Streetwise Professor

There is considerable discontent at the fact that Congressmen don’t read the bills they vote on, and that Presidents don’t read the bills they flack for.  But the dirty secret is that these bills are unreadable.  Un-fricking-readable.  To wit, this deathless prose from the ACES (American Clean Energy and Security Act) bill, better known as the Waxman-Markey cap & trade bill:

• • (A) by inserting ‘(1)’ after ‘(a)’;

    (B) by inserting after the 2nd sentence the following: ‘With respect to energy transactions, the Commission shall fix limits on the aggregate number of positions which may be held by any person for each month across all markets subject to the jurisdiction of the Commission.’;

    (C) in the 4th sentence by inserting ‘, consistent with the 3rd sentence,’ after ‘Commission’; and

    (D) by adding after and below the end the following:

  (1) IN GENERAL- Section 4a(a) of such Act (7 U.S.C. 6a(a)) is amended–

(f) Requirement to Establish Uniform Speculative Position Limits for Energy Transactions-

‘(2)(A) Not later than 60 days after the date of the enactment of this paragraph, the Commission shall convene a Position Limit Energy Advisory Group consisting of representatives from–

‘(i) 7 predominantly commercial short hedgers of the actual energy commodity for future delivery;

‘(ii) 7 predominantly commercial long hedgers of the actual energy commodity for future delivery;

‘(iii) 4 non-commercial participants in markets for energy commodities for future delivery; and

‘(iv) each designated contract market or derivatives transaction execution facility upon which a contract in the energy commodity for future delivery is traded, and each electronic trading facility that has a significant price discovery contract in the energy commodity.

Or:

• • • • (I) by inserting ‘of this paragraph and section 4a(a)’ after ‘(B) through (D)’; and

        (II) by inserting ‘of this paragraph’ before the period; and

        (I) in the heading, by striking ‘LIMITATIONS OR’; and

        (II) by striking ‘position limitations or’.

      (i) in subparagraph (A)–

      (ii) in subparagraph (C)(ii)(IV)–

      (i) in the heading by striking ‘LIMITATIONS OR’; and

      (ii) by striking ‘position limitations or’.

      (i) in the heading by striking ‘LIMITATIONS OR’; and

      (ii) by striking ‘position limits or’.

    (A) SIGNIFICANT PRICE DISCOVERY CONTRACTS- Section 2(h)(7) of such Act (7 U.S.C. 2(h)(7)) is amended–

    (B) CONTRACTS TRADED ON OR THROUGH DESIGNATED CONTRACT MARKETS- Section 5(d)(5) of such Act (7 U.S.C. 7(d)(5)) is amended–

    (C) CONTRACTS TRADED ON OR THROUGH DERIVATIVES TRANSACTION EXECUTION FACILITIES- Section 5a(d)(4) of such Act (7 U.S.C. 7a(d)(4)) is amended–

  (2) CONFORMING AMENDMENTS-

  (1) by inserting ‘(1)’ after ‘(c)’; and

  (2) by adding after and below the end the following:

(g) Elimination of the Swaps Loophole- Section 4a(c) of such Act (7 U.S.C. 6a(c)) is amended–

‘(2) For the purposes of contracts of sale for future delivery and options on such contracts or commodities, the Commission shall define what constitutes a bona fide hedging transaction or position as a transaction or position that–

‘(A)(i) represents a substitute for transactions made or to be made or positions taken or to be taken at a later time in a physical marketing channel;

Etc. etc.  For page after page.

Yeah.  Go ahead.  Try to read it.  I dare you.

Just to “read” the sections of ACES that relate to derivatives trading, you have to have at hand the Federal Power Act, the Federal Gas Act, and the Commodity Exchange Act.  You have to flip back and forth, find this subsection of that section and do the foregoing edits.

These things are monstrosities.

And then you have to ask: what bill to read?  Here are some statistics on ACES:

Version	Word Count	Changes From Previous Version	Percent Change
Introduced in House	159,219	n/a	n/a
Reported in House	190,427	1,292	28%
Engrossed in House	245,590	2,258	41%

This bill metastasized from 159K words to over 245K, involving 3,550 changes.

This way of legislating gives staff and lobbyists tremendous power, as Congressmen inevitably delegate extensively to staff to write and read this gibberish, and staff depend heavily on lobbyists for information and help in drafting.

I would rather watch sausages being made any day of the week.  Any. Day. Of. The. Week.