“NO” on $16 Billion Bailout of National Flood Insurance Program

This week, the Senate will vote on the Additional Supplemental Appropriations for Disaster Relief Requirements Act of 2017 (H.R. 2266), a $36.5 billion disaster aid package intended to provide emergency relief funding for victims of hurricanes Harvey, Irma, Maria, and Nate, and for those fighting wildfires across California and other western states. The bill includes $18.67 billion for the Federal Emergency Management Agency’s (FEMA) Disaster Relief Fund (DFR) — $4.9 billion of which could be used to subsidize direct loans to Puerto Rico and are unlikely to be repaid — $576.5 million for federal wildfire suppression, and a $16 billion bailout of the National Flood Insurance Program’s (NFIP) nearly $30 billion debt. Heritage Action key voted against the bill in the House.

In the official disaster supplemental request to Congress, Office of Management and Budget (OMB) Director Mick Mulvaney writes that “the NFIP required immediate financial relief to fulfill its obligations to its policyholders, but the program must also be reformed to place it on a sound financial footing and to enable the private market for flood insurance to expand.” OMB also argued the NFIP’s debt cancellation stems from “unforeseen, unanticipated events … it should be provided as an emergency requirement for budgetary purposes.” Heritage Action critiqued the request in a statement last week from vice president Dan Holler:

“The administration’s request to treat a $16 billion bailout for the failing federal flood insurance program as an emergency is irresponsible. There have been numerous efforts over the past decade to make the NFIP financially and structurally sound, but special interest pushback successfully blunted serious reforms. Put another way, the NFIP’s existing debt stems from poor design and congressional inaction, not an unforeseen crisis.

“If the administration and congressional leaders want to write off the NFIP’s debt it should be paid for and tied with the reforms similar to those recommended by Director Mulvaney. Anything short of that is simply a taxpayer bailout of a failed, big-government program and a victory for the special interests.”

The Heritage Foundation explained last month that emergency spending must meet five criteria: Necessary, sudden, urgent, unforeseen, and not permanent. The five-part test was first created by President George H.W. Bush’s OMB in 1991. In a report to Congress, as required by P.L. 102-55 (June 1991), OMB defined emergency spending as the following:

  1. Necessary expenditure–an essential or vital expenditure, not one that is merely useful or beneficial;
  2. Sudden–quickly coming into being, not building up over time;
  3. Urgent–pressing and compelling need requiring immediate action;
  4. Unforeseen–not predictable or seen beforehand as a coming need (an emergency that is part of an aggregate level of anticipated emergencies, particularly when normally estimated in advance, would not be “unforeseen”); and
  5. Not permanent–the need is temporary in nature.

The $16 billion bailout, which the legislation notes will be “treated as public debt of the United States,” fails the five-part test multiple times. The NFIP’s debt obviously built up over time and bailouts are by definition permanent in nature. Some lawmakers have raised concerns that additional bailouts are forthcoming because the bill waives the Stafford Act and allows “the Secretary of Homeland Security, in consultation with the Secretary of the Treasury” to cancel debts “in whole or in part” at their discretion.

Federal relief to victims of hurricanes is warranted, but Congress must act in a fiscally responsible manner by offsetting funding that is not truly “emergency” in nature. As Heritage Action made clear in September, “Any funds that fall outside the strict definition of ‘emergency spending’ should, such as the reported inclusion of small business loans, be offset.”

In the aftermath of Hurricane Katrina in 2005, the Republican Study Committee (RSC) unveiled “Operation Offset,” which was essentially a menu of spending cuts to offset the costs of disaster relief and rebuilding efforts. The Heritage Foundation applauded the effort, writing that The President and Congress are making huge federal commitments for relief and rebuilding, but these should not translate into an unprecedented expansion of the federal budget at a time when spending is already near an all-time high.”

Unfortunately, lawmakers will not be allowed to offer offsets or reforms because the bill will likely be voted on under a suspension of the rules, which requires a two-thirds vote. Regardless, The Heritage Foundation’s Blueprint for Balance: A Federal Budget for 2017 and Blueprint for Reform: A Comprehensive Policy Agenda offer dozens of offset options should lawmakers wish to revive Operation Offset. More spending is likely on the way, Interior-Environment Appropriations Subcommittee Chairman Mike Simpson (R-Idaho) made clear “This isn’t the last supplemental.”

***Heritage Action opposes the $16 Billion Bailout of National Flood Insurance Program and will include it as a key vote on our legislative scorecard.***

“YES” on the Repeal of Title I of Obamacare (Sen. Amendment #1430)

The Senate will vote on an amendment (#1430) offered by Senator Mike Lee (R-Utah) to H. Con. Res. 71 that would repeal Title I of Obamacare. This amendment expands the budget resolution’s existing deficit neutral reserve fund for legislation that repeals Obamacare to specifically include the repeal of Title I of Obamacare.

As Heritage Action has written previously, Title I of the Affordable Care Act is the regulatory architecture of Obamacare that is responsible for the rising cost of health care. It is the beating heart of Obamacare that includes a number of health insurance mandates and regulations including guaranteed issue, community rating, essential health benefits, and actuarial value, among others. Taken together, these mandates and regulations restrict consumer choice and drive up the cost of health care premiums by a national average of 44.5 to 68 percent.

Republicans have promised to repeal Obamacare for over seven years, but despite full control of the federal government, they have failed to do so. This amendment would repeal the heart of Obamacare and begin the process of moving to a patient-centered health care system that works for all Americans.  

Heritage Action supports the Lee Amendment and will include it as a key vote on our legislative scorecard.

Related:
Heritage Action Will Score Vote-A-Rama
Heritage Action: Full Repeal Must Include the Regulatory Architecture of Obamacare (March 2017)

CO-SPONSORSHIP of the Pain-Capable Unborn Child Protection Act (S.1922)

The Pain-Capable Unborn Child Protection Act (S.1922), introduced by Sen. Lindsey Graham (R-S.C.), would protect unborn children by preventing abortions 20 weeks after conception, at which time scientific evidence suggests the child can feel pain.

S.1922 mirrors legislation (H.R. 36), introduced by Rep. Trent Franks (R-Ariz.), which passed the House 237-189. The House has passed similar pain-capable unborn protection legislation several times since the beginning of the 113th Congress, each of which were subsequently blocked by Senate Democrats.

This Congress has the opportunity to advance pro-life legislation and now has a willing ally in the White House. In a statement of administration policy, the Trump administration affirmed its support of this legislation. Senators can help advance pain-capable unborn protection legislation to a floor vote by cosponsoring S.1922.

The 20 week ban proposed in S.1922 is current law in almost every country in the world, has successfully become law in over a dozen states, and is supported by a vast majority of Americans. As Sarah Torre, policy analyst at the Richard and Helen DeVos Center for Religion and Civil Society at The Heritage Foundation, writes:

The vast majority of Americans—including nearly 60 percent of women—support limits on dangerous and gruesome late-term abortions performed after 20 weeks. That’s five months, or halfway through pregnancy, when unborn children can feel pain and women are at increased risk for the negative effects of abortion.

National leaders’ failure to protect women and unborn children from late-term abortion has made United States’ policy on abortion extreme among developed nations. The U.S. is currently one of only seven countries in the world—in the company of North Korea and China—in which elective, late-term abortion after 20 weeks is allowed.

In a Heritage report titled, “Defending Life: Opportunities for the 115th Congress,” research associate in the DeVos Center for Religion and Civil Society at The Heritage Foundation Melanie Israel prioritizes passage of the Pain-Capable Unborn Child Protection Act in addition to other pro-life opportunities this Congress. Heritage Action key voted the House bill earlier this week.

The nonpartisan Congressional Budget Office (CBO) estimates that passing this bill could potentially save 10,000 lives each year—a number widely considered to be on the conservative side. Sen. Graham presented a life-affirming vision Heritage Action agrees with: “I don’t believe abortion, five months into pregnancy, makes us a better nation. America is at her best when she’s standing up for the least among us and the sooner we pass this legislation into law, the better. We are on the right side of history.”

As Heritage’s Defending Life report concludes: “With pro-life majorities in the House and Senate, and a President who has committed to defend innocent life, Congress has the opportunity of a generation. Passing key pro-life legislation should be among the highest priorities in the 115th Congress.” Now is the time for the Senate to act on the Pain-Capable Unborn Child Protection Act, and protect women and unborn children from gruesome late-term abortions performed after 20 weeks.

Heritage Action supports S.1922 and will include CO-SPONSORSHIP of this legislation in our scorecard.

“YES” ON THE CONGRESSIONAL DISAPPROVAL OF THE CFPB’S “ARBITRATION RULE” (S.J. Res. 47)

This week the Senate could vote on a Joint Resolution (S.J. Res. 47) providing for congressional disapproval of the rule issued by the Consumer Financial Protection Bureau (CFPB) related to “Arbitration Agreements.” Sponsored by Sen. Mike Crapo (R-Idaho), S.J. Res. 47 would use the Congressional Review Act (CRA) to overturn a new rule issued by the CFPB intended to ban financial service providers (banks, credit card companies, small dollar lenders, etc.) from using mandatory arbitration clauses to resolve their disputes and avoid class action lawsuits.    

Arbitration has a long history of providing consumers with efficient, cost-effective and fair results in disputes with financial service providers. The Heritage Foundation explains the “only real alternative” to arbitration is “expensive and time-consuming litigation that in many cases does more to line trial lawyers’ pockets than redress consumers’ injuries.” In other words, “any action to curtail arbitration would only injure consumers and workers.” In a recent commentary, Norbert Michel, Director of the Center for Data Analysis at The Heritage Foundation, elaborated:


“Many trial lawyers oppose arbitration because it denies them of exorbitant class-action lawsuit fees—it is an inexpensive alternative to courtroom litigation. Arbitration is undeniably a fair and effective alternative for resolving disputes, particularly between businesses and consumers. Proponents of the bureau’s rule are upset that financial services companies often use mandatory arbitration clauses in their contracts, thus preventing customers from resolving disputes through class-action litigation.”

Congress authorized the CFPB to study arbitration agreements in the misnamed Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. According to Diane Katz, Senior Research Fellow in Regulatory Policy at The Heritage Foundation:


“The statute also authorized the bureau to regulate arbitration agreements “if the bureau finds that such a prohibition or imposition of conditions or limitations is in the public interest and for the protection of consumers. The findings in such rule shall be consistent with the study conducted under subsection (a).” The bureau produced an arbitration study in 2015, but the content was methodologically meaningless and the rule is not, in fact, consistent with the study.”

In response to the CFPB study, more than 50 members of Congress called upon Director Richard Cordray to reexamine the bureau’s “fatally-flawed study.” The Arbitration Rule is just the latest of many unwarranted and costly regulations perpetrated by the CFPB that undermine consumer choice and offend the Constitution’s separation of powers.

Ultimately, Congress should act to eliminate the CFPB altogether or at least dismantle the Bureau as outlined in the Financial CHOICE Act of 2017 (H.R. 10). In the meantime, passing S.J. Res. 47 will protect consumers and send a clear message to federal agencies that Article I’s legislative powers are vested in Congress, not Washington, D.C. bureaucrats.

***Heritage Action supports S.J. Res. 47 and will include it as a key vote on our legislative scorecard.***        

Related:
Heritage Foundation: The Unfair Attack on Arbitration: Harming Consumers by Eliminating a Proven Dispute Resolution System (2013)
Heritage Foundation: Time to Eliminate the Consumer Financial Protection Bureau (2016)
Heritage Action: Congress Must Roll Back CFPB’s Costly Arbitration Rule (2017)
Heritage Foundation: This Official Had the Spine to Stand Up to the Powerful CFPB. Congress Should Follow His Lead (2017)
Heritage Foundation: House and Senate Set to Protect Consumers From an Overreaching Federal Agency (2017)

Co-Sponsorship of the Employee Rights Act (S. 1774)

The Employee Rights Act (S. 1774), introduced by Sen. Orrin Hatch (R-Utah), would protect workers from union pressure by putting power in the hands of employees and making union leaders more accountable to their members. As the Heritage Foundation notes, if union bosses “were angels, such changes would be unnecessary” but “since they are not” new protections are necessary.

Heritage explains the legislation would guarantee employees the rights to:

  • Vote privately in a secret ballot election before forming a union;
  • Opt out of having their personal contact information provided to a union during an organizing drive;
  • Hear from employers at least 40 days prior to voting in a union election;
  • Vote in a secret ballot election before accepting a contract or going on strike;
  • Vote regularly on re-electing their union;
  • Decide whether their union can spend their dues on matters unrelated to collective bargaining; and,
  • Be free from union interference or extortion in exercising their legal rights.

Workers should not be pressured or coerced by unions or union bosses to take actions that undermine their rights. Protecting the voting rights of employees is essential:

“Under general union representation, employees relinquish their individual negotiating authority to a union. The union becomes the sole representative of the employees in negotiations with their employer. Unionized employers must negotiate employment terms with the union and the union alone. They may not bargain with individual workers.”

Though the purpose of unions is ostensibly to protect workers, they often fail to do so because they are motivated by the “institutional objectives” of expanding in size, income and influence. They want “contracts that protect their institutional powers.” When the interests of unions come in conflict with the interests of workers, unions often make decisions that benefit them rather than employees. In an effort to expand power and influence, unions discourage secret ballot elections or work to eliminate them altogether; this results in the loss of privacy benefits for workers. Unions can also call for a strike without first consulting workers.

Workers deserve a say in decisions that put their jobs at risk. The Employee Rights Act would amend this by requiring a secret ballot vote before a union can call a strike. Furthermore, the bill would solidify paycheck protection provisions, provide a mechanism for union re-certification, and finally criminalize union threats under federal law.

David W. Kreutzer, Ph.D., Senior Research Fellow in Labor Markets and Trade in the Institute for Economic Freedom and Opportunity at The Heritage Foundation, issued this statement:

“All union members deserve the protection of secret ballots and reasonable choice over who represents them. Ninety-four percent of union members are represented by unions for whom they never voted.  Let the dues-payers decide whether their union is an effective advocate for them or not. Competent, worker-focused union leadership has nothing to fear from members’ freedom to choose.”

The Employee Rights Act would solve many problems workers face today, including problems enshrined in current labor law. The bill would help restore a balance of power in the workplace from unions to workers and help ensure labor unions best serve the interest of employees, not union bosses.

Heritage Action supports S. 1774 and will include CO-SPONSORSHIP of this legislation in our scorecard.