Congress Needs to Eliminate The Practice Of Index Speculation

[Guest Testimony of Michael W. Masters]

Congress has closely regulated pension funds, recognizing that they serve a public purpose. Congress should modify ERISA regulations to prohibit commodity index replication strategies as unsuitable pension investments because of the damage that they do to the commodities futures markets and to Americans as a whole.

 

Congress should act immediately to close the Swaps Loophole. Speculative position limits must “look-through” the swaps transaction to the ultimate counterparty and hold that counterparty to the speculative position limits. This would curtail Index Speculation and it would force ALL Speculators to face position limits.

 

Congress should further compel the CFTC to reclassify all the positions in the Commercial category of the Commitments of Traders Reports to distinguish those positions that are controlled by “Bona Fide” Physical Hedgers from those controlled by Wall Street banks. The positions of Wall Street banks should be further broken down based on their OTC swaps counter-party into “Bona Fide” Physical Hedgers and Speculators.

 

There are hundreds of billions of investment dollars poised to enter the commodities futures markets at this very moment. If immediate action is not taken, food and energy prices will rise higher still. This could have catastrophic economic effects on millions of already stressed U.S. consumers. It literally could mean starvation for millions of the world’s poor.

 

If Congress takes these steps, the structural integrity of the futures markets will be restored. Index Speculator demand will be virtually eliminated and it is likely that food and energy prices will come down sharply.

 

Resources

 

http://www.cftc.gov/educationcenter/economicpurpose.html

 

http://www.platts.com/Resources/whitepapers/moc.pdf?a=i

 

http://www.economist.com/research/articles...ory_id=10252015

[Guest Jodi Seth]

Dingell Introduces Bill on Oil Speculation, Energy Market Manipulation

 

Rep. John D. Dingell (D-MI), the Chairman of the Committee on Energy and Commerce introduced legislation that would empower the Secretary of Energy to gather information from multiple federal agencies and commissions responsible for studying, overseeing and policing petroleum-related energy markets in an effort to uncover the factors affecting the price of crude oil and petroleum products.

 

“For too long, energy markets have operated behind a veil of secrecy,” Dingell said. “I have dark suspicions about the effects that unchecked speculation and possible market manipulation are having on the price of crude oil and petroleum products. Given the record energy prices that are harming businesses, farmers, consumers, and our economy as a whole, Congress should act to determine the precise effects that manipulation and speculation are having on energy prices, and work to identify where there are gaps in regulation that allow this rampant speculation.”

 

Cosponsored by Rep. Joe Barton (R-TX), the top Republican on the Energy and Commerce Committee, the bipartisan legislation would require the Department of Energy to establish an interagency working group that would be responsible for producing a study identifying the factors that affect the price of crude oil and petroleum products. The working group would include members from the Federal Energy Regulatory Commission (FERC), the Federal Trade Commission (FTC), and other relevant regulatory bodies. The working group is expected to include representatives from the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

 

Under the leadership of the Secretary of Energy, this working group would advise Congress on gaps in data collection and oversight involving both the physical and financial markets, in the United States and abroad. It would also assess whether the existing framework for policing the integrity of the financial and physical markets can or should be strengthened. The legislation would require the working group to report back to Congress quarterly and to complete its study within a year of the bill’s enactment.

 

“This legislation will help bring needed accountability to energy markets,” Dingell said. “The recent run up in energy prices has caused great concern and calls for action. Before we act, we must get the facts so that we can craft a solution that actually addresses this problem.”

 

The Committee on Energy and Commerce’s Subcommittee on Oversight and Investigations has been investigating energy speculation since last year. The Committee held a hearing on the topic in December and has scheduled a second hearing for June 23 to explore whether weak regulation of the futures market has permitted pension managers and currency hedgers to flood the oil futures market with so much money that, at a time of tight supply and demand, oil prices have become disconnected from underlying supply and demand.

 

View the legislation:

 

http://energycommerce.house.gov/EnergySpec...108/HR.6238.pdf

[Guest Granta]

99% of futures contracts are traded by non-natural buyers. Hedge funds can leverage a la Carlyle Capital 99:1 and margin requirements are a mere 5%. Do the math to see what distortions this kind of leverage can do to the commodity and oil markets - as such leverage did to the Sub-Prime market.

 

What is needed is a higher margin requirement for non-natural buyers - ones who couldnt take or store the commodity in the first place - and caps on positions being held. The liquidity argument is baseless as there was plenty of liquidity five years ago - before the $280 billion of financial speculator money came into the commodity arena.

[Guest OBAMA FOR AMERICA]

Sen. Barack Obama on Sunday said as president he would strengthen government oversight of energy traders he blames in large part for the skyrocketing price of oil.

 

The Democratic candidate's campaign singled out the so-called "Enron loophole" for allowing speculators to run up the cost of fuel by operating outside federal regulation. Oil closed near $135 a barrel on Friday - almost double the price a year ago.

 

 

Read Full Story

[Guest Representative Bart Stupak]

REPUBLICANS BLOCK STUPAK BILL TO STOP GAS PRICE GOUGING

 

Eleven Republicans who previously supported price gouging legislation flip-flopped and voted against it Tuesday.

 

Republicans in the U.S. House of Representatives Tuesday night blocked passage of legislation authored by U.S. Congressman Bart Stupak (D-Menominee) that would protect consumers from price gouging of gas, diesel and other fuels. The 276 to 146 vote on H.R. 6346, the Federal Energy Price Gouging Prevention Act, fell six votes short of the two-thirds majority required to pass the bill under expedited procedure referred to as suspension of the rules. Eleven Republicans who supported price gouging legislation in May 2007 reversed their votes Tuesday.

 

“With Americans paying an average of $4.07 a gallon for gas – and most northern Michigan residents paying even more than that – members of Congress had a chance to stand up for American consumers,” Stupak said. “It is disappointing that so many House Republicans sided with Big Oil instead.”

 

Stupak’s bill, the Federal Price Gouging Prevention Act, would provide the Federal Trade Commission (FTC) with a clear, enforceable definition of price gouging. The bill would authorize the Federal Trade Commission (FTC) to investigate and punish those who unreasonably inflate the price of energy, focusing enforcement on the worst offenders, specifically companies with sales of more than half a billion dollars a year. It would impose tough criminal penalties: Corporations would face fines of up to $150 million; individuals would face fines up to $2 million and up to 10 years in jail. Penalties collected from price gougers would go toward the Low Income Home Energy Assistance Program (LIHEAP).

 

The House passed a similar Stupak bill (H.R. 1252) in May 2007 by a vote of 284 to 141. President Bush has threatened to veto that legislation should it reach his desk.

 

“With prices rising, it makes sense that we would vote on this legislation before millions of Americans fill their gas tanks and hit the road for the Fourth of July,” Stupak said. “Rather than voting to provide federal protection that ensures gas and diesel prices are justified, House Republicans voted to protect the handful of unscrupulous wholesalers, retailers and refiners raking in excessive profits from the very fuel prices crippling American families.”

 

In addition to Stupak’s price gouging bill, the House plans to consider a number of other energy proposals in the coming days and weeks to address record-high energy prices. Specifically, the House will also consider legislation to:

 

· Force oil companies to “use it or lose it” – Would compel the oil industry to start drilling or lose permits on the 68 million acres of undeveloped federal oil reserves which they are currently warehousing, keeping domestic supply low and prices high.

 

· Close loopholes allowing speculators to manipulate energy prices – Would curb excessive speculation in the energy futures markets, which experts have noted is driving up the price of a barrel of oil by as much as half.

 

· Reduce transit fares – Would provide grants to mass transit authorities to lower fares for commuters pinched at the pump and expand transit services.

 

Stupak introduced legislation on Friday to close the loopholes allowing energy speculators to artificially inflate prices. H.R. 6330, the Prevent Unfair Manipulation of Prices (PUMP) Act, is the most comprehensive proposal in Congress to address the issues allowing energy traders to evade federal oversight. The bill – which has been introduced in the House and Senate – has bipartisan support.

 

Stupak, as chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations, held a seven-and-a-half hour hearing on Monday looking at energy speculation. Multiple witnesses testified that enacting Stupak’s PUMP Act would have an immediate impact on energy prices, lowering the price of oil by $65 to $70 a barrel and corresponding gas prices by 30 to 50 percent within 30 days.

 

“As the House takes up additional energy proposals, I hope more of my Republican colleagues will abandon their failed energy policies,” Stupak said. “The American people need Congress to get past the rhetoric. Enacting a federal price gouging law, curbing excessive speculation and compelling the oil companies to use their existing drilling permits are all steps Congress can take today to provide real relief for consumers.”

[Guest BlingBling_*]

H.R. 6346: Federal Price Gouging Prevention Act

Failed 276-146 six votes short of the two-thirds majority required to pass the bill.

 

You can thank these Representatives for not having the guts to vote.

 

No Vote AR-2 Snyder, Victor [D]

No Vote CA-7 Miller, George [D]

No Vote CA-12 Speier, Jackie [D]

No Vote CA-28 Berman, Howard [D]

No Vote FL-19 Wexler, Robert [D]

No Vote IL-1 Rush, Bobby [D]

No Vote IL-7 Davis, Danny [D]

No Vote IN-6 Pence, Mike [R]

No Vote KS-3 Moore, Dennis [D]

No Vote LA-3 Melancon, Charles [D]

No Vote OH-15 Pryce, Deborah [R]

No Vote OR-3 Blumenauer, Earl [D]

No Vote UT-3 Cannon, Christopher [R]

 

You can thank these Representatives for throwing our economy down the toilet.

 

Nay AL-1 Bonner, Jo [R]

Nay AL-2 Everett, Terry [R]

Nay AL-3 Rogers, Michael [R]

Nay AL-4 Aderholt, Robert [R]

Nay AL-6 Bachus, Spencer [R]

Nay AK-0 Young, Donald [R]

Nay AZ-2 Franks, Trent [R]

Nay AZ-3 Shadegg, John [R]

Nay AZ-6 Flake, Jeff [R]

Nay AR-3 Boozman, John [R]

Nay CA-2 Herger, Walter [R]

Nay CA-3 Lungren, Daniel [R]

Nay CA-4 Doolittle, John [R]

Nay CA-19 Radanovich, George [R]

Nay CA-21 Nunes, Devin [R]

Nay CA-22 McCarthy, Kevin [R]

Nay CA-24 Gallegly, Elton [R]

Nay CA-25 McKeon, Howard [R]

Nay CA-26 Dreier, David [R]

Nay CA-40 Royce, Edward [R]

Nay CA-41 Lewis, Jerry [R]

Nay CA-42 Miller, Gary [R]

Nay CA-44 Calvert, Ken [R]

Nay CA-46 Rohrabacher, Dana [R]

Nay CA-48 Campbell, John [R]

Nay CA-49 Issa, Darrell [R]

Aye CA-50 Bilbray, Brian [R]

Nay CA-52 Hunter, Duncan [R]

Nay CO-4 Musgrave, Marilyn [R]

Nay CO-5 Lamborn, Doug [R]

Nay CO-6 Tancredo, Thomas [R]

Nay FL-1 Miller, Jeff [R]

Nay FL-4 Crenshaw, Ander [R]

Nay FL-6 Stearns, Clifford [R]

Nay FL-7 Mica, John [R]

Nay FL-12 Putnam, Adam [R]

Nay FL-14 Mack, Connie [R]

Nay FL-15 Weldon, David [R]

Nay FL-21 Diaz-Balart, Lincoln [R]

Nay FL-24 Feeney, Tom [R]

Nay FL-25 Diaz-Balart, Mario [R]

Nay GA-1 Kingston, Jack [R]

Nay GA-3 Westmoreland, Lynn [R]

Nay GA-6 Price, Tom [R]

Nay GA-7 Linder, John [R]

Nay GA-9 Deal, Nathan [R]

Nay GA-10 Broun, Paul [R]

Nay GA-11 Gingrey, John [R]

Nay ID-1 Sali, Bill [R]

Nay ID-2 Simpson, Michael [R]

Nay IL-6 Roskam, Peter [R]

Nay IL-11 Weller, Gerald [R]

Nay IL-16 Manzullo, Donald [R]

Nay IL-18 LaHood, Ray [R]

Nay IL-19 Shimkus, John [R]

Nay IN-3 Souder, Mark [R]

Nay IN-4 Buyer, Stephen [R]

Nay IN-5 Burton, Dan [R]

Nay IA-4 Latham, Thomas [R]

Nay IA-5 King, Steve [R]

Nay KS-1 Moran, Jerry [R]

Nay KS-4 Tiahrt, Todd [R]

Nay KY-2 Lewis, Ron [R]

Nay KY-4 Davis, Geoff [R]

Nay KY-5 Rogers, Harold [R]

Nay LA-1 Scalise, Steve [R]

Nay LA-4 McCrery, James [R]

Nay LA-5 Alexander, Rodney [R]

Nay LA-7 Boustany, Charles [R]

Nay MD-6 Bartlett, Roscoe [R]

Nay MI-2 Hoekstra, Peter [R]

Nay MI-3 Ehlers, Vernon [R]

Nay MI-4 Camp, David [R]

Nay MI-6 Upton, Frederick [R]

Nay MI-7 Walberg, Timothy [R]

Nay MI-8 Rogers, Michael [R]

Nay MI-9 Knollenberg, Joseph [R]

Nay MN-2 Kline, John [R]

Nay MN-6 Bachmann, Michele [R]

Nay MN-7 Peterson, Collin [D]

Nay MS-3 Pickering, Charles [R]

Nay MO-2 Akin, W. [R]

Nay MO-7 Blunt, Roy [R]

Nay MT-0 Rehberg, Dennis [R]

Nay NE-2 Terry, Lee [R]

Nay NE-3 Smith, Adrian [R]

Nay NV-3 Porter, Jon [R]

Nay NJ-3 Saxton, H. [R]

Nay NJ-5 Garrett, E. [R]

Nay NJ-7 Ferguson, Michael [R]

Nay NJ-11 Frelinghuysen, Rodney [R]

Nay NM-2 Pearce, Steven [R]

Nay NY-3 King, Peter [R]

Nay NY-13 Fossella, Vito [R]

Nay NY-25 Walsh, James [R]

Nay NY-26 Reynolds, Thomas [R]

Nay NC-5 Foxx, Virginia [R]

Nay NC-6 Coble, Howard [R]

Nay NC-9 Myrick, Sue [R]

Nay NC-10 Mchenry, Patrick [R]

Nay OH-4 Jordan, Jim [R]

Nay OH-5 Latta, Robert [R]

Nay OH-16 Regula, Ralph [R]

Nay OK-1 Sullivan, John [R]

Nay OK-3 Lucas, Frank [R]

Nay OK-4 Cole, Tom [R]

Nay OK-5 Fallin, Mary [R]

Nay PA-5 Peterson, John [R]

Nay PA-9 Shuster, William [R]

Nay PA-16 Pitts, Joseph [R]

Nay PA-18 Murphy, Tim [R]

Nay SC-1 Brown, Henry [R]

Nay SC-2 Wilson, Addison [R]

Nay SC-3 Barrett, James [R]

Nay SC-4 Inglis, Bob [R]

Nay TN-1 Davis, David [R]

Nay TN-2 Duncan, John [R]

Nay TN-3 Wamp, Zach [R]

Nay TN-7 Blackburn, Marsha [R]

Nay TX-1 Gohmert, Louis [R]

Nay TX-2 Poe, Ted [R]

Nay TX-3 Johnson, Samuel [R]

Nay TX-5 Hensarling, Jeb [R]

Nay TX-6 Barton, Joe [R]

Nay TX-7 Culberson, John [R]

Nay TX-8 Brady, Kevin [R]

Nay TX-10 McCaul, Michael [R]

Nay TX-11 Conaway, K. [R]

Nay TX-12 Granger, Kay [R]

Nay TX-13 Thornberry, William [R]

Nay TX-14 Paul, Ronald [R]

Nay TX-19 Neugebauer, Randy [R]

Nay TX-21 Smith, Lamar [R]

Nay TX-24 Marchant, Kenny [R]

Nay TX-26 Burgess, Michael [R]

Nay TX-31 Carter, John [R]

Nay TX-32 Sessions, Peter [R]

Nay UT-1 Bishop, Rob [R]

Nay VA-2 Drake, Thelma [R]

Nay VA-7 Cantor, Eric [R]

Nay VA-11 Davis, Thomas [R]

Nay WA-4 Hastings, Doc [R]

Nay WA-5 McMorris Rodgers, Cathy [R]

Nay WI-1 Ryan, Paul [R]

Nay WY-0 Cubin, Barbara [R]

[Luke_Wilbur]

For the Record...

 

H.R. 6377: To direct the Commodity Futures Trading Commission to utilize all its authority to direct the Commodity Futures Trading Commission to utilize all its authority, including its emergency powers, to curb immediately the role of excessive speculation in any contract market within the jurisdiction and control of the Commodity Futures Trading Commission, on or through which energy futures or swaps are traded, and to eliminate excessive speculation, price distortion, sudden or unreasonable fluctuations or unwarranted changes in prices, or other unlawful activity that is causing major market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities.

 

Passed 402-19

 

Our government works

[Guest Congressman Hoyer]

High gas prices are particularly burdensome for motorists in the National Capital Region, where commuting times are among the worst in the nation. The measures passed by the House, combined with other action we have taken, are key components of a comprehensive energy strategy that seeks to provide Americans with relief at the gas pump, while weaning our nation from its dangerous addiction to foreign oil. I am also pleased that our region will directly benefit from $53.7 million in federal funds to enhance public transit services and encourage ridership.

[Guest JesseLee]

S. 3183 would amend the Commodity Exchange Act to provide oil and gas price relief by requiring the Commodity Futures Trading Commission to take action to end excessive speculation. Watch who opposes this bill.

 

By Mr. DORGAN (for himself, Mr. Nelson of Florida, and Mr. Carper):

 

S. 3183. A bill to amend the Commodity Exchange Act to provide oil and gas price relief by requiring the Commodity Futures Trading Commission to take action to end excessive speculation, and for other purposes; to the Committee on Agriculture, Nutrition, and Forestry.

 

Mr. DORGAN. Mr. President, I rise to introduce a piece of legislation on behalf of myself, Senator Nelson of Florida, and Senator Carper dealing with the subject of energy speculation. I want to run through a couple charts, and I want to describe the reason for the introduction of this legislation.

 

This chart shows the price of oil and what has happened to the price of oil. The price of oil has nearly doubled in a year. There is no justification for it, no fundamentals of supply and demand that explain what has happened to the price of oil.

 

These commodity contracts, by and large, are traded in this country on something called the commodity exchange--NYMEX, it is called. This is what it looks like. They trade back and forth, and there are legitimate reasons to trade on the exchanges. Those reasons to trade on the exchanges are for legitimate hedging for actual physical petroleum products for future delivery. The problem is, with respect to the oil markets, the legitimate hedging has become a smaller part of what is traded. There is now this unbelievable speculation going on in the commodity markets. That speculation has perverted the market, broken the market, causing the price of oil and gasoline to be well above that which is justifiable.

 

We have an organization in the Government called the Energy Information Administration, the EIA. They are the ones who know what there is to know about energy issues. As shown on this chart, here is what they have told us. Back in May of 2007--last year--here is where they said the price of oil would be. Back in July, they said it would be on this line, as shown on this chart; back in September, on this line. I hope they were not buying any commodities on the basis of their advice--they would be flat broke in a month. Here is what happened to the price. It went straight up. All the while, the EIA did not seem to have the foggiest notion of where the price was going to go. Why? Because the fundamentals do not justify what is happening.

 

Now I have the EIA coming down to testify before my subcommittee this week. I want to ask them these questions. They insist there is very little speculation in this marketplace. But most experts insist this has become an unbelievable spectacle of speculation that injures America's drivers and consumers, injures our industry, and causes great damage to our economy.

 

A House study, just in the last few days, from the House Subcommittee on Oversight and Investigations, said here is what has happened to the commodities market with respect to oil. As to the oil futures market: 37 percent used to be speculators in that market. Now it has gone to 71 percent. The speculators have taken over that market.

 

When the Commodity Exchange Act was passed by the Congress in the 1930s, here is what the congressional report said: This bill authorizes the Commission--the Commodity Futures Trading Commission; that is supposed to be the regulating body--to fix limitations on purely speculative trades and commitments.

 

Hedging is exempted. But for purely speculative positions, we provided the authority to the Commodity Futures Trading Commission to deal with that because we did not want this market to be taken over by speculators.

 

I have used these charts many times.

 

This one has to do with Fadel Gheit, the top energy analyst for Oppenheimer & Co. Here is what he says:

 

 

There is absolutely no shortage of oil. I'm convinced that oil prices shouldn't be a dime above $55 a barrel.

 

I call it the world's largest gambling hall. ..... It's open 24/7. ..... Unfortunately, it's totally unregulated. ..... This is like a highway with no cops on the beat and no speed limit and everybody's going 120 miles an hour.

 

 

I will not show all the charts I have shown in the past, but the CEO of Marathon Oil says:

 

 

$100 oil isn't justified by the physical demand in the market.

 

 

It was recently reported Americans drove 4.5 to 5 billion fewer miles in the last 6 months than in the previous 6 months. So we are driving 4 or 5 billion fewer miles, using less energy. Four of the first 5 months of this year, crude oil inventories were up--not down, up. So if the supply of the product is going up and the use of the product is going down, the marketplace would have you believe--or at least you would expect--the price would come down. Instead, the price has gone up, which demonstrates this is not about market fundamentals. It is about an unbelievable orgy of speculation in the marketplace that is not justified.

 

Now the question is, Will Congress do something about it or will it just apply some lip gloss? Is this just something where we act as if we are doing something or are we going to drive the speculators out of this market? I am introducing legislation that is tough and real and will address this issue.

 

The regulating body here is the Commodity Futures Trading Commission. It has acted like most regulating bodies in recent years. Most of them are run by people who came to the Government not liking Government and not wanting to regulate. It all goes back to Mr. Pitt, back in 2001, in which he said: The Securities and Exchange Commission is going to be a business-friendly place. Well, we have seen a lot of these agencies that are business friendly. They just get out of the way and pretend they are in a deep Rip van Winkle sleep, and they are not going to see anything and they are not going to know anything and they are not going to care much about anything.

 

[Page: S6022] GPO's PDF This agency is not much different--the Commodity Futures Trading Commission. The fact is, it has been asleep on its feet, just dead from the neck up. It is time for us to say to this agency: It is your job to regulate. The fact is, Franklin

 

Delano Roosevelt, when he signed this legislation some 70, 80 years ago, said:

 

 

It should be our national policy to restrict, as far as possible, the use of these exchanges for purely speculative operations.

 

 

Franklin Roosevelt knew it. Why doesn't this Commodity Futures Trading Commission know it?

 

The legislation I am introducing today does a couple things. No. 1, it demands the Commodity Futures Trading Commission by date certain to distinguish between that which represents normal hedging transactions between producers and consumers of a physical product and the rest, which is speculation. It says this market is designed for normal hedging of risks between producers and consumers of a physical product. Others who are engaged in excess speculation are going to be slapped with a higher margin--a 25-percent margin requirement--that is either quadruple or quintuple the current requirement, depending on what is assessed between the 5- and 7-percent rate. But this essentially says to speculators: It is going to cost you more to speculate in this marketplace if you are one of these folks who just want to speculate to make a lot of money.

 

Will Rogers talked about this long ago. He talked about people buying things they will never get from people who never had it. That is what is going on with investment banks, hedge funds, and a lot of others who are neck deep in this marketplace. They have never seen a barrel of oil. They don't want a barrel of oil. All they want to do is speculate and make a bundle of money. The problem is, it is damaging this country.

 

My legislation, No. 1, requires the separation of legitimate traders verses speculators. It puts an increased margin requirement on the speculators to try to wring some of that speculation out of the market.

 

No. 2, it requires position limits that are significant, imposed by the Commodity Futures Trading Commission.

 

No. 3, it requires the Commodity Futures Trading Commission to revoke or modify any previous actions they have taken in which they have prevented themselves from being able to regulate and see the transactions that exist in this futures market.

 

Unbelievably almost, the Commodity Futures Trading Commission, which is the regulator, decided, on its own volition, that it would allow, for example, a London exchange, largely owned by American interests, to come in and trade on computer terminals in Atlanta, GA, and pretend they are not American. So the Commodity Futures Trading Commission said: Do you know what, we will do a letter of no action so we can't regulate and can't see it. That is unbelievable, in my judgment. It is an unbelievably irresponsible position for a regulator to have taken. It is taken, I suppose, by those who believe ``regulations'' is a four-letter word. It is not. If ever we wonder about that, take a look at what has happened to the price of oil and gas in a situation where speculators have taken over.

 

The Commodity Futures Trading Commission is a regulator of this market. It has done a miserable job. It has nearly all the authority it needs to do the right thing. What I propose to do with the Commodity Futures Trading Commission is wring the speculators out of this market. They have distorted the market, broken the market, and we end up in a situation now where the price of gasoline is devastating this economy. The price of oil is not justified by supply and demand. When that happens, there is a responsibility for this Congress to act. It is an urgent responsibility, in my judgment, now for this Congress to say what is happening is wrong, it is hurting this country's economy, it is hurting industries and the American people, and we need to do something about it. The best start, in my judgment, would be to pass this legislation I am introducing today.

 

One final point. I am reaching out to Democratic and Republican offices in the hopes that this will be a bipartisan piece of legislation that will address a very serious issue on an urgent basis and begin to do something that moderates the price of oil and gas that many experts have told us is 20, 30, and in some cases 40 percent above that which is justified by the marketplace. We should not stand for it. We do not have to. We ought to pass this legislation soon.

 

By Mr. KERRY:

 

S. 3184. A bill to make grants to States to implement statewide portal initiatives, and for other purposes; to the Committee on Finance.

 

Mr. KERRY. Mr. President, we must do all we can to ensure that our young people have the skills necessary to compete in today's global economy. My home State of Massachusetts has done an outstanding job ensuring that educators have access to the high-quality tools necessary to adequately prepare our students for the future. In particular, they have been one of a handful of pioneering states that have created a statewide, online education ``portal'', which is a suite of web-based tools that enhance the teaching and learning experience for teachers, parents, and students.

 

Education portals are a one-stop resource for educators, parents, and students to support teaching and learning, as well as leadership skills. Portals provide access to shared resources and create an entry point to other information and services including: lesson plans; research-based training resources; model classroom examples; engaging interactive media; listservs; and after-school resources. Among other things, a portal allows educators to quickly search for lesson plans or other resources by content standard, grade level, specific student and classroom needs, and/or topic. It also provides a secure, on-line community for educators to collaborate and discuss teaching and learning experiences, as well as providing a vital communication tool between the school and parents.

 

It is for these reasons, I am sponsoring legislation to help my State and others secure the funding they need to improve their education systems and prepare their students for success. While it is true that Congress has done a lot to promote education technology and set higher standards for teachers, more must be done to address the divide that afflicts so many of our rural and urban schools.

 

What is missing is a funding source for states to develop and maintain web-based tools for training, communication, collaboration, and curriculum planning. The Empowering Teaching and Learning Through Education Portals Act establishes annual competitive grants that will provide funding on a one-to-one basis for states that wish to implement and maintain best-practice education portals. The legislation also provides new tax incentives to private organizations that support State education portal efforts.

 

The Empowering Teaching and Learning Through Education Portals Act bridges the urban-rural digital divide by ensuring that all districts have access to the best available resources. It supports high quality teaching, professional development and retention of teachers and promotes an on-line support network and learning community for teachers and administrators. Furthermore, it provides teacher coaching and guidance in order to address the challenges of teaching a diverse student body, and collaborate on winning strategies to address various learning styles, needs, and achievement levels. It offers administrators tools to securely communicate and collaborate with district personnel, as well as with the Department of Education, and gives them access to formative assessments and other resources. Finally, it provides a means to actively engage students in a rich, relevant, multimedia environment that results in improved learning and student retention.

 

It is imperative that we prepare our children for the sophisticated workforce of the 21st century and an increasingly competitive global economy. This legislation takes some of the brightest ideas for modernizing teaching and learning and matches them with the dollars needed to translate them from paper to practice. That, I believe, is a goal we can all agree on.

 

I urge my colleagues to support the Empowering Teaching and Learning Through Education Portals Act.

 

Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.

 

There being no objection, the text of the bill was ordered to be printed in the Record, as follows:

 

[Page: S6023] GPO's PDF S. 3184

 

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

 

SECTION 1. SHORT TITLE.

 

This Act may be cited as the ``Empowering Teaching and Learning Through Education Portals Act''.

 

SEC. 2. DEFINITIONS.

 

In this Act:

 

(1) 21st CENTURY SKILLS.--The term ``21st century skills''--

 

(A) means skills that students need to succeed in school, work, and life; and

 

( includes--

 

(i) skills related either to core academic subjects or to 21st century themes;

 

(ii) learning and innovation skills, such as--

 

(I) creativity and innovation;

 

(II) critical thinking and problem solving; or

 

(III) communication and collaboration; and

 

(iii) life and career skills to prepare students for the global economy, such as--

 

(I) flexibility and adaptability;

 

(II) productivity and accountability; or

 

(III) leadership and responsibility.

 

(2) CORE ACADEMIC SUBJECTS; EDUCATIONAL AGENCIES; SCHOOLS; STATE.--The terms ``core academic subjects'', ``elementary school'', ``local educational agency'', ``secondary school'', ``State'', and ``State educational agency'' have the meanings given the terms in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).

 

(3) COVERED EDUCATOR.--The term ``covered educator'' means a teacher, administrator, or other professional staff member, at a covered school.

 

(4) COVERED PARENT.--The term ``covered parent'' means the parent of a covered student.

 

(5) COVERED SCHOOL.--The term ``covered school'' means a Head Start agency operating a Head Start program, or a public school that is a preschool, elementary school, secondary school, or institution of higher education (including such an institution offering a program leading to a baccalaureate degree or a program leading to an advanced degree).

 

(6) COVERED STUDENT.--The term ``covered student'' means a student at a covered school.

 

(7) COVERED TEACHER.--The term ``covered teacher'' means a teacher at a covered school.

 

(8) EDUCATION TECHNOLOGY.--The term ``education technology'' means any technology resource that improves the learning, training, and engagement of students or helps teachers learn, improve their knowledge, and practice.

 

(9) INSTITUTION OF HIGHER EDUCATION.--The term ``institution of higher education'' has the meaning given the term in sections 101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001, 1002).

 

(10) PROFESSIONAL DEVELOPMENT.--The term ``professional development'' means a resource or training that increases a teacher's skills, content knowledge, or other information that has a positive impact on student learning.

 

(11) SECRETARY.--The term ``Secretary'' means the Secretary of Education.

 

SEC. 3. GRANTS.

 

(a) In General.--The Secretary may award grants to eligible States, to pay for the Federal share of the cost of implementing and maintaining education portal initiatives.

 

( Amounts.--The Secretary may award the grants for periods of not less than 1 year and not more than 3 years.

 

© Federal Share.--

 

(1) IN GENERAL.--The Federal share of the cost described in subsection (a) shall be 50 percent.

 

(2) NON-FEDERAL SHARE.--The State may provide the non-Federal share of the cost in cash or in kind, fairly evaluated, including plant, equipment, or services. The State may provide the non-Federal share from State, local, or private sources.

 

SEC. 4. APPLICATIONS AND AWARDS.

 

(a) In General.--To be eligible to receive a grant under this section for an initiative, a State shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.

 

( Contents.--The application shall contain, at a minimum--

 

(1) a comprehensive plan for the initiative for which the State seeks the grant, including evidence that the initiative meets the requirements of subsections (a) and © of section 5;

 

(2) information describing how the State will provide the non-Federal share of the cost described in section 3(a), and will continue to provide that share during the implementation of the initiative and the remainder of the grant period;

 

(3) information describing how the State will meet the maintenance of effort requirements in section 6;

 

(4) information explaining the protocol the State will use to ensure safe and legal access to the education portal;

 

(5) an assurance that the State has established or will establish an advisory panel, to provide advice on the implementation and maintenance of the initiative, including representatives of leaders in school districts, leaders at institutions of higher education, State educational agencies, parents, and teachers; and

 

(6) a plan to ensure sufficient statewide bandwidth capacity and systems access to implement and maintain the State education portal.

 

© Awards.--In determining the amounts of grants under this Act, the Secretary--

 

(1) shall take into consideration the extent to which a State has developed and implemented an education portal initiative prior to the date of the submission of the application involved; but

 

(2) shall not penalize States that have made greater progress in developing and implementing such initiatives.

 

SEC. 5. USE OF FUNDS.

 

(a) Required Uses.--A State that receives a grant under this Act for a fiscal year shall use the funds made available through the grant to implement or maintain an education portal initiative that includes--

 

(1) collecting and making available--

 

(A) high quality resources (including data, tools, and digital media content) for covered educators, covered students, and covered parents, that support teaching, leading, and learning, and are, as appropriate, aligned with State education standards; and

 

( information for covered teachers to use in assisting covered students to attain skills such as 21st century skills; and

 

(2) collecting resources for ongoing and sustainable professional development for covered educators, related to the use of education technology, and making the resources available through the implementation of research-based methods and strategies for teacher coaching, collaborating, or mentoring.

 

( Allowable Uses.--The State may use the funds made available through the grant for such an initiative, for a portal that--

 

(1) gives covered educators access to formative assessment and other resources to address various student learning styles, needs, and achievement levels;

 

(2) provides an entry point to other information or services, including information on model examples of effective classroom practices, subscriptions or data systems, content standards, lesson plans, courses of study, engaging interactive media, Web resources, e-mail list management software, online portfolios, after-school program resources, and other educational resources;

 

(3) provides access to technology-based curriculum resources and tools that promote the teaching and learning of 21st century skills;

 

(4) enables covered educators to quickly search for lesson plans, professional development resources, model examples of effective classroom practices, or other resources, by content standard, grade level, or topic;

 

(5) provides an online support network or community for covered educators to collaborate on and discuss teaching, learning, curricula, and experiences, and serves as a communication tool between covered educators and covered parents;

 

(6) includes digital media content developed by a television public broadcasting entity in coordination with the grant recipient; or

 

(7) makes available access to 1 or more resource sections of the education portal, subject to the protocol described in section 4((4), by covered education, covered students, and covered parents, from other States (with no requirement for State-specific log-ins), so that those covered educators, covered students, and covered parents can benefit from resources developed in the State, thereby expanding access to the national learning community.

 

© Provision of and Access to Resources.--The covered educators, covered students, and covered parents in the State may provide resources and information for the education portal, subject to the protocol described in section 4((4). The resources and information in the education portal shall be accessible statewide by the educators, students, and parents, subject to the protocol.

 

(d) Other Federal Funds.--A State that receives a grant under part A of title II of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6601 et seq.) may use funds made available through that grant to maintain (but not implement) the State's education portal initiative under this Act, after the end of the period in which the State receives funding under this Act.

 

(e) Conforming Amendment.--Section 2113(a) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6613(a)) is amended by striking ``A'' and inserting ``Subject to section 5 of the Empowering Teaching and Learning Through Education Portals Act, a''.

 

SEC. 6. MAINTENANCE OF EFFORT.

 

(a) In General.--A State that receives a grant under this Act for a fiscal year shall maintain the expenditures of the State for education portal initiatives at a level not less than the level of such expenditures of the State for the fiscal year preceding the first fiscal year for which the State received such a grant.

 

( Reduction.--If the Secretary determines that a State, during a fiscal year, expends less than the sum required to comply with subsection (a), the Secretary shall--

 

(1) determine the difference between the required sum and the expenditure; and

 

(2) reduce the State's grant under this Act for the following year by the amount of the difference.

 

SEC. 7. EVALUATIONS AND CONFERENCE.

 

(a) Federal Evaluation.--The Secretary shall conduct an evaluation of each initiative funded under this Act.

[Guest Joe Lieberman, ID-Conn.]

Speculation is not illegal, but that does not mean it isn't hurtful. Motivated by the weakness of the dollar and rising demand for oil, speculators are moving enormous amounts of money into commodity markets for the obvious purpose of making more money. But in doing so they are artificially inflating the price of food and fuel futures and causing real financial suffering for millions of people and businesses...

 

Speculation has passed the point where it provides stability to the commodity markets. It is now excessive and has consequences that are very, very harmful. And that's why our government must step in as soon as possible to protect our consumers and our economy because against the forces of the speculative markets, the average person simply cannot protect himself or herself.