February 10, 2017
"to elevate the condition of men--to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance, in the race of life." --Abraham Lincoln
Chairman's Note: Earmarks Would Only Weaken Congress
In November the American people voted to give Republicans unified control of the federal government because, in large part, we pledged to "drain the swamp" — that corrupt political culture prevailing in our nation's capital that enables elites to manipulate the levers of government to their advantage.
Changing business as usual in Washington is a tough fight. But we would be going the wrong way if Republicans were to lift the current ban on earmarks — those infamous provisos attached to spending bills that funnel taxpayer money to pet projects and parochial interests — as some have proposed.
The most that can be said of the proposal to revive earmarks — a practice Republicans voted to prohibit in 2010 — is that it begins from a correct observation that political dysfunction is plaguing Washington today. Article I of the Constitution vests "all legislative powers" in Congress. But in recent decades, legislators have been giving away many of their lawmaking powers to the executive branch.
So today, just as the vast majority of the federal government's rules are written by unelected bureaucrats in the executive branch, these same bureaucrats often enjoy more discretion than members of Congress in deciding how federal taxpayer money is spent.
Republicans are rightfully frustrated by this state of affairs, which has led some of our colleagues in the House to float the idea of bringing back earmarks. As they tell it, reviving earmarks would strengthen Congress by reclaiming the legislature's most potent authority: the power of the purse.
Congress needs to assert its power of the purse, but not in this manner. Letting members of Congress take credit for federal money steered to their constituents does not fix the incentive problem at the core of today's congressional dysfunction. In fact, it would only worsen it.
As anyone who worked in Washington before 2010 will remember, earmarking was not the innocuous exercise of Congress' constitutional spending power; it was the tool lobbyists and leadership used to compel members to vote for bills that their constituents — and sometimes their conscience — opposed.
The good news is that there's a better way to strengthen Congress. Instead of reviving earmarks, which would ultimately only further weaken the legislative branch, there are other ways to reinvigorate Congress' power of the purse without also reinvigorating special interests in Washington.
For example, Congress can use the authorization process to reform how federal agencies spend taxpayer dollars to ensure the process for selecting funding priorities and recipients is transparent, merit-based and consistent with congressional intent. We can also rewrite our outdated budget process rules in a way that puts Congress back into the driver's seat instead of the current role of junior partner to the executive branch.
As the co-leaders of the Article I Project, a network of House and Senate conservatives committed to putting Congress — and, by extension, the American people — back in control of Washington, our mission is to make Congress once again responsible, both in discharging its constitutional duties and making itself accountable for the consequences.
Unfortunately, bringing back earmarks would not do this. It would make our job harder, make Congress weaker and make federal power more centralized, less accountable and more corrupt. That's why we'll be working to keep the ban in place, and we invite conservatives to join us.
An unabridged version of this article, co-written by Rep. Jeb Hensarling (R-TX), first appeared in The Washington Examiner.
Issue in Focus: Repealing CFPB's Prepaid Card Rule
Millions of Americans, mostly young, poor, and minority, either do not have a bank account or are “under banked” – meaning they do not have access to a full range of basic financial services. Life without a bank account can be very difficult in America today. You can’t cash checks, order products online, or get credit for emergencies.
Fortunately, recent advances in technology have enabled some entrepreneurs to help address this problem by creating prepaid cards that allow many unbanked and under banked Americans to participate in the economy.
According to one source, while consumers put less than $1 billion on prepaid cards in 2003, by 2012 that number had risen to $65 billion and is expected to reach $121 billion by 2018.
There is obviously a need for prepaid cards and the market is meeting it.
Unfortunately, the Consumer Financial Protection Bureau (CFPB), created under President Obama, believes that regulation and paternalism, not voluntary cooperation and free-enterprise ingenuity, are the best tools to address the problems of the unbanked.
In November of last year, the CFPB released a finalized rule that imposes new and onerous standards on the burgeoning market that will affect not only pre-paid cards, but a laundry list of other pre-paid products. In the document, CFPB’s bureaucrats establish new rules and regulations for this vast range of pre-paid consumer options and declare their intent to “close loopholes and protect prepaid consumers when they swipe their card, shop online, or scan their smartphone.”
Proponents of the rule, including the regulators at CFPB, argue that these standards protect unsuspecting pre-paid customers from becoming victims to overdraft fees and other abuses that result from predatory lenders.
Despite these good intentions, the CFPB’s pre-paid card rule misses the mark – and the basic point of pre-paid cards. Arguably, one of the reasons pre-paid products are so popular, especially among millennials, is that they function like a simplified version of a bank account, without all the bells and whistles. The overdraft feature is an option, fueled by consumer choice, which users are free to utilize for a number of reasons – the most popular of which seems to be in cases of emergency. Furthermore, only 10 to 15 percent of prepaid products include this feature, giving most consumers the option to choose what kind of pre-paid product best suits their needs.
The underlying assumption behind this rule seems to be that American consumers are uninformed, uneducated, and unable to make their own choices – unwitting simpletons who are, at any given moment, vulnerable to the predatory behavior of villainous financial institutions. But this implicit condescension doesn’t conform with reality. In fact, the prepaid-product market has proven to be incredibly competitive and functional that responds well to consumer preferences. It is clear that many pre-paid users actually like the overdraft feature, which means the CFPB rule would limit consumer choice by killing a feature preferred by a significant portion of the market.
That is why I cosponsored a resolution this week that would use the power of the Congressional Review Act (CRA) to undo this regulation. This CFPB prepaid rule is one of just many midnight regulations that the Senate and House will hopefully repeal in the coming weeks.
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