Legislative Updates: April 2011
Roll Call, a newspaper that follows the goings-on of Congress and all things Washington, recently published an article entitled, "Legislative Pace About to Get Even More Glacial." The article sums up what has been accomplished so far in the 112th Congress and attempts to explain why the House and Senate seem to be so disconnected these days.
According to the article, the Senate hasn't passed a lot of legislation because the House is hard at work passing many bills that the Senate leadership has publicly stated will not be considered or voted on. While the House always passes more legislation than the Senate, the difference is most pronounced during a divided Congress, as we have this year with the Republicans in charge of the House and the Democrats in charge of the Senate and the White House.
The House has already passed several spending-reduction measures that would eliminate programs favored by Democrats and has placed a high priority on passing legislation that would undo many existing laws passed under Democratic control, such as the health care bill and parts of Dodd-Frank. Obviously, the majority Democrats in the Senate are not interested in repealing laws that they just passed and care deeply about, which is why they have reached a stalemate. As a result, President Obama has signed into law just six acts so far this year, two of which were continuing resolutions that funded the government and all of which were extensions of existing programs.
But that's not to say that the chambers haven't been busy. The House Financial Services Committee (HFSC) held 14 hearings in March, which equals one for each day the House was in session. Most of the hearings were to examine existing federal programs, such as the GSEs, the National Flood Insurance Program and the Consumer Financial Protection Bureau, and to consider proposals to reform them. The Committee also held oversight hearings on the Dodd-Frank legislation and its costs to small businesses and impact on job creation.
The Senate Banking Committee (SBC) held seven hearings in March, the majority on the housing market and the future of the housing finance system. Reform of the housing finance system has emerged as a top priority of both the HFSC and SBC. Members of the HFSC have already introduced legislation to reform Fannie Mae and Freddie Mac and both Committees are expected to continue to hold hearings and debate what can and should be done to rebuild the housing finance system. Whether the work at the Committee level will translate to legislative victories for these important issues remains to be seen.
Meanwhile, in regulatory news, Fed Chairman Ben Bernanke recently gave a speech on the role of clearinghouses in the marketplace and the need for regulators to step up their oversight of them. He stated that, "the flip side of the centralization of clearing and settlement activities in clearinghouses is the concentration of substantial financial and operational risk in a small number of organizations." His speech made it clear that he believes more intensive regulation of clearinghouses is required in light of the financial crisis. This speech is seen by many as a good roadmap of the areas where the Fed is expected to be active.
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