WASHINGTON – U.S. Congressman Jeb Hensarling (R-TX) delivered a speech at Hillsdale College’s Kirby Center today entitled, “Reviving America’s Constitutional Order.” The speech marked the formal launch of the Article One Project (A1P), which is a new network of House and Senate conservatives – led by Hensarling and Senator Mike Lee (R-UT) – working together on a broad agenda to strengthen Congress by reclaiming constitutional powers now being exercised by the Executive Branch. The following is text of the speech as prepared for delivery:
It is truly an honor to be with you and to be joined by my good friend, Senator Mike Lee. In his short time in Washington, Mike has become a nationally recognized defender of our sacred liberties and a tireless advocate for our founding constitutional principles. How fortunate we are that he serves in the United States Senate, especially during this pivotal time for our country.
And thank you to Hillsdale College for hosting this event. Hillsdale is indispensable to the cause of liberty, and it’s great to be back.
Last summer my wife Melissa and I took our 13 and 11 year old children to Philadelphia. Of course we visited Independence Hall, where everywhere you turn you are walking in the footsteps of giants, like Washington, Madison, Franklin – and all those heroic patriots who made this great experiment, this golden hope for all mankind called America, possible.
As we walked, I was reminded that the years leading up to the Constitutional Convention were some of the most difficult our nation has ever endured. Crushing debt and rampant inflation put our young nation on the edge of economic collapse. Bitter trade disputes between the states threatened to become violent. Some thought the answer lied in secession. Others feared perhaps a return to monarchy. Patrick Henry boycotted the proceedings.
Madison and General Henry Knox had to travel to Mount Vernon to convince the retired Washington to even attend.
As the delegates gathered, the public mood was so dark that Edmund Randolph worried: “Are we not on the eve of war, which is only prevented by the hopes from this Convention?”
Many times, despair and anguish ruled the day. More than once, the whole enterprise seemed destined for certain failure.
But it did not fail. The Spirit of ’76 still resoundingly echoed in those hallowed halls. The seed of American exceptionalism was surely planted in 1776. But it did not take firm root until 1787.
Only then did “we, the people” truly secure our liberty. And the course of human events would never be the same.
In his penultimate State of the Union message, President Reagan reminded us that those three simple words – “we, the people” – make all the difference between our constitution and the constitutions of other nations. “In those other constitutions,” he said, “the government tells the people what they are allowed to do. In our Constitution, we the people tell the government what it can do and that it can do only those things that are listed in that document and no others.”
The sheer genius of our Constitution – its framework of checks and balances, limited government, co-equal branches of government – secured our fundamental rights and gave rise to the freest, most prosperous civilization the world has ever known. But to put it mildly, over the years many of these principles have been neglected – sometimes abandoned.
Instead of a limited federal government operating from a clearly defined enumeration of powers, we have a leviathan that has metastasized into the nation’s largest creditor, debtor and lender; its largest employer, property owner and tenant; its largest insurer, health care provider and pension underwriter.
Instead of checks and balances, we have the President’s pen and phone.
Instead of three co-equal branches of government, we have seen the rise of an unaccountable fourth branch – namely agency government.
Our woeful neglect of America’s first principles pre-dates the Obama presidency and regrettably has occurred during the administrations of both Democrats and Republicans. But there can be no denying the wounds to our Constitution have grown markedly worse during Barack Obama’s time in office.
It is a reminder that while ominous foreign threats to our safety and security may lead the nightly news – threats that emanate from faraway capitals like Moscow, Damascus and Tehran – we cannot and must not lose sight of the domestic threats to our freedom and prosperity that emanate from another capital city far closer to home: Washington, DC.
Some of these domestic threats may appear less evident in the short-term, but over time they are corrosive to our Constitution and to our wellbeing as individuals and as a nation.
None of us can afford to lose sight of Madison’s famous warning that, “there are more instances of the abridgement of the freedom of the people by gradual and silent encroachment by those in power than by violent and sudden usurpations.”
That’s why we’re gathered here today to launch the Article One Project, a new network of conservatives working together to reclaim Congress’s rightful constitutional role.
Fortunately, as we embark on the project’s critical mission, we are not without guidance. The Constitution already shows us the pathway forward: limit government, not freedom; guarantee opportunity, not outcomes; and assure that all Americans stand equal before the law.
As a member of Congress, there is no job more important and none that I take more seriously than upholding the Constitution.
Yet I do not recall ever in my lifetime a moment when the Constitution is under assault more than today.
Just in the last few years, we have seen an American president unilaterally create new law, annul existing law and even declare the Senate in recess when it was not so he could install political functionaries into top government positions.
Clearly, that whole “advice and consent” foolishness can be such a bother to a president! This from a man who frequently reminds us he used to be a constitutional law professor. Surely his former students have a cause of action for teaching malpractice. Hopefully the statute of limitations has not run!
The devotees of this governing philosophy, so at odds with America’s founding principles, call themselves “progressive.”
But as my good friend and our Speaker, Paul Ryan, has said: “The ironic thing about ‘progressivism’ is that it’s terribly old-fashioned.”
For progressives believe only a certain class of people – a class to which they, of course, belong – has the duty and the responsibility to hold political power. We must yield to their expert management for our own good because – as one architect of Obamacare said – the rest of us are just too stupid to know better. So how could we possibly know what health insurance plan is best for us, what kind of mortgage we need, or how much water should be in our toilets? To Progressives, the Constitution is just a huge inconvenience.
Herbert Croly, a leading voice of the early Progressive movement and co-founder of The New Republic magazine, said as much when he stated the Progressive vision of government “legislates, but without being…a legislature. It administers, but without being…an executive. It adjudicates, but without any power of attaching final construction to the law. It is simply a convenient means of consolidating the divided activities of the government for certain practical social purposes.”
Madison, in Federalist number 47, had a different take on this notion. He wrote, “The combination of all power legislative, executive, and judiciary in the same hands…may justly be pronounced the very definition of tyranny.”
The seed of this form of tyranny was planted during the Wilson Administration, bloomed during FDR’s New Deal, became overgrown in LBJ’s Great Society, and has now reached crisis proportions under President Obama.
This century-long Progressive expansion of unconstitutional government has unleashed the modern regulatory state as we know it – extremely powerful, exceedingly intrusive, imperiously opaque, bafflingly bureaucratic, and alarmingly unaccountable.
Now Congress has been no an innocent bystander during all this. Part of the reason we have this out-of-control regulatory state is because, for too long, Congress has outsourced its constitutional responsibilities.
As we all know, Article One, Section One of our Constitution states “all legislative powers herein granted shall be vested in a Congress.” Thus, when Congress delegates its fundamental legislative authority to an unelected and unaccountable bureaucracy, it has arguably acted in an unconstitutional manner. This self-enfeeblement must end.
Because when Congress allows its authority to be usurped, the people’s right to both self-government and due process is undermined. Instead of being governed by the rule of law, citizens become more and more governed by the rule of rulers.
The citizen’s right to carefully deliberate proposed legislation through their representatives in Congress becomes reduced to nothing but a “notice and comment” period when they are permitted to merely lodge complaints and suggestions – all of which the unelected bureaucrats are free to ignore, all of which the unelected bureaucrats may use to retaliate.
The result? It is OSHA now, not Congress, that governs over workplace safety. It is the EPA now, not Congress, that governs our air quality. It is HHS now, not Congress that governs over our health care. And most alarmingly to our economic opportunity and economic liberty, it is the bureaucratic progeny of Dodd-Frank that now rules over our financial markets.
So where do we go from here?
First, Congress must reaffirm the primacy of congressional authority. And of all the tools we can use to address this, none is greater than the power of the purse. This Article One responsibility is the most potent and effective instrument we have to hold the Executive accountable. To paraphrase a colorful fellow Texan, President Johnson: If you grab a bureaucracy by its budget, its heart and mind will soon follow. For years, Congress has slowly surrendered its constitutional power over federal spending. Our first priority is to reclaim it.
To do so, Congress needs serious reforms that will give us an entirely new budget process. As someone who National Review once called “Representative Budget Reform,” I am eager for us to start, though success will not be easy or immediate.
But I take heart knowing, as Jefferson did, that “the ground of liberty is to be gained by inches.”
Reforming the broken budget process is something I’ve worked on since coming to Congress. Fortunately, we have taken the first step in budget reform with the success of our opening salvo – the ban on earmarks.
In addition to budget reform, Congress must also end the practice of delegating lawmaking authority to unelected and unaccountable agency government. No more passing vague laws that direct agencies to fill in the blanks. For example, the REINS Act -- which has passed the House – would introduce both constitutionally and accountability into the system by requiring Congress to approve any major new regulations.
The Act is as simple as it is profound. Its ultimate passage into law must be a major priority of the Conservative Movement.
Ladies and gentlemen, let each of us take our stand for freedom as in the olden time when brave patriots met at Independence Hall. That remarkable group dared to believe they could start the world over again.
Let us dare to believe that we, in our own way, can again secure the blessings of liberty for coming generations of Americans. Let us take our stand today as free people called to make our future worthy of our past. Let us rededicate ourselves to Article One of the Constitution.
"All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives."
– Article I, Section 1, U.S. Constitution
The federal government is broken. And while there is plenty of blame to go around, only Congress can fix it.
We don’t mean this as an indictment of any one leader or party, because the dysfunction in Washington today has accreted over decades, under Houses, Senates, and presidents of every partisan combination, as well as the many different justices of the Supreme Court.
To be sure, not every misguided, dysfunctional federal policy is a direct act of Congress. But that points toward the root problem.
The stability and moral legitimacy of America’s governing institutions depend on a representative, transparent, and accountable Congress to make its laws. For years, however, Congress has delegated too much of its legislative authority to the executive branch, skirting the thankless work and ruthless accountability that Article 1 demands and taking up a new position as backseat drivers of the republic.
So today, Americans’ laws are increasingly written by people other than their representatives in the House and Senate, and via processes specifically designed to exclude public scrutiny and input. This arrangement benefits well-connected insiders who thrive in less-accountable modes of policymaking, but it does so at the expense of the American people — for whose freedom our system of separated powers was devised in the first place.
In short, we have moved from a nation governed by the rule of law to one governed by the rule of rulers and unelected, unaccountable regulators.
Congress’s abdication, unsurprisingly, has led to a proliferation of bad policy and to the erosion of public trust in the institutions of government. Distrust, also unsurprisingly, is now the defining theme of American politics.
For conservatives, Congress’s dereliction represents something of a crisis. First, because conservatives believe in constitutionalism as a bulwark of freedom and justice in our society. And second, because the transfer of lawmaking power from Congress to the executive branch tends to thwart the kinds of policies that conservatives often advocate — namely those that limit the size, ambitions, and influence of the federal government.
It’s no wonder Congress’s job-approval ratings are at historic lows. Oftentimes we’re not even doing our job, and — just look around — the American people are paying the price.
Congress’s reclamation of its constitutional authority is a necessary first step toward real reform, within Washington and around the country.
That is why we have joined with eight colleagues in the House and Senate to develop and promote a new agenda of structural reforms that will strengthen Congress and reassert its vital role in our society. We call it the Article 1 Project (A1P).
Specifically, A1P will focus on restoring congressional power in four key areas at the core of Washington’s — and America’s — broken status quo.
First, Congress must reclaim its power of the federal purse. Our formal budget process, which dates to 1974, has fallen apart, and we must restructure it for a post-earmark world. We need to bring entitlement programs back onto the actual budget and bring self-funding federal agencies back under annual appropriation.
Second, we need to reform legislative “cliffs” that loom behind expiring legislation — at the end of the fiscal year and when the federal debt nears its statutory limit — to realign the incentives of the American people and their government.
Third, Congress must take back control of actual federal lawmaking. Today, the vast majority of federal laws are unilaterally imposed by executive-branch agencies. The bureaucrats in these agencies then serve as police, prosecutors, and courts in the ensuing cases. All major regulations should be affirmatively prioritized and approved by a vote of Congress.
Finally, we must clarify the law governing executive discretion, which right now allows presidents and federal bureaucrats to ignore or rewrite federal statutes, so long as they have a clever enough reason.
Reform in these four areas would put Congress back in charge of federal lawmaking and put the American people back in charge of Washington — just as the Founders intended.
With political attention now fixated on the presidential race, little hope for major legislative breakthroughs in President Obama’s final year in office, and the American people furious at Washington’s indifference and dysfunction, now is the perfect time for Congress to begin thinking about what a re-constitutionalized federal government would look like.
Such a government would not deliver either party or any citizen everything it wants. But it would give the American people a more representative and responsible government, and in turn, a healthier, freer society. All that stands between Americans and the government of, for, and by the people that the Founders bequeathed us is the will of the Congress to finally step up and do its job.
— Mike Lee represents Utah in the U.S. Senate. Jeb Hensarling represents Texas’s fifth district in the U.S. House of Representatives.
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WASHINGTON –Congressman Jeb Hensarling (TX-5) is asking students across the 5th Congressional District to help honor the service and sacrifice of veterans by participating in the annual Valentines for Vets program.
Each year, Congressman Hensarling’s office collects hand-made Valentine’s Day cards from 5th District students that are delivered to hospitalized veterans at the Dallas Veterans Administration Medical Center. The valentines will also be delivered to members of our veterans organizations.
“These valentines are a great way to say thank you to the brave men and women who have made tremendous sacrifices to protect our freedom,” said Congressman Hensarling. “We need to let them know that we appreciate all that they have done for our country. I know each veteran who receives one of these cards will be happy to see how much our students care about them and care about America.”
Teachers, principals, parents and organizations who would like to participate in this effort should contact Amanda Beltran in Congressman Hensarling’s Athens office at (903) 675-8288. All valentines must be collected by Monday, February 8th to ensure delivery by Valentine’s Day.
Valentines for Vets is an annual program held in conjunction with National Salute to Hospitalized Veterans Week. Every February, Americans open their hearts to our nation's hospitalized veterans by sending cards and letters to Department of Veterans Affairs (VA) medical centers across the country.
WASHINGTON—U.S. Congressman Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, release the following statement in response to President Obama’s State of the Union Address.
“Given that President Obama used tonight’s State of the Union to take a rhetorical victory lap, the speech should have lasted about two minutes rather than over an hour. The American people feel no victory in their household finances or the security of our homeland, and the president clearly isn’t convincing them otherwise.
“While President Obama touted his success in the war on terror and the actions he has taken to secure our homeland, one recent poll showed Americans fear a terror attack on the homeland more than at any point since 9/11 and another poll showed that 74% of Americans are not satisfied with the president’s progress in the war on terror. The president also touted our standing and strength in the world, even as Iran is testing ballistic missiles, North Korea has resumed testing of their nuclear arsenal, and ISIS continues to carry out attacks across the globe.
“The president also focused on what he sees as increased economic opportunity for the American people thanks to his policies. In reality, American incomes have dropped and the poverty rate has increased during his tenure—meaning American families are working harder and harder but still can’t seem to get ahead. Furthermore, most Americans seriously doubt they will leave their children and grandchildren a better country than they inherited—which is the very antithesis of the American dream. Some of the biggest drags on the economy are also some of the president’s biggest legislative accomplishments: Obamacare and Dodd-Frank. More than half of Americans disapprove of Obamacare, which is no surprise considering the cost of healthcare has grown at nearly double the rate of wages and – despite the president’s promises – many Americans have lost the ability to keep the doctors and health plans they had before the law was passed. Since Dodd-Frank became law, we’re losing an average of one community financial institution per day under the sheer weight, volume, and complexity of Dodd-Frank’s 400 regulations—making it harder and harder for Americans to buy a house or get a loan to start a small business.
“Tonight, we heard President Obama express a lot of optimism. Sitting in the chamber, I too felt optimistic—knowing that this was his last State of the Union Address and that his presidency is coming to an end. The American people are ready for a change. I look forward to working with my colleagues in the House in my capacity as chairman of the House Financial Services Committee to lay out bold ideas and common-sense proposals that will promote more opportunities for low- and moderate-income Americans and empower them to achieve financial independence.”
WASHINGTON—U.S. Congressman Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, issued the following statement after voting in favor of the Senate amendment to the Restoring Americans’ Healthcare Freedom Reconciliation Act (H.R. 3762).
“For the first time since Obamacare was passed, we are putting a bill to repeal it on President Obama’s desk. Thanks to a special process known as reconciliation – which prevents the Senate from being able to block legislation through filibuster – the president will be forced to veto be accountable on a bill that would free Americans from the scourge known as Obamacare. This is the fulfillment of the promise made by Republicans to the American people that we would use every tool we could to put a repeal bill on President Obama’s desk. While there is no doubt in anyone’s mind that President Obama will veto the legislation, this important process makes it clear for the American people: it is President Obama and Democrats who stand in the way of repealing a law that has made health care less accessible, more expensive, and more burdensome, and it is Republicans who are working to repeal and replace Obamacare with a patient centered approach.
“This legislation also forces President Obama to defend sending federal funds to any organization – like Planned Parenthood – that is engaged in the horrific act of abortion. Americans were outraged by recent videos showing officials at Planned Parenthood trafficking in human baby body parts. After similar legislation to strip tax dollars from these organizations was filibustered in the Senate, today’s legislation bypasses that roadblock and shows the American people that it is Republicans who are fighting to defend the most fundamental of our rights: the right to life.
“I am proud to join with every Republican member of Congress from Texas who voted in support of the reconciliation process. As Senator Cruz said, it ‘is a significant step towards repealing every word of Obamacare. This bill repeals as much of that failed law as we can under arcane Senate rules and the narrow guidelines of the budget. I am also encouraged that this bill prohibits taxpayer funds from going to abortion-providers.’”
WASHINGTON—U.S. Congressman Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, released the following statement in response to President Obama’s planned executive actions that would infringe on American’s 2nd Amendment rights.
“By his own admission, the executive actions President Obama announced today would have done nothing to prevent the recent and horrific mass shootings he is using to justify his actions. Nor would these executive orders do anything to prevent terrorists and violent criminals from obtaining guns. What it will do is erode the constitutionally guaranteed right of law-abiding citizens to ‘keep and bear arms.’
“In short, President Obama is doing nothing more than using the personal tragedies of Americans to justify his anti Second Amendment agenda in the worst manifestation of Rahm Emanuel’s counsel to ‘never let a crisis go to waste.’ Instead of using straw-man arguments to double down on his contempt for law-abiding gun owners, the president should direct his administration to enforce the laws on the books and work with the people’s elected representatives in Congress to address the real causes of gun violence, like mental illness.”
WASHINGTON—When federal regulators launched a crackdown on alleged discrimination in auto lending two years ago, they knew their methodology would be questioned. But they calculated they could secure a market-shaping settlement by going after a company unlikely to fight the charges because it needed to avoid a complaint to clinch government approval for a broader restructuring.
That is the conclusion of a report, based on internal documents and emails written by the staff of the Consumer Financial Protection Bureau, released Tuesday by congressional Republicans who have long criticized the discrimination probe.
“Some of the claims being made in this case present issues…that would pose litigation risks…,” CFPB staff members wrote in one 2013 memo addressed to the bureau’s director, Richard Cordray, which was included in the report.
But such concerns, the officials said in the same 23-page document, would be offset by the likelihood of a settlement by the target company, Ally Financial Inc. “Ally may have a powerful incentive to settle the entire matter quickly without engaging in protracted litigation,” the agency’s lawyers wrote, noting that the company’s failure to secure approval to become a holding company would force it to divest itself of key businesses, primarily its insurance subsidiaries.
The document showed Mr. Cordray approved the staff’s report by signing his initials.
Samuel Gilford, a CFPB spokesman, said the bureau wasn’t able to comment immediately, adding that it hadn’t had the time to review the report or verify the authenticity of the accompanying documents.
“The CFPB’s goal has been, and continues to be, the elimination of illegal discrimination,” he said, adding that the bureau will fairly and consistently enforce the related law to “ensure borrowers harmed by discrimination receive the relief they deserve.”
The $98 million settlement with Ally was the government’s biggest case involving alleged discrimination in the auto-loan market and the first case for the CFPB in the industry. The regulators accused the auto lender, formerly known as GMAC, of offering a pricing system that resulted in 235,000 minority borrowers being charged higher interest rates than white customers by auto dealers.
The agency’s campaign to pursue auto lenders has set off fury among industry officials and many lawmakers. They have two main complaints: The CFPB’s foray into the industry despite its lack of authority over auto dealers; and the methodology used to measure the extent of discrimination based on guesswork, rather than concrete data. Proponents of the action say the CFPB has shed light on questionable industry practices previously unknown to the public and succeeded in reaching settlements worth over $200 million.
Identifying racial bias in auto lending has proved a challenge for the CFPB, as auto-loan applicants, unlike mortgage borrowers, don’t have to disclose their race or ethnicity. So the CFPB used a proxy method where they looked at applicants’ names and locations to make educated guesses about what their races were.
The report was put together by the Republican majority staff of the House Financial Services Committee, which has led the political charge by conservatives trying to defang the CFPB, created by the 2010 Dodd-Frank Act following the financial crisis. The report was released days after the House passed legislation that would rescind the bureau’s 2013 guidance aimed at protecting minority borrowers from being charged higher rates by auto dealers. The bill received bipartisan support, with 88 Democrats joining 244 Republicans.
An Ally spokeswoman said, “It is a very comprehensive report, and we decline to comment further.”
Part of the 54-page document prepared by the Financial Services Committee examines the December 2013 deal that the CFPB and Justice Department reached with Ally, in which the company agreed to settle the allegations of discrimination without admitting or denying wrongdoing.
Offering a rare look into regulators’ tactics for a major enforcement case, the report cites, among other things, the 23-page memorandum addressed to Mr. Cordray and dated Oct. 7, 2013, from staff members of the bureau’s Office of Enforcement and Office of Fair Lending, including Patrice Ficklin, assistant director of fair lending and equal opportunity.
The staffers identified Ally as “one of the largest auto loan lenders” in the U.S. that was “in the end stages of a major reorganization.” They explained the company hoped to exit from the government control it was put under during the financial crisis and was trying to raise capital through an initial public offering.
To do so, Ally, which had been hit by the subprime crisis, needed to receive approval from the Federal Reserve and Federal Deposit Insurance Corp. to convert to a holding company and maintain key business units.
“Ally may be strongly inclined to reach a timely and robust resolution of this matter if it can potentially result in (Ally’s) successfully converting to a financial holding company,” the CFPB lawyers wrote.
They explained to Mr. Cordray that the Fed had indicated that a finding of a fair-lending violation would “most likely result in the denial of holding company status.” They added the Fed had also suggested that if Ally took “prompt and robust corrective action,” that would be taken into consideration.
The FDIC, the lawyers said, had also indicated a similar intent in awarding a rating needed for Ally to convert to a new status.
Five days before its deadline to achieve financial holding company status, Ally on Dec. 20, 2013, signed a settlement with the CFPB and Justice Department. On Dec. 23, the company said the Fed approved its application to become a financial holding company.
In essence, “settlement of the Bureau’s fair lending investigation was a prerequisite for Ally’s status change,” the House Republicans’ report said.
Ally isn’t the only company that has settled with the CFPB cases over alleged violations of fair-lending rules. In September this year, Hudson City Bancorp. Inc. reached a settlement over allegations that the New Jersey bank withheld mortgages from minority borrowers. Days later, the bank received regulatory approval on its long-awaited merger with M&T Bank Corp., announced more than three years earlier.
Beginning with its settlement with Ally, its first case in the auto lending industry, the CFPB has reached agreements worth more than $200 million with several other auto financing companies. The cases center on the dealer markup, which allows car dealers to add or subtract a few percentage points to the interest rates borrowers pay. Regulators say that dealers have been charging higher markups for minority borrowers than for their nonminority counterparts.
Corrections & Amplifications
The document showed Richard Cordray approved the staff’s report by signing his initials. An earlier version of the online article incorrectly stated the document showed no evidence of Mr. Cordray approving the report.
WASHINGTON – U.S. Congressman Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, issued the following statement upon House passage of a legislative package to fund the government and make permanent several temporary tax provisions.
“The American people expect and deserve better than last minute, omnibus spending legislation that lumps almost all government programs, both good and bad, into one massive bill. While Speaker Ryan and the members of this House had to play the bad hand that was dealt to us months ago – before he became speaker – I am encouraged by the speaker’s commitment to move away from this irresponsible practice.
“The president won’t admit it, but we are a nation at war. At a time when the threat from ISIS and radical Islam is increasing at an alarming rate, funding our national defense and ensuring our fighting men and women have the tools necessary to carry out their mission and defend their homeland – not reducing their ranks, as President Obama has done – must be our top priority. This legislation represents billions more in our national defense than if Congress had not taken any action. Earlier in the year, Defense officials told Congress that operating under scheduled cut levels would lead to ‘decreased readiness, more casualties of American troops and a lack of confidence among allies around the world.’ These dire warnings were made before ISIS began its new offensive against the West. Ultimately, I voted for this bill because victory against radical Islam is the only acceptable outcome and time is of the essence.
“Like all omnibus spending bills, this bill spends way too much—and much of what it spends is on bad programs. While I am disappointed by many aspects of the bill, there are several notable provisions worthy of support—including lifting the 40 year ban on crude oil exports that can help make the world less depending on OPEC and Russian oil; strengthening the Visa Waiver Program to protect against terrorists exploiting Western passports; and prohibiting any taxpayer funded bailout of insurance companies’ losses from participating in Obamacare. In addition, the inclusion of the Protecting Americans from Tax Hikes Act to make permanent several temporary tax provisions will provide much needed certainty for hardworking American taxpayers and businesses, grow our economy, and rein in the IRS – while setting the stage for fundamental tax reform in the future.”
Congressman David Scott recently lambasted the Consumer Financial Protection Bureau for its “deceitful” auto-loan regulation based on “shamefully flawed” information. Now it looks like the Georgia Democrat was being kind.
The Republican staff of the House Financial Services Committee has released a trove of documents showing that bureau officials knew their information was flawed and even deliberated on ways to prevent people outside the bureau from learning how flawed it was.
The bureau has been guessing the race and ethnicity of car-loan borrowers based on their last names and addresses—and then suing banks whenever it looks like the people the government guesses are white seem to be getting a better deal than the people it guesses are minorities. This largely fact-free prosecutorial method is the reason a bipartisan House supermajority recently voted to roll back the bureau’s auto-loan rules.
The vote occurred before the release of the House committee report, which shows that the regulators were guessing and knew that they weren’t even making good guesses. A May 2013 draft of a memo for bureau Director Richard Cordray prepared by bureau staff including Assistant Director Patrice Ficklin reported they had “reason to believe that our proxy is less accurate in identifying the race/ethnicity of particular individuals than some proprietary proxy methods that use nonpublic data.”
A draft version of the memo also noted that if the bureau never publicly released the details of how it was guessing the race of borrowers, “our internal methodological deliberations will not be discoverable.” In other words, the law-abiding taxpayers getting sued by the bureau would not be able to learn how bogus its discrimination claims were. A draft memo also noted that a “methods announcement” would “endanger” the work of the bureau in part “by providing fodder to defendants to show how our methods are inferior to other proprietary proxies.”
Unable to sustain its non-transparency policy, the bureau eventually released some information on its guessing methodology, and outsiders have been poking holes in it ever since. The Wall Street Journal recently recreated the algorithm used by the bureau to do its guesswork and tested it with some well-known politicos. The algorithm didn’t know what to make of such last names as “Kasich” and “ Obama.”
That didn’t stop the bureau from branding car dealers as racists. A November 19, 2014 memorandum from bureau staff to Mr. Cordray requested authorization for a case against Honda’s American finance company and other defendants.
Mr. Cordray approved the request even though the memo explained what happened when a lender applied the bureau’s methodology to a set of mortgage borrowers whose race and ethnicity were already known. It turned out that “only 54% of the applicants identified by the proxy methodology as African-American were actually African-American,” according to the memo. Good enough for government work? Remember, this fraud was used not only to smear the reputations of law-abiding businesses but also to seek hundreds of millions of dollars in settlements.
The bureau, which had been stonewalling information requests from the House, initially reacted to this document disclosure by saying it wasn’t able to verify their authenticity. A week later the bureau was still giving us the same story, without producing any evidence to suggest the documents aren’t legitimate. The bureau is doing further damage to its credibility—if it had any left.
What we can’t figure out is why, after the yeoman work of Jeb Hensarling’s House Financial Services Committee in exposing this outrage—and an overwhelming bipartisan vote on the House floor—Senators still don’t seem in any hurry to act. Banking Committee legislators on either side of the aisle aren’t making this a priority.
This illegal guessing game of name-that-race underscores how much antidiscrimination law has become a political shakedown, and how the consumer bureau is a lawless body that needs to be reined in if it can’t be eliminated.
WASHINGTON – U.S. Congressman Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, released the following statement upon House passage of the Visa Waiver Program Improvement Act of 2015 (H.R. 158). The legislation, authored by Chairwoman Candice Miller (MI), would allow the Secretary of Homeland Security to suspend a nation’s participation in the Visa Waiver Program if they do not share essential terrorism and foreign traveler data with the United States. The bill was advanced last week by the House Task Force on Counterterrorism and Homeland Security, which Hensarling is a member of.
“As a Congress, we have no more important responsibility than to protect the American people from all enemies foreign and domestic. In the wake of the attacks in Paris, the House moved swiftly and deliberately to deal with the potential security threat posed by refugees from Syria, Iraq, and other countries with substantial ties to terrorism. Today, the House has taken further action to address the threat of potential terrorists holding western passports by strengthening the Visa Waiver Program (VWP).
“As we know, one of the great threats posed by ISIS is their ability to recruit foreign fighters, many of whom – including several of the Paris attackers – have western passports which makes it easier for them to enter into the United States. While countries allowed to participate in the VWP must agree to enhanced security measures and to share vital counterterrorism and law enforcement information with the United States in order to participate, a recent report found that the program has several gaps that pose a threat to national security. The bill passed by the House today addresses these gaps and adds additional protection to keep terrorists from exploiting the program to access our shores.”
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First elected to Congress in 2002, Jeb Hensarling is a strong conservative and an outspoken advocate for limited government and unlimited opportunity.
As chairman of the House Financial Services Committee, Jeb is a leader in promoting consumer choice, competitive markets, and smart regulation in our financial markets. He was the only member of Congress to have introduced comprehensive reform legislation for Fannie Mae and Freddie Mac during the credit crisis, lauded in the media as “a concrete plan for fixing Fannie and Freddie.” Jeb was recognized by The New York Times for “leading the GOP Vanguard against the Bailout,” and was the only member of Congress to have introduced a legislative alternative to TARP during the heart of the credit crisis, which would have minimized taxpayer exposure and the politicization of the market.
A lifelong conservative dedicated to advancing the principals of faith, family, free enterprise, and freedom, Jeb was chosen by his colleagues during the 112th Congress to chair the House Republican Conference—the fourth ranking leadership position in the House—and in the 110th Congress, he was elected chairman of the Republican Study Committee—the largest conservative caucus in the House. The Associated Press recently recognized Jeb’s consistency on conservative issues saying, “he made cutting federal spending, ending earmarks and reducing the size of government his priorities before the tea party came into existence.”
In recognition of his relentless fight to cut wasteful Washington spending and remove barriers to job growth, Jeb was appointed to serve on the Congressional Oversight Panel for TARP, the National Commission on Fiscal Responsibility and Reform, and was most recently appointed co-chairman of the Joint Select Committee on Deficit Reduction.
Prior to the 112th Congress, Jeb served as the number two Republican on the House Budget Committee—under now Chairman Paul Ryan—and has consistently fought to reduce our debt and stop out-of-control Washington spending. He is a co-author of the “Spending, Deficit, and Debt Control Act,” a landmark budget reform bill that was heralded as the “gold standard” of budget enforcement legislation by a coalition of conservative groups, including the Americans for Tax Reform, Citizens United Against Government Waste, Citizens for a Sound Economy, and the National Taxpayer Union. Jeb also authored the “Spending Limit Amendment”—a Constitutional amendment that would limit federal spending to no more than 20% of the economy—the historic average since WWII. For his work to rein in wasteful Washington spending and put our country back on a fiscally sustainable path, the National Review Online dubbed him “Rep. Budget Reform,” and The Dallas Morning News called him a “truth teller” who “has become one of the most important GOP members of Congress.”
Born in Stephenville, Texas, Jeb grew up working on his father’s farm near College Station. He earned a degree in economics from Texas A&M University in 1979 and a law degree from the University of Texas in 1982. Before coming to Congress, Jeb spent ten years in the private sector, serving as an officer for a successful investment firm, a data management company, and an electric retail company.
Jeb and his wife, Melissa, are members of St. Michael and All Angels Church, and reside in Dallas with their two children, Claire and Travis.
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