Hensarling Delivers Opening Statement at FSOC Hearing
Washington,
February 6, 2018 -
Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at today’s full committee hearing with Treasury Secretary Steven Mnuchin on the Annual Report of the Financial Stability Oversight Council (FSOC):
Mr. Secretary – this is your first appearance before the House after the Tax Cuts and Jobs Act was signed into law. I want to let you know, on behalf of the majority, how grateful we are to you and the president for your leadership and for helping to sign this act into law. It is truly, truly historic.
After eight years of failed economic policies that led to the slowest, weakest recovery in the modern era, the economy is starting to take off and wages are finally growing again. Consumer optimism abounds.
How ironic, but totally predictable, that equity markets would now swoon over the prospects of higher interest rates and possible inflation associated with a breakout of economic growth. Artificially low interest rates may have benefitted some on Wall Street but they haven’t been particularly helpful to Main Street.
We have always known that the Fed would face significant challenges in unwinding its balance sheet when the economy took off. If you’re listening, good luck, Chairman Powell. You volunteered for the job.
But today, the underlying economy is strong and getting stronger due to the policies of the Trump Administration. We’re averaging 3 percent growth again. Unemployment remains at a 17 year low, wages just grew at 2.9 percent – the fastest in almost a decade. 2 million Americans have gone back to work. All of this in President Trump’s first year in office, and we are just now on the leading edge of the Tax Cuts & Jobs Act.
Let’s take a look at the impact on the financial services industry alone.
JP Morgan Chase recently announced it will be making a $20 billion, five-year investment across its business. In addition to increasing wages for their employees, they plan to boost small-business lending by nearly 20%.
In my hometown of Dallas, Comerica announced it is boosting its minimum wage to $15 and giving a $1,000 bonus to 4,500 employees.
Nationwide is giving its employees a $1,000 bonus and increasing its 401(k) match.
Visa is also increasing its 401(k) eligibility and contributions, as well.
BB&T is raising its minimum wage from $12 to $15 an hour and giving its employees a onetime bonus of $1,200.
Hardly crumbs.
And these are just a few of the financial services companies that have announced benefits due to the Tax Cuts and Jobs Act. Again, Mr. Secretary, thank you and thank you to the president.
Unfortunately, tax reform alone will not unleash our nation’s full economic potential. Why? Because, for the last eight years our economy has been drowning in a sea of complex, onerous, expensive and job crushing Washington red tape. Fortunately, the Trump Administration has aggressively cut needless red tape like few others. But much work remains, including at the Financial Stability Oversight Council.
FSOC can clearly serve a vital function in promoting financial stability by monitoring market developments, facilitating information sharing across regulatory silos, and making policy recommendations to Congress to mitigate risk.
Unfortunately, FSOC has proven it can also harm our economy through its designation of SIFI’s.
Under the last administration FSOC simply eviscerated G.E. Capital, one of America’s great companies. One that had capitalized millions of small and midsize companies, from local bakeries to furniture stores. It’s just gone.
In a dangerous, unlawful and misguided effort it attempted to designate MetLife a SIFI; an insurance company. Fortunately, the decision was found to be “arbitrary and capricious” and overturned.
Mr. Secretary, I am encouraged by much of what I read in FSOC’s annual report under the new leadership of a new administration. I look forward to hearing more about it.
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