Last week, President Trump signed Bill’s legislation that removes an onerous provision of Dodd-Frank into law. Below is Bill’s op-ed, which originally appeared in the Holland Sentinel, that discusses his legislation and the ongoing effort to cut through the sea of job-destroying bureaucratic red tape that is slowing economic growth and hindering job creation.
The tide is changing in Washington. For too long, bureaucrats prioritized the number of rules and regulations enacted ahead of how they affected the American people. Those days are over. Republicans in Congress are committed to getting our economy back on track, reining in bureaucrats across Washington, and reclaiming the proper constitutional role of the legislative branch.
Over the past 20 years, the various agencies in Washington, D.C., have issued over 80,000 rules with little to no legislative input or oversight. These “rules” can have serious implications for hardworking families and small businesses here in West Michigan, as well as the largest and most successful companies in America.
In an effort to counter the growing amount of bureaucratic red tape that has been pouring out of Washington, House Republicans have begun using a legislative tool known as the Congressional Review Act to reset our nation’s regulatory structure. In fact, I used this legislative mechanism to author and pass House Joint Resolution 41 (H.J. Res. 41) earlier this month which was signed by President Donald Trump on Tuesday.
H.J. Res. 41 addresses a resource extraction provision contained within Dodd-Frank. If you’re wondering what Dodd-Frank has to do with resource extraction, you’re not alone. As a member of the House Financial Services Committee, I have spent an extensive amount of time examining Dodd-Frank as well as the rules and regulations stemming from it. The more I studied, the more I learned that Dodd-Frank is a deeply flawed law that not only directly hurts our economy here in West Michigan, but has left our nation with less opportunity and less prosperity.
Specifically, section 1504 of Dodd-Frank, the subject of H.J. Res. 41, adds a burdensome reporting requirement that forces publicly traded U.S. companies to reveal sensitive business information, putting them at a competitive disadvantage on the global stage. When American companies are going up against state-owned foreign entities such as Petróleos de Venezuela and then have to show the competition a summary of their business plan, how can we expect U.S. companies to successfully compete?
The Securities and Exchange Commission (SEC), the agency that was forced to author this rule, estimates that initial compliance costs will total $1 billion with annual compliance costs totaling $591 million thereafter. If my legislation didn’t eliminate this rule, American companies would have spent significant resources to comply with an inefficient government regulation, instead of using those dollars to invest, expand, and create good-paying private sector jobs.
Section 1504 also has a sordid legal history. In 2013, a federal court ruled that the SEC misinterpreted the law and vacated the initial rule. Special interest groups then sued the SEC, claiming they were taking too long to follow the instructions of the court. In response, the SEC then issued a second version of the rule that was strikingly similar to the first. So similar in fact, that yet another lawsuit was being prepared to challenge the “new” rule in federal court. Since my legislation was enacted, the SEC now has a year to go back to the drawing board and follow the court’s original instructions.
Some have tried to misconstrue the overturning of section 1504 as promoting corruption; this couldn’t be further from the truth. Despite claims to the contrary, H.J. Res. 41 does nothing to undermine the ability of the SEC and Justice Department to police foreign corruption. Both of these agencies still have at their disposal federal laws, including the Foreign Corrupt Practices Act, which prohibits bribing foreign officials to assist in obtaining or retaining business by public companies or their agents. Even without the SEC’s resource extraction rule in effect, fraud and corruption remain illegal activities that should be punished to the fullest extent of the law.
At the end of the day, I hope this information helps provide some clarity on just how misguided our nation’s arcane regulatory process has become. In order for our economy to reach its full potential, we need to have a regulatory environment that is efficient and effective. My legislation is a positive first step in strengthening our economy, restoring constitutional balance, and providing hardworking Americans with greater opportunity to achieve success.