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WASHINGTON- Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following floor statement in support of H.R. 3340, the Financial Stability Oversight Council Reform Act:
Mr. Speaker, I rise in strong support of H.R. 3340, the Financial Stability Oversight Council Reform Act.
I’d like to thank our colleague who authored this legislation, Mr. Emmer. He is certainly one of the hardest working and most thoughtful freshmen that we have on the Financial Services Committee.
As the American people know all too well, over years if not decades Congress has ceded far too much power to unaccountable bureaucrats. Article I ceding power to Article II. At the same time, it has provided many bureaucrats with access to money with no accountability on how that money is spent.
The Financial Stability Oversight Council – or FSOC as it is known by its acronym – typifies this misguided yielding of power to the unaccountable and unelected. Last month, there was, however, a small victory for those who are alarmed by an ever-encroaching federal government and the shadow financial regulatory system that FSOC is a part of and that operates with little transparency or accountability to the American people. I speak of the recent judicial ruling that struck down FSOC’s designation of MetLife as a “Too Big to Fail” financial institution. FSOC’s decision was found to be “unreasonable” and the result of a “fatally flawed” process.
Today we can achieve another victory, another step in restoring the Rule of Law and and checks and balances by reining in an administrative state run amok, by passing this important bill that is in front of us now.
FSOC is clearly one of the most powerful federal entities to ever exist and, unfortunately, also one of the least transparent and least accountable.
First, the Council’s power is concentrated in the hands of one political party, the one that happens to control the White House.
All but one of the FSOC’s members is the presidentially-appointed head of a federal agency, but interestingly the agencies themselves are not members, thus denying bipartisan representation. This structure clearly injects partisan politics into the regulatory process, it erodes agency independence, and it undermines accountability. Furthermore, FSOC’s budget is not subject to congressional approval, removing yet another vital check and balance to its immense power over our economy and over our people.
FSOC has earned bipartisan condemnation for its lack of transparency. Two-thirds of its proceedings are conducted in private. Minutes of those meetings are devoid of any useful substantive information on what was discussed. Even Dennis Kelleher, the CEO of the left-leaning Better Markets, has said “FSOC’s proceedings make the Politburo look open by comparison. At the few open meetings they have, they snap their fingers and it’s over, and they are all scripted. They treat their information as if it were state secrets.”
FSOC typifies not only the shadow regulatory system but also the unfair Washington system that Americans have come to fear and loathe: powerful government administrators, secretive government meetings, arbitrary rules, and unchecked power to punish or reward. Thus, oversight and reform is paramount.
And that is why the gentleman from Minnesota drafted H.R. 3340. The legislation before us would bring much needed accountability and transparency to two very powerful agencies birthed by the Dodd-Frank Act: The Financial Stability Oversight Council and the Office of Financial Research.
Currently, these two agencies are funded by assessments on financial institutions – money that ultimately comes out of the pockets of their customers. These funds flow directly from financial institutions into the Office of Financial Research’s coffers and are available immediately to be spent by both the Office of Financial Research and the Financial Stability Oversight Council.
H.R. 3340 is a very simple, common sense bill.Instead of allowing unaccountable bureaucrats to set their own budgets, this bill places these two agencies on budget, reviewed by Congress -- the elected representatives of “We the People.” It says the Council and the Office should be funded through the normal, transparent Congressional appropriations process to ensure greater accountability and transparency.
Is it too much to ask to have these two powerful government agencies actually be subject to Congressional oversight and budget approval? This should be the rule for the growing number of federal bureaucracies tossed into the alphabet soup of Washington regulators who have more power than ever over the financial decisions and the American dream of hardworking fellow citizens.
Unfortunately, I have to pose this question often to my colleagues on the other side of the aisle. How much more congressional authority do we wish to outsource to regulatory agencies? Why did people run for Congress if they didn’t want to legislate? Why did they run for Congress if they didn’t want to engage in oversight? Oversight is a fundamental congressional responsibility and that includes budget oversight- most importantly, it includes budget oversight.
And sooner or later, the shoe's going be on the other foot. Sooner or later, the White House will be in different hands. Sooner or later, the Congress will be in different hands. So this should not be a partisan issue. This is about Article I of the Constitution. All Members, on both sides of the aisle, should care passionately about this issue to hold agencies accountable for their spending.
We’re not just writing legislation for one Congress. We are writing legislation not just for one Congress or one administration. So the bare minimum level of accountability to the elected representatives of “We the People” is to have Congress control the power of the purse. And this is part of our quintessential and essential oversight responsibilities -- regardless of who sits in the Oval Office or the Speaker's chair.
If we're going to do our job, that means Congress must exercise its Article 1 responsibilities, and H.R. 3340 will help us do just that.
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