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Texas Congressman Jeb Hensarling, Chair of Financial Services Committtee

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Congressman Jeb Hensarling joined me this morning to talk “repeal and replace”:

Audio:

01-12hhs-hensarling

Transcript:

HH: Voice challenged today, but I wanted to come to work, because I wanted to talk to this man, Representative Jeb Hensarling of the 5th District in Congress of Texas. He is the chairman of the House Financial Services Committee, very crucial in the repeal and replacement of Obamacare. Chairman Hensarling, welcome to the Hugh Hewitt Show, I apologize for my voice. I feel fine. I just don’t sound so good.

JH: Well, that was going to be my first question, Hugh. I hope you feel better than you sound.

HH: Yeah, I feel really good. Tell me, Mr. Chairman, last night, the Senate passed the budget resolution, which sets in part in motion the reconciliation process. Now, if it passes the House, and it will, it says by January 27th, you’ve got to come up with repeal and replace. Is Financial Services one of the two committees that will be working on that in the House?

JH: No, it is not. We are working on Obamacare’s brother called Dodd-Frank. And what Obamacare is to family health care, Dodd-Frank is to household finances. So our committee is not specifically involved in the repeal of Obamacare, but as a member of Congress, I’m thrilled to be able to vote for it.

HH: Now which committees do get it, Mr. Chairman?

JH: It would be the Ways and Means Committee and the Energy and Commerce Committee.

HH: All right, now I would assume then reconciliation, part 2, which is the 2018 budget, might indeed deal with Dodd-Frank, because that’s the other killer on the economy. Do you think that’s possible?

JH: Well, I do think it is possible. We can’t quite get to it all, but we can get to a lot of it through this reconciliation process. Now not one in a thousand really understand what that is, but essentially, it means in the Senate you need 51 votes instead of 60 votes to move legislation forward. And so it’s kind of inside baseball on how it can be used, but there are aspects of Dodd-Frank, which frankly, is just really retarding economic growth. It’s hurting households in their credit cards, their checking accounts, their mortgages. Small business lending, Hugh, is at a 25 year low. Entrepreneurship is at a generational low. And Dodd-Frank has a lot to do with that. So we’ve got to do our own version of repeal and replace of Dodd-Frank. A fair amount of it, not all of it, can be done through reconciliation, and we already have the replace bill. It’s called the Financial Choice Act, which stands for creating hope and opportunity for investors, consumers and entrepreneurs, and it will end bank bailouts. It will promote economic liberty and financial independence. It will promote capital formation. It has regulatory relief for struggling community financial institutions. We’re losing one a day due to Dodd-Frank. Good stuff, I might say.

HH: And I would add that I fully expect that to be reconciliation 2.0 next year.

JH: Indeed.

HH: That seems to me to be a natural. Is that your expectation as well?

JH: Well, that’s my expectation. I mean, Hugh, frankly, there are a few decisions made above my pay grade, but I know it is a priority of President-Elect Trump, and whatever the math is in nine days, I guess we can drop the elect off that title. But he has said he’s committed to “dismantling” Dodd-Frank, and in the House Financial Services Committee, we have a bill to allow him to do that. I don’t think there’s another bill out there today that does do that. So it is a priority of the administration, and conversations I’ve had at high levels of the administration, I know they’re interested in using the reconciliation process. And we can get rid of the bank bailout fund, called the Orderly Liquidation Authority where yes, taxpayers are on the hook for bailing out big banks. It’s just amazing eight years after the crash that taxpayers are still on the hook for bailing out big banks, but they are under Dodd-Frank, under this reconciliation process. But we can absolutely get rid of that. There’s an Orwellian-named agency called the Consumer Financial Protection Bureau…

HH: Terrible.

JH: …which frankly hurts consumers.

HH: Yeah, yeah.

JH: It is one national consumer czar or dictator who has the ability to decide what credit cards go in our wallet, what checking accounts we can have, or even if we can have a mortgage. And guess what? Since this agency has been in place, free checking at banks has been cut in half. Many auto loans are up as much, cost as much as $500 dollars more. And when fully phased in, they have something called the qualified mortgage rule that’s phased in over about a seven year period, but when fully phased in, roughly a third of all people who qualify for a mortgage as recently as 2010 can’t get a mortgage. I mean, this is just nightmare kind of stuff. It is the rule of bureaucrats over the rule of law. It’s got to come to an end, and that’s something else we can do in this reconciliation process, Hugh.

HH: Now that brings me to a little bit of inside baseball, Mr. Chairman. I’m going to talk about this with John Cornyn next hour as well. Both reconciliation 1, the repeal and replacement of Obamacare, and reconciliation 2, next year, the repeal and replacement of Dodd-Frank, will require a number of rulings by the United States Court of Appeals for the District of Columbia Circuit, of which I am an alum as a clerk. It is an 11 member court. It is now staffed by seven Democratic judges and 4 Republican judges, because it was packed by Harry Reid when he broke the filibuster.

JH: Yes.

HH: I believe an expansion of that court would survive a Byrd rule challenge. You could add four judges, undo that packing, and do it this spring through this reconciliation. Do you agree with my assessment?

JH: Well, I’m not an expert on the Byrd rule, so I know the Byrd rule, but being a House member, the Byrd rule is a creature of the Senate. So I hope that you are right, and assuming you are right, and I’m on your show, so I’m going to assume you’re right, then I would heartily recommend that my Senate colleagues do exactly what you have proposed.

HH: And so you would not feel, well, let me put is as a pure question. I want to pack the DC Court to unpack it from what Harry Reid did, because otherwise, these rules that are coming out of these agencies are deferred to. We cannot get regulatory reform, and we won’t be able to uphold our reconciliation reforms, if the DC Circuit sits there, because the Supreme Court can only take so many appeals from it. We have to fix that court. Agree or disagree, Mr. Chairman?

JH: Well, again, it has been packed. It has been packed by the Democrats, and by the way, it, you know, it’s Constitutional. The last time I read the Constitution, it is Article I that has the ability to create courts, expand courts. We get to decide jurisdictions. And so this is within our Constitutional authority. And the second highest court in the land, the DC Circuit, has indeed been packed by non-Constitutionalist liberal ideologues. And something has to be done about it to return to Constitutional government. And so I heartily agree, and I hope the Senate will give it very serious consideration.

HH: I want to inform the audience as well, this is just for their benefit, Merrick Garland is 63 years old, was appointed by President Clinton, Karen Henderson is 72. She was appointed by H.W. Bush. Judith Rogers was appointed by Clinton. She’s 77. David Tatel was appointed by Clinton. He’s 74. Janice Rogers Brown was appointed by W. She’s 67. Thomas Griffiths is 62, a W. appointment. Bret Cavanaugh is 51, a W. appointment. But then the four that Harry Reid pushed through, Sri Srinivasan is 49. Patricia Millett is 53. Nina Pillard is 55. Robert Wilkins is 53. This court will be an obstacle to regulatory reform, and you know how much we need that. Unless and until we fix it, Mr. Chairman, and you know, regulatory reform is everything for the domestic economy, isn’t it?

JH: Well, absolutely. I would say regulatory reform, as important as tax reform is…

HH: Yes.

JH: Regulatory reform is even more important. I mean, I just vividly remember a small business person from my Congressional district, I don’t know, a year or two ago, came up to me, had a successful cabinetry shop, shut it down, and he just pointedly told me he got to the point where I felt my government didn’t want me to succeed, and just rattle off a litany of regulations that crushed the life out of this 18 person worker force business. So it’s happening all over America. You’re not seeing open signs on businesses, you’re not seeing we’re open for hiring signs on business, and it is the regulatory burden that is just crushing the life out of the animal spirits in our economy, and it’s one of the reasons we continue to suffer through the slowest, weakest, non-recovery recovery in the history of the republic. I mean, with the right public policy, and particularly relieving us of this regulatory burden, I think we’re capable of 4, 4 ½% economic growth, if not even 5.

HH: Yes. Now Speaker Ryan was on my show last week, and he said well, we’re going to address this through the Chevron rule, but that’s a 60 vote rule in the Senate. That would require Democrats. They’ll never vote to reform the Chevron rule. The only way to do this is through the courts. Let me close by giving you a minute again. Even though Dodd-Frank repeal and replace is probably a year away, there’s a lot of important educational work about this agency. What is the worst thing about this agency? I happen to believe it’s unconstitutional. We’ll never get that ruling out of this DC Circuit, but what’s the worst part of the Cordray agency? And by the way, can Cordray be replaced by the President-Elect, in your view, when he becomes the president?

JH: Well, I do believe that he can be. It is an agency that has been ruled unconstitutional. Now the court stayed its own ruling so this one national consumer nanny stays in place. But I would recommend to the President yes, I think the President has the power to remove him. He has the power to remove him for cause, number one, under the current statute, and under the ruling of the court. I think he has the opportunity to remove him. And it is an agency that again, has helped contribute to free checking being cut in half, credit cards going up by 2 percentage points, being 15% less available. It’s an agency responsible for many auto loans increasing their costs by $500 dollars. It’s responsible for mortgages being less available and more paperwork. Bottom line is it’s crushing individual Americans in their kitchen table economics, and it’s got to go.

HH: Chairman Hensarling, I couldn’t agree with you more. I hope Mr. Cordray is the ex-head of that agency in about ten days. Thank you, Chairman Hensarling. Press on.

End of interview.

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