|2:05 PM EDT||
Scott Garrett, R-NJ 5th
Mr. GARRETT of New Jersey. Mr. Speaker, like all my colleagues, I believe that financial reform is necessary now. But the legislation that is before us really, which empowers failed bureaucrats through government overreach and unnecessary job killing, is just not the right legislation.
First, you know, one of the major fundamental flaws of this 2,300-page bill is the section that basically empowers government bureaucrats with so-called resolution authority to basically pick winners and losers again, to continue that failed bailout philosophy.
Now, I know the chairman and the proponents of this bill claim that these provisions are meant to add certainty and stability to our financial system. But when you think about it, when you set up an alternative to bankruptcy for failed firms so that there are now two potential tracks for failed firms to go down, that actually introduces more uncertainty, more uncertainty for the financial markets, for the investors, for the counterparties, for our entire economy because of this bill. And that
uncertainty, what does that lead to? It leads to failing to invest and leads to less job creation as well.
Furthermore, this section of the legislation gives an alarming amount of power to government regulators and bureaucrats to basically decide the fate of a firm and its creditors. Under this administration, we've seen this before. We've seen the rule of law trampled when the Federal Government bullied into submission secured creditors in the Chrysler situation. In favor of whom? Well, politically favored unsecured creditors.
And what is this legislation? This would codify the ability of regulators to engage in similar conduct, further eroding confidence in our rule-based economy. And sending investors where, to this country? No. To overseas, scattering them to other opportunities, rather than here in the U.S.
Not only that, but this resolution authority, in codifying a better deal than in bankruptcy for at least some of the politically connected, gives large firms an unfair advantage over their smaller rivals.
This then does what? It increases moral hazard by encouraging investment in firms that basically otherwise just don't deserve it. And this is a part of the problem that led to the demise [Page: H5227]
that we have seen in other areas of our economy, talking about Fannie Mae and Freddie Mac, the GSEs, which, by the way, are never touched in this legislation whatsoever.
Another aspect of the problem with this bill is Big Brother, Big Brother overreach that didn't exist before. This bill creates two new government bureaucracies, including the so-called Office of Financial Research, that will have unprecedented power to track the financial activities of everyone here and everyone in the entire United States. You're taking money out of the ATM, that's tracked. You're trying to set up a new credit card, that will be tracked. Information about any one of your consumer
transactions, that will now be able to be tracked and gathered without anyone's approval, any citizen's approval. And it will be monitored by whom? Basically by unelected and unaccountable bureaucrats here in Washington with few or hardly any constraints whatsoever on how they're going to use the information or when they're going to use the information.
Then there's the section on derivatives, another massive, massive job killer. I joined with Congressman Frank Lucas. We offered an alternative to this bill in the last days that was basically the original House version of the bill. It had broad bipartisan support. Unfortunately, under pressure from Democrat leadership, not a single Democrat supported that House language in the final vote, despite the fact that very same language was originally sponsored by the Democrat Financial Services
and Agriculture Committee chairman.
The results of all this? Well, the result of that section not being in it means that businesses big and small all over this country which had absolutely nothing to do with this financial crisis will now have a very difficult time to hedge their risks, to guard against future risk, because they will have to pay literally hundreds and hundreds of billions of dollars in additional funds to control risks on a daily basis.
What does that mean for all of us? More job losses. This bill is a job killer. And it will raise prices, too, for every American across the country, whether you are talking about food prices, energy prices, you name it. How many jobs will be lost? In a recent study by Keybridge, they found between 100,000 and 120,000 jobs will be lost because of this job-killing bill.