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April 1, 2001

Can Fossella Deliver the Goods?

By Editorial Staff

Rep. Vito Fossella (R-N.Y.) starts his third term in Congress as one of the most recognizable advocates for traders and the securities industry. In the 106th Congress, Fossella was the House GOP leadership's point man on securities reform. This session, Fossella believes bipartisan determination to rescue an economy at risk may finally win traders the Section 31(a) fee relief-along with broader tax cuts - they have lobbied for so long. The congressman shared his thoughts with Traders Magazine on these issues and the economy in general.

Traders: How much of Section 31(a) fee reduction success is linked to President Bush's effort to pass his tax plan?

Fossella: I think there are equally strong arguments for both fee reduction and tax reduction. Maybe in the grand scheme of things they sort of come together [but] I don't see it that way.... I think the tax cut plan will pass. And if we generate broad bipartisan support on this fee reduction bill, it will pass as well.... I think that if history is a guide, the president will embrace this. We have bipartisan support in both the Senate and the House. So I will be frankly amazed if the president will not sign this [Section 31(a) fee] bill into law.

Traders: Do you sense any change in the momentum in Congress for fee relief, given the deteriorating economic situation?

Fossella: What the economy needs right now is a shot in the arm on two fronts. One is a tax cut to stimulate our economy, to create incentives to go out there and produce and to save and invest. And secondly, I'd love to see the Fed reduce [interest] rates even more. So I think the combination of a good fiscal policy and monetary policy, with a view to growing our economy, reducing interest rates and taxes, will be the antidote to what is a shaky economy. And this fee reduction bill goes hand in hand with that fundamental notion.

Traders: Do you see any change in the momentum for fee reduction in this Congress compared to the last?

Fossella: Yes, I do. As of [mid-March] we had 32 members of Congress who have indicated they wanted to be original co-sponsors to the bill. I'm sure there will be more. [Last session] it was significantly less - there was not this much enthusiasm, where we have members of Congress calling my office. We have nine Democrats already, some of whom are on the [House] Financial Services Committee. It's refreshing to see members of Congress understand that...we're not asking them to do anything other than to get the legislation in line with its original intent. Hopefully we'll bring the legislation to the floor in the next month or so and get it to the president.

Traders: Is it wise for President Bush to be talking down the economy and warning about imminent blackouts in California, among other signals, when the stock market is in freefall?

Fossella: It's the markets that are doing the talking - it's not any one individual, including the president, that's doing the talking. It's the investors who have seen their deferred compensation plans lose their value, 401(k)s taking a dive, mutual funds - that's what's driving and justifying the conversation today. Which is exactly why we need to stimulate our economy and get us back on a path of significant economic growth...I don't think it's President Bush. I think what President Bush is doing - as I am doing - is acknowledging reality.