Floor Statement in Opposition to the 2014 House Republican Budget
Thank you very much, Mr. Chairman, and I thank Mr. Van Hollen for yielding me time.
Today I rise in strong opposition to the Republicans' budget, a budget that makes absurd claims to reducing the deficit by repealing crucial government authority to protect our economy. Lest we forget that Lehman Brothers' disorderly bankruptcy sparked the worst financial crisis since the Great Depression.
Should a megabank fail in the future, the Dodd-Frank Act specifically authorizes regulators to dissolve the failing firm, fire its executives, wipe out shareholders and deny the claims of creditors.
The gentleman from Wisconsin calls this a bailout, erroneously, concluding that the Dodd-Frank Act enshrines "Too Big to Fail" when in fact it provides all the necessary tools to end it. If Dodd-Frank actually did what the Republicans say, why does no large firm want to be designated as "Systemically Significant?"
The Republican proposal also deceptively suggests that a repeal of the liquidation authority generates real savings to the American taxpayer. The Dodd-Frank legislation designed this authority to pay for itself over time, with any initial upfront costs being completely recouped by selling assets and imposing an assessment after the resolution on financial institutions with more than $50 billion in assets. The law specifically states that taxpayers shall bear no losses from the exercise of any authority under the liquidation title.
Once again, the Republican budget is misleading and dishonest. The National Journal has called the Republican proposal a budget gimmick and even The Wall Street Journal dismissed it as mere budget quirks. If the authority to wind down a mega firm is repealed, the American taxpayer will be called on again to bear the risk of another financial crisis like 2008, which the G.A.O. found cost the U.S. economy $13 trillion.
Mr. Speaker, I urge all of my colleagues to reject this Republican budget. I yield back the balance of my time.
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