Heritage Action Supports Rep. Gary Palmer and Sen. Mike Lee’s Agency Accountability Act

Earlier this year, Rep. Gary Palmer (R-AL) and Sen. Mike Lee (R-UT) introduced the Agency Accountability Act of 2017 (H.R. 850 & S. 299). This legislation would restore Congress’ power of the purse found in Article I of the Constitution over unelected federal bureaucrats by requiring “any agency that receives a fee, fine, penalty, or proceeds from a settlement” to “deposit such amount in the general fund of the Treasury.”  

Under current law, federal agencies that confiscate taxpayer dollars through fines, fees and proceeds from legal settlements — such as the Consumer Financial Protection Bureau and the Financial Stability Oversight Council — may repurpose those dollars as they see fit. The Agency Accountability Act would subject this revenue to the regular appropriations process and empower lawmakers, not federal bureaucrats, to determine how best to allocate scarce resources.

Justin Bogie, The Heritage Foundation’s Senior Policy Analyst in Fiscal Affairs, explains:

“Under current law, agencies have the ability to use funds received through fines, fees, and proceeds from legal settlements without going through the formal appropriations process, thus avoiding congressional oversight.

“The Agency Accountability Act seeks to correct this problem by requiring that (with limited exceptions) any fees, fines, penalties, or proceeds from a legal settlement be deposited into the Treasury’s general fund. The funds would then be available to the respective agencies, but only through the formal appropriations process.”

This legislation restores power back to Congress to make funding decisions. It also increases transparency within federal agencies by shining a light on the amount of revenue raised from agency fees and penalties, and the source of that revenue. Bogie continues:

“According to a report from the House Oversight and Government Reform Committee, agencies collected $83 billion in fines between fiscal years 2010 and 2015. The committee found that the amount of power given to agencies to pursue penalties and legal settlements allows them to act as both judge and jury.

“By forcing agencies to return these revenues to the Treasury’s general fund before they are appropriated back to the agencies, Congress would be able to fully account for how much revenue these agencies collect and what sources they collect from.”

Under this legislation, lawmakers would also have the option of keeping this revenue in the general fund for the purpose of deficit reduction. In fiscal year 2015 alone, agencies collected $516 billion through a wide array of user fees.

The Agency Accountability Act is a win for lawmakers who want to reclaim their rightful power of the purse and for those who care about fiscal sustainability and the negative economic effects of our growing national debt. With nearly two-thirds of the annual federal budget already consisting of “auto-pilot” mandatory spending, Congress should use this opportunity to pass the Agency Accountability Act and take back the power of the purse.

***Heritage Action supports the legislation, encourages Representatives and Senators to support it, and reserves the right to key vote in the future.***

 

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Heritage Action Supports Chairman Hensarling’s Financial CHOICE Act (H.R. 10)

In response to the housing collapse and financial crisis of 2007-08, Congress rushed to pass the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act under the guise of “consumer protection.” But instead of addressing the root causes of the financial crisis, such as the government’s reckless efforts to expand housing affordability and implied guarantees to bail out large financial institutions, Dodd-Frank empowers the very regulatory establishment which created the environment that led to the financial crisis in the first place.

Heritage Foundation Financial Regulations expert Norbert Michel writes:

“The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act is among the most inappropriately named laws ever enacted in the U.S. It neither reformed Wall Street nor protected consumers, and it imposed massive new regulations on banks far away from Wall Street.”

Along with imposing 3,500-plus pages of new rules and regulations on the financial industry, Dodd-Frank codifies “too big to fail” policy, runs local community banks out of business, restricts access to credit for investors and homebuyers, raises lending costs, reduces access to capital for small businesses, and created one of the most powerful and unaccountable federal agencies — the Consumer Financial Protection Bureau (CFPB). Evidence shows Dodd-Frank is one of the major factors responsible for the country’s historically slow economic recovery.

On June 6, 2016, House Financial Services Committee Chairman Jeb Hensarling (R-TX) unveiled his plan to repeal most of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. His legislation, entitled the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs) Act, was a significant, positive step toward repealing Dodd-Frank and restoring economic stability and growth to the financial markets.

But after the election of President Donald Trump and with Republicans maintaining control of both branches of government, Chairman Hensarling took advantage of the opportunity to strengthen  and reintroduce his bill.    

According to the Financial Services Committee website, the Financial CHOICE Act of 2017 would:

“end taxpayer-funded bailouts of large financial institutions; impose tougher penalties on those who commit financial fraud and insider trading; demand greater accountability from Washington regulators, and relieve well-capitalized banks from growth-strangling regulations that slow the economy and harms consumers.”

The newly introduced Financial CHOICE Act would do the following:

  • Mitigate “too big to fail” and bank bailouts by repealing most of Title I and all of Title VIII of Dodd-Frank.
  • Stop the government from seizing troubled financial firms through orderly liquidation and returns to a time-tested bankruptcy system by repealing Title II of Dodd-Frank.
  • Fundamentally reform the CFPB:
    • Rename it as the “Consumer Financial Opportunity Agency”
    • Governed by a single director removable at will by the president along with a deputy director appointed by the president
    • Restructure into an enforcement agency only, with no supervisory authority
    • Subject it to congressional oversight and the appropriations process
  • Rein in the Federal Reserve’s emergency lending authority by making it more difficult for the Fed to conduct bailout-style loans to insolvent firms.
  • Unleash small business creation, innovation and entrepreneurship by eliminating the misguided Volcker rule which has limited capital formation over the past few years.
  • Repeal the “Durbin Amendment” that allows the Federal Reserve to price-fix interchange fees from debit card purchases.
  • Subject all new major rules imposed by financial regulatory agencies to congressional approval under the Regulations from the Executive in Need of Scrutiny (REINS) Act.
  • Strengthen penalties on Wall Street for those who engage in fraud, insider trading and other corrupt practices.

Summarizing the core principle of the bill, Norbert Michel issued this statement:

“Dodd-Frank enshrined too big to fail with several key changes that make future taxpayer bailouts likely. The Financial CHOICE Act of 2017 repeals those key provisions and reduces the likelihood of future bailouts by providing regulatory relief for firms that absorb their own losses. Specifically, The CHOICE Act provides relief to banks that choose to fund themselves with more equity, thus lowering the probability of failure and taxpayer bailouts. Thus, the Financial CHOICE Act emphasizes the key principle that should drive any financial regulatory reform effort: there’s no justification for heavily regulating companies that bear their own losses.”  

The Financial CHOICE Act is a significant, positive step toward full repeal of Dodd-Frank. This bill provides regulatory relief essential to restoring economic growth, significantly reins in the unaccountable CFPB, and pushes the government out of the business of enacting price controls by repealing the Durbin Amendment. Republican members of Congress have repeatedly promised to get rid of Dodd-Frank and stop taxpayer funded bailouts. Now they have the opportunity to fulfill that promise by bringing the Financial CHOICE Act (H.R. 10) to a vote in the House and Senate, and sending the bill to the president’s desk.

***Heritage Action supports the legislation, encourages Representatives and Senators to support it, and reserves the right to key vote in the future.***

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Repeal Obamacare Progress (MacArthur-Meadows Amendment)

Heritage Action’s CEO Mike Needham said the proposed MacArthur-Meadows Amendment to the AHCA “advances the debate and raises key issues for the Senate to consider as the effort to repeal Obamacare moves forward.”

This amendment, which is the product of weeks-long negotiations by Rep. Tom MacArthur (R-NJ) and Rep. Mark Meadows (R-NC), is an important step forward in rolling back the Title I regulations of Obamacare because it would allow states to say “NO” to some of the most harmful parts of Obamacare. As Mike made clear, “this is not full repeal and it is not what Republicans campaigned on” but it does “represent important progress”. That means there is more work to do.

How did we get here?  Last month Congress introduced the American Health Care Act (AHCA). The original bill failed to truly repeal Obamacare. Fortunately, House Republican leaders pulled the bill from the floor.

Since that point, conservatives have been leading. Members of the House Freedom Caucus have worked directly with the Trump Administration and a handful of more moderate Republicans to make important policy changes that allow the debate to move forward.

So what does the new amendment include? The amendment allows states to opt out of two of the most harmful parts of Obamacare, the essential health benefits mandate and parts of community rating scheme.

Essential health benefits: This mandate forces insurance companies to cover comprehensive benefits for all recipients regardless of needs or wants. It essentially dictates one size fits all health insurance policies. Requiring essential health care benefits restricts health care providers from customizing plans and offering consumers a choice in the marketplace. Allowing states to set their own essential health benefits would lead to increased choice and lower costs.

Community rating: This mandate prevents insurance companies from setting prices based on various risk and cost factors. Requiring community rating forces many consumers to pay more for insurance than should be necessary. Allowing states to set their own standards will lead to increased choice and lower costs.

Is this the final bill? No. Even if  the MacArthur-Meadows Amendment is added to the AHCA, the bill must be voted on by the House. From there it will head to the Senate where is it guaranteed to change. That will provide  Senate conservatives an opportunity to make further changes and continue repealing key parts of Obamacare.

Heritage Action will continue pushing for real repeal of Obamacare and move toward a patient-centered healthcare system.

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FACT SHEET: GOP Campaigned on Repealing Obamacare’s Community Rating Provision

 

“Our members campaigned on this bill. Heck, about a dozen Freedom Caucus members co-sponsored the Price bill, which is what this is.” — Speaker Paul D. Ryan, March 10, 2017

Better Way Promise: “Patients with pre-existing conditions, loved ones struggling with complex medical needs, and other vulnerable Americans should have access to high-quality and affordable coverage options. …[W]e believe states and individuals should have better tools, resources, and flexibility to find solutions that fit their unique needs.” (A Better Way to Fix Health Care, Page 5)

Over the past several days, some have suggested the Better Way proposal never intended to repeal Obamacare’s community rating provision.  They argue that many Republicans have promised to ensure that Obamacare is replaced with conservative solutions to protect the most vulnerable while preserving a functional insurance market. But their conflation of this general promise with a pledge not to repeal Obamacare rules like community rating is disingenuous.

Example: The Speaker routinely cites a bill introduced by now-Secretary Tom Price as an example of the type of bill conservative lawmakers have previously supported. He construes their support for this bill as implicit support for community rating. But the Price bill could not have been clearer:

From Empowering Patients First Act: SEC. 3. NO MANDATE OF GUARANTEED ISSUE OR COMMUNITY RATING. Nothing in this Act shall be construed to provide a mandate for guaranteed issue or community rating in the private insurance market.  (H.R. 2300, Page 5)

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Want to talk to your Members of Congress? Check this list

Conservative accountability goes beyond casting a vote. Building a society in which freedom, opportunity, prosperity, and the civil society flourish requires a sustained effort.  That is why we have compiled a non-exhaustive list of upcoming townhalls, all of which provide excellent opportunities to discuss important issues with members of Congress.

As always, make sure to confirm the details with the Representative or Senator’s office.

Email Emily.Stewart@heritageaction.com for any further details.

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