“President Obama was right in 2008 when he called the Export-Import Bank ‘little more than a fund for corporate welfare’ and wrong today when he cheerleads for its renewal.
“We need to level the playing field so American manufacturers and small businesses can compete. But Ex-Im doesn’t level the playing field; Ex-Im rigs it in favor of few powerful Fortune 500 corporations that are the overwhelming beneficiaries of Ex-Im. Washington shouldn’t pick winners and losers, and hardworking American taxpayers – who are already under tremendous stress – shouldn’t be forced to pay for foreign corporate welfare that advantages a handful of powerful, politically-connected corporations.
“Because over 98 percent of all U.S. exports are funded without Ex-Im, no one can make a credible case that Ex-Im’s continuation is critical to our economy. What would really help American manufacturers and small businesses compete on a level playing field are pro-growth tax, energy, regulatory and liability policies that the House has already passed but are being blocked by Democrats in the Senate. These policies are also embodied in legislation introduced by my colleague Congressman Mick Mulvaney. I’ve co-sponsored his bill, the American Renaissance in Manufacturing Act (the ARM Act) to begin addressing the competitive disadvantages our American manufacturers face. The pro-growth policies in the ARM Act, not the crony-connected political privileges of Ex-Im, will really level the playing field and help America compete.
“I urge President Obama to join us in helping to make American exporters more competitive through greater opportunity, not more foreign corporate welfare.”
August 21, 2014
Should the government help pay for Americans to rebuild after big terrorist attacks? If so, how much? Congress is in the process of answering these questions.
Since 2002, the federal government has provided a financial backstop for private terrorism insurance policies, promising public money to offset losses after large, expensive attacks. After $100 million in losses, the federal cost-sharing program is designed to kick in. Thankfully, the backstop hasn’t been necessary so far. But the policy is about to expire, and lawmakers must decide what to do with it before the end of the year.
The Senate passed a bill last month that would extend the current system for seven years with a few tweaks but no major changes. The vote in that chamber was 93 to 4. In the House, however, the debate is roiling, with Republicans deeply split about what to do. Some don’t want to see federal money put on the line to help developers in major terrorism targets — read, cities — obtain affordable insurance for big building projects, which has been a primary effect of the policy to date. Others — particularly those who represent districts that contain possible terrorist targets — would take the Senate’s status quo approach. The man at the center of this fight, Financial Services Committee Chairman Jeb Hensarling (R-Tex.), has proposed a bill that would keep the system in place for five years but, among other things, raise the point at which the federal government would step in to $500 million in losses.
It certainly makes sense for the government to provide some guarantee of help following a catastrophic attack. Congress would no doubt approve assistance after a big terrorist strike, anyway. It’s better to have a system with certain boundaries and rules in place before that happens. This makes even more sense when one considers that the government has a lot of control over — and responsibility for — protecting the homeland from catastrophic attacks. It has more influence in that realm of national tragedy than it has on the timing, location or severity of other disasters that elicit federal funds — hurricanes, tornadoes, floods or earthquakes, say.
But there is a legitimate debate to be had about what qualifies as a disaster big enough that the whole nation should bear some or most of the private rebuilding costs. It is neither unreasonable nor heartless for the House to wonder whether the Senate is promising too much assistance, when the private insurance market may be able to handle losses beyond its $100 million threshold on its own. Raising the bar might have negative consequences for the cost of constructing and operating large buildings in various places around the country, insurance on which would probably become more expensive or difficult to obtain. But it is only fair to ask those who use and benefit from those facilities to help pay something closer to their true cost.
The House should renew the policy, but it is right to explore more ambitious changes than those the Senate approved.
And according to The Hill, “Officials with the Export-Import Bank have exceeded their travel budget over the last three years by $3 million.” (“Ex-Im Busts Travel Budget by $3M” the headline reads). “Much of the recent travel appears designed to build public support for the bank,” The Hill reports.
“Being the chief export subsidizer in the country carries lots of responsibilities including, apparently, barnstorming the country to try and rally the businesses you subsidize to push lawmakers to keep the subsidies flowing. This ain't cheap,” notes the Washington Examiner.
e•gre•gious -- outstandingly bad; shocking.
“While You’re Away on Vacation…”
Before President Obama leaves tomorrow for his Martha’s Vineyard vacation, we have a suggested day-trip he could make when he gets bored after his umpteenth round of golf and the inevitable campaign fundraiser: he could visit the millions of taxpayer dollars “invested” by the Export-Import Bank into Evergreen Solar between 2009-2010.
It’s just a 3-hour drive from Martha’s Vineyard (even quicker with Air Force One!).
Oh, wait. Nope. Never mind. He CAN’T visit Evergreen Solar.
Note to White House advance staff: Please don’t confuse Evergreen Solar with Solyndra, another failed “green energy” company that received Ex-Im’s corporate welfare. That’s in one of the other 57 states.
“Today, President Obama was cheerleading for the Export-Import Bank, which he once cheered against as a candidate when he called the Bank ‘little more than a fund for corporate welfare.’ Given that we learned this week that the Export-Import Bank is connected to 40 different ongoing fraud investigations, it’s a very odd time for the president to be cheering for them.
“Because over 98 percent of all U.S. exports are funded without the Export-Import Bank, no one can make a credible case that its reauthorization is critical to the economy. What would really rejuvenate the economy is a repeal of Obamanomics. Whether it is the president’s health care law, Dodd-Frank, or the wasteful ‘stimulus’ package, the fact is our nation remains in the longest, slowest, weakest, non-recovery recovery in our history because of the president’s failed economic policies.
“American manufacturers compete in the global marketplace at a competitive disadvantage right now largely due to our high corporate tax rate, legal liability costs, and burdensome regulations. If President Obama was really interested in leveling the playing field for American manufacturers, he would work with Republicans in Congress on pro-growth tax, energy, regulatory, and liability policies -- not some international arms race to the bottom funded with taxpayer subsidies for his friends at Fortune 500 companies. Congressman Mick Mulvaney (R-SC) recently introduced H.R. 5360, the American Renaissance in Manufacturing Act (ARM Act), which I have co-sponsored, to begin to address the competitive disadvantages our American manufacturers face. The pro-growth policies in the ARM Act, not the crony-connected Export-Import Bank, are a real solution to the problem.
“I urge the president to join us in helping to make our exporters more competitive through greater opportunity, not greater taxpayer subsidies or guarantees.”
e·gre·gious -- outstandingly bad; shocking.
“A Wealth of Political Connections” Connects Troubled Foreign Company to U.S. Taxpayers
What do U.S. taxpayers, former Vice President Al Gore and former Gov. Bill Richardson have in common?
We’ll let the Washington Free Beacon take it from here in its report: “Former Employees Allege Widespread Illegality at Taxpayer-Backed Solar Company”.
Washington Examiner | CFPB opens new investigation in bid to exonerate bureau managers on discrimination
Times Record News | Neugebauer wants to get government out of terror insurance
Wall Street Journal | House Panel Passes Bill to Ease Capital Requirements on MSRs
Real Clear Markets | Dodd-Frank's Birthday Marred By Its Many Inadequacies
American Banker | House Panel Passes Bill to Ease Capital Requirements on MSRs
Wall Street Journal | Regional Banks Push Congress to Amend 'Systemically Important' Tag
Washington Examiner | GAO opens new probe of CFPB 'toxic workplace' charges
Wall Street Journal | Republicans Demand Consumer Regulator’s Documents in Wake of Supreme Court Case
Washington Times | ‘Operation Choke Point’: A noose for business
Bloomberg | Ex-Im Bank Watchdog Pursuing 40 Fraud Cases: Lawmaker
e·gre·gious -- outstandingly bad; shocking.
Did an Ex-Im Project Lead to 27 Deaths?
The Export-Import Bank’s approval of $3 billion in financing for a liquefied natural gas project in Papua New Guinea reportedly led to the deaths of 27 villagers who were killed on January 24, 2012 in a massive landslide.
“With millions of our fellow Americans unemployed and underemployed, job number one continues to be jobs creation and economic growth. Our committee has approved dozens of bipartisan bills- several of which are piled up on Harry Reid’s desk- to help alleviate the red tape burden that Washington piles on job creators so all Americans can enjoy a stronger, healthier economy,” said Chairman Jeb Hensarling (R-TX).
The following is a summary of the bills the committee passed:
H.R. 5018, the Federal Reserve Accountability and Transparency Act, sponsored by Rep. Scott Garrett (R-NJ) and Rep. Bill Huizenga (R-MI). H.R. 5018 was approved 32-26.
H.R. 5018 is the first piece of legislation developed as part of the Committee’s Federal Reserve Centennial Oversight Project. It requires the Federal Reserve to adopt a more predictable rules-based policy -- of the Fed’s own choosing -- that leads to a healthy and stronger economy. It also requires the Fed to share with the public whatever rules-based approach it decides to follow. The bill also requires the Federal Reserve to conduct a cost-benefit analysis when adopting new regulations in order to ensure the benefits of proposed regulations outweigh the cost to the economy.
H.R. 3240, the Regulation D Study Act, introduced by Rep. Robert Pittenger (R-NC). H.R. 3240 was approved by voice vote.
H.R. 3240 requires the Government Accountability Office, in consultation with credit unions and community banks, to conduct a study examining Federal Reserve Regulation D minimum reserve requirements. Regulation D forces financial institutions to focus on compliance rather than spending time with consumers to meet their financial needs.
H.R. 3913, a bill to amend the Bank Holding Company Act of 1956 to require agencies to take into account the promotion of efficiency, competition, and capital formation before issuing or modifying certain regulations, sponsored by Rep. Sean Dufy (R-WI). H.R. 3913 was approved 32-22.
H.R. 3913 is based on the common-sense proposition that before any rule can be proposed, a federal agency must determine if the rule promotes efficiency, competition, and capital formation. Instead of forcing financial institutions to spend precious time and money complying with unnecessary bureaucratic red tape, Congress can allow them to focus on encouraging economic growth by providing consumers with financial products and services.
H.R. 4042, the Community Bank Mortgage Servicing Asset Capital Requirements Study Act of 2014, sponsored by Rep. Blaine Luetkemeyer (R-MO). H.R. 4042, as amended, was approved 44-9.
H.R. 4202 requires the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation to conduct a study to determine the appropriate capital requirements for mortgage servicing assets for any banking institution other than an institution identified by the Financial Stability Board as a global systemically important bank. H.R. 4042, as amended, also prohibits the implementation of Basel III capital requirements related to mortgage servicing assets for non-systemic banking institutions from taking effect until three months after a report on the study mandated by the bill is transmitted to Congress.
H.R. 5148, the Access to Affordable Mortgages Act of 2014, sponsored by Rep. Blaine Luetkemeyer (R-MO). H.R. 5148 was approved 31-23.
H.R. 5148 would amend federal law to exempt creditors offering mortgages of $250,000 or below from onerous property appraisal requirements stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 11-203).
H.R. 4329, the Native American Housing Assistance and Self-Determination Reauthorization Act (NAHASDA) of 2014, sponsored by Rep. Steve Pearce (R-NM). H.R. 4329 was approved 47-11.
H.R. 4329 extends the authorization for NAHASDA for five additional years with the following reforms:
Rep. McHenry, who chairs the Financial Services Subcommittee on Oversight and Investigations, announced that the GAO had agreed to conduct the review during a hearing with CFPB Director Richard Cordray. The hearing was the Subcommittee’s fourth since the beginning of April about allegations of employment discrimination and retaliation at the CFPB.
“Since the Subcommittee opened its investigation into allegations of discrimination and retaliation at the CFPB, no fewer than 32 employees have come forward about their maltreatment. These 32 brave leaders have come forward to do what is right: to protect their colleagues who suffer, and they have stood up even in the face of retribution from their managers if they are found out,” said Chairman McHenry. “Shortly, all CFPB employees will have an opportunity to confidentially share all of their concerns with the Government Accountability Office.”
The GAO investigation was requested by Chairman McHenry as well as Financial Services Committee Chairman Jeb Hensarling (R-TX) and Financial Institutions and Consumer Credit Subcommittee Chairman Shelley Moore Capito (R-WV).
“The problem is a CFPB management culture that condones intimidation, discrimination, and retaliation. And if the Director has failed to reprimand and remove bad managers, then the problem is also his leadership – or lack thereof,” said Chairman McHenry.
To read witness testimony and watch previous Subcommittee hearings looking into these allegations, click here, here and here.
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