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Mr. CONAWAY. Madam Chairman, I rise today in strong support for H.R. 4078, the Regulatory Freeze for Jobs Act.
I applaud the work of my colleagues to combat the growing stranglehold that needless government regulation is having on job creation and on economic growth. Today's bill will put an end to the ``regulate first'' attitude that pervades the Obama administration.
Contrary to popular belief, this legislation does not prohibit regulators from moving forward with new regulations, but it does require a Presidential or congressional waiver to do so. This simple, prudent check on the power of bureaucrats will ensure that regulations must be justified before they are enacted and that less burdensome alternatives are considered first.
Beyond just slowing the pace of regulations, H.R. 4078 also contains language that will substantially reform the way two of our independent agencies develop rules for financial institutions. I am pleased that the Red Tape Reduction and Regulatory Reform Act would finally require the Commodity Futures Trading Commission to perform a comprehensive cost-benefit analysis for each rule that they propose.
One of the most important steps in any regulatory process must be an effort to accurately quantify the costs and the benefits of a proposed action. This is the foundation of good rulemaking. Despite this, the CFTC has consistently stated that their obligation under the law is to only ``consider'' the cost and benefits of proposals. I believe that we can do better, and they must do better. Today's legislation is simple and straightforward. It would extend the same requirements for cost-benefit analysis to the CFTC that the President has already asked every other executive branch agency to fall under.
During the Dodd-Frank rulemaking process, the CFTC has rarely tried to estimate the cost of compliance. At times, ``consideration'' included vague statements like ``the costs could be significant.'' At other times, costs were dramatically underestimated. In one particular instance, industry groups calculated that the cost of compliance with a proposed rule was 63 times greater than the CFTC's guess.
Accurately assessing compliance costs is one-half of the equation. The other half, of equal importance, is capturing the benefits of a new rule. Regulators must quantify what good the rule does. It is not simply good enough to regulate because the authority exists. There must also be tangible benefits for market participants that outweigh the costs of the imposed rules.
Requiring cost-benefit analysis is a bipartisan step toward better governance. Exact language now contained in H.R. 4078 passed out of the Agriculture Committee unanimously in January. Last year, President Obama was right to demand that the executive agencies be held to a higher standard of analysis. Today, there's no reason why we should not require the same from the CFTC.
H.R. 4078 will strengthen the rulemaking process at CFTC and it will result in better rules and a safer marketplace. This small mandate on the economists and lawyers at the CFTC will ensure that the burdens placed on large businesses and small are justified in the real world, not just in the pages of the Federal Register.
It's also important to note that the bill is prospective--it will not hinder or delay the current proposed rules already making their way through the process. As well, title VII of H.R. 4078 is consistent and complementary to previously House-passed cost-benefit analysis.
I urge my colleagues to support passage of H.R. 4078.
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Mr. CONAWAY. I rise today to oppose the gentleman's amendment.
This amendment, which exempts any regulation aimed at limiting oil speculation from the provisions of this bill, is no doubt well-intentioned. No one in this body should be willing to settle for any market manipulation or illegal trading activities. Indeed, the Federal Government already has a robust and effective enforcement effort. In an April 2011 letter to Senator Maria Cantwell, the Federal Trade Commission wrote:
The Commission established a number of processes to identify, investigate, and, if warranted, prosecute illegal behavior in the energy industry using our full array of enforcement tools. After review, Bureau of Competition staff determined that none of the complaints involved conduct that violated the market manipulation rules.
In fact, CFTC Chairman Mike Dunn summarized it in a January 13, 2011, statement during the open meeting on the proposed rule. He said:
To date, CFTC staff has been unable to find any reliable economic analysis to support either the conclusion that excessive speculation is affecting the markets we regulate or that position limits will prevent excessive speculation.
Indeed, study after study has shown that excessive speculation has not been the problem that my colleague would argue. Instead, almost every instance of high prices can be traced back to market fundamentals and an imbalance in supply and demand.
But today's amendment, though, isn't really about excessive speculation. If it were, we would also be talking about the speculators who have brought the natural gas markets to an all-time low, betting that our newfound abundance of natural gas cannot all be used. Instead, today's amendment is about finding fault. It's about finding a scapegoat for the problem of high gas prices that have been plaguing all of our constituents.
While I can sympathize with the gentleman's desire to know who is responsible, the truth is the high price of oil is a problem of our own making. Policy decisions that were made years ago--failing to open new areas of production, boutique fuel mandates, and slow-walking new infrastructure--all contribute to today's pain at the pump.
Compounding these regulatory burdens is a growing long-term supply problem. While we have experienced recent production gains, that may not be enough to offset the demands of an expanding global economy. As China, India, and others continue to industrialize, and as the United States shakes off its economic downturn, we will again see pressure on production to keep pace with demand.
Over the past 3 years, oil producers in America have invested in new drilling technology and set off a production boom in places like North Dakota, Pennsylvania, and in my home State, my hometown in the Permian Basin area. This investment has led to 3 straight years of increasing domestic production on private lands, adding an additional 120,000 barrels of oil a day in production last year alone.
If prices are too high, we should not castigate producers and/or investors; we should open access to more supplies. If it is worth it, Americans will produce more oil and bring down prices.
Efforts to blunt market signals by introducing regulations that make it harder to trade commodities may provide a temporary reprieve from high prices, but it will come at a cost. In the long term, artificially lowered prices like this may lead to less investment and ultimate supply shortages. The better way to fight high prices is to increase supply. Just as the natural gas markets have plummeted to 10-year lows, oil prices will respond to increasing production.
I urge my colleagues to oppose the amendment and not to waste any more taxpayer dollars on finding blame for Congress' failure to act.
I yield back the balance of my time.
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