▶ 3:36:07202.2 billion. Would it surprise you to learn that World Liberty Financial, that stable coin that we're referring to, is the fifth largest in the world? And it it doesn't bother you at all that of all of the government officials that you have reaffirmed are barred from issuing a stable coin or being affiliated with the issuance of a stable coin during their service that this one seems to be missing. That doesn't bother you.
▶ 3:36:36Look, if you want to have consumer protection and clarity for investors and have the United States lead in financial technology, you should be supporting these bills because they are the regulatory framework, the enforcement framework, the anti-fraud framework, the
▶ 3:36:55This is the part that I guess I'm it frustrates me, Mr. Hills, because I I actually I know you're passionate about this. Okay. I I recognize we debated FIT 21 last year. I remember that debate. You have clearly spent a great deal of time invested in thinking through these issues. So I I take your point about consumer protections. I believe there needs to be a regulatory.
▶ 3:37:15Did you offer an amendment?
▶ 3:37:17Excuse me. Did you offer an
▶ 3:37:17amendment? I'm not done with my statement and then you I I'll let you I'll let you have an opportunity. Okay.
▶ 3:37:23My point is that
▶ 3:37:25I'm not asking you about the consumer protections or the safeguards or the regulatory structure. This was a very simple simple ethics issue regarding the president of the United States. And to your point, I I think the question you're going to pose to me is that I advocate for I don't know if the Genius Act was considered, but essentially advocate during FIT 21 or any of those other debates to add the president or the vice president of the United States to this particular language.
▶ 3:37:54I don't know that we've ever had a president of the United States or vice president of the United States. I actually I don't want to impugn the vice president. I don't believe he has a staple coin. We've never had a president of the United States affiliate with a company or own a company that owns or rather has issued a payment stable coin. So I this circumstance is completely unprecedented and my point is why not just add those four words and move on.
▶ 3:38:18That that's my point is that you put so much work and effort into building out a regulatory structure and I don't I don't know how we can proceed knowing that the person who perhaps stands to gain the most is the president of the United States in terms of his p private financial interests.
▶ 3:38:39And I I believe that if this were a president of another political party, if if Joe Biden owned World Liberty Financial, issued a payment stable coin that had a market cap of $2.2 billion, that my colleagues on the other side of the aisle would say, you know what, maybe we ought to add language in here that says the president of the United States shouldn't be able to issue a payment stable coin.
▶ 3:39:03that if the rule is good enough for members of Congress, for you, for me, for Chairwoman Fox, sure, there's plenty of people out there who would love to have a, you know, be able to access a a stable coin issued by Chairwoman Fox, but she doesn't get to do that, as you said, under existing law or under this legislation, which reaffirms that law. And I'm simply saying Donald Trump shouldn't either. That's that's my point.
▶ 3:39:28But I I understand that uh we're my colleagues disagree with me on that. So
▶ 3:39:35if if I may.
▶ 3:39:37Sure. Chairwoman will indulge me. Yeah.
▶ 3:39:39Yeah. I I appreciate it. Uh you know uh we're talking about areas of jurisdiction. What we
▶ 3:39:46areas of jurisdiction. What we have applied has been existing law. We haven't changed existing law in terms of ethics uh in terms of uh financial um uh campaign finances uh or any of that. We've we've applied the existing law into this these pieces of legislation. So government ethics laws are the jurisdiction of the oversight committee uh who are not a part of this bill.
▶ 3:40:16Um it's with that is within their jurisdiction. if you know we would need we need them in the room to discuss to discuss to those laws
▶ 3:40:26to those laws. Uh they they wouldn't uh which is is what my Democratic friends seem to be asking for this this bill as chairman Hill has said numerous times is about protecting a broad marketplace any change to add President Vice that is incorrect require government oversight that is incorrect
▶ 3:40:46Mr. N goose would you
▶ 3:40:49not interrupt the witnesses when they're trying to answer a question.
▶ 3:40:54Thank you.
▶ 3:40:54Go ahead.
▶ 3:40:55I think he was concluded and that was why so thank you chairman uh Chairman Thompson I should say. Um are you complete? Can I So I hear what you're saying about restating existing law. Chairman Hill and I you know had that exchange. The language here and the staff can correct me if I'm wrong on this.
▶ 3:41:14the rule of construction this the language that and I'll quote it again prohibit any member of Congress or senior executive branch official from issuing a payment stable coin during their time in public service that is this Congress's or this the committee's construction their interpretation of existing law that language that what the language I just quoted that does not appear in the organic statute that it's referencing and I unless And
▶ 3:41:45uh Chairman Hillary, your staff can correct me if I'm wrong on that. That essentially what you're saying, what this uh legislation purports to say is here's a rule of construction. Ethics laws govern this circumstance and we are suggesting that it should be construed in this way to suggest that nobody should be able to issue a payment stable coin if you're a member of Congress, member of the House, member of the Senate or senior executive official. But honestly, even if that weren't the case, the point is we could change the law.
▶ 3:42:13And I guess that's my it would take nothing to adopt Miss Waters's amendment that adds four words to this bill that makes clear that the president and the vice president, any president, any vice president, that they don't issue stable coins. That's it. I thank the chair.
▶ 3:42:30Mr. Nagus, Mr. Scott, you're recognized.
▶ 3:42:35Thank you, Madam Chair. Uh, I'm fine with 1919 and 3633. I have serious reservations about Senate Bill 1582. I I guess the Senate language is clear that is not to be regulated as a security. Is that correct, Mr. Hill?
▶ 3:43:04that a stable coin is not.
▶ 3:43:06that's correct.
▶ 3:43:08Is it regulated as a commodity?
▶ 3:43:11It's regulated as a dollarbacked stable coin. It's not treated as as either.
▶ 3:43:17Okay. So, if it's a dollarbacked stable coin,
▶ 3:43:22it's a as a payment. It's a as a payment But a dollarbacked stable coin would indicate that if I have issued a billion dollars worth of the stable coin that I have a billion dollars in cash to back it up.
▶ 3:43:37And so is that the way it would work? I have a billion dollars in cash in an account and therefore I can issue a billion dollars worth of stable coins. A a stable coin would be backed by 100% of US Treasury bills, Treasury notes with a maturity of less than 93 days, insured bank deposits, which would include like a short set of CDs, overnight treasury repo.
▶ 3:44:05So it is meant to be dollar for dollar as a payment vehicle for use on a on a blockchain
▶ 3:44:12Okay. So who is going to guarantee that the dollars are in the account?
▶ 3:44:18The each of the issuers is regulated uh by in the Genius Act by their if it's a bank issuer they'll be regulated by their bank primary regulator. If it's a non-bank issuer, permitted under the act could be regulated by the Federal Reserve. And each month there's a rolling reserve analysis of the dollar fordoll security that's attested to by the CFO and CEO of the stable coin issuer.
▶ 3:44:45They have a regular set of regulatory inspections by their primary dealer and they have an annual audit. So if I'm a state regulated bank and I'm going to issue stable coins, then it's going to be a state regulator that is going to regulate.
▶ 3:45:02Well, the primary regulator for a state bank, uh, state member bank is the Fed and a state non-member bank is the FDIC.
▶ 3:45:11Okay. So now the FDI and the Fed are going to have to be set up to regulate all of the stable coins. Well, the Fed particularly, and I think that's one of the logics why the uh the the Genius Act has the Fed um involved is because the Fed has f Federal Reserve has been the primary payment regulator, you know, for decades in the country.
▶ 3:45:36So, they're very used to regulating payments because banks are involved in making payments, complying with all the regulations governing payments uh on a regular basis. I guess I you know I was I was in business for a long time.
▶ 3:45:57I watched as AAA rated insurance companies went down from time to time as um you know runs on investments take take things down and then the investors get take tremendous losses when that when that happens in some cases. In other cases, other people step in and and stop the losses. I I don't uh I don't pretend to understand the whole crypto thing or the stable coin thing. To me, it's very Pokemonish.
▶ 3:46:29Uh lack of better terminology. Um but I I would just tell you I respect you, Mr. Hill. Um but I'm I don't have a comfort level with the Genius Act at this stage. And um there's there's no reason for um continuing to take everyone's time in this meeting. U happy to meet with you at some other point, but I'm not prepared to support that.
▶ 3:46:52Yeah, be happy to to meet with you. Would love to have your specific uh questions about it. Um
▶ 3:46:58I I don't understand it so bad that I don't even know what questions to ask is is what I would tell you, Mr. Hill. I would feel very much better about it if it'd gone through the House committee. Well, this has gone this uh the starting in 2022, Mrs. Waters, Mr. Mckenry have held hearings and exchanged text and worked on text about dollarback stable coins.
▶ 3:47:24It's something that we marked up in the committee last year. Uh and then Bill Hagerty introduced the Genius Act in the last Congress in October, the 118th Congress. And this year, both the House and the Senate have reviewed stable coin text. They've worked hard to make that text very, very similar. It's not identical. Uh but we've had hearings on it extensively in this Congress.
▶ 3:47:50But once this bill passes, it's it's going to become the law if if it comes through here like this. Like, you know, the last piece of legislation, we passed it through the House, went to the Senate, went through a big committee process, and there were changes made, and then there was an acceptance back to the I I I don't like the Senate telling us we have to take their legislation without any changes to it. I don't mind telling you that. I don't think that's the way it's supposed to work.
▶ 3:48:17Um, that said, Madame Chair, I'll yield what time I don't have left. Thank
▶ 3:48:25Uh, Miss Leisure Fernandez, you're
▶ 3:48:29Thank you very much, Madam Chair, and thank you to the entire panel. And and I think it's uh interesting because the the entire panel is bringing issues about is is it important for us to get involved in this regulation. I think every single one of you from uh ranking member waters down agrees that this important, right?
▶ 3:48:47Uh, but I guess what I'm struggling with was is the failure of the bills to address the underlying issue of potential and potentially very real corruption. Right?
▶ 3:49:03We never have had in the history of the United States a president who in the mere span of six months has increased his wealth by 620 million because of I will use your term uh chairman um uh assets what digital assets right because of digital assets which then raises the
▶ 3:49:33question of given that there is this potential and given the fact that there is a potential of difficulty of tracking it, why wouldn't we take this opportunity to do what Congress is supposed to do is say we're not here to just say as as as my colleague from Colorado was trying to point out, oh, but that's what's always been the case. It's like, "No, no, this is brand new.
▶ 3:49:59So maybe we need brand new guard rails and statements." And and and I'm reading an article uh from the Bloomberg News which says that Trump's crypto link with Binance raises conflict of interest questions. And this is as as an example, right?
▶ 3:50:19Apparently, the uh the the founder, Finance's founder and principal owner, Changpang Xiao, if I'm saying it correctly, uh has applied for a pardon. And the reason he needs a pardon is because he pleaded guilty in 2023 to failing to maintain an effective anti-money laundering program.
▶ 3:50:42His exchange paid more than $4 billion in penalties after authorities accused it of allowing money to open crow flow to terrorists, cyber criminals, and child Child abusers.
▶ 3:51:02So this is something that should be But you have the UAE giving $2 billion dollar to sha I'm going to say his name all wrong. Who is seeking a pardon from Trump and Trump is benefiting from this money that's being put in his Bitcoin.
▶ 3:51:25So I just it's like one of those things where there is huge potential for corruption and we have a chance now to address it. And so I guess if that's the case there was this amendment that me that ranking member Waters brought why didn't you support that amendment chairman?
▶ 3:51:45I mean, it was a simple thing to add the president to the list of entities that shouldn't be engaging in this behavior in this this activity of the assets, the digital assets.
▶ 3:51:56Well, what we've done for four years, two years under the Biden administration in the few months of this administration is craft exactly the kind of regime that will stop bad behavior in and around digital assets. That's why the Clarity Act, the Genius Act are essential. It's why it has strong bipartisan support over the last three years as we've crafted this so that things like what's happened in Binance or what happened in FTX as eloquently outlined by Mrs.
▶ 3:52:26Waters can't happen again that we don't put our investors at risk or our consumers at risk. That's the whole concept behind this framework and by having highly regulated payment stable coins and market structure that close the regulatory gaps, close the manipulation gaps, close the fraud gaps, close the lack of disclosure gaps. So I yield back to you.
▶ 3:52:48Thank you so much. I I don't see that there's anything in this bill that closes the ability of the president of the United States to engage in business raking in $620 million. And I guess ranking member Waters, you have uh what comments would you like to make on this debate?
▶ 3:53:14I have an amendment this germaine to this bill and in all of the and presentations that have gone on here whether you want to talk about uh the 100 ways that we could have uh created um the kind of safety handrails or whatever you want to call them.
▶ 3:53:38The one thing that stands out above everything else is the president is definitely in conflict of interest. This is corruption in its finest form. The president of the United States in the short term that he's been here has enriched himself and his family.
▶ 3:54:03And it's very simple for those people who believe that members of Congress should not be able to own a What is it about their thinking that would say but the president and the vice president can and I know that we have this amendment. We could do it very easily but we're not going to do it. What is this?
▶ 3:54:33It does not make good sense. And they cannot justify in any shape, form or fashion. Why? If they agree with that this is corruption, if they agree with us that this is conflict of interest, if they agree with us that the president is using the office of the presidency to enrich himself and surround himself with billionaires that want to be close to him.
▶ 3:55:02Why is it we don't stop it right now? Go ahead with the bill and talk about why you like it. But this one issue, it overrides everything. either you're willing to stop the corruption by the president of the United States or you're not. That's
▶ 3:55:19And I think that that the point is you don't even need to say that the president is engaging in corruption. If you don't want to say that about the president, you don't have to say it. What you can say is we want to remove the doubt. We want to remove the doubt that any elected official would act in any way but in the public's interest and not in his or her own financial interest.
▶ 3:55:48That's why we have the bills that we have. That's why we have I saw Seth Magaziner in here earlier and I know he's got a bill uh for which I am a co-sponsor with Representative Roy White. Representative Royan magazine or a bipartisan bill to say we should not engage in stock trading. I'm president. Right.
▶ 3:56:08So that way we remove we remove the appearance the the concern the worry about a conflict of interest and about corruption. It's easy enough to do. You don't need to say he's engaging it. You need to say the public wants to know he is not. So let's do it now. And I think that that's what your amendment does.
▶ 3:56:32Nobody should nobody should be making money. Nobody should be selling their pardons. Nobody should be doing that. It's a simple fix.
▶ 3:56:40You're absolutely right. And you put it very simply.
▶ 3:56:45That's all it takes.
▶ 3:56:46And I think the chair of the agricultural committee has asked if I give him some time.
▶ 3:56:51I thank the general lady. I I just want to share some words with you. Um, crypto is meant for both Democrats and Republicans. Certainly, that was the case in the House of Representatives because there are allies of the crypto industry on both sides of the aisle in the House and that was reflected in the crypto crypto industry's engagement.
▶ 3:57:12I think the best thing that can happen in terms of moving forward is that we arrive at a bipartisan solution in terms of legislation that is pending in Congress in the Congress because that is the only way for it to be sustainable at this point. Crypto is not partisan. Donald Trump is a separate problem that has to be addressed.
▶ 3:57:34But when you take away that piece of it, which is very important piece, I think substantially figuring out how we arrive at a bipartisan resolution of the crypto issues that are currently pending before Congress is what will best serve the American people and also best serve an appropriately regulated industry that allows for innovation but also has guard rails to protect the American consumer. I say shared words. They're not my words.
▶ 3:58:03They're the words of minority leader Jeff.
▶ 3:58:05Okay. So I think that that this still this still ignores the question that we are asking that that uh the ranking member has asked that my colleague from Colorado and I have asked as well as Mary Gay which is the issue of this bill could easily we could vote right so another way to do that is to to do the regulatory it's the issue of making sure that the provisions which prevent a member of Congress or a
▶ 3:58:35cabinet from engaging in owning and selling and and and and creating crypto and digital assets apply to every elected official. So I would welcome having that amendment so that people could vote on it on the floor of the house. I mean this is like what this rules committee is supposed to be about. This is, you know, the rules committee. When people ask me what it does, it's it should be like making sausage, right?
▶ 3:59:05People talk about how the, you know, legislature is messy. It's making sausage. Well, maybe somebody wants to say, "Let's put this spice in. Let's put this salt in. Let's not kill this stuff. Let's allow a vote on her amendment, which would simply apply the same laws and rules to the president as the two committees of jurisdiction have been willing to apply to us. We're also elected. He's also elected.
▶ 3:59:34She's also elected. Whoever serves us in the future is elected.
▶ 3:59:40Uh is there anything else you want to add? Uh,
▶ 3:59:43um, I suppose that my question may not be directed to you, but to the chair. Is an amendment in order?
▶ 3:59:54We've not made those decisions yet.
▶ 4:00:07It would be nice if it were. I think it would be in the interest of increasing I mean we need the public to in the work we do in a way that it's not motivated by self-interest and that's why that kind of amendment would make a lot of sense. Now the ranking
▶ 4:00:26I I would just I would just say it could be the rules committee could make it in order. Uh but uh this rules committee uh has presided over the most closed Congress in history. Uh we've had more closed rules than any other Congress. Um and um and we're on uh and and and that and last year they broke their record of of being the most closed uh Congress in history. So the rules committee unfortunately uh has become a place where democracy goes to die.
▶ 4:00:55Um and u so the answer to your question is yes, it could be made in order. Uh but I wouldn't hold your breath.
▶ 4:01:01Will the gentleman yell?
▶ 4:01:03Uh yeah, happy to. Um I think you clarified that uh it could be made in order uh but one cannot expect that it will be and I um am very interested in what I just heard from Mr. Scott. And so I'm not giving up on the possibility.
▶ 4:01:26We heard um very Republican conservative member uh say he doesn't know what this is all about. He doesn't understand any of this and it doesn't make good sense to him.
▶ 4:01:39So I would not rule out the fact that if in fact this amendment was taken up, there may be members who have heard things today who understand more about this bill, who understand the corruption, who understand the way that the president has enriched himself in six months, they may be thinking different than you've ever heard before. Well, I can guarantee you that the Democrats will uh offer amendments.
▶ 4:02:10Uh and we will find out whether or not uh there's some flexibility here. Uh but I I but I as we're waiting, I I'll go across the street to church and light a candle just to see whether or not we can get any help uh to try to persuade people. But I thank the general yield back. With uh with that, Madame Chair, uh I will also yield.
▶ 4:02:34Thank you, Miss Leisure Fernandez. Mr. Griffith, you're recognized.
▶ 4:02:39Thank you, Madam Chair. Uh I too have concerns. As my friend, the gentleman from Georgia laid out uh trying to figure it out and get there. But first, let me go through a couple little things. Uh we keep talking about history and all this and and somehow this bill's come all about in the minds of our colleagues has become all about the president. I've read through the bill.
▶ 4:03:04I still have some questions on it, but this this bill is not about the president of the United States. And and I've heard some things thrown around about in history and making money while president. And so I took an occasion to check on some things that I had in the back of my mind. And I will tell you, Madam Chair, that George Washington was a big proponent of the Ptoic River came the PTOIC River and Ohio Canal Company.
▶ 4:03:32He did he was president of that as well as the James River Company, which would later be the James River and Canal Canal Company. Uh he was president of both those companies before he was president and that was the big thing then. That was the big new thing, building canals for transportation internally. And um and so he was heavily involved in those.
▶ 4:03:56And then when he became president, he maintained his involvement, although he stepped back as president, but he was still interested in the companies. And in fact, during his presidency, gave what today wouldn't seem like a lot of money, $20,000 to Liberty Hall Academy. Liberty Hall Academy then changed its name because it was the largest gift I believe at that time in the history of the United States to an educational institution. It changed its name to Washington Academy.
▶ 4:04:25Uh it would today be known as Washington Lee University. I'm a graduate of that institution and I received benefits from Washington's money when I was there because it was such a large sum of money at the time that it is still benefiting the students of the uh university. Um and uh and so you know I don't know what President Trump will do with his money but uh the bottom line is is that this is not a historical first.
▶ 4:04:53Madam Chair, it is something that has been out there and and as the chairman uh chairman Hill has said on numerous occasions, this bill just tracks the existing law. And as you may have heard me say before, Madam Chair, that we had an old saying when I was in the Virginia House of Delegates when people would get upset about something that was part of the existing law and they wanted to insert it into somebody else's bill.
▶ 4:05:18The the saying was, "Well," and it was for my friend Terry Gilgore uh of Scott County. He would say, "Well, you might have a point, but get your own bill." So, I would say to my colleagues, if you're if you're concerned about that section of the bill that tracks the current law, focus on I mean, this is not a small bill. It's a number of pages. It took me a long time to get through it as I was reading through it.
▶ 4:05:45I I I would just say focus on what the bill's really about and there are questions there that have to be answered. I'm not disagreeing with my colleagues on the other side. There's some questions, but if it's if it's all about the president that you're concerned about those sections, get your own bill. We'll take a look at it. All right. M Mr. Chairman Hill, here's one of the questions I have and and I think I know the answer, but I want to get confirmation.
▶ 4:06:09If a bank or credit union issues a stable coin and the bank or credit union is covered by the FD FDIC or other uh the credit unions have a slightly different organization and somebody goes and and they buy some of the stable coin issued by that bank. We'll go with the banks because I know that's FDIC and the credit unions have a similar organization. Is that stable coin covered by the protections and the insurance from the Federal Deposit Insurance Corporation?
▶ 4:06:40I thank the gentleman from Virginia for his comment. I might just make a a brief comment on uh his references to the Ethics and Government Act of 1978. Think about Congress debating that bill just four years after Richard Nixon designed in in disgrace. And yet they purposely chose not to include the president and the vice president in every aspect of the office of government ethics that they created. So I agree with you.
▶ 4:07:06If people want to amend the office and or the uh uh ethics and government act then we ought to have a process for that. Take witnesses and and see what changes could be made. To your question, thank you for it. Uh the Genius Act stipulates that payment stable coins are not insured by the FDIC. Banks may not make representations that a stable coin is guaranteed by the US government or covered by the FDIC.
▶ 4:07:34Payment stable coins are fundamentally different than bank deposits. It's literally like saying the bank has a credit card, the bank has a debit card. It's a new payment mechanism. And so the answer to your question is no. a bank or a credit union that does issue a payment stable coin.
▶ 4:07:52We'll do that through a subsidiary with strict separate capital rules, rules governing the one-on-one reserves that I talked about uh with the gentleman from Georgia and the separate auditing of that payment stable coin product as opposed to looking at it as a liability of the bank directly. I hope as the overseeing agencies look into this, they will make that clear to the consumer. Uh that's just one of several consumer questions I have.
▶ 4:08:20But uh for now, other than wondering if the pieces of the president's suit from the debate might qualify as an NFT, uh and I know they don't, but it's it's just fun to think about. I will yield back. Madam
▶ 4:08:36I thank the gentleman for always almost always giving us a good history lesson. I thought I had heard somewhere that President Washington also had a whiskey business that um brought in some income that might have been questionable. That's what I thought you were going to bring up, but I don't know the history wells, but I think you'd brought it up once before.
▶ 4:08:57I have to I'll have to double check on the whiskey.
▶ 4:09:00All right. Thank you, Mr. Langworthy. You're recognized. I I have no questions. I would like to offer uh either Chairman Hill or or Chairman just a moment to sum up anything that hasn't been discussed or to come out against any of the allegations or or nonsense that we've heard here tonight.
▶ 4:09:20Well, I thank the gentleman for the opportunity. Um I just just want to touch on the consequences of failing to act at this point. As I made in my remarks prior, there are countries all over the world that are in moving in position because they want to be in the driver's seat for web 3.0, the internet of value.
▶ 4:09:41And so what are the uh consequences if if we don't pass the Clarity Act, we're actually going to be seating US leadership um abroad. Uh make no mistake, failing to pass Clarity Act would undermine US leadership in both technology and the finance sectors. Under the previous administration, the US began to see this leadership in the digital asset market to foreign jurisdictions.
▶ 4:10:08That's how we wound up with CFX being in the Bahamas and um and consumers losing$8 billion dollars because we did not have a regulatory regime here in the United States. um that would could you well we're FTX more than their US uh FTX derivatives division uh would have been here and avoided that.
▶ 4:10:32Uh other countries have viewed the lack of regulatory clarity in the United States as an opportunity to to attract talent, capital and innovation to their own markets. Meanwhile, market participants have looked abroad given a regulation by enforcement approach.
▶ 4:10:48I call it what we've seen over the the previous administration was regulation by punishment here at home where there was no clarity um and um and folks were fined and and uh and punished uh and the failure was actually the failure was the federal government because we haven't provided a regulatory regime uh to protect consumers and foster innovation.
▶ 4:11:14Jurisdictions like Singapore, the European Union, uh the United Arab Emirates have already implemented regulatory frameworks that provide certainty and stability, giving them thus far a competitive edge in attracting digital asset businesses. But make no mistake, Clarity will provide a regulatory regime, will protect consumers, will foster innovation, and and this is where people want to do business in the United States of America.
▶ 4:11:43uh but we've been lacking that regulatory regime to be able to allow that to happen. Thanks for the
▶ 4:11:48Thank you, Chairman Hill.
▶ 4:11:49Gentleman from New York, thank you for your question. What we've seen tonight, in my view, is a gross distraction about some members in the House's view about Trump family business. And instead of focusing on the absolute need that we've seen for four years and even longer for regulatory clarity, legislative clarity, permanent solutions to these regulatory gaps identified by President Biden in his executive order, asking
▶ 4:12:19Congress to pass a law to regulate spot markets, which is something our agricultural committee has done on a bipartisan basis. Uh both last Congress under Mr. Scott, Mr. Thompson and in this Congress uh with Miss Craig and Mr. Thompson, Mr. Davis, Mr. Johnson, this is and I this was a request from Joe Biden. President Trump has made the same request in his executive order. We need to close the gaps in this market. Consumers benefit, America benefits, jobs benefit.
▶ 4:12:49And we've lost that through this distraction of the Trump family businesses. And I get it. I get the politics of it. But the right thing for this country to do is to pass these bills. We got 71 Democrats joined us in the last Congress on market structure called FIT 21 that we've referenced tonight. The Clarity Act as drafted by the House A Committee, the House Financial Services Committee is a better bill than FIT 21.
▶ 4:13:18I would hope my Democratic colleagues can see that this closes the gap, provides spot market regulation, provides funding for the CFTC and brings true clarity to this market to benefit the US. And finally, This has been the work of the House as echoed by the Senate. The Genius Act got 68 votes, Madame Chair, in the Senate. Strong bipartisan work.
▶ 4:13:46It was a labor of months at the end of the 118th Congress and for the past five months. So I would urge my colleagues support both these bills create the clarity necessary for a venture ecosystem and a digital asset ecosystem that will protect investors uh protect consumers and let our country be the leader that both President Biden and I'd say President Trump have asked. Let's have a golden age that we lead in fintech for the exact reasons Chairman Thompson referenced.
▶ 4:14:16We have the best capital market system. We have the best rule of law. We have the largest economy. We have the dollar is the reserve currency. All these bills leverage those strengths exactly as as the president has suggested. So I urge a yes vote and I thank the govern.
▶ 4:14:33Will the gentleman yield? Thank you very much. Um Mr. Hill, um I am terribly insulted uh by the fact that you would describe uh our concern about the president of the United States enhancing his riches on the backs of the people of this country.
▶ 4:15:01Now, I'm going to take my time back because I didn't yield you time to talk to give another dump derangement syndrome monologue. And this is this it's my time, not yours.
▶ 4:15:13Thank you. You got it back.
▶ 4:15:14Thank you. And I'll keep it. Uh
▶ 4:15:16and I don't want it anymore. I've said what I have.
▶ 4:15:19This committee has become the headquarters of Trump derangement
▶ 4:15:22That's okay.
▶ 4:15:23And we're going to end it right now.
▶ 4:15:25Okay. You're perpetually waters.
▶ 4:15:29You're perpetually. Please. He took his time back.
▶ 4:15:32Okay. Well, that's okay. It's hard to be contained when I get insulted. And you talked about false statements, etc.,
▶ 4:15:39Miss Waters.
▶ 4:15:41Yes, that's my name.
▶ 4:15:44Mr. Langworthy, you're recognized.
▶ 4:15:46Uh, I I think um we've said all we need to say here and I yield back.
▶ 4:15:52Thank you, Mr. Jack. You are recognized.
▶ 4:15:55Thank you, Madam Chair. Chairman Hill, I just want to note I thought your close was uh tremendous there. So no need to further expound upon that. I just want to note for the record both the digital act and the genius act as I understand it and as chairman Hill mentioned many times throughout this hearing 6830 vote in the senate and as I understand uh the clarity act was 476 in the agriculture committee and 3219 and financial services committee. So, if I'm mistaken, please correct me.
▶ 4:16:20But otherwise, I think that prevents or provides us with an opportunity and prevents any argument that this is a partisan grab. It's a bipartisan package of legislation, and I'm excited to vote on it later this week. And with that, I yield back, Madam
▶ 4:16:35Thank you, Mr. Jack. And I want to thank our witnesses again on this panel. And there being no further questions of this panel, you're excused. Thank you, Madam Chair. Uh, we have enough seats up here for Mr. Davidson, Mr. Magaziner, Mr.
▶ 4:17:05Koreah, Mr. Castton, and Mr. Licardo. If you all are here, we'd ask you to come forth. They are
▶ 4:17:14very fancy. Let's see a little
▶ 4:17:51I guess Mr. Korea.
▶ 4:17:53I'm I'm not You're not in sitting in order. Forgive me. I'm
▶ 4:17:57okay. All right. I'm I'm Sam Licardo. My
▶ 4:18:02I said Mr. Koreah was not here.
▶ 4:18:04Oh, yes. I'm sorry. I
▶ 4:18:06That's what I said.
▶ 4:18:07Okay. Thank you. Madam Chair,
▶ 4:18:14sir, can
▶ 4:18:14can I just ask unanimous consent to insert the record uh uh statement by u representative McBride uh in support of her amendment, a statement by Representative Cross in support of his amendment, and a statement by Representative Carter of Louisiana in support of his amendments.
▶ 4:18:31Without objection.
▶ 4:18:32Thank you.
▶ 4:18:33You're welcome. Um, uh, gentlemen, uh, we're here to hear your testimony. As you've probably heard me say before, we will put your written testimony into the record. We'd, um, urge you to keep your comment short. Um, and then that will allow the members of the committee to ask some questions. Mr. Davidson, you're
▶ 4:18:58Uh, thanks, Madam Chairwoman, and thanks for your long service here in Congress and on rules committee. And uh we see why this is often one of the most thankless jobs in Congress as we sit here through it. Um but thanks for hearing the debate on amendments. Uh frankly, Republicans agree that the Genius Act should be amended. That's why we're trying to amend it in the Clarity Act. But make no mistake, the Genius Act, if it passes the House, is going to go straight to the president's deck desk, be signed, and become law.
▶ 4:19:26And uh the the clarity act if it passes is going to go to the senate where the senate will give its normal lever of deference to the house which is generally none. Uh they care about our opinions occasionally. Sometimes they even care about the presidents but they have no trouble ignoring the president, the speaker, chairman, anything else in the senate. But in my nine years in Congress, I've never seen the house amend an S number bill. We give them clean votes.
▶ 4:19:53But what we're here tonight is asking for really a record-breaking event for us to amend an NS number bill and send it back to the Senate with changes. And we all agree there should be changes. So I've got two amendments. One adopts the central bank digital currency ban because the Genius Act, unless it's amended, will create what is known as a layered central bank digital currency. The front end will be stable coins.
▶ 4:20:20Consumers will get be given the illusion of uh a product of choice. They can go to banks. They can go to stablecoin issuers and everything else. But all the data collected will be intact as it's transferred to the back end. And on the back end, you'll be operating a central bank digital currency the same way as if it was run by a central bank. In fact, central banks around the world are working on this.
▶ 4:20:42The Federal Reserve through the bank bank of New York, the Federal Reserve Bank of Boston, Federal Reserve Bank of San Francisco are hiring people to write code to do this. The hub for it has been the the Bank of New York and they've worked with uh the Bank of International Settlement in Basil, Switzerland. Um Andy Bar and I took a Kodell with Mr. Casten was on and the Bank of England's working on a central bank digital currency.
▶ 4:21:07The European Central Bank is working on a central bank digital currency and they're all working on the same type of architecture that China's doing. China's linked central bank digital currency to digital ID and they've tied the digital ID to social credit score. All this is possible with the AI database or the AI language model that uh Palunteer has just been given the green light to start developing. Now, it doesn't have to be that way.
▶ 4:21:34We could design a ledger that is immutable that is not centrally managed and centrally controlled and filtered. Another word for central bank digital currency is permissioned money or programmable money things like that. So it puts a agent between you and your money. So we should ban it. And we are going to vote on Mr. Emmer's bill as a standalone bill. But the reason we're voting on it as a standalone bill, frankly, is because Democrats want that kind of a surveillance system.
▶ 4:22:05They they will vote no if we put it on the Clarity Act. They would have voted no if we put it on the Genius Act in the Senate. And they will vote no on it when we bring it to the Senate. There is no path to 60 votes because they want this surveillance tool. It is the creepiest surveillance tool ever developed. It truly is, as the Lord of the Rings refers to, the one ring to rule them all. You don't need a SWAT team stacked outside the door when you control everybody's money and their access to it. So, that's the one amendment.
▶ 4:22:34And the other one is very basic self-custody. kind of the whole point of crypto uh currency or really, you know, digital assets where a token represents something else of value is to be able to disrupt the status quo of account-based systems so that third individuals could interact with one another in a permissionless peer-to-peer way without a third party being involved.
▶ 4:22:58Just like cash, you want to be able to transact at the speed of light across time and space uh without a third party cancelling or filtering your transactions. That's the appeal. But without self-custody, it's sort of pointless. It's not even really that interesting. So, uh that's why Bitcoin is such a huge percentage of the market structure, uh the share of the market and others aren't as much because there really are differences between what the digital asset represents.
▶ 4:23:27So we should protect self-custody at all times just like we protect cash. And if you create a system of money where the government is is is the granter of your permission, that's not the system our government was founded on. Our our government was recognized that we are endowed with certain inalable rights that among them are life, liver, pursuit of happiness. The right to transact predates any government. If you and I want to transact individually before government, somebody was being kind of nosy if they interjected themselves into our transactions.
▶ 4:23:56But right, if you don't protect self-custody, everything about the future of money is going to change. So without those two provisions, even though I've been the longest proponent I know in Congress on these bills, and I'm excited that we're finally doing stable coin regulation, I'm voting no on the Genius Act. And honestly, this rule shouldn't be the way that it is. It shouldn't pass. It should pass by saying we're going to allow these amendments. A lot of the dysfunction we see here in Congress is because we don't legislate.
▶ 4:24:25we don't get to come and represent our districts. And for people that aren't aren't a financial services or a the first chance they've had to weigh in on this is when it comes to the floor and they're going to be stripped of the right to represent their constituents. I think it's wrong. Um and that's why I'm offering these amendments. So I yield back.
▶ 4:24:44Thank you very much, Mr. Davidson, Mr.
▶ 4:24:47Thank you, Madam Chair, ranking member, members of the committee. Um I sit here today not only as a representative from Rhode Island but uh having spent the bulk of my career uh in the financial services space. I was state treasurer in Rhode Island for eight years overseeing more than 15 billion dollars of assets. I worked in the private sector and financial services before that. At a high level my view is that this is a free country and in a free country people should have the right to own trade or or issue cryptocurrency.
▶ 4:25:16Lord knows there are plenty of stupider and more dangerous things that we let people do with their money as we should in a free country. But we also have a responsibility to ensure that the marketplace is fair, transparent, and safe so that people don't get scammed. We have learned the hard way what can happen when Congress does not effectively regulate financial services. We learned it in the 2008 financial crisis. We learned it in the savings alone crisis in the 1980s.
▶ 4:25:45People lost their homes, their jobs, their financial security through no fault of their own. When the financial sector is not well reggulated, people get hurt. And in this clarity act, most of the debate as I've watched it tends to be around, you know, is our digital assets are they more representative of do they represent commodities or securities or currency? What type of asset is it? what can we compare it to to decide who to regulate it?
▶ 4:26:16Maybe it's an important question, but in my view, it doesn't matter nearly as much as the question of whether the regulator that has chosen to regulate a digital ass asset has the expertise and the resources to do the job. The question of whether cryptocurrency or digital assets are commodities or securities or whatever does not matter as much as whether the regulator has the resources to do the job.
▶ 4:26:45Under the Clarity Act, much of the responsibility for regulating crypto is placed with the CFTC. I don't have a philosophical objection to this, but I am concerned that the CFTC does not have the resources to do this job effectively. Compared to other financial regulators, the CFTC is small. It has a staff of about 700 people, historically focused on regulating agricultural derivatives, not complex digital assets.
▶ 4:27:16The so-called fee in this bill to fund the CFTC or SEC's regulatory authority over crypto in this bill is not really a fee at all. It requires Congress to authorize an amount every single year. what is this Congress proposing to do to the CFTC's budget in the coming year? Cut it by $30 million.
▶ 4:27:43So, you're tasking a small agency with only 700 employees that already have other work to do with regulating this enormous $3 trillion industry that tens of millions of people participate in at the same time that you're proposing to cut their budget.
▶ 4:28:05I'm offering an amendment to establish a real funding mechanism for the agencies tasked with carrying out this bill, the CFTC and the SEC, to ensure that they have the resources to hire and train adequate staff and deliver on the new responsibilities that we would be tasking them with. We want people to know that when they invest or build in this space that there is a level playing field with responsible oversight.
▶ 4:28:31We need to make sure that this law has the support behind it to actually protect people. My amendment will make that possible. So again, to sum up, setting aside all of the debates about how cryptocurrency should be regulated, how digital assets should be regulated, at the very least, whoever the regulators are should have the resources that they need to do their jobs. With that, I'll yield back.
▶ 4:28:57Thank you very much. Um, Mr. Casten, you're recognized.
▶ 4:29:01Thank you, Madam Chair, ranking member. Oh, am I on there? There we go. Madam Chair, ranking member. Thank you. Um, so I'm I rise for a for speak to five amendments. Uh, the first three are all about mixers. And I want to just explain a little bit about what this is because outside of our nerdy committees, people don't pay attention to stuff. So, the theory of crypto is that all these transactions are on the blockchain. If I was to transfer my crypto to you, Madam Chair, you were to transfer to Mr. McGovern, he was to transfer it to Mr. Ricardo, we'd be able to see on this digital ledger what that history was.
▶ 4:29:31And and in theory, that should stop illegal activity. What mixers do is say, "We're going to take all of the coins we have. We're going to put them in a big digital bucket. We're going to shake them up, and then we're going to spit out different pieces that have the same value, but now you've lost the connection." Um, it's a fancy way of saying moneyaundering. The bad guys really like these mixers because it allows them to bypass all of the transparency of the of the chain.
▶ 4:29:58Amendment 19 creates an explicit authority under the International Emergency Economic Powers Act to impose sanctions on computer code that underpins decentralized these DeFi services. And this is in direct response to a request from the Treasury Department in 2023 asking for that authority. A part of the reason they ask for that is that these mixers often can be these decentralized protocols. you write a piece of code that does all this.
▶ 4:30:24And what the bill, the Clarity Act, says right now is that if you're using those codes, well, a human didn't write the code, so nobody should be so we should be responsible and you're exempted from compliance. To put this in context, in 2022, the Treasury Department sanctioned Tornado Cash, which would be a DeFi protocol, one of the largest mixers in the world for helping to launder hundreds of millions of dollars in crypto stolen by North Korea.
▶ 4:30:48According to national security experts at the White House, half of North Korea's nuclear program is funded by cryptocurrency theft and cyber attacks that then go through these mixers. If we don't want North Korea to have nukes, we've got to show close that barn door. The response of the crypto industry to those sanctions on tornado cash was to sue because the crypto industry was more interested in making money than preventing North Korea from getting nukes. They ultimately won that lawsuit because they didn't have this protection.
▶ 4:31:17I would submit to you that if we don't want North Korea to have a nuclear weapon, we should make sure that our financial enforcers have the ability to impose those sanctions when warranted. Amendment 22 also related to Think about this conceptually. If we are going to say that we are going to indemnify anybody who writes a piece of computer code that is executing these digital transactions because they didn't do it. the code did it.
▶ 4:31:48We should probably reasonably require if we're going to indemnify you that the code has to have a module in there that complies with all laws, right? You know, chat GPT has a spell check module. Um, you know, JG GBT spits an answer out. It's it's spelled correctly. We could have a module within this DeFi code that complies with all laws. Could you write the code to do that? Absolutely. How should we do that? That probably is a little bit more complicated than I think is beyond the reading level in Congress and I include myself in that lower reading level.
▶ 4:32:16And so what we've done in amendment 22 is to simply to say let's create a public private partnership, bring outside folks in, figure out how to write a piece of code in these D5 protocols that ensures that if you are going to get the indemnification, take this code, block it in, and now those DU protocols are exempt because we don't want these to be used for moneyaundering. I think it's sensible. I think it's reasonable.
▶ 4:32:37that uses the private sector and basically says rather than kick the can down the road, let's take a tech forward approach that phases this in over time and gets it done. I think it's sensible. The final mixer amendment is amendment 24 which directs the Treasury Department to finalize an overdue rule making to classify crypto transactions involving mixers in foreign jurisdictions as a primary moneyaundering concern. That is a direct word out of fins that they used. These mixers can be located anywhere.
▶ 4:33:07I can click a button on my phone. It can send a piece of Bitcoin to your account, Mr. Norman, or it can bounce to a website in in in Russia. It doesn't know the difference. They're all just pipes and tunnels, right? Except that if those mixers are located in foreign jurisdictions, all of a sudden they're outside the supervision of our regulators. And criminals are typically doing that. Binance, the largest crypto exchange that Miss Leer Fernandez was talking about with with CZ.
▶ 4:33:34Um, they accepted more than $275 million from one mixer before it was shut down. And they laid plead guilty in the United States. I would point out under existing law, people saying we need new law to change the regulatory regime. They plead guilty under existing law to aiding and abetted money laundering on a massive scale. Um, finance, by the way, is the same company that wrote the computer code that is being used in President Trump's USDI stable coin. There are some conflicts of interest here.
▶ 4:34:04The Trump administration has now lifted those existing sanctions on on tornado cash, which limits regulators view into that. So, we can fix this because Finsen has an existing proposed 2023 rule to impose impose enhanced and more frequent reporting requirements on crypto exchanges that have gone through an offshore mixture.
▶ 4:34:23I would point out that when Fininsson did that, that was the first time, I believe, someone will correct me if I'm wrong, was the first time that an agency had ever used section 311 of the Patriot Act to target an entire class of transactions. That's how big a deal this is. They've used the Patriot Act to go after specific individuals, specific firms. They said this whole class of things is a problem and now they're sitting on that. This amendment says get that get that rule making done. Um my last two amendments not related to mixers.
▶ 4:34:51The first ensures that the SEC and CFTC who are going to be tasked with this rule making are adequately staffed before they initiate joint rulemakings. Um could be a three majority um Republican majority of the SEC after Commissioner Krenshaw's term expires at CFTC. We are soon going to have only one commissioner who by the way currently leads crypto policy at Anderson Horowitz and has a conflict of interest. This is going to be bipartisan. Let's make sure that the commissions are fully staffed. The last 128 and I know you're I know you're nervous on time here.
▶ 4:35:22We got to shut down these crypto ATMs. I would encourage you go talk to convenience stores who have these crypto ATMs and they are taking advantage of seniors who go in, they get asked to say, "Can you put your money in an account, turn it into Bitcoin, transfer the Bitcoin to me, and they have no recourse to get it back." There are currently 32,000 cryptocurrency ATMs nationwide. There's more than 1100 in the Chicago area where I live. These have become a preferred payment system for international criminal networks. You put it in, you can't get it back.
▶ 4:35:49According to a recent FTC report in 2023, consumers lost $110 million to Bitcoin ATM fraud. This amendment uh would require that crypto ATM operators update the location of their ATMs, verify identities before processing a transaction, and implement anti-fraud It's just looking after our constituents here. And I I hope you'll accept all these amendments. Thank you. Look forward to your questions.
▶ 4:36:16Thank you very much, Mr. Licardo. you're
▶ 4:36:19Uh thank you, Madam Chair. Uh I represent a district that includes about half of Silicon Valley, and I certainly support sensible crypto legislation and regulation. I'm an original co-sponsor of the Stable Act, and I will be voting for the Genius Act later this week. Uh and my district is hardly cryptoverse, and I appreciate Chairman Hill's uh collaborative approach on this and other legislation. The Clarity Act, however, uh has two very substantial omissions and I have two amendments to address those emissions.
▶ 4:36:49Uh first, amendment 36 mirrors the language of a bill that I introduced in February, HR1 1712, the MEM Act. Uh I was the first member of Congress to introduce a bill criminalizing the issuance of a commodity security or digital asset by federal officials such as President Trump. Uh, and I suspect you have heard plenty about that issue, but I am grateful for my uh, colleagues, 25 of them who co-sponsored to Senator Chris Murphy who introduced a companion bill and several other colleagues who have introduced similar bills.
▶ 4:37:19Uh, I'm I've said plenty about this issue in the media and certainly you've heard plenty. So, I'm going to move on. The second amendment that I introduced is what I would like to invite your attention to. It's amendment number 38. Uh, I have heard many industry experts in Silicon Valley and elsewhere tell me how puzzled they are about this bill that exerts such tremendous focus on regulating crypto trading on centralized exchanges. Yet, decentralized or DeFi protocols undergo no scrutiny whatsoever.
▶ 4:37:49And in fact, regulation is precluded precluded on DeFi protocols by this bill. And yet the evidence is clear that a majority of fraud, theft, money laundering, or other crime is happening on those DeFi protocols, not on centralized exchanges.
▶ 4:38:04So simply, if you believe that our intention with this bill or any other law is to deter and reduce fraud, money laundering, theft, and other crime, this bill represents an effort to launch a global naval strategy by deploying all of our ships to the Great Salt Lake. To be sure, most crypto transactions still do take place on centralized exchanges like Coinbase.
▶ 4:38:31Yet, a rapidly growing number of those transactions are happening on DeFi protocols. And experts, including those who have testified before our committee, tell us that within a couple of years, we can expect that a majority of our crypto transactions are going to be happening on those DeFi protocols that are utterly unregulated by this bill.
▶ 4:38:52My amendment seeks to establish a voluntary set of standards established by private public committee comprised of DeFi industry, academic and regulatory And that uh committee would essentially create a certification that would inform crypto users, participants in the market that DeFi serving companies meet industry best practices for preventing theft, fraud, moneyaundering, and a host of other crimes and unlawful activity.
▶ 4:39:19Now, D5 service providers could choose to comply or not with these standards. It would be their choice. Uh the certification or branding would simply inform participants in the market about who's complying with best practices and who is not. Much in the way that uh Energy Star used to inform consumers about which appliances will help them reduce utility bills. With this amendment, there will be no growth in the regulatory state that I know some of my colleagues fear so much.
▶ 4:39:49merely calls for the creation of voluntary standards that can ensure participants in the market will be better informed. Now, I mentioned we have ample evidence that the crime and the malfeasance is happening on DeFi protocols, non-entralized exchanges. We have a lot of evidence for that. I'll mention just a couple pieces. January 15, 2025 chain analysis report regarding crypto crime trends that quote stolen funds increased 21% last year to$2.2 billion.
▶ 4:40:14the largest share of stolen funds was robbed from decentralized finance or defy services. Second, a study also published in January 2025 in the Journal of Cyber Security collected data on 1,141 profit-driven crimes from 2017 to 2022, comprising more than 30 billion in losses. And the findings show that 91% of those crimes were related to DeFi protocols, not decentralized finance.
▶ 4:40:46Uh, and the findings also show that DeFi participants are the first victims of crimes targeting the DeFi industry. That is 42% I'm sorry, 52% of the events targeted them. In other words, we are setting consumers up to be taken advantage of.
▶ 4:41:00Finally, an April 2023 US Treasury report called the illicit finance risk assessment, D5 Finance finds, and I quote, "The most significant current illicit finance risk in this domain is from DeFi services that are not compliant with existing anti-moneyaundering obligations and quote, poor cyber security practices by DeFi services enable theft and fraud of consumer assets also present risk for national security, consumers, and the virtual asset industry." In other words, this bill
▶ 4:41:30is regulating an area that certainly could use regulation, but utterly missing the great majority of crime, theft, malfeasants, and torsious activity that is going to be happening. We are setting consumers up to be victims if we ignore what's happening on D5 protocols. Thank you.
▶ 4:41:52Thank you very much. Um, any questions,
▶ 4:41:58I just want to thank uh the panel for being here. I I support making all your amendments in order. Um, and Mr. Davidson, I even support making your amendments in order. But I think one of the things that we're learning here is that there are a lot of members who are not necessarily in the committees of jurisdiction or not members of the Senate who have some good ideas and part of what we should the floor debate should be is not just uh you know weighing whatever the committee reports out but also um voting on your your ideas.
▶ 4:42:27Um if people majority like them they'll vote for them. If they don't they'll vote against them. I'll just say one thing Mr. Davidson though is that um you know I've um I think there is a I think we're we're now in a in a pattern here where uh amendments good amendments by Democrats and Republicans are routinely being blocked um because it's easier just to bring something to the floor and vote up or down.
▶ 4:42:52I don't think that's going to change unless you and others um if your amendments are denied vote against the rule. Uh I think it's the only message that's going to resonate with the leadership here um is whether or not they can't pass a rule unless they are more inclusive in terms ter terms of amendments. So I have no idea what the amendment is going to look what the rule will look like because we haven't seen it yet. Um I'm willing to bet you're probably not included but uh but I
▶ 4:43:21Mr. McGovern I'm just really glad to finally have your support for one of my amendments being made in order. I don't know if I'll vote for it, but I'll vote to make it an order. But anyway, I with that I yield back.
▶ 4:43:31Gentleman yields back. Now recognized gentleman from South Carolina.
▶ 4:43:36No questions. Now recognize the gentle lady from Pennsylvania.
▶ 4:43:39I really do appreciate the amendments that look at consumer protection. We've had to deal in my office with more than one senior who's um been defrauded of their entire life savings through cryptocurrency scams and such. So, uh, we are well overdue for regulation in that area. Thank you. I yield back.
▶ 4:43:59Gentle lady yields back. Now recognize the gentleman from Georgia, Mr. Scott.
▶ 4:44:04Thank you, Mr. Chairman. I'm gonna ask this to Mr. Davidson since he's on the financial services committee. And the thing that I struggle with is when they say you have to have a dollar in assets for every dollar that you issue, right? and and those assets have to be the highest risk asset would be basically a 90-day treasury as I understand. Is that
▶ 4:44:27That's correct.
▶ 4:44:28Okay. So, a 90-day treasury pays somewhere just north of 4%.
▶ 4:44:35These people didn't get this rich making Right? I mean, they just didn't. I mean, you don't become a billionaire earning 4% on your money. and and my fear is that they come back next year and say, "Well, hey, we can't make any money at a dollar for dollar, so we need it to be 75 cents on the dollar." Um,
▶ 4:44:56well, stop a future Congress from taking away the dollar for dollar match.
▶ 4:45:01Well, I mean, we we did that with the US dollar. We used to back it with gold. Now, we back it with nothing but a promise. Um, we're having a hard time selling our debt, right? So part of the reason Treasury yields are up is because uh our spending is up and even though the revenue is up, the spending is up
▶ 4:45:19Uh so our deficits are growing. Our credit score was downgraded and stable coins for a lot of people offer a way to create more demand for the treasuries and so the treasuries would be held. And if you look at a hedge fund, a lot of the hedge funds only take about a 2% management fee. you're getting north of 4% for just leaving the money parked at the bank. They don't have to deploy it. They don't have to do any underring.
▶ 4:45:45Well, my my point is this. If you had a billion dollars and you wanted to create an account and and issue issue stable coin, you would have to have a put your $1 billion in basically 90-day treasuries, right?
▶ 4:46:01Or or cash. So you you would get think about it you would get I mean frankly if me you and a buddy decided to put it together uh
▶ 4:46:08well you could count me in for about a hundred grand that's about
▶ 4:46:11we raised the capital from somewhere you've got
▶ 4:46:14that was a joke by the way I don't want
▶ 4:46:16on a billion dollars you've got u essentially a $40 million management fee for running that which is you know we could operate a pretty nice company with 40 million I mean you're we're running our MAS with less than 2 million and we usually have about 15 people
▶ 4:46:32would would the gentleman yield.
▶ 4:46:34Because because I want to just clarify and I I think Mr. Hill probably accidentally misspoke in the last
▶ 4:46:39The the highest risk thing in that in the portfolio is not the 90-day treasury. It's uninsured deposits. This the the Genius Act does not require that deposits be insured. And so it there there are no uninsured deposits. There's no fractional reserve banking in stable coins. They're fully deposited. Okay. I don't want to get hold of
▶ 4:47:00I want to recognize the gentleman. It's his time and then if we can go one at a time because I can't hear. I know the stenographers can't hear when y'all start talk. I know it's interesting but we can't understand you when everybody's talking at the same time.
▶ 4:47:11I'm I'm just
▶ 4:47:13I'm going to thank y'all for being here. I I don't understand crypto. I've never understood crypto. Um my my whole issue and and getting back to again what Mr. Davidson was saying is the value of the US dollar. And if you want to I mean I mean if we ever lose the dollar as the world currency that then we as a country will will cease to exist as we know it.
▶ 4:47:37And I do think that with a piece of legislation like this I mean I personally think that it should go through the house committee and then and then see what the house committee says about it. With that I yield.
▶ 4:47:50Gentleman has yielded back now. Recognize the gentleman from Colorado Mr. Noose for his time of questioning. I think uh I think the chairman I agree with Mr. Scott and agree with Mr. from a government, the ranking member and would support every one of your amendments being ruled in order.
▶ 4:48:07And to me, I think what's most striking perhaps about this particular panel is that I think all of you or three of you serve on the And so the fact that you serve on the committee of jurisdiction, but you don't have an opportunity to really discuss or debate or amend this bill because the bill didn't go through your committee in regular order. So you're compelled to come before the rules committee to make your case here. We all know of course we went through this a week ago or two weeks ago where you know a lot of this is theater.
▶ 4:48:38It's not none of your amendments are going to be made in order. I don't not I hate to break the news to you but the chair you know the Republicans are not going to make any of the amendments in order. So I don't I just is it's a shame and why the House Republican caucus I shouldn't say the entire caucus but those in the caucus who are passionate about exercising their constitutional prerogatives with respect to the House's equities are willing to just constantly let the Senate roll this chamber and
▶ 4:49:08send bills directly to the president. I mean, what's the point of having having the House here debate these bills if it's just a matter of the Senate's going to work its will, send us whatever it's got, and House Republicans are going to have to accept it and that's that's the end of the show. So, that's a shame. I don't think that's the way this process should work and uh hope springs. Maybe it won't on this front, but I'll yield
▶ 4:49:33Gentlemen is back. Now recognize Mr. Now recognize Mr. Jack Georgia.
▶ 4:49:41No questions as well. Thank you all for
▶ 4:49:43I I will say now recognize myself and I will just say appreciate you all being here. Uh it is of some concern as you heard from one of the gentlemen from Georgia. This is not the committee of expertise and the place to have had a lot of these debates probably ought to have been in the committee of expertise. That's why we put people in committees where they can learn. either they already know or they can learn an expertise in the subject matter area.
▶ 4:50:09That being said, I yield back and let me see what my script says. All right. Is there anyone else seeking to testify on HR 41416, HR 3633, HR1 1919, or Senate 1582. Seeing none, this closes the hearing portion of our meeting.
▶ 4:50:40And we're going to suspend
▶ 4:52:07The chair will be in receipt of a motion from the gentleman from Georgia, Mr.
▶ 4:52:11Madam Chair, I move the committee grant HR 4016, the Department of Defense Appropriations Act 2026, a structured rule. The rule waves all points of order against consideration of the bill. The rule provides one hour of general debate equally divided and controlled by the chair and ranking minority member of the committee on appropriations or the respective design. The rule provides that the bill shall be considered as read. The rule waves all points of order against provisions in the bill for failure to comply with clause 2 or clause 5a of rule 21.
▶ 4:52:40The rule makes an order only those amendments printed in part a of the rules committee report. Amendments on blanc described in section three and proform amendments described in section four. Each amendment shall be considered only in the order printed in the report. May be offered only by a member designated in the report. Shall be considered as read. Shall be debatable for the time specified in the report. Equally divided and controlled by the proponent and an opponent.
▶ 4:53:04Shall not be subject to amendment except as provided by section four of the rule and shall not be subject to a demand for division of the question. The rule waves all points of order against the amendments printed in part A of the rules committee report or amendments on block described in section three of the rule. The rule provides that the chair of the committee on appropriations or his design may offer amendments on block consisting of amendments printed in part A of the rules committee report not earlier disposed of. Amendments on block shall be considered as read.
▶ 4:53:34Shall be debatable for 20 minutes equally divided and controlled by the chair and ranking minority member of the committee on appropriations or the respective design shall not be subject to amendment except as provided by section four of the rule and shall not be subject to a demand for division of the question. The rule provides that the chair and ranking minority member of the committee on appropriations or their respective design may offer up to 10 pro-former amendments each at any point for the purpose of debate. The rule provides one motion to recommit.
▶ 4:54:03The rule further provides for consideration of HR 3633 the digital asset market clarity act of 2025 under a structured rule. The rule waves all points of order against consideration of the bill. The rule provides that in lie of the amendments in the nature of a substitute recommended by the committees on agriculture and financial services now printed in the bill an amendment in the nature of a substitute consisting of the text of rules committee print 119-6 modified by the amendment printed in part B of the rules
▶ 4:54:33committee report shall be considered as adopted and the bill as amended shall be considered as read. The rule waves all points of order against provisions in the bill as amended. The rule provides one hour of general debate equally divided among and controlled by the chair and ranking minority member of the committee on agriculture or the respective design and the chair and ranking minority member of the committee on financial services or their respective design. The rule makes an order only the amendment printed in part C of the rules committee report.
▶ 4:55:02Each amendment shall be considered only in the order printed in the report may be offered only by a member designated in the report. Shall be considered as read. shall be debatable for the time specified in the report equally divided and controlled by the proponent and an opponent shall not be subject to amendment and shall not be subject to a demand for division of the question. All points of order against the amendment printed in part C of the rules committee report are waved. The rule provides one motion to recommmit.
▶ 4:55:28The rule further provides for consideration of HR 1919, the anti-CBDC surveillance state act under a closed rule. The rule waves all points of order against consideration of the bill. The rule provides that the amendment in the nature of a substitute recommended by the committee on financial services now printed in the bill shall be considered as adopted and the bill as amended shall be considered as read. The rule waves all points of order against provisions in the bill as amended.
▶ 4:55:56The rule provides one hour of general debate equally divided and controlled by the chair and ranking minority member of the committee on financial services or the respective design. The rule provides one motion to recommit. The rule provides further for consideration of Senate Bill 1582, the Genius Act, under a closed rule. The Senate waves all points of order against consideration of the bill. The rule provides that the bill shall be considered as read. The rule waves all points of order against provisions in the bill.
▶ 4:56:25The rule provides one hour of general debate equally divided and controlled by the chair and ranking minority member of the committee on financial services or their respective design. The rule provides one motion to recommit. Finally, the rule provides that the requirement of clause 6A of rule 13 for a twothirds vote to consider a report from the committee on rules on the same day it is presented to the House is waved with respect to any resolution reported through the legislative day of July 18th, 2025 relating to the bill HR4 to
▶ 4:56:55rescend certain budget authority proposed to be rescended in special messages transmitted to the Congress by the president on June 3rd, 2025 in accordance with section 1012A of the Congressional Budget and Employment Control Act of 1974.
▶ 4:57:13Thank you very much, Mr. Jack. You've now heard the motion. Is there discussion or amendment to the rule?
▶ 4:57:19Madam Chair,
▶ 4:57:19Mr. McGovern,
▶ 4:57:20I have an amendment to the rule. I move the committee make an in order amendment number one to S1582 offered by Representative Davidson which protects an individual's right to maintain a hardware wallet or software wallet for the purpose of facilitating the individual's own lawful custody of digital assets and to engage in direct peer-to-peer transactions in digital assets with another individual or entity for the individual's own lawful purposes using a hardware wallet or soft or software wallet.
▶ 4:57:50Thank you, Mr. McGovern. Is there any further discussion on the amendment? Hearing none, the questions on the amendment. All those in favor signify by saying I.
▶ 4:58:00Those opposed say no.
▶ 4:58:02No. In the opinion, chair the nose have it. The amendment is not agreed to.
▶ 4:58:06Ask for roll call.
▶ 4:58:07The clerk will call the role.
▶ 4:58:09Mrs. Fishbach,
▶ 4:58:10Mrs. Fishbach, no. Mr. Norman,
▶ 4:58:12Mr. Norman, yes. Mr. Roy, Mrs. Howin.
▶ 4:58:15Mrs. Hchen? No. Mr. Langworthy? No.
▶ 4:58:17Mr. Langworthy? No. Mr. Scott?
▶ 4:58:19Mr. Scott, no. No. Mr. Griffith.
▶ 4:58:24Mr. Griffith. I Mr. Jack.
▶ 4:58:26Mr. Jack. No. Mr. McGovern.
▶ 4:58:29Mr. McGovern. I
▶ 4:58:30Miss Scan.
▶ 4:58:31Miss Gallon. I Mr. Nagus.
▶ 4:58:34Mr. Noose. I. M. Ledger. Fernandez.
▶ 4:58:36M. Ledger Fernandez. I. Madam Chair.
▶ 4:58:39Madam Chair. No.
▶ 4:58:45The clerk will report the total.
▶ 4:58:47Six. Yay. Sevens. the uh nose have it. The amendment is not agreed to.
▶ 4:59:00Madam chair, I'm sorry.
▶ 4:59:02Six yays, six nays.
▶ 4:59:06Uh the nos have it. The amendment is not agreed through.
▶ 4:59:10Madam chair, I have an amendment to the rule. I move the committee strike section nine of the rule which provides authority for the rules committee to bring a rule for the Senate amendment to HR4 the recisions act of 2025 to the floor on the same day it is reported out of the rules committee now I don't know what the Senate will do but the house passed bill was atrocious that it will kill over 14 million people including over four million children according to a study published in the Lancet
▶ 4:59:40last month this is a massively important bill member should have time to carefully consider any changes the Senate makes before sending it to the president's desk. That's not a lot to ask, but with same day authority, Republican leadership can just jam it through the rules committee and the House in a matter of hours. I urge a yes vote on my amendment, and I yield back.
▶ 5:00:02Is there any further discussion on the amendment by Mr. McGovern? Hearing none, the questions on the amendment. All those in favor signify by saying I.
▶ 5:00:12Those opposed say no. No.
▶ 5:00:15In the opinion, chair, the nose have it. The amendment is not agreed to.
▶ 5:00:19That's great. Roll call. Me.
▶ 5:00:20The clerk will call the role.
▶ 5:00:22Mrs. Fishbach.
▶ 5:00:23Mrs. Fishbach. No. Mr. Norman.
▶ 5:00:25Mr. Norman. No. Mr. Roy. Mrs. Houchin. Mrs. Howchin. No. Mr. Langworthy.
▶ 5:00:29Mr. Langworthy. No. Mr. Scott.
▶ 5:00:31Mr. Scott. No. Mr. Griffith.
▶ 5:00:33Mr. Griffith. No. Mr. Jack.
▶ 5:00:35Mr. Jack. No. Mr. McGovern.
▶ 5:00:37Mr. McGovern. I. Miss Gallon.
▶ 5:00:39Miss Gallon. I. Mr. Negus. Hi.
▶ 5:00:41Mr. Negus. I. Miss. Ledger. Fernandez.
▶ 5:00:43Miss Ledger Fernandez. I Madam Chair.
▶ 5:00:47Madam Chair. No.
▶ 5:00:50Clerk will report the total
▶ 5:00:5140s, 8 N.
▶ 5:00:53The nose have it. The amendment is not agreed to.
▶ 5:00:56Madam Chair, I have another amendment to the rule. Um, I move the committee make an order amendment number 50 to HR 3633 offered by Representative Kana, which would require the attorney general to preserve and release any records related to Jeffrey Epstein. Madam Chair, on February 21st, 2025, President Trump's own attorney general, Pam Bondi, said on Fox News, the Epstein client list was sitting on her desk, quote, "Right now, to review," end quote.
▶ 5:01:26Cash Patel, Trump's FBI director, said during his confirmation hearing that he would do everything everything if confirmed to make sure the American people knew quote the full weight of what happened. End quote. Patel, who now leads the FBI, said on the Benny Johnson show that the FBI was hiding the Epstein client list. Donald Trump Jr., the president's own son, tweeted out, and I quote, "Show us all the Epstein client list right now.
▶ 5:01:52Why would anyone protect the those scumbags?" Ask yourselves this question and then the answer becomes very apparent." End quote. And now, forgive me, but suddenly these same people are telling us there's nothing to see here. Trump is posting that we should all just move on. Well, I want to know what the hell is in these files. And I think we all want to know why Trump is suddenly changing his tune and is so desperate to sweep this under the rug. But you know what? This also gets at his credibility.
▶ 5:02:23This is about trust. Republicans said, "Trust us. Vote for us and we will release these files." And here we are. They are backtracking. They said they aren't going to cut Medicaid and they did. They said they wouldn't add to the deficit in debt. They exploded both. They said that they stand with law enforcement. They won't even hang a plaque honoring officers for their heroism on January 6th. They talk about law and order and can't even condemn the president for pardoning the people who violently attacked the Capitol building.
▶ 5:02:52So, please forgive me if I don't believe a word of any of it. This isn't about guta politics. It's about credibility or rather the lack of credibility on the other side because they constantly say one thing and do something else. So I urge a yes vote on my amendment and I yield back.
▶ 5:03:10Is there any further discussion on
▶ 5:03:11Madam Chair? I fail to see how that amendment is gerine to this rule. And madam chair um we are the rules committee and we routinely wave the rules of germanus and make uh and make and make things in order.
▶ 5:03:29This is about defense appropriations and crypto legislation
▶ 5:03:34whether you could vote mr. Unfortunately it is gerine.
▶ 5:03:40Is there any further discussion on the
▶ 5:03:43Madam chair
▶ 5:03:44miss leger Fernandez you're recognized. Madam Chair, the Epstein files uh concern issues of abuse of women and abuse of children. You know, as the chair of the Democratic Women's Caucus, you often see me raising issues of we need to address this. And not only that, but Republicans and the MAGA world have said they want to know about this. Your constituents want to know. So, the question is, why are they not just releasing them? Uh, and I think it's it's a it's a simple thing to do.
▶ 5:04:14and and you're going to be asked to vote whether you require the release. That's going to be a simple vote. Will you require the release? Is there anything that needs to be hidden? If there isn't, then just release the files. Silence those who would question it. So, every Republican on this committee should be able to easily vote yes. And with that, Madame Chair, I yield back. Thank you, Miss Leisure Fernandez.
▶ 5:04:44Any further discussion? Hearing none, the questions on the amendment. All those in favor signify by saying I.
▶ 5:04:52Those opposed say no.
▶ 5:04:54In the opinion chair, the nos have it. The amendments.
▶ 5:04:57Chair, I'm kind of shocked by that. Uh, I will ask for a roll call.
▶ 5:05:01The clerk will call the roll.
▶ 5:05:03Mrs. Fishbach, no. Mrs. Fishbach, no. Mr. Norman,
▶ 5:05:06Mr. Norman, I. Mr. Roy. Mrs. Hchin. Mrs. Houchin? No. Mr. Langworthy. Mr. Langworthy. No. Mr. Scott.
▶ 5:05:13Mr. Scott. No. Mr. Griffith.
▶ 5:05:15Mr. Griffith. No. Mr. Jack.
▶ 5:05:17Mr. Jack. No. Mr. McGovern.
▶ 5:05:19Mr. McGovern. I Miss Scallan.
▶ 5:05:21Miss Scallan. I. Mr. Noose.
▶ 5:05:24Mr. Noose. I. Miss. Ledger Fernandez.
▶ 5:05:26I miss Ledger Fernandez. I. Madam Chair.
▶ 5:05:29Madam Chair. No.
▶ 5:05:33Clerk will report the total.
▶ 5:05:36Five. Seven.
▶ 5:05:38Uh, the nos have it. The amendment is not agreed to. And I think most of us believe what's appropriate will be released when it is time for the president to release it.
▶ 5:05:51thank you chair. I have I have another uh we'll try one more time at this. Uh I don't have the same confidence you do uh given the flip-flopping uh we've seen. I I I need a neck brace. Uh I mean they flip-flop so uh quickly and so rapidly. But I have another amendment to the rule.
▶ 5:06:08I I move to add a new section to the rule which would provide for consideration of a resolution introduced by Representative VC HRE 577 which affirms Congress's article one authority to conduct oversight demands that the Trump administration release the Epstein files calls on the Department of Justice and FBI to submit a report on any delays suppression or destruction of evidence related to the files and supports full transparency and access to these documents in the interest of justice.
▶ 5:06:37and accountability. This resolution shall be considered under a closed role with one hour of debate equally divided and controlled by the committee of the judiciary. This is essentially a sense of congress resolution. Um so I I I if you believe that the administration should release what it has available um I think this should be an easy yes vote for everybody and I yield back my time.
▶ 5:07:04Madam Chair,
▶ 5:07:04is there further discussion?
▶ 5:07:06Mr. Norman,
▶ 5:07:08you know, I debated on this and I agree with Austin. This isn't Germaine. I was surprised that you ruled that it was. This isn't the the this isn't the body to do this. Um, and it'll be borne out by the legal authorities and by the public. Now, I'm I'm voting against your resolution
▶ 5:07:27because um you know, it'll be found whatever this comes out as time goes. We haven't heard all the information. Well, this is just Germaine, by the way.
▶ 5:07:37Well, I don't think it is. No, we're talking about crypto, Jim. We're talking about crypto. We're talking about regulations of
▶ 5:07:44I yel back.
▶ 5:07:46Madam Chair,
▶ 5:07:46Madam Chair.
▶ 5:07:47Madam Chair,
▶ 5:07:49Mr. Griffith, if
▶ 5:07:50I might, I Madam Chair, I understand under the very loose rules of geraness that this house has that this technically is gerine. Thank you. But I have I have championed since coming to that we have stricter geranous rules. And this is this is a classic example. This is not in anybody's I understand in our rules it is gerine.
▶ 5:08:18So I'm not disagreeing with you or with the ranking member on the way it's been done. But I have advocated that we tighten up the geriness rules because everything in the kitchen sink can be added in. And it's my understanding the reason this is germanine is because in one of the bills that we took up tonight, there's a reference to uh the Department of Justice and that's sufficient to bring this in.
▶ 5:08:41The American people understand that that's not that doesn't make this the proper venue and this doesn't make this the proper time to do it. And that's why I voted no on the last one. And that's why I vote no on this one because notwithstanding the fact that it may technically because it touches one subject area that touches one subject area that touches one subject area. I mean under this everything under the sun is gerine to this rule. I think that's an improper way to run this place.
▶ 5:09:10I have felt that way for the entire time I have been here and I would be uh remiss and not continuing my campaign that we should tighten up the language if I didn't vote no on the gentleman's. It's nothing personal. It's just I feel strongly on the on geranus that we've got it wrong and we've had it wrong probably for at least 50 years and we need to tighten it up and so I'm voting no because whether it's technically germanine or not is not the test I'm looking at. Would it meet Morgan Griffith's test of germanous?
▶ 5:09:40Would it meet the Virginia House of Delegates test of germanous? Absolutely not. It would not. And would it meet the test of germanous in most legislative bodies in this nation in our state legislatores and other legislatores? It would not meet the test of geriness. Only here in the United States House does it meet the test of germaniness. And I think that's ridiculous. And I apologize. I I got carried away, but I'm voting no.
▶ 5:10:05Madam Chair, thank
▶ 5:10:07you, Mr. Griff. the Mr. McGovern, you're
▶ 5:10:10First of all, the uh let me respond to the gentleman. The previous um measure we voted on was gerine to one of the bills. This one is gerine to the rule and that you're offended that a rule contains many different topics. We have we have a defense appropriations bill and we have crypto legislation. Talk about differences of you know topics all in one rule. So this is totally gerine to the rule and I get it.
▶ 5:10:38you guys are twisting yourself into knots trying to find a way to avoid, you know, dealing with this issue. Uh, you know, and and this is the kind of the the lightest touch in terms of addressing the Epstein files. Basically, a sense of Congress resolution saying to the administration, explain yourself and release what you have. That's what this is. So, this is gerine to the rules. Absolutely. Uh, and you know, and I would urge a yes vote on Is there further discussion?
▶ 5:11:08M
▶ 5:11:10go ahead.
▶ 5:11:10Miss Gallon, you're recognizing.
▶ 5:11:12Thank you. I I do appreciate the ranking member pulling us back to the topic under discussion, which is whether or not after years of saying there's stuff in the Epstein files, whether or not the Trump administration now should uh disclose the Epstein files because either there's stuff in there they're covering up or they were lying to the American public beforehand when they said there was stuff there. So, I urge a yes vote on this amendment.
▶ 5:11:39Thank you, Miss Camp. Any further
▶ 5:11:43Any further discussion on our side?
▶ 5:11:46Miss Leger Fernandez or Mr. Nigus.
▶ 5:11:49So, Madam Chair, I'll be really quickly. I think that we have Republican staff have said this is Germaine. So, regardless of how you feel about it, it is clear you have the power. This committee has the power to decide whether to request, demand, suggest that the Trump administration, the Department of Justice release the files.
▶ 5:12:15So the question that you will be voting on with the power that has been granted to you is should they release the fires? That is the vote you will be making as to whether it should go forward to the floor for that vote. So you with your vote will be preventing even the consideration of the release of the Epstein files. You will be voting against the release of the Epstein files. You have the power. Let's see how you vote.
▶ 5:12:51Um, Miss Lesie Fernandez, again, um, none of us like to be told why we are voting a certain way.
▶ 5:13:05We do not like to be told why we are voting a certain way. You do not know our minds. You do not know our hearts. Is there further discussion on the Madam Chair,
▶ 5:13:22Mr. Noose.
▶ 5:13:24Thank you, Madam Chair. I just want to echo the sentiments of the ranking member. I certainly support this amendment as I supported the last amendment. I would say, just to be clear, that last vote, four Democrats joined by one Republican, Mr. Norman, ultimately voted in favor of an amendment that would ensure the release of these files.
▶ 5:13:46And I think this vote provides another opportunity for our colleagues on the other side of the aisle again just before we cast this vote to perhaps join Mr. Norman in voting in favor of releasing the files. So with that I'll be voting yes and I hope my colleagues will do the same.
▶ 5:14:08All those in favor of the motion by Mr. McGovern signify by saying I.
▶ 5:14:13I. Those opposed? No.
▶ 5:14:17In the opinion chair of the nos have it. The amendment is not agreed to.
▶ 5:14:20Ask for roll call.
▶ 5:14:22The clerk will call the role.
▶ 5:14:23Mrs. Fishbach. No.
▶ 5:14:25Mrs. Fishbach. No. Mr. Norman. Mr. Norman. No. Mr. Roy. Mrs. Houchin. Mrs. Hchen. No. Mr. Langworthy. Mr. Langworthy. No. Mr. Scott.
▶ 5:14:32Mr. Scott. No. Mr. Griffith.
▶ 5:14:34Mr. Griffith. No. Mr. Jack.
▶ 5:14:36Mr. Jack. No. Mr. McGovern.
▶ 5:14:37Mr. McGovern. Hi. Miss Gallon. Hi.
▶ 5:14:39Miss. Scallan. I. Mr. Noose.
▶ 5:14:41Mr. Noose. I led Fernandez. I
▶ 5:14:44Fernandez. I Madam Chair,
▶ 5:14:47Madam Chair, no.
▶ 5:14:51The clerk will report the total.
▶ 5:14:52Four yays. Eight nays.
▶ 5:14:54The nose have it. The amendment is not agreed to. Any further discussion or amendment? Miss Scandlin, you're
▶ 5:15:06I have an amendment to the rule. I move the committee make in order amendment number 31 to HR 3633 offered by Representative Waters which would establish a crypto investor and consumer bill of rights featuring among other things 247 customer service or SIPC like coverage fiduciary best execution rules anti-frontunn rules bankruptcy remote custody with 24-hour withdrawals and monthly
▶ 5:15:36auditor attest tested proof of reserves. The amendment would also provide additional funding for the SEC and CFTC so they are able to implement the other bills that we're voting on. I yield back.
▶ 5:15:52The gentleoman yields back. Is there further discussion on the amendment? Hearing none, the questions on the amendment. All those in favor signify by saying I.
▶ 5:16:03Those opposed say no.
▶ 5:16:05Any opinion? Chair of the nose have it.
▶ 5:16:07I would request a roll call vote.
▶ 5:16:08Miss Gandlin requests a roll call vote. The clerk will call the role.
▶ 5:16:12Mrs. Fishbach. Mrs. Fishbach. No. Mr. Norman. Mr. Norman. No. Mr. Roy. Mrs. Hchin. Mrs. Hchin. No. Mr. Langworthy. Mr. Langworthy. No. Mr. Scott. No.
▶ 5:16:20Mr. Scott. No. Mr. Griffith.
▶ 5:16:22Mr. Griffith. No. Mr. Jack.
▶ 5:16:24Mr. Jack. No. Mr. McGovern. Hi.
▶ 5:16:26Mr. McGovern. I. Miss. Scallan. Hi.
▶ 5:16:27Miss Gallant. I. Mr. Negus. Hi.
▶ 5:16:29Mr. Negus. I. M. Ledger Fernandez. Hi. M. Ledger Fernandez. I Madam Chair.
▶ 5:16:34Madam Chair. No
▶ 5:16:36clerk will report the total
▶ 5:16:37four yays eight n
▶ 5:16:39the nos have it. The amendment is not agreed to. Is there further discussion? Um Mr. Noose.
▶ 5:16:46Thank you, Madam Chair. I have an
▶ 5:16:49I have an amendment to the rule. I move the committee make an order amendment number 21 to HR 3633 offered by myself which would ban members of Congress, presidents and vice presidents, including candidates, from issuing or endorsing digital assets and requires any existing assets to be placed in a blind trust. Uh is there further discussion on the amendment by Mr. Negus? Hearing none the questions on the amendment. All those in favor signify by saying I.
▶ 5:17:16Those opposed say no.
▶ 5:17:19In the opinion chair of the nos have it. The amendment is not agreed to. Mr. Neos request a recorded vote. The clerk will call the role.
▶ 5:17:26Mrs. Fishbach.
▶ 5:17:27Mrs. Fishbach. No. Mr. Norman. Mr. Norman. No. Mr. Roy. Mrs. Houchin. Mrs. Hchin. No. Mr. Langworthy. Mr. Langworthy. No. Mr. Scott. Mr. Scott. No. Mr. Griffith. Mr. Griffith. No. Mr.
▶ 5:17:39Mr. Jack. No. Mr. McGovern.
▶ 5:17:40Mr. McGovern. I. Miss. Scallan.
▶ 5:17:42Miss. Gallon. I. Mr. Nagus.
▶ 5:17:44Mr. Negus. I. Miss. Ledger. Fernandez.
▶ 5:17:47M. Ledger. Fernandez. I Madam Chair.
▶ 5:17:49Madam Chair. No.
▶ 5:17:51Clerk will report the total.
▶ 5:17:52Four. Yes. Eight nays.
▶ 5:17:54The nos have it. The amendment is not agreed to.
▶ 5:17:58Further discussion or amendment.
▶ 5:18:00Madam chair.
▶ 5:18:00Miss Ledger Fernandez.
▶ 5:18:02I have an amendment to the rule. I move the committee make an order amendment number 425 to HR416 offered by Representative Crow, which increases and decreases funding by79,765,000 to maintain fiscal year 26 support for the readiness and environmental protection integration program at no less than fiscal year 25 levels. The WEP program helps prevent and address the threats that result from drought, flooding, and wildfires that threaten military readiness and operations.
▶ 5:18:32military personnel, warf fighting equipment and infrastructure. We've seen how destructive flooding can be in my state and in Texas. Uh and this is funding that is combined with state and local funding and NGO partners to really help the bases. As an example, uh rep funding has helped uh the Canon Air Force Base, which you hear me speak of a lot.
▶ 5:18:55uh and we've uh assisted in uh saving water because of the fact that the Ogalala reservoir is plummeting in terms of its readiness. So it's it's a program that's really important and I think it should be bipartisan and hopefully we'll get some funding for that and with that madam chair I yield
▶ 5:19:14Um is there further discussion on the amendment from Miss Leisure Fernandez?
▶ 5:19:20Hearing none the questions on the amendment. All those in favor signify by saying I.
▶ 5:19:25Those opposed say no.
▶ 5:19:26No. In the opinion of chair of the nos have it. The amendments not agreed to.
▶ 5:19:32Recorded vote.
▶ 5:19:33The clerk will call the role.
▶ 5:19:35Mrs. Fishbach. Mrs. Fishbach. No. Mr. Norman. Mr. Norman. No. Mr. Roy. Mrs. Hchin. Mrs. Hchen. No. Mr. Langworthy. Mr. Langworthy. No. Mr. Scott.
▶ 5:19:45Mr. Scott. No. Mr. Griffith. Mr. Griffith. No. Mr. Jack.
▶ 5:19:48Mr. Jack. No. Mr. McGovern.
▶ 5:19:50Mr. McGovern. I am Miss Scantland.
▶ 5:19:52Miss Scallan. I am Mr. Nagus.
▶ 5:19:54Mr. Nagus. I am M. Ledger Fernandez.
▶ 5:19:56Missed Fernandez. I am Madam Chair.
▶ 5:19:59Madam Chair. No.
▶ 5:20:00Clerk will report the total
▶ 5:20:02four yays. Eight nays.
▶ 5:20:04The nose have it. The amendments not agreed to.
▶ 5:20:07Madam chair.
▶ 5:20:07Miss Leger. Fernandez. You're
▶ 5:20:09Madam chair. I have an amendment to the rule. I move the committee make an order amendments number 189 offered by representative TI to HR46 and number 466 offered by representative under road to Um both of the section A1 the amendment to section 8142 prohibits funds from being used to implement administer or otherwise carry out the October 2022 DOD memorandum ensuring access to reproductive health care and it
▶ 5:20:40also these amendments uh would prohibit the use of funds to eliminate or reduce access to any assisted reproductive technology for members of the armed services and their families. As you know wh many women including service women um uh face many issues with regards to reproductive health care from whether access to reproductive health care whenever they have the need for abortion whether it's for medical issues or other ways but also if they choose to have a family and can't IVF is some is a way that is helping
▶ 5:21:10many women including those in the military uh and uh it's no surprise that more than one in six of female service members report challeng challenges in building a family are a primary reason they would leave military service and this is one way of helping women stay in their service especially if they're trying to build that family and with that madam chair I yield back
▶ 5:21:34is there further discussion on the
▶ 5:21:36I I have a question from pro she offered two amendments I think
▶ 5:21:45okay all right that's just none the questions on the amendment. All those in favor signify by saying I.
▶ 5:21:59Those opposed say no. No. In the opinion chair of the nos have it. The amendment is not agreed to. Uh the clerk will call the role.
▶ 5:22:12Mrs. Fishbach. Mrs. Fishbach. No. Mr. Norman. Mr. Norman. No. Mr. Roy. Mrs. Hchin. Mrs. How? No. Mr. Langworthy.
▶ 5:22:19Mr. Langworthy. No. Mr. Scott.
▶ 5:22:21Mr. Scott. No. Mr. Griffith.
▶ 5:22:22Mr. Griffith. No. Mr. Jack.
▶ 5:22:24Mr. Jack. No. Mr. McGovern.
▶ 5:22:26Mr. McGovern. I Mr. Nagus. Miss Sorry, Miss Gallon.
▶ 5:22:30Miss Gallon. I Mr. Necuse.
▶ 5:22:33Mr. Negus. I. Miss. Ledger. Fernandez.
▶ 5:22:35M. Ledger Fernandez. I. Madam Chair.
▶ 5:22:38Madam Chair. No.
▶ 5:22:40Clerk will report the total.
▶ 5:22:41Four yays. Eight nays.
▶ 5:22:43The nos have it. The amendment is not agreed to. Is there further discussion on the rule? Hearing no further discussion, the question is on the motion from the from the gentleman from Georgia. All those in favor signify by saying I.
▶ 5:23:05Those opposed say no.
▶ 5:23:08In the opinion of the chair, the eyes have it. The motion is agreed to.
▶ 5:23:12Mr. McGovern request a roll call vote. The clerk will call the role.
▶ 5:23:17Mrs. Fishbach.
▶ 5:23:18Mrs. Fishbach. I. Mr. Norman.
▶ 5:23:20Mr. Norman. I. Mr. Roy. Mrs. Houchin.
▶ 5:23:23Mrs. Hchin. I. Mr. Langworthy. Hi.
▶ 5:23:26Mr. Langworthy. I Mr. Scott.
▶ 5:23:28Mr. Scott. I Mr. Griffith. Mr. Griffith. I Mr. Jack.
▶ 5:23:32Mr. Jack. I. Mr. McGovern.
▶ 5:23:34Mr. McGovern. No. M. Miss Gallant.
▶ 5:23:36Miss Scallan. No. Mr. Nagus.
▶ 5:23:38Mr. Nagus. No. Miss Ledger Fernandez.
▶ 5:23:41Miss Ledger Fernandez. No. Madam Chair.
▶ 5:23:43I. Madam chair, I
▶ 5:23:46clerk will report the total.
▶ 5:23:48Eight yays, four nays.
▶ 5:23:50The eyes have it. The motion to report is agreed to. Accordingly, the gentleman from Georgia, Mr. Jack, will be managing this rule for the majority
▶ 5:23:58and Miss Scandlin will be managing for the Democrats.
▶ 5:24:00And Miss Scandlin will be uh handling for the minority. Without objection, the committee is adjourned.