Public Citizen Comment on Debt Limit Bills
slated for hearing June 6, 2023 before House Financial Services Committee
June 5, 2023
Chair Patrick McHenry
Ranking Member Maxine Waters
Honorable Members of the Committee
U.S. House Committee on Financial Services
2129 Rayburn House Office Building
Washington, D.C. 20515
Dear Chair McHenry, Ranking Member Waters and Members of the Committee,
On behalf of more than 500,000 members and supporters of Public Citizen, we offer the following comment on legislation to be discussed at a hearing entitled “Uncertain Debt Management: Treasury Markets and Financial Institutions” on June 6, 2023, before the House Financial Services Committee.
This hearing comes less than a week after MAGA Republicans held responsible budget management hostage with an antiquated, counterproductive, and unconstitutional debt limit law. Now, the majority brazenly wants to inspect the devices that the U,S. Treasury can deploy during the next hostage crisis.
Here are three bills, as described by the committee majority’s hearing announcement.
H.R. __ a bill to require the Chairperson of the Financial Stability Oversight Council to provide contingency plans for a disruption in the timing of payment on Treasury securities.
H.R. __ a bill to require the Secretary of the Treasury to issue a report containing information on extraordinary measures available when the debt of the United States Government approaches the statutory limit,
H.R. __ a bill to require testimony and reports by the Secretary of the Treasury in anticipation of the debt of the United States Government reaching the statutory limit.
In isolation, these seem innocuous measures. In the context of what certain extremists in the House majority are willing to threaten, they appear to equip the hostage-takers to know better how long they can imperil the government before an actual default.
As Public Citizen executive vice president Lisa Gilbert stated last week when the debt deal was reached, “We should never have been in this position. And we are here only because MAGA Republicans used the threat of default to hold the American people hostage. They forced a lose-lose situation where the choice was between harmful policies that hurt millions of people or failing to pay our nation’s bills with equally catastrophic impacts on jobs, retirement accounts, and more.
“As we look past this moment, we must learn from it and find a pathway to abolishing the debt limit. We cannot afford this endless cycle of manufactured crisis and hostage taking. The faith and credit of the American economy and the well-being of our nation’s families cannot continuously be on the chopping block as the stick endlessly forcing untenable deal-making.”
We therefore oppose these bills.
We also address two other bills to be considered at this hearing unrelated to the debt limit.
H.R. __ a bill to amend the Federal Reserve Act to bring the non-monetary policy related functions of the Board of Governors of the Federal Reserve System into the appropriations process. As with the House majority’s efforts to politicize the Consumer Financial Protection Bureau, we oppose this measure. Financial regulation is already subject to industry capture. The agencies are accountable to Congress through open channels of communication as well as regular, statutorily required congressional hearings. Subjecting the Federal Reserve’s supervisory functions to the appropriations process will lead to the kind of inadequate oversight that led to the failures of Silicon Valley Bank, Signature and First Republic. We oppose this bill.
H.R. __ a bill to increase the asset thresholds at which financial institutions become subject to certain requirements. This bill would remove oversight of larger banks. It ignores the lesson of the failures of three banks that grew precipitously following enactment in 2018 of S. 2155, which also increased the threshold for enhanced supervision. We oppose this bill.
The committee majority should be focused on issues of importance to average Americans, not plotting the next hostage crisis or how to remove oversight of the financial sector.
For questions, please contact Bartlett Naylor at bnaylor@citizen.org
Sincerely,
Public Citizen