With the health care debate, ClimateGate, Copenhagen, and the possibility of the EPA regulating carbon, you may not be aware that the House will soon vote on a financial regulatory bill that Rep. Patrick McHenry (R-NC) describes as “Barney Frank’s permanent bailout fund.” Today’s blogger conference call with Mr. McHenry and Rep. Cathy McMorris Rogers (R-WA) was very enlightening. According to Mrs. McMorris Rodgers, should this “bad bill” pass it will mean the government will take over another American industry – financial services. She described it as a “super regulator” that will decide the winners and losers in America.
Rep. McHenry did his best to explain this bill so normal Americans can understand what Barney Frank and the Democrats are attempting to do. The repercussions will be felt by all of us. Fast food restaurants like McDonald’s won’t be able to sell the McDouble for $1 because they could lose the ability to control costs through derivatives. Our checking accounts will be more expensive and savings accounts will pay even less interest than they do now. And at a time when businesses need credit to expand, the banks will be further limited in their ability to lend. The reason, according to Mr. McHenry, is that banks will be forced to pay billions into the regulatory bailout fund, so the assets sent to the federal government won’t be available for making loans. The Consumer Protection Agency will decide which financial products can be offered to consumers. It will be even harder for American families to obtain mortgages if judges can use mortgage cramdowns to decide who owes a mortgage and who doesn’t.
Mr. McHenry voted against TARP I, and he describes this financial services bill as TARP II. The government fund for bailouts will cost $4.5 billion while the consumer protection agency will cost $1.1 billion. The Democrats’ unprecedented spending continues, and in fact, they voted today on a half a trillion dollar omnibus spending bill that includes everything but the kitchen sink. But not to worry, he said they’ll stick the kitchen sink into a separate bill.
I asked if they had a response to President Obama’s accusation that Republicans are scaring Americans. McHenry was quick to point out that it’s the policies of the president and the Democrats in Congress that are frightening Americans and small businesses. Large and small businesses alike are afraid of tax increases. The uncertainty over what government’s going to do next prevents businesses from making investments and using financial products.
Rep. McHenry also updated us on the US Census. He is fairly confident there will be a full and accurate count, and if so, the GOP may pick up a few seats due to population growth in Republican areas. Ten years ago the Census Bureau used the long form, but today the form will be only ten questions so it should be much simpler to answer. Keeping the Census out of the White House and Rahm Emanuel was a victory for the Republicans, as was forcing them to ditch ACORN.
As far as funding for ACORN, Mr. McHenry said keeping federal, state and local funds out of their hands will be an ongoing process. He said Republicans will continue to hold the Democrats’ feet to the fire and “tease them out” to see who will continue to support ACORN.
The Democrats have been moving fast and furiously to ram through as much of their agenda as they possibly can. I asked how much of what they pass can be repealed. Cathy McMorris Rogers chimed in to say it can all be repealed. But that won’t happen with the Democrats in the majority and President Obama in the White House.
************************************************
As a side note, if you haven’t read Amity Shlaes’ The Forgotten Man, you really should. So much of what the Democrats are doing today is reminiscient of what FDR did back in the 1930s. Contrary to popular belief, FDR’s policies prolonged the Great Depression. It looks like history is repeating itself.
Recent Comments