WASHINGON — Election year partisanship and controversy largely elbowed credit union topics off the agenda on the first day of NAFCU's 2012 Congressional Caucus. The annual event began Sept. 12, right at the beginning of a short congressional session before legislators head home to campaign for the November elections.
Rep. James Clyburn (D-S.C.), assistant Democratic leader, kicked off the morning's legislative speakers , telling credit union executives that he believed that Congress would resolve lingering debt reduction and budget impasses in time to avoid a series of Jan. 1 tax increases and budget cuts that become known as the fiscal cliff or sequestration.
“I am convinced if I were taking a bet, we would not get sequestration,” Clyburn said. “I think that all of us are well- educated enough to know that we cannot run the risk. Therefore, the lame duck session will be one where we do some short-term fixes for the problem.”
Among the possible options discussed were three- or six-month continuing budget resolutions as well as three- or six-month continuations of the budget cut deadlines. But he stressed the final form the legislation will take will not be visible until after the election.
“What form will all of this take?” he asked. “Depends on Nov. 6. Based on those results. people will get honest and serious about solving these fiscal problems.”
Rep. James Hensarling (R-Texas) also touched on the looming fiscal cliff but argued that it should be considered a national defense fiscal cliff and a taxation cliff since cuts in nondefense spending would only amount to 3%.
“A 10% cut in our national defense is simply unacceptable and should be to all who hold that national defense is the sacred trust of our government's responsibility,” Hensarling said. And while he cited a report from the Congressional Budget Office that the fiscal cliff will lead to a renewed recession, he did not express confidence that a lame duck session of Congress would resolve it in time.
In addition, just as at CUNA's Governmental Affairs Conference this year, the Consumer Financial Protection Bureau proved a lightning rod for controversy with lawmakers from both parties defending or attacking it.
Rep. William Clay Jr., (D-Mo.) defended the agency and the Dodd-Frank Act that created it, noting that new law outlawed too big to fail institutions and would prevent taxpayers from having to bail them out lest they wreck the entire financial system.
“Never again will American taxpayers have to bail out institutions that have become too big to fail,” Clay told the executives. He also, several times, thanked the audience for NAFCU's help in his primary victory during a tight race.
But he was followed at the podium by Hensarling, who launched his discussion with the statement, “Now for something a little different.”
Hensarling attacked the CFPB and the Dodd-Frank Act as a “legislative drive by shooting” for which he received healthy applause. Later he described the Dodd-Frank as an outline of a law aimed at guiding bureaucrats in the creation of more bureaucracy.
The problems with the CFPB and the Dodd-Frank, in his view, are that the agency is an attack on individual liberty, and he contended that the act did nothing more than launch a wave of additional regulations.
Hensarling never explained how some of the agency's alleged pernicious effects were supposed to occur but cited government and nongovernment sources as reporting the organization would wind up limiting consumer's credit options and driving up interest rates.
Rep. Michael Grimm (R-N.Y.) also took up the verbal cudgel against the agency, telling executives that he feared for what the CFPB and Dodd-Frank would do to small businesses and small lenders, “places where you know your customers and they know you.”
But unlike Hensarling, Grimm attacked the agency on a specific point, questioning whether such an organization with as much power should be run by one person. “We have a lot of experience with similar agencies and we know that sometimes more opinions are better than just one,” he said, “no matter whether their intentions are right or not.”
Grimm said the question of having only one leader grew even more important when you consider that Congress did not control the agency's budget. “If they come after you and Congress does not control the budget, who are you going to appeal to,” he said.
The topics of elections and partisanship even dominated the reflections offered by NCUA board member Michael Fryzel. He spent much of his talk recalling early American history and noting that the United States grew through its different conflicts about governance largely because it had leaders who were willing to see beyond their own narrow political interest to what the country needed as a whole. He proposed that credit unions, which already have a strong track record of backing legislators who can and should represent their interests in Congress, should also back leaders who are the sorts of legislators who embody the spirit of the nation's founders.
“Through 45 years, NAFCU has carried out the mission of looking after the interest of federal credit unions with energy and effectiveness. Without NAFCU’s work, it’s hard to imagine that credit unions would now boast 93 million members in a system that saves American families billions of dollars a year when compared to other financial services,” said Fryzel. “Now I urge you take another step, to fully engage yourself in the election of congressmen who not only champion credit unions but also are willing to be realists, who look far into the future rather than into the next political rally or the next election.”
He added that credit unions should seek to back leaders who “can “reach across the aisle and work with all sorts of other persons, men and women who put their country above their personal agendas, persons who work to solve problems rather than chase rainbows. We need persons who despite their own opinions of others or even theories of government are willing to set aside differences to pass laws that support thrift and industry, creating a proper environment for trade and business” he urged.
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