Omnibus Appropriations Billby Senator Jack Reed
Posted on 2014-12-15
REED. Madam President, I wish to explain my opposition to the
Fiscal Year 2015 Omnibus Appropriations bill.
[[Page S6862]] For months, I worked hard alongside Chairwoman Barbara Mikulski, Ranking Member Richard Shelby, and our colleagues on the Senate Appropriations Committee to craft a bipartisan agreement, which fit within stringent spending limits, to fund the government and strengthen our economy.
Regrettably, the last minute addition of an unrelated bill on multiemployer pension plans tilted the balance away from a bill that reflects a tough bipartisan compromise to a bill that, hastily and without thorough review, makes fundamental changes to numerous private retirement plans. Moreover, another provision of the bill seeks to undo a portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act that would force large banks to separate the riskiest derivatives trades away from subsidiaries that benefit from federal deposit insurance.
Because of the inclusion of these provisions, I am unable to vote for the omnibus. It is a shame, because there is otherwise much good here.
This compromise bill includes federal funds, which I advocated for, to boost economic and community development and environmental restoration projects in Rhode Island, as well as key education, manufacturing, workforce training, health care, nutrition, energy efficiency, transportation, and defense initiatives.
I thank Chairwoman Mikulski for her boundless energy and ceaseless efforts in putting a bill together with these kinds of investments.
As chairman of the Senate Interior Appropriations Subcommittee, I am proud of what we were able to accomplish. I particularly commend Senator Lisa Murkowski for being an outstanding partner, as well as her clerk, Leif Fonnesbeck, and her subcommittee staff, Brent Wiles, and Emy Lesofski. I also thank the majority staff: Rachael Taylor, Virginia James, Ryan Hunt, and Rita Culp for their work and guidance during my tenure as chairman.
I especially wish to recognize Virginia James, who is retiring this January after a distinguished 27-year Senate career. Ginny has served as a trusted adviser on tribal health, science, and arts and cultural issues to both Democrats and Republicans, stretching back to her days serving as an aide to former Appropriations Committee Chairman Mark O. Hatfield. There are many Federal agencies--from the Smithsonian and the National Gallery of Art to the U.S. Geological Survey and the Indian Health Service--that owe Ginny a debt of gratitude for her work, as does the Senate. She will be missed for both her skill and her humor.
Because of the bipartisan efforts of the staff and members of our Subcommittee, the Interior Appropriations bill included in this omnibus legislation has $2.356 billion for the Clean Water and Drinking Water State Revolving Funds, which is $581 million above the fiscal year 2015 budget request. This funding will help states and localities make important infrastructure investments, create jobs here in the U.S., and improve environmental quality.
While I am disappointed that the House insisted on the inclusion of a few controversial policy riders, I'm pleased that we were able to eliminate many of the most damaging legislative provisions that those on the other side of the aisle were demanding. These provisions would have impacted the ability of agencies under the Subcommittee's jurisdiction to do their jobs to protect the public and the environment, including their ability to address climate change.
I am dismayed, however, that the House refused to accept the Senate's language that would have allowed for a more rational way to account and pay for emergency wildfire suppression. Every member of the House Interior Appropriations Subcommittee had cosponsored nearly identical legislation and the House Committee report expressed support for this change. Yet the House refused to adopt it in this agreement. I believe my colleagues in the West may regret not taking the opportunity when they had the chance.
I am also disappointed that my colleagues in the House could not agree, at long last, that it is time for oil and gas companies to pay a share of the costs of inspecting their on-shore drilling operations.
There are other aspects of the omnibus that are troubling.
As the long time champion of the Low Income Home Energy Assistance Program (LIHEAP), along with Senator Susan Collins, I regret seeing the program cut by $34 million. Although significantly higher than the President's request, the reduction comes after years of cuts or stagnant appropriations. Meanwhile, the number of households eligible for LIHEAP assistance continues to exceed available funds and those receiving assistance have seen their grants decrease. I hope we can do better in the future.
While the bill includes important investments in surface transportation and aviation systems, I think we should be doing more, given the benefits to our economy. I am especially disappointed that the TIGER grant program, which has helped advance a number of critical transportation projects in Rhode Island, has been cut by $100 million from a year ago.
I am also troubled by language that would set aside the Federal Motor Carrier Safety Administration's Hours of Service regulation in order to have further study of the rule, which has been in effect for nearly 1\1/2\ years. While I welcome additional studies on driver safety, I don't think it is appropriate to simply set aside a rule that has been the subject of more than a decade of work and legal review. What concerns me most is that it could force truck drivers, who have one of the most grueling jobs in the country, to work longer hours, potentially increasing fatigue and putting more people at risk on our roadways.
The bill also hobbles the Department of Homeland Security, providing only enough funding to keep it running until February 27 of next year. This is the response by my colleagues on the other side of the aisle to the actions the President has taken with respect to immigration. Due to this intransigence, some initiatives to secure the border cannot be funded nor can measures to address the humanitarian crisis of children crossing our Southwest border or security weaknesses at the White House.
Even if these faults could be overlooked because of the many positive provisions in the bill, it is, for me, irreparably damaged by two controversial riders that have nothing to do with funding the government.
The bill would repeal section 716 of the Dodd-Frank Wall Street Reform Act. Section 716 prevents bank subsidiaries that are covered by federal deposit insurance or that take advantage of Federal Reserve lending programs from engaging in the riskiest derivatives trades. In essence, the riskiest derivatives trades would be pushed out from these subsidiaries in an effort to reduce systemic risk and provide greater assurances that Wall Street gambles would not be subsidized by taxpayers.
Whether you are in favor of preserving or repealing section 716, everyone should understand by now that the last thing Congress should be doing is passing incredibly complex and consequential derivatives legislation with little deliberation as part of an omnibus appropriations bill.
Serious concerns have been raised about repealing Section 716. Some have pointed out that the riskiest derivatives are so volatile that it will be impossible to charge the proper deposit insurance premium to account for the additional risk that the most unpredictable swaps will bring to FDIC insured banking subsidiaries. In other words, the potential losses could far exceed the amounts that have been reserved for contingencies. This should be concerning to all of my colleagues, especially in light of the 2008 financial crisis.
It is clear that big Wall Street banks have more than had their say. I merely ask that taxpayers be given an equal opportunity to have their say before they are asked yet again, perhaps years from now, to bail out Wall Street for their excesses.
The deep irony is that when my colleagues and I transparently fight for foreclosure prevention for Americans who were harmed by the recklessness of big banks and financial institutions, we are told that it was our constituents who were reckless and that we shouldn't be encouraging moral hazard. By repealing a section that seeks to establish a prohibition against federal government bailouts of swaps entities, some of my colleagues are revealing [[Page S6863]] their view that our largest banks should be held to a significantly lesser standard than distressed American homeowners. They seem to believe that when it comes to the potentially reckless choices of banks, they can continue to wreak havoc in our financial markets--and if their bets fail spectacularly, taxpayers will be there to clean up their mess. This shouldn't be the case.
If Members want to debate and vote on this issue in the open, I welcome the opportunity, but to avoid the debate by tucking this provision in a 1,600 page funding bill is a disservice to the seriousness of the issue. I am disheartened that despite what past experience has shown us, we are rushing towards what could be another grave mistake.
While much attention has been paid to the repeal of section 716 and other controversial pieces of this legislation, I am even more troubled by the last-minute addition of a bill that would make major changes to the multiemployer pension system.
The multiemployer pension program, guaranteed by the Pension Benefit Guaranty Corporation (PBGC), is in financial distress. Just 1 month ago, the PBGC's annual report raised a number of concerns about the increasing deficits of the multiemployer pension program. Alarmingly, the report predicted a high likelihood of many plans failing over the next decade, which would jeopardize the PBGC's ability to ensure retirees even a minimum guarantee on their pensions. We must take action to ensure that middle-income employees and retirees do not have the rug cut out from under them and lose retirement benefits.
We should have a thoughtful, open debate about how we ensure that middle-income employees and retirees receive the pension benefits they have earned so they are able to enjoy a secure retirement. We need a solution that honors these retirees' lifelong work.
Regrettably, this legislation--for the first time--opens the door to cutting pension benefits for current retirees. It would renege on the commitments made to middle-income families across the country. Hamstrung by budget constraints over the last few years, we have not done as much as I would have liked to protect programs that provide much needed support to hard-working families. My efforts to extend unemployment insurance, which benefits a broad cross-section of Americans, have been rebuffed by House Republicans time after time this year. And now even hard earned pension benefits are not safe.
The financial stability of multiemployer plans is a serious challenge that Congress will have to confront. However, we must consider a range of options before we move to dismantle the longstanding protections afforded to employees and their families by the Employee Retirement Income Security Act (ERISA). One of the most important aspects of this law stipulates that benefits for troubled multiemployer pension plans must be paid out first with remaining assets. The legislation we are considering flies in the face of that commitment by allowing benefit cuts to be the first option for restoring solvency to these plans.
Any solution is going to require tough compromises from everyone, but all stakeholders should have the opportunity to participate in crafting a solution instead of having it developed in secret and rammed through as part of a must-pass spending bill. This is the sort of action that infuriates the people we represent. But more important than process, this bill will have an effect on people's lives for years to come and gives further cause for Americans to think that their government doesn't have their back or care about their economic security. We shouldn't approach it so frivolously. We need to make sure the policy is right.
Given the outstanding efforts of Chairwoman Mikulski and my colleagues on the Appropriations Committee it is difficult for me to say this, but because of the reasons I have explained, I voted no on this bill.