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Public Statements

Red Tape Reduction and Small Business Job Creation Act

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. Madam Chairman, my amendment hopefully is deemed to be somewhat simple, as this piece of legislation moves forward, trying to make sure that definition of cost from the regulatory environment, is properly, shall we say, a proper box is built for it. So the amendment in many ways is very simple.

The costs to organizations, a business, a business concern--as rules are being promulgated, that business is spending money to get into compliance. Those costs should also be calculated and put into the cost to the economy calculation.

Secondly, as the calculations are being built, it should also--the calculations should take a look at what it did to the revenues of organizations, because those revenues are what are used to hire people, to grow, to expand the economy and, actually, ultimately, expand the tax base.

So the amendment's very simple. It basically says, as the calculations are being made for cost of regulations, okay, let's actually add them up in a fashion where we actually acquire the real cost.

Madam Chairman, I reserve the balance of my time.

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. Reclaiming my time, Madam Chairman, and I appreciate the gentleman from Maryland's comments. But he hit one part there, and that is you do believe that the costs to industry, to business, to job creators should be calculated. It's just the debate here is how they should be weighted and how ultimately, I assume, how they should be documented.

All I'm trying to accomplish here with this amendment is a couple of very simple mechanics, those costs that go into the preparatory to be in compliance with the newly promulgated rule should be calculated, and that the calculation of the cost in the net revenues, gross revenues, to a job-creating industry should also be part of that calculation.

And part of this was the bill is--I obviously fully support it, but I thought actually creating a little tighter definition of many of the types of costs that happen in a regulatory environment. I mean, obviously we will have a separation on the view of does it stymie regulation.

I'm from the view that I truly believe one of the great hindrances to economic growth, to job growth in this country is the substantial growth of our regulatory environment.

Okay, if we're going to run legislation that says regulations that exceed a certain cost, you know, are held till employment reaches a certain level, why not make sure we're calculating those appropriately?

Madam Chairman, with that, I reserve the balance of my time.

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. And to my friend from California, she has always been a passionate and very articulate in the battle for resources for the regulators.

But I'm going to stand here in opposition to this amendment for a couple of very simple reasons. One, this is already the job they're supposed to be doing with the money they have, this cost-benefit analysis. And we can talk about that further.

But also, as you work through the amendment, I have great concern for the law of unintended consequences, and that is, in a weird way, subsidizing and incentivizing bad cost-benefit analysis. In the amendment, it basically says, if you end up in litigation over your cost-benefit analysis, there should be an appropriation, an unspecified amount of money that the appropriators should send you for that litigation. So if you do a really bad job in your cost-benefit analysis and you get sued, you actually get more money that is supposed to be appropriated to you.

The sort of constant thing I focus on a lot is that law of unintended consequences of, does it actually create an incentive to draw down more cash for the agency, for the litigation? And the way you get to the litigation is the quality of the work that was done in the cost-benefit analysis.

So there are two primary issues: A, this is what the agencies are supposed to be doing; and B, in the design of the amendment, I actually have a concern that ultimately, it may incentivize the very thing we're trying to stop.

And with that, Madam Chairwoman, I reserve the balance of my time.

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. My two arguments still stand. But there is one other point. And I actually have a little bit of information here.

According to the inspector general of the CFTC, the commission regularly employs a ``stripped down'' type of cost-benefit analysis that has ``proved perilous for financial market regulators.'' In the past, they've used a stripped-down methodology.

So in many ways, what we're doing here in the overall legislation is saying, here's the box, you are supposed to be doing this, it's already part of your budget. And as I spoke earlier, in the design of the amendment, I have a fear of the unintended consequences that you are almost incentivizing; that when the litigation happens, the agency actually ends up getting more money.

And with that, Madam Chairwoman, I yield back the balance of my time.

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. To my friend from New York, this is sometimes one of those amusing moments you get where we're both referring to the same litigation as part of our arguments against my side and for her amendment and somewhat making the point that, in that proxy rule litigation, demonstrating that the SEC actually didn't do the proper job. And actually, that's what the court stood up and told them.

One of the reasons--and maybe this is just the classic fundamental different view of what the Agency should be doing to ultimately protect investors and the economy and working towards capital formation--is you would think the Chairman of the SEC, instead of moving this to the bottom of the ranking, it would be at the very, very top. You would think, actually, in many ways you'd want to rewrite this amendment, at least from my view, flip it, saying one of the very first things the Chairman of the SEC does is come in and say, Hey, we did an appropriate, detailed cost-benefit analysis for this new rule and regulation, and here's the impact it has on the economy; here's the impact it has on job creation.

If we stand here repeatedly and say how much we care about jobs and economic growth, I would think that would be the order you would want to be pursuing. In many ways, this amendment--actually, not in many ways, it's what the amendment does--it actually does just the reverse. It lowers that to the bottom of that ranking.

With that, Madam Chairman, I reserve the balance of my time.

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. Madam Chairwoman, just one quick comment I'll throw in there.

I'm part of the belief system that one of the great burdens right now in economic growth and to sort of that next generation of what's the next world of jobs that will be coming into our economy--how are we going to form the capital, how are we going to see what our future looks like--is actually, in many ways, what we're debating here. I do believe the massive growth in the regulatory environment over the last couple of years is stymying that next generation.

There is one point I also want to make. Think of the last decade. I'm doing this somewhat from memory, but I think a decade ago the SEC's budget was about $300 million. Today, I believe it's $1.35 billion. So it's up $1.05 billion in 10 years, to give you some sense of how much massive increase has been moved into the regulatory body.

With that, Madam Chairman, I yield back the balance of my time.

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