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STIVERS: Correcting Dodd-Frank
Congress needs to unwind red tape that threatens manufacturing jobs
A picture paints a thousand words, but in the case of a foot-high stack of government regulations, it’s not a pretty picture. And it’s more like several-hundred-thousand words with the number of government regulations increasing tenfold under the current administration. The reality of government regulations run amok was brought home to me when one of my constituents, a local business leader, brought in a stack of new federal rules with which his company needed to be in compliance within a matter of weeks. So, instead of hiring a number of new employees on the plant floor and growing his business, this business leader had to turn the time and attention of his top-management team to interpreting and complying with these new regulations.
The list goes on. Tucked into the 2,300 pages of the Dodd-Frank Act is one such regulatory burden that, if enforced, would literally put a stop to many manufacturing jobs in Ohio and the rest of the country. This provision opened credit-rating agencies to costly lawsuits and forced them to stop bond issuers from publicly releasing their ratings. These ratings are required for the sale of asset-backed securities, so as a result, the entire asset-backed-securities market in the United States shut down right after Dodd-Frank was signed into law.
Although many may never have heard of asset-backed securities, these financial products are vital to companies such as Ford and Honda, which rely on them to finance the production and sale of cars and trucks. In my district, there is a Honda manufacturing plant that employs 4,400 people and has the capacity to produce more than 400,000 vehicles a year. Especially at a time when Ohio and the nation suffer from high unemployment, the fact that a jobs creator like Honda could be severely hurt by a bad government regulation is unacceptable.
The harmful consequences of this Dodd-Frank provision were so immediate that the Securities and Exchange Commission (SEC) stepped in and declared it would not enforce the measure. The SEC’s action - or inaction, in this case - restored the asset-backed-securities market for the time being. But as long as this provision remains on the books, it is a threat to thousands of American jobs.
H.R. 1539, the Asset-Backed Market Stabilization Act of 2011, which I introduced in April, would end this threat for good. It would permanently remove this job-threatening provision from the law so it could have no further or potential negative impact on jobs.
In order for companies to expand their businesses, they need to have confidence that the rules of the game won’t be changed after they have started playing. If we wish to see companies like Honda expand their production and payroll, Washington can’t be endangering the existence of important financial markets on which our job creators rely.
H.R. 1539 already has been approved by the House Financial Services Committee, where I and other members of the majority have spent time combing through the thousands of pages and hundreds of burdensome regulations imposed on the economy by Dodd-Frank. This one law is so massive and complicated it led one writer for the New York Times to label it the “lawyer full employment act.” We’re scrutinizing all of Dodd-Frank’s red tape to find and correct those provisions that endanger jobs, such as the one that impacted the asset-backed-securities market.
Washington can be a frustrating place to work for an Eagle Scout like me. Good, practical policy can be stalled easily or defeated outright because of partisan bickering or special-interest influence. It is important to me that I have the ability to look a fellow Ohioan in the eye and tell him I am doing my level best to help turn this economy around. As a member of Congress, I can’t create jobs, but I can work to ensure the passage of legislation to ensure that free enterprise can. By cutting through Washington’s unnecessary red tape, we can empower the private sector to do what it does best - create opportunity, wealth and jobs. Quite simply, that’s the American way.
Rep. Steve Stivers, Ohio Republican, is a member of the House Financial Services Committee.
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