Hensarling: “You Cannot Win a War on Poverty as Long as You Are Conducting a War on Jobs”
January 15, 2014 -
Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following statement at today’s hearing on how the Dodd-Frank Act’s Volcker Rule will impact job creators:
As a nation we just marked the 50th anniversary of the War on Poverty; tragically, a failure on more than one level. To win, we need more jobs, which means we need less Volcker.
In two weeks the President of the United States will deliver his sixth State of the Union Address. Early in his term, he received from a Democratic Congress every single major policy initiative he asked for: the stimulus, Obamacare, and Dodd-Frank from which the Volcker Rule arises – he got it all.
The result of this is an unprecedented spending spree and regulatory tsunami, the effects of which are now apparent to all. We have become a part-time worker, unemployment check, food stamp, insolvent nation with few opportunities and even fewer hopes for the truly needy amongst us. The president’s policies have exacerbated the very income inequality that he now decries. Under President Obama, 6.7 million more Americans have fallen into poverty. America is suffering under the highest poverty rate in a generation, median household income has fallen each year that he has been in office, and a record 47 million Americans receive food stamps.
With a record like this, when it comes to the War on Poverty, some Americans may just wonder what side the president is on. And if history proves a reliable guide, during the State of the Union address, the President will offer more of the same: more food stamps, more unemployment checks, more minimum wages – all neatly wrapped in the politics of division, redistribution and envy.
That is not right. That is not fair. And its not what hardworking, struggling families in the Fifth District of Texas are looking for. Joseph of Mabank, Texas told me “I am a disabled veteran and have been without work for over a year…all I want is to have a good-paying job, and let the rest happen as it comes.” Claudia from Mineola in my district. She was laid off for nine months, finally found a job that paid her 25 percent less and added 60 miles to her daily commute. Said said “I don't have the American taxpayers bailing me out or lending me money that I can't pay back.”
It’s for Joseph and Claudia and all the unemployed and underemployed Americans that we have to fight for and you cannot win a War on Poverty as long as you are conducting a war on jobs.
That brings us to the subject of today’s hearing: the 900-plus page compound, complex, confounding, confusing, and convoluted Volcker Rule. Like most of the other 400-plus rules of Dodd-Frank, the Volcker Rule is aimed at Wall Street, it hits Main Street, and regrettably the poor and downtrodden amongst us become collateral damage.
First, Volcker is a solution in search of a problem. It is important to note that of the roughly 450 financial institutions that failed during or as a result of the crisis, not a single one failed because of proprietary trading. In fact, financial institutions that varied their revenue stream were better able to weather the storm and thus keep lending and thus support jobs.
Instead, these bank failures came largely from a concentration in lending in the subprime and sovereign debt markets. And who steered these financial institutions into these markets? Sadly but not surprisingly, it was Washington and they’re still at it.
At one of our earlier hearings on the Volcker Rule, a Democratic witness claimed the burdens placed on our economy by Volcker were no big deal because, he said, it “only applies to just a few banks.” If thousands upon thousands of negative comments the regulators received in response to their proposal from community and regional banks, businesses both big and small, did not lay that claim to rest, I believe today’s hearing will. The statement that Volcker only applies to “just a few banks” ranks right up there with “If you like your health care plan, you can keep it.”
For if it were true that this 900-plus page regulation “applies to just a few banks,” why did the Public Utility Commission in my native Texas warn that my constituents could experience “higher and more volatile” electricity prices because of Volcker? That’s higher electricity prices for the poor.
And why will the Volcker regulation, as one study points out, take $800 billion out of the productive economy and sideline it? That’s the equivalent of taking more than $6,900 out of every American household’s paycheck.
As a nation, we can do better. We must do better. The path out of poverty is not food stamps or unemployment checks. It’s not the culture of victimization or the politics of envy. And it is certainly not the Volcker Rule which will harm numerous of our capital markets: equity, joint ventures, CDO, venture capital and especially the CLO market.
The path out of poverty is well-known. It has everything to do with strong faith-based institutions, strong families, strong communities of support, strong schools designed for students- not teachers’ unions. And small businesses and entrepreneurships with access to affordable and available capital so that there are boundless job opportunities for all- especially the poor and as Chairman of this committee, this is what we will work for.