Congressmembers on both sides of the aisle yesterday joined forces to pass the so-called “Jobs for America Act” (H.R. 4).
In the vote, 221 Republicans and 32 Democrats matched the absurd anti-regulatory rhetoric of the U.S. Chamber of Commerce and other Big Business groups with absurd anti-regulatory policy. The bill contains provisions designed to stifle, stall, shrink and stop safeguards the public relies on and includes the text of familiar deregulatory bills like the Regulatory Accountability Act and the REINS Act (which the House already has voted on). If enacted, H.R. 4 represents a green light allowing reckless corporations to do simply whatever they want with as little oversight as possible.
Big Business groups have been making hyperbolic claims about regulations killing jobs – and the inverse claim that gutting regulation will create jobs – for decades. The predictions never come true.
Consider the following examples from Public Citizen’s recent report:
- 1974: The Occupational Safety and Health Administration bans the carcinogen, vinyl chloride. The plastics industry claimed that the OSHA regulation would kill 2.2 million jobs. Those claims were proven completely false. A new way to manufacture vinyl chloride was developed within a year without any jobs lost.
- 1975: The National Highway Traffic Safety Administration increases the fuel efficiency standard. Industry reports warned that 1.5 million jobs would be lost. By 1985, automakers had met the higher standard without losing any jobs.
- 1990: The Environmental Protection Agency sets new pollution standards under the Clean Air Act. Business Groups responded with doomsday hysterics, claiming up to 2 million jobs would be lost. Those were proven entirely wrong. Instead, according to the Investor’s Business Daily, “Pollution has been falling across the board for decades, even while the nation’s population and economy have expanded.”
- 1995: EPA removes lead from gasoline. Monsanto claimed 43 million jobs would be killed. The removal of lead is now considered one of the biggest public health success stories while gas prices did not dramatically increase and no jobs were lost.
Statement of David Arkush, Managing Director of Public Citizen’s Climate Program
Today, the U.S. House Committee on Science, Space, and Technology holds a hearing to criticize the U.S. Environmental Protection Agency’s (EPA) plan to curb climate-disrupting carbon pollution from power plants. The hearing will be a farce, as Chairman Lamar Smith (R-Texas) is on record denying the science of climate change, and in this Congress alone, House Republicans have voted 217 times against clean air, the environment, climate change policy and clean energy. Despite mounting evidence that climate change is harming our natural environment in disastrous ways, as well as positive news that we can respond much more cheaply than expected, their story remains the same: Deny there is a problem, and deny there are solutions.
The EPA’s proposal to curb carbon pollution is good policy on economic and consumer grounds alone. The EPA projects that its plan will boost the economy by $26 billion to $84 billion per year and lower consumers’ electric bills 9 percent by 2030. These benefits stem not just from slowing climate change, but from curbing air pollution from the dirtiest power plants, promoting energy from renewable sources and using energy more efficiently. House Republicans who deny the science of climate change should still support cleaning up the air to make Americans healthier. They should still support saving American consumers money on their utility bills. And they should support making the U.S. a leader on cleaner and cheaper energy sources rather than clinging to dirty, unhealthy and expensive energy from the past.
Contact: Angela Bradbery (202) 588-7741
Karilyn Gower (202) 588-7779
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Bankers pulled over for speeding can depend on certain government officials to try to get their tickets cleared: a set of Republicans on the House Financial Services Committee. Bankers whose business model depends on unfair, deceptive and abusive practices have found rhetorical comfort, if not actual relief, from repeated efforts by the committee to disable the Consumer Financial Protection Bureau (the hallmark creation of the Dodd-Frank reform law).
Now, another creation of this Dodd-Frank law meant to check unsafe banking has come under fire from these same Republicans: the Financial Stability Oversight Council (FSOC). On September 17, the panel’s Subcommittee on Oversight and Investigations will engage in a ritual grilling. This ritual will then likely serve to buttress legislation the House will approve on largely partisan lines to disable the FSOC. (There are some Democrats who want bankers to think they’ll try to fix their traffic tickets as well.)
What is FSOC? Why should Americans and responsible members of Congress care?
The Council is a collaboration of top financial regulators with 10 voting members, made up of the:
- Secretary of the Treasury (chairs the Council),
- Chair of the Federal Reserve,
- Comptroller of the Currency,
- Director of the Consumer Financial Protection Bureau,
- Chair of the U.S. Securities and Exchange Commission,
- Chair of the Federal Deposit Insurance Corporation,
- Chair of the Commodity Futures Trading Commission,
- Director of the Federal Housing Finance Agency,
- Chairman of the National Credit Union Administration Board, and
- an independent member (with insurance expertise) appointed by the President
These regulators meet to discuss emerging problems and recommend actions that would be taken by specific regulators.
Here are some of the benefits of FSOC:
- Addressing fragmented supervision: There are state banks and national banks, with 50 separate regulators for the former, and a different regulator for the latter. If a bank is owned by a bank holding company, that’s under the purview of still another regulator. If the bank holding company owns a broker/dealer such as Merrill Lynch, that’s overseen by another regulator. And another regulator oversees firms that engage in commodity futures. Credit unions, of course, have their own regulator. The FSOC attempts to take a holistic view.
- Helps address gaps: Current regulators are responsible for parts of the financial industry. But the 2008 crash demonstrated that contagion spread from one sector to another. For example, when AIG’s financial products division, supervised by the Office of Thrift Supervision, found itself unable to pay claims on credit default swaps, the problem harmed many banks and broker/dealers making those claims, which were supervised by other regulators. In conceiving the Council, the President explained that it would ‘‘bring together regulators across markets to coordinate and share information, to identify gaps in regulation, and to tackle issues that don’t fit neatly into an organizational chart.’’
- Early warning: The FSOC must identify emerging problems. Its annual report serves as a warning discipline. In the midst of the booming market during the inflation of the house bubble, regulators were either complacent or loath to publicize potential problems. The annual report must contain areas that the Council considers concerning.
- Helps with inter-regulator information: Financial deregulation allowed firms to engage in multiple activities that were once prohibited at a single firm. Yet the regulatory system did not change. As a consequence, one regulator might examine one business at a firm and another regulator might examine another business with little coordination or information sharing. FSOC can help address problems that arise from such parallel oversight.
- Help combat regulatory arbitrage: Financial firms must structure their products to secure supervision from regulators believed to be less rigorous. Such arbitrage played out during the savings-and-loan crisis when developers found that the regulator relaxed standards for lending. The FSOC can recommend better regulations for certain agencies.
- Help press regulators to reform markets? If a regulator is perceived as lax, the FSOC can make recommendations. Already, under direction from the FSOC, the Securities and Exchange Commission finalized rules to strengthen money market funds, where investor runs during the 2008 crisis led to seizure in short-term funding for business provided by these funds.
- FSOC can break up the mega-banks: The Council plays a significant role in determining whether action should be taken to break up those firms that pose a “grave threat” to the financial stability of the United States.
- FSOC can designate non-banks for special supervision: Some firms that fall outside of traditional banking may nevertheless contribute to financial contagion and should be subject to special supervision. Already, the FSOC has designated General Electric Capital Corp., AIG, and Prudential Financial, Inc. The Council may soon designate MetLife, Inc. The Council’s determinations follow a lengthy process involving hearings and the opportunity for a firm to appeal in court.
- Transparency. Many of the FSOC meetings are open to the public. FSOC officials must also appear before Congress. FSOC’s explanations for designating a non-bank as systemically significant are also published.
You would think that after yesterday’s historic majority Senate vote to overturn Citizens United, we’d be out of tremendous victories to share with you.
But we’re not finished yet.
Amid the exciting news about the constitutional amendment was a another huge victory for Public Citizen and our allies: through our leadership, more than one million people have submitted comments in support of the Securities and Exchange Commission petition calling for disclosure of corporate political spending.
One million comments is a record at the SEC — in fact, it’s a record by nearly 900,000. No rulemaking in the history of the agency has garnered such broad and tremendous support. The general public gets that undisclosed corporate money is an affront to the integrity of elections, but the diversity of support for this rule is a testament to just how common-sense it truly is. Investors, academics, state treasurers, members of Congress, small business owners, the list goes on and on, have all called on the SEC to act.
To mark this milestone, we took the fight right to the SEC’s doorstep.