July 27, 2012

Drilling

This week the House considered H.R. 6082: Congressional Replacement of President Obama’s Energy-Restricting and Jobs-Limiting Offshore Drilling Plan. It might interest you to know that H.R. 6082 represents the 11th bill to expand drilling that has been considered in the House this Congress. The Obama Administration has already said it will veto the bill. This legislation opens up practically all remaining public land to drilling. It requires oil and gas leasing from Maine to South Carolina, off the coast of southern California and off Bristol Bay in Alaska. Some of these areas have already been protected from drilling by governors of impacted states, but H.R. 6082 does away with those protections.

In a continued attack on environmental regulations, this bill weakens the environmental review process. It requires the Department of Interior to conduct just one Multisale Environmental Impact Statement (EIS) for all of the impacted areas. In the past, a multisale EIS is prepared only for lease sales in areas that have similar characteristics. This bill requires one EIS for three unique and very different coastal areas. The environmental conditions that exist in southern California are very different than those off the coast of Maine or Alaska. It is irresponsible to toss these three areas together just to speed up the environmental review process.

It’s worth noting that oil imports have dropped every year that President Obama has been in office and are currently at a 17 year low. I voted NO. H.R. 6082 passed and the entire vote is recorded below:

Regulatory Reduction

The House yesterday passed H.R. 4078: Regulatory Freeze for Jobs Act. This legislation is a combination of 7 bills that seek to slow down or stop agencies from issuing regulations. It prohibits any federal agency from taking any significant regulatory steps until the unemployment rate is at 6% or lower. The definition of “significant” is so broad in the bill that it could impact virtually every pending regulation. This will have far reaching and troubling consequences. For example, H.R. 4078 prohibits the implementation of rules relating to the Food Safety Modernization Act, prohibits the implementation of rules to make infant formula safer and prohibit rules that implement the Veterans’ Benefits Improvement Act of 2010. That means rules making our food and infant formula safer, and rules that will help give veterans access to improved services won’t go into effect. I could cite many more examples of initiatives that will languish because of this bill. The Administration has issued a veto message on H.R. 4078. I voted NO. H.R. 4078 passed and the entire vote is recorded below:

Audit the Fed

The House this week also considered H.R. 459: legislation to require a full audit of the Board of Governors of the Federal Reserve System and the Federal Reserve banks by the Comptroller General of the United States before the end of 2012. I am committed to shining a light on the Federal Reserve, its balance sheet and its actions. However, I support the Fed’s independence in the one area that should remain free from politics: its monetary policy. H.R. 459 would allow the GAO to “audit” or second guess the Fed’s monetary policy decisions and make recommendations on how to do such policy, which could pressure the Fed into responding to political whims of the moment. An audit like this is vulnerable to politics. Elections are really the best way to change policy. Independence in this area is essential and is observed by every industrialized nation with a central bank. For this reason, I could not support H.R. 459.

Please note that I support increased transparency of the Fed in all other areas. For example, the Wall Street Reform bill, which I voted for, requires the GAO to audit the Fed’s balance sheet and to make public all firms that received emergency lending funds. It also examined how much went to whom and whether the money was used for its intended purpose. That bill also prohibits the Fed from bailing out any individual company. I fully support scrutiny like this and believe more can be done along these lines. The audit required in H.R. 459 goes beyond that and I could not support it. I voted NO. H.R. 459 passed and the entire vote is recorded below:

Treasury Secretary Geithner

On Wednesday the House Financial Services Committee heard from Treasury Secretary Timothy Geithner. He took a range of questions on the implementation of the Wall Street reform bill, the impact of the LIBOR scandal on the U.S. and the state of the economy. LIBOR is the London Interbank Offered Rate and is the basis on which all interest rates are set. Therefore, news that it was being manipulated in 2008 is very concerning. LIBOR impacts your mortgage, credit card rates, auto loans and much more. Although I am glad that the LIBOR controversy came up at this week’s hearing, I am disappointed that the committee still has not held a hearing solely on this topic.

Secretary Geithner was head of the New York Fed in 2008 and raised concerns about LIBOR manipulation at the time to the British Bankers Association (BBA). The BBA is a private group of banks that calculates the LIBOR. Many Members were specifically interested in how Secretary Geithner approached the LIBOR controversy in 2008. These are important questions and I too am interested in learning more about that. The Committee should not however, be focusing on this aspect of LIBOR alone. The Financial Services Committee should hold a hearing on the broader effects of the LIBOR controversy, including how it is it impacting the average American consumer. The banks involved should be called to testify on LIBOR to better inform the Committee on this controversy. Narrowly focusing on Secretary Geithner doesn’t get at the larger issue of how this interest rate could be so easily manipulated.

The issue of regulation came up many times during the hearing. As I have reported before, Republicans have taken every opportunity to defund the agencies responsible for implementing the Wall Street reform bill. That is a problem. If the proper regulatory tools are in place but there isn’t any money to implement them, they won’t be effective. If Congress wants improvements to our financial system, regulators must be given adequate funding to do their jobs.

What’s Up Next Week

Next week the House is expected to consider an extension of the Bush tax cuts as well as an extension of the farm bill.