Newsletter: Authorization for Use of Military Force; Olympics; 'Too Big to Fail'; More Votes on Keystone XL; Tax extenders; More Tax Cuts; FHA Hearing

Statement

Authorization for the Use of Military Force

President Obama has asked Congress for an Authorization for the Use of Military Force (AUMF) against the Islamic State of Iraq and Levant (ISIL). I believe the Constitution requires such Congressional authorization and I commend the President for his outreach. A three year limit has also been placed on military action. Although such a deadline will obviously be known to ISIL who can respond accordingly, I still believe it is important to establish one. An open-ended AUMF does not take into account the role of future Presidents. With a time limit in place, the next Commander-in-Chief will still have the ability to reauthorize the AUMF if it is determined that additional time is necessary. I also note and appreciate the President's decision to include a repeal of the 2002 AUMF against Iraq.

While I am heartened by the Administration's engagement with Congress, I cannot support this proposal as currently drafted. I strongly believe that, despite ISIL's public embrace of brutal tactics and measures, the United States should not be leading yet another military coalition to carry out attacks in the Middle East. The countries most directly threatened by ISIL have yet to commit themselves to the level that this AUMF commits the United States. In the very recent past there are several examples of America creating wartime coalitions in the Middle East which, while they have met with success on the battlefield, have had decidedly mixed results in the aftermath. Without firm commitments from our partners in the region, including ground troops which they should be able to supply, and without a direct and obvious threat to the United States, I am not prepared to support going to war with ISIL.

I also have concerns about how the proposal is drafted. Half measures are recipes for failure and this resolution is a half measure. The AUMF is largely defensive in nature, focused on allowing U.S. forces to carry out search and rescue missions, reconnaissance missions and special operations missions. All of those are legitimate wartime operations. However, even if I were inclined to support this AUMF, I would be deeply reluctant to commit U.S. service personnel to combat with restrictions attached. I have always thought it wrong to send American forces into a conflict without authorization to win that conflict using all available resources, as long as they are legally and morally appropriate. Time and again, we have sought to "limit" our involvement in war. Too often, the limits agreed to make no sense in an actual combat theater.

Olympics

In the months ahead we will learn much more about the plans and potential cost of hosting the 2024 Summer Olympics. This week organizers met with the Massachusetts Congressional Delegation to begin conversations about Boston's Olympics bid. I wanted to share with you a Boston Globe article about that meeting, which includes my thoughts on the availability of federal dollars.

Too Big to Fail

This week I introduced H.R. 888, The Subsidy Reserve Act of 2015, legislation I first filed in 2013. It requires financial entities with assets over $500 billion, those perceived as "too big to fail", to maintain capital equal to the amount of the subsidy they receive from taxpayers, to weather a future crisis. The largest and most interconnected financial institutions in America still benefit from an effective government subsidy, shielding them from the worst effects of their risky behavior. Just last year, the Federal Reserve found that the 11 largest banks in the country have failed to show, six years after the financial crisis, that they could collapse without taking the whole economy with them. H.R. 888 provides the shareholders of these institutions with two options: if you choose to remain large enough to threaten the whole economy then you must hold enough capital to cover your own losses. If you prefer not to hold the capital, then reduce the size of your company.

The idea behind the legislation is simple. If banks get a subsidy, it should be quantified and banks should hold capital sufficient to cover it. If they don't get a subsidy, the legislation won't have any impact on them. The Dodd- Frank financial regulatory reform law addresses "too big to fail" financial institutions by requiring living wills and establishing an orderly process to unwind failing banks without devastating the financial system. The impression still lingers, however, that the government would bail out "too big to fail" firms and the largest actors are benefitting from this perception at the expense of smaller financial institutions and taxpayers. H.R. 888 would end this unfairness. Structural reform of "too big to fail" entities would be achieved without overt government intervention. Banks competing for financing would do so on the merits. Ultimately, the risk to taxpayers would be reduced, either because these firms have voluntarily downsized, or because they are better capitalized and less risky.

More Votes on Keystone XL

This week the House considered S.1, the Senate passed Keystone XL Pipeline Act. This is basically the same legislation that the House voted on last November and again in January. The only real difference is that the Senate added some provisions related to energy efficiency. The Keystone XL Pipeline would carry crude oil over the Canadian border through parts of the United States to the Gulf Coast. This was not a vote to approve the pipeline. Instead it was a vote on process. Because of the nature of the project, including the fact that it will cross an international border, there is a required approval process. I don't think there is any question that a project like this one should be subject to a significant environmental review, including under the National Environmental Policy Act (NEPA). Just like the other two bills that the House recently passed, S. 1 exempts the pipeline from all of this. The review process is ongoing and there is no reason to stop it. This legislation also sets a troubling precedent by allowing the project to bypass required reviews, creating a similar path for other projects.

Tax Extenders

Yesterday the House considered H.R. 644, the Fighting Hunger Incentive Act of 2015. This bill certainly sounds like something that would enjoy broad bipartisan support. However, H.R. 644 is really all about making several tax cuts permanent without offsetting the cost of doing that. One of those tax cuts relates to businesses that donate excess food to charity. Others relate to conservation easements, investment income of private foundations and charitable contributions from retirement accounts. Taken together, these tax cuts would add to the deficit by more than $14 billion over ten years.

More Tax Cuts

Today the House considered H.R. 636, America's Small Business Tax Relief Act of 2015. This legislation also makes a series of tax cuts permanent without offsetting their cost which will increase the deficit by almost $80 billion over ten years. They include provisions for small business investments, charitable deductions and asset holding periods.

FHA Hearing

This week I participated in a Financial Services Committee hearing on oversight of the Federal Housing Administration (FHA). Department of Housing and Urban Development Secretary Julian Castro testified before the committee, which primarily focused on HUD's recent decision to reduce the FHA mortgage insurance premium. I was pleased by this news because it will make homeownership more affordable for those seeking to enter the housing market. These premiums have been steadily increasing and I have long advocated a return to more affordable levels which will help make this program more accessible to qualified moderate-income families. I took the opportunity to talk about HUD's Distressed Asset Stabilization Program. Properties that have fallen into loan delinquency are sold to investors, often as part of large packages. I believe that a better approach would be to offer these properties to community groups or individual buyers, which could help to revitalize some neighborhoods.

What's Up Next

A district work period is scheduled for next week. House votes will resume on Tuesday February 24th.

Congressman Mike Capuano

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