June 22, 2012

Transportation

The ninth extension of transportation legislation expires a week from tomorrow – June 30th. This bill funds road, bridge and transit projects all over the country. At this writing agreement has not been reached but House and Senate conferees are still working at reconciling their differences. A number of outstanding issues remain, including funding levels, the Keystone XL pipeline and changes to environmental regulations covering infrastructure projects. I certainly hope that the House will have a good bill to vote on next week, but in the current climate I have my doubts. You might be interested in an opinion piece I submitted to The Hill’s Congress Blog on Wednesday on this subject.

JPMorgan Chase

On Tuesday the House Committee on Financial Services held a hearing regarding the regulatory implications of JPMorgan Chase’s recent $2 billion trading loss. Because the investigation of this loss is ongoing, the hearing focused more on related provisions of the 2010 financial reform legislation that are still being implemented. We heard from industry regulators such as the Securities and Exchange Commission and the Federal Deposit Insurance Corporation, as well as Jamie Dimon, the CEO of JPMorgan. Mr. Dimon apologized for the loss, but added that no customer or taxpayer money was impacted due to the company’s large capital reserves. He also insisted that no additional regulation would be needed to manage what happened at JPMorgan. He may be right that JPMorgan can sustain and manage this $2 billion loss. Yet the day after the hearing, Moody’s downgraded the major American banks, including JPMorgan. Although not fatal, it underscores the concern I have about the stability of our financial institutions and strengthens my resolve to push for fair, effective regulations.

What happens when the next bank loses money from this type of trading but is not as well capitalized as JPMorgan? Or what if many banks engage in this type of trading and create a systemic risk? While we can’t stop every loss from happening, it is important that regulators have transparency and the ability to monitor this type of potential risky behavior of banks. That will help ensure that this doesn’t become a $20 billion or $200 billion loss. This is why I have argued strongly for the full implementation of financial regulatory reform, which includes sufficiently funding it and not watering down its provisions. So far, Republicans have been unwilling to provide the necessary resources and have been quick to create exemptions at every opportunity.

Lands Package

This week the House considered H.R. 2578: to amend the Wild and Scenic Rivers Act related to a segment of the Lower Merced River in California, and for other purposes. H.R. 2578 is a combination of 14 Natural Resources and Energy and Commerce Committee bills. Some provisions of the bill could be non-controversial and should have no trouble passing on their own. Others, however, are troubling. Some of the more controversial measures include H.R. 1505, which sets up a 100 mile operational control zone along northern and southern U.S. borders. It places all this land under the control of the Department of Homeland Security and then exempts that broad swath of territory from 36 current environmental laws. H.R. 1408 is also included in H.R. 2578 and that bill gives one Alaskan tribe logging rights and access to public lands in the Tongass National Forest. This sounds like an earmark to me and as you may recall, Republican leadership says they have ended the practice of earmarking. H.R. 3069 is another controversial bill included in this lands package. It allows for the killing of sea lions as way to help protect endangered salmon, ignoring the many other reasons for the decline of the salmon population. I voted NO. H.R. 2578 passed and the entire vote is recorded below:

Energy Bills

The House also considered H.R. 4480: Strategic Energy Production Act of 2012. I have numerous concerns with this bill. It weakens the Clean Air Act by changing the way that the EPA establishes air pollution standards. Currently the EPA bases its determination on health and science. H.R. 4480 instead requires the EPA to consider costs to the industry when developing air pollution standards. This bill requires that every time oil is released from the Strategic Petroleum Reserve (SPR), the same percentage of public lands must be offered for drilling. The SPR is only tapped during emergencies and its use should not be hindered in this manner. H.R. 4480 blocks the EPA from finalizing rules controlling air emissions from vehicles and oil refineries. It also directs the Interior Department to approve drilling leases for 25% of the land that the oil industry requests each year. With this regulation, it’s easy to see how quickly all public lands could be designated for drilling. This bill also requires the Interior Department to prioritize energy production over everything else when it comes to using public lands. I voted NO. H.R. 4480 passed and the entire vote is recorded below:

What’s up Next Week

Next week the House is expected to continue consideration of FY 2013 appropriations bills as well as legislation relating to transportation. In addition, interest rates on federal student loans will double on July 1st unless Congress takes action. It is my hope that Congress will do something next week to address this responsibly.