Weekly remarks: Richard Shelby-Dems block financial reforms; Obama-Thankful for healthcare
I’m Alabama Senator Richard Shelby, the ranking Republican on the Senate Banking Committee. The Senate is currently debating legislation to reform our nation’s financial system. The outcome will have serious consequences for our financial system and our economy for years to come. That’s why we need to get this right.Republicans believe that meaningful financial reform is necessary. And such reform should address the causes of the financial crisis, promote economic growth, and end bailouts for good. The legislation that the Democrats proposed failed each of these tests.
At its core, the recent financial crisis stemmed from a meltdown in the mortgage market. At the heart....
...of this market lie the government-sponsored housing agencies Fannie Mae and Freddie Mac. For decades, these multi-trillion dollar institutions leveraged the implicit backing of the American taxpayer to encourage mortgage lending to people who could not afford to repay the loans.
But when home prices finally collapsed, these ticking time bombs exploded, saddling taxpayers with hundreds of billions of dollars of debt. This situation remains unresolved today. In fact, Freddie Mac just this week asked for another 10.6 billion of your dollars.
For years, Democrats blocked meaningful reform of Fannie and Freddie, and not much has changed. Their legislation to reform the financial system touches nearly every corner of the economy, but these major contributors to the crisis are left unscathed.
A recent Wall Street Journal editorial observed, ‘Reforming the financial system without fixing Fannie and Freddie is like declaring a war on terror and ignoring al Qaeda.’ Well said. In the days to come, Republicans will be demanding that financial reform include Fannie and Freddie.
And, while the Democrat bill fails to address, in any way, this central cause of the crisis, it does, however, dramatically expand the reach of the federal government into parts of our economy that had nothing to do with the financial crisis.
If the Democrats have their way, the so-called Consumer Financial Protection Bureau could reach into every small business who provides credit and place unreasonable burdens on them, which only means higher costs and fewer choices for consumers.
Moreover, the Democrats’ new bureaucracy is completely divorced from regulators who are responsible for monitoring the safety and the soundness of our banks. Separating consumer protection from safety and soundness is the same ill-conceived approach that led to the demise of Fannie and Freddie Mac.This week, Republicans stood with America’s small business owners and offered a rational alternative that strengthens consumer protections without burdening Main Street with unnecessary regulations. The Democrats chose, once again, to ignore the American people and unanimously rejected our amendment. The vast array of Main Street business groups who wrote in support of the Republican alternative deserved better.
And although this legislation still has many flaws, there has been some improvement on one important front. After insisting that changes be made, Republicans were able to close significant loopholes in the Democrats’ bill that would have perpetuated taxpayer funded bailouts. These changes demonstrate our determination to protect the American taxpayer and the future of our economy.
Ultimately, this debate is about the appropriate role of the federal government in the economy. Republicans believe that the federal government should protect taxpayers and promote economic growth. We will continue to support changes to this legislation in an attempt to achieve these goals. Thank you. ####
It has now been a little over a month since I signed health insurance reform into law. And while it will take some time to fully implement this law, reform is already delivering real benefits to millions of Americans. Already, we are seeing a health care system that holds insurance companies more accountable and gives consumers more control.
Two weeks ago, four million small business owners and organizations found a postcard in their mailbox informing them that they could be eligible for a health care tax cut this year – a tax cut potentially worth tens of thousands of dollars; a tax cut that will help millions provide coverage to their employees.
Starting in June, businesses will get even more relief for providing coverage to retirees who are not yet eligible for Medicare. And a little over a month from now, on June 15th, senior citizens who fall into the prescription drug coverage gap known as the “donut hole” will start receiving a $250 rebate to help them afford their medication.
Aside from providing real, tangible benefits to the American people, the new health care law has also begun to end the worst practices of insurance companies. For too long, we have been held hostage to an insurance industry that jacks up premiums and drops coverage as they please. But those days are finally coming to an end.
After our administration demanded that Anthem Blue Cross justify a 39% premium increase on Californians, the company admitted the error and backed off its plan. And this week, our Secretary of Health and Human Services, Kathleen Sebelius, wrote a letter to all states urging them to investigate other rate hikes and stop insurance companies from gaming the system. To help states achieve this goal, we’ve set up a new Office of Consumer Information and Insurance Oversight, and will provide grants to states with the best oversight programs.
In the next month, we’ll also be putting in place a new patients’ bill of rights. It will provide simple and clear information to consumers about their choices and their rights. It will set up an appeals process to enforce those rights. And it will prohibit insurance companies from limiting a patients’ access to their preferred primary care provider, ob-gyn, or emergency room care.
We’re holding insurance companies accountable in other ways, as well. As of September, the new health care law prohibits insurance companies from dropping people’s coverage when they get sick and need it most.
But when we found out that an insurance company was systematically dropping the coverage of women diagnosed with breast cancer, my administration called on them to end this practice immediately. Two weeks ago, the entire insurance industry announced that it would comply with the new law early and stop the perverse practice of dropping people’s coverage when they get sick.On Monday, we’ll also be announcing the new rule that allows young adults without insurance to stay on their parents’ plan until they’re 26 years old. Even though insurance companies have until September to comply with this rule, we’ve asked them to do so immediately to avoid coverage gaps for new college graduates and other young adults. This also makes good business sense for insurance companies, and we’re pleased that most have agreed. Now we need employers to do the same, and we’re willing to work with them to make this transition possible. These changes mean that starting this spring, when young adults graduate from college, many who do not have health care coverage will be able to stay on their parents’ insurance for a few more years. And you can check healthreform.gov to find a list of all the insurance carriers who have agreed to participate right away.
I’ve said before that implementing health insurance reform won’t happen overnight, and it will require some tweaks and changes along the way. Ultimately, we’ll have a system that provides more control for consumers, more accountability for insurance companies, and more affordable choices for uninsured Americans. But already, we are seeing how reform is improving the lives of millions of Americans. Already, we are watching small businesses learn that they will soon pay less for health care.
We are seeing retirees realize they’ll be able to keep their coverage and seniors realize they’ll be able to afford their prescriptions. We’re seeing consumers get a break from unfair rate hikes, patients get the care they need when they need it, and young adults get the security of knowing they can start off life with one less cost to worry about. At long last, this is what health care reform is achieving. This is what change looks like. And this is the promise we will keep as we continue to make this law a reality in the months and years to come. Thanks so much. ####
Photo: Molly Riley / Reuters; Shelby's office; Pete Souza / White House.