Search Form
First, enter a politician or zip code
Now, choose a category

Public Statements

Restoring American Finacial Stability Act of 2010 - Continued

Floor Speech

Location: Washington, DC


Mr. CHAMBLISS. Mr. President, I rise to express my disappointment at the posture of the massive legislative overhaul of our financial markets that appears set to pass this body.

I am disappointed at what this bill, as written, means for businesses on Main Street and for the livelihoods of Americans who had nothing to do with the financial meltdown.

I am also disheartened at how this body has made a bad bill even worse. For all the times the other side of the aisle has accused the minority of being obstructionists, for all the claims of partisanship, the process by which this bill has become the government power-grab it is today illustrates how the majority has served as its own ``party of no''.

After repeated efforts by Republicans in the past 18 months to reach a middle ground on necessary reforms for America's financial regulatory structure, reasonable compromises we presented were rejected at every turn.

And two years after the jolt of the economic crisis, and with no hope in sight for cooperation from the White House, a 1,400-page, one-sided piece of legislation was brought to the Senate floor.

Now with more than 400 amendments filed, and just 10 percent of those considered, this administration is again set to sign into law another mammoth piece of legislation--one with enormous and long-lasting repercussions for this country--with little to no Republican input.

The consequences of actions we take here in the coming days will be drastic in their reach into American businesses of all sizes.

Make no mistake: This bill will not punish Wall Street. In fact, the CEOs of Wall Street firms are supportive of this bill as written.

After all, it is difficult to say this bill goes after Wall Street when the CEO of one of its largest financial institutions says ``..... the biggest beneficiaries of reform will be Wall Street itself.'' Lloyd Blankfein, CEO, Goldman Sachs, Homeland Security & Government Affairs hearing, 4/27/10.

No, the real targets will be businesses across America, not just big firms on Wall Street but auto dealers in suburbs or appliance stores on small-town Main Streets. Everywhere a small business allows its customers to pay with lines of credit, the Federal Government will be there.

One of the biggest problems with this legislation is that it does not address one of the root causes of America's economic crisis: Fannie Mae and Freddie Mac.

These entities--effectively deemed by the White House and others as ``too big to legislate''--continue to perpetuate a sickness on the American economy.

As structured, these ``bailout behemoths'' continue to rely on taxpayer money to maintain their fiscal imprudence--to the tune of $145 billion. But nothing in this bill attempts to stop that drain on taxpayers' wallets.

Another glaring example of government intrusion in this bill is the creation of a Consumer Financial Protection Bureau empowered to collect any information it chooses from private businesses and consumers, including personal and financial information.

This new agency will have the authority to share that information with the very financial firms it is attempting to regulate. In other words, taxpayers will be paying for Wall Street's market research.

As for Title VII--the derivatives title--it is simply a debacle.

As ranking member of the Agriculture Committee, I have spent a great deal of time examining how derivatives have played a role in the market meltdown, and not surprisingly, we have found that there are a number of regulatory improvements we need to make relative to the oversight of swap market participants.

However the language we are considering today is, quite frankly, another power grab by the administration and the regulators for provisions in law that had absolutely nothing to do with the crisis we experienced in the market place 2 years ago.

This administration, along with the majority in this body, want to regulate Ford Motor Credit the same as they regulate large banks such as JP MorganChase and Goldman Sachs. Guess who is going to end up paying the price for that change in regulation? My Georgia constituents who want to buy cars. They will be paying more in the form of interest because if this bill is enacted into law, Ford will be forced to pay more to hedge its interest-rate risk.

The majority wants to make it more difficult for clearinghouses to approve swaps for listing, which is senseless, as they also require mandated clearing.

The majority claims that by forcing more swaps into a clearinghouse it will lessen systemic risk. Why, then, are we making the clearinghouses jump through more hoops to clear these contracts?

As I understand it, the current system where clearinghouses have the discretion to list contracts for clearing have experienced no problems. And as we know, the clearinghouses certainly aren't responsible for the financial crisis.

The majority is also requiring major swap participants to hold more capital in reserve. I can understand the need for requiring those who hold large swaps positions to margin, or collateralize, their positions. But why are we also going to make them set aside capital? Again, we are treating them like banks and they are not banks.

If we make manufacturers set aside capital, it will only tie up money they would otherwise have available to hire workers, pay benefits and run their companies. With unemployment approaching 10 percent, we should not make it more difficult for employers to hire. We should not apply a banking model to market participants that are not banks.

As for market participants that need swaps to manage risk and have negotiated individualized arrangements where they pledge noncash collateral: How are they going to pledge collateral to a clearinghouse? Last time I checked, the Chicago Mercantile Exchange, CME, and International Continental Exchange, ICE, did not accept natural-gas leases as margin.

This bill will now require theses customers to post cash collateral to the clearinghouse, thereby tying up resources they would otherwise be investing in locating more natural gas or petroleum. This is not a very smart plan when we so desperately need to become less dependent on foreign sources of energy.

Rather than focusing on perfecting what actually could help lessen risk within the derivatives system, we have a clear case of what I believe the administration and some in this body see as an opportunity to regulate simply for the sake of regulating.

The financial crisis and its causes seem to have become afterthoughts. The objective has shifted from regulating Wall Street to regulating manufacturers, energy producers, food producers, hospitals and anyone else who might seek to enter into a contract to manage their risk.

Meanwhile, consumers will pay the price. Why? Because the White House and the majority in Congress lost sight of the problem that should be fixed and seized the opportunity to insert government into every industry, financial and otherwise.

Mr. President, our side came to the table in good faith with ideas on necessary reforms to America's financial markets.

We presented our thoughts on how best to prevent another meltdown. We negotiated, we compromised, and we tried to work across the aisle toward a common goal.

Ultimately, these efforts were fruitless. The other side stonewalled, and our ideas were opposed.

Now this bill--which will have a similar economic impact as the health care bill, yet which has only been debated for a fraction of the time--will soon be law. And our economy and the livelihoods of Americans who work in large and small businesses will be worse for it.

I yield the floor.


Skip to top

Help us stay free for all your Fellow Americans

Just $5 from everyone reading this would do it.

Back to top