Reflections of a Freshman

Floor Speech

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Mr. Speaker, I thank the gentleman from Texas (Mr. Neugebauer) for his service and that of his spouse and family, for they made my welcome to Congress so agreeable and so appropriate, and I have enjoyed my service with Mr. Neugebauer on the House Financial Services Committee.

You know, when I am home, one of the most frequent questions I get is to describe the major changes that I have seen in Washington since my previous work on Capitol Hill and in the executive branch. And yes, now it has been more than 24 years since I served in the administration of George H. W. Bush from 1989-1993, 24 years and three two-term Presidents--two Democrats, one Republican. Anyone familiar with life inside the beltway would certainly see that the city's traffic has become unbearable, and the number of places to eat has really been improved in those 24 years.

But tonight I don't want to talk about the enrichment of life along The National Mall with new monuments to FDR and MLK and new visionary sites, such as the Native American Museum and now our African American Museum. Instead, it is not urbanization or nightlife that has happened that I noticed, that I talk about when I see my constituents, but it is really the changes I see in public policy as I wander back like Rip Van Winkle 20 years later to our Nation's Capital.

The politics and productivity of the city are more stymied and less successful than in my experience in the executive branch, led by George H. W. Bush, or even in my service as a legislative aide on the Senate Banking Committee staff back during the days of the first term of President Reagan.

Tonight I would like to outline my thoughts on those biggest differences I have seen in our Federal Government. These include the size and complexity and the unmanageable nature of the administrative state, the growth and unreformed nature of our mandatory spending programs, the failure of the Congress to meet its most fundamental constitutional responsibilities, that is, the oversight of the executive and the timely and thoughtful appropriations governed by the Appropriations Clause of our Constitution.

At the end of this ``Rip Van Winkle'' overview, I will offer suggestions as to possible solutions to these challenges that we face in Washington. While I am a realist, I understand consensus is difficult in this city, and, while sensitive, my remarks tonight will appeal, in my view, to both Democrats and Republicans about how do we have an effective Federal Government, one that honors our constitutional limitations, the best intentions of our Founders, and demonstrates to the American people that their legislative and executive branches can work together for the long-term common good and the general welfare of this Nation.

Thomas Jefferson, author of the Declaration of Independence, does a splendid job in enumerating the significant grievances that the American colonists had against King George III. Among them, my favorite of the ``Facts . . . submitted to a candid world": ``He,'' the king, ``has erected a multitude of New Offices, and sent hither swarms of officers to harass our people, and eat out their substance.'' When I am visiting with our fellow citizens in the seven counties of the Second Congressional District of Arkansas, our doctors and hospital administrators, people who own small businesses, community bankers, high school and elementary schoolteachers, university administrators, highway contractors, small-town mayors, inevitably the size, scope, and complexity of the paperwork, micromanagement, and intrusion of the administrative state dominates that conversation.

While other policy proposals from the tax and policy ideas to funding the need for our needed Federal programs, inevitably every conversation ultimately returns to how management and employees believe they are no longer focused on their missions to increase sales, produce profits, grow their business, educate kids, operate on patients, make loans to entrepreneurs and successful businesses, and help expand the American Dream. Instead, they are stuck in a world of three-ring binders, CYA activities, and a morass of paperwork and documentation--all possibly well-intentioned, but the bottom line is they take people away from their core mission and core values, drive up costs, reduce availability of credit to consumers, drive up prices for consumers, and, in many ways, cause Americans to be cynical about their government.

In a 2015 article on New York City's broken bureaucracy, Phil Howard decried the red-tape jungle that doubles costs and postpones critical infrastructure projects in one of the greatest cities in the world. This is a fundamental issue today because President-elect Trump says we need to invest more in infrastructure. Look at the dollar per mile of road paved when you look at the costs added by the bureaucracy.

In 1931, the construction of The Empire State Building was completed in 410 days, 12 days ahead of schedule. Today, just raising the roadway of the Bayonne Bridge in New York, besides absurd requirements to survey historic buildings within a 2-mile radius of an existing bridge that touched no buildings, it required 47 permits from 19 different agencies and a 5,000-page Federal environmental assessment and a city environmental review before a permit could even be issued. After 5 years, the project was sued for inadequate environmental review. Now the $1.3 billion project is not expected to be completed until 2017. We are talking about years, decades to raise the deck on the bridge that will increase traffic to New York Harbor that in no way endangers the environment or any other aspect.

Peggy Noonan has said that Washington is turning America into the paperwork nation at odds with the American character of inventors, builders, innovators, and pioneers. I have a message for our President-elect. When you are involved in partnering with us in draining the swamp, it is a worthy goal, how about draining America's inbox and just leave our American people alone to innovate, employ people, and help grow this economy.

This is why the Founders struggled so mightily over the proper role of the Federal versus State prerogatives in designing our Constitution. It is the core of why they settled upon the enumerated powers in our Constitution and left those other powers not so designated to the Federal Government to our States or entrusted to the people. Over recent years, the administrative state has eroded that trust the people have to make their own good choices. It is critical that we restore this trust and allow our local and State governments to tackle social and economic challenges with our people close to the problems and create a commonsense approach.
So your old friend, Rip Van Winkle, here tonight has returned to the banks of the Potomac to see a great leviathan draped across the landscape. Called the administrative state, this beast now reigns supreme, uncaring, tone deaf, and its tentacles dedicated to one-size- fits-all edicts, and, in many ways, unresponsive even to the will of the people's representatives in the United States House and Senate.

Phil Howard, who I referenced a few minutes ago, wrote two great books that I encourage everyone in our country to read: ``The Death of Common Sense'' and ``The Rule of Nobody,'' which succinctly outline the failures of this system that has been built up, calcified over the years, with no one in the system really responsible for asking: What is the right thing to do?

Ultimately, then, no one is responsible for these failures of the administrative state. Instead, administrative officials have come to Capitol Hill and rarely offer testimony of value that adds to the debate, that informs the decisionmaking. A typical example can be seen in the 6 years of review and critique of the post-recession banking measure called the Dodd-Frank Act. Former Committee on Financial Services chair here in the House, Barney Frank, and author of this bill, principal architect, said that many things in this final act weren't right and required modifications, but a standard response from the Obama administration's financial officials at the Comptroller of the Currency, the FDIC, or the Federal Reserve, or even the SEC, our securities commission, can be paraphrased simply as: Congress passed the law, we are implementing the law, period, full stop.

That is not the right answer nor is it the right question. Standing for orthodoxy instead of what will benefit the American people, that should be their obligation, to help Congress design policies that help the American Dream flourish. Jefferson, envisioning our nation divided into States, counties, and townships, said: ``It is not by the consolidation, or concentration of powers, but by their distribution, that good . . . is effected.'' Abraham Lincoln reminded our citizens that ``the legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all . . . `'

I place emphasis on the nature of ``community of people'' whereby we buy into this longstanding philosophical position of subsidiarity, whereby solutions to problems or challenges are best decided and left to the community and that, if necessary, the government closest to the people band together with families and local associations to take action, not punt every decision to the Federal Government.

At one time, such dedication to self-reliance and common sense were lauded as virtues, essential to the character of our Nation and of our people. Edmund Burke referred to the ``middling'' associations for doing good in England, and Alex de Tocqueville spoke reverently of Americans' insatiable ability to problem solve through the formation of associations of all kinds, that Americans were always finding themselves producing an association to build inns, to raise churches, to distribute books, to send missionaries out, to help create hospitals, prisons, and schools, all local communities coming together to do these things for themselves.
In my first 2 years in Congress, I have witnessed firsthand the overwhelming size of the administrative state when compared to my earlier service on Capitol Hill and in President Bush 41's White House.

First let's consider the sheer volume of rules that have been issued, estimated to cost our economy $100 million or more in net cost. Just under President Obama, we have witnessed over 600 rulemakings that exceed $100 million in threshold. Some, like the Clean Power Plan, many, many times that amount. In fact, the Office of Management and Budget, as of November 15, just a few days ago, noted there were 98 more midnight rules of the Obama administration; 17 of those hitting the $100 million mark of cost to our economy.
The conservative American Action Forum has estimated that President Obama has imposed 40 percent more major rules than his predecessor and that the overall cost of the Obama administration's regulations on the American people stands at $813 billion.

Likewise, consider the longer term. This chart illustrates the scope of these rulemakings as well as the long-term trend in publication of new rulemakings in the Federal Register, where all the government's actions are published for public dissemination and review. But still more than the sheer number and cost of these rulemakings is how intrusive they have become in daily lives or duplicative they are of another rule that was never repealed. That is why I found very appealing President-elect Trump said let's repeal rules before we make new ones. I wrote him recently, suggesting that he form a regulatory reform task force, like President Reagan did, and put Vice President Pence in charge of it to work with OMB and peel back this layer of duplicative costly regulation. These costs hurt consumers, and they hurt job creation.

A mortgage application, a fundamental part of our American experience across this Nation for a first-time home buyer used to be about 100 pages. Now it is about 500 pages. I would argue the consumer is not materially better informed or better off with these additional pages. Instead, we have just added duplicative paperwork because it looks better. But on reflection, is that consumer better off? Is our Nation better off for that cost? Shouldn't these kinds of things use common sense? In 1994, I served on The Heritage Foundation's Advisory Council on Regulatory Reform. Twenty years ago, your old Rip Van Winkle friend here argued that the cost in 1994 of the Federal regulatory system was nearly $1.6 trillion annually. I compared it, then, to the personal income tax, what it raised, what we all contribute of about $1.2 trillion in 1994 dollars.

The everyday government involvement in hardworking Americans' lives has only grown over those past two decades, and the Competitive Enterprise Institute's across-the-board cost estimate now for Federal regulations, including the impact of the Obama administration is nearly at $1.9 trillion per year, exceeding the cost of the individual income tax system and corporate tax revenues and quickly approaching--are you seated?--quickly approaching the entire amount of corporate pretax profits.

The regulatory regime of the Federal Government is not just vast and costly, it is unnecessarily intrusive. In Arkansas, we have seen agency regulations have devastating effects on our farmers, our small businesses, nonprofits, schools, colleges, universities, and State agencies. No one is immune from the leviathan's overreach.

Also in recent years, one has noted the expansion of the executive branch authority by increasing staff at the White House that is not subject to the confirmation of the United States Senate. While President Reagan had appointed one czar to work on drugs in the White House, President Obama has appointed 44 czars, with 35 of those not requiring confirmation by the United States Senate.

By using executive orders or executive memoranda to carry out policies that exceed existing statutory authority and properly belong to the first branch of government, the legislative branch, here, President Obama has hit new heights in what historian Arthur Schlesinger termed ``the imperial Presidency.''

It is critical to note that it is not the numbers of executive orders that are meaningful as to the directives themselves and how far- reaching they are vis-a-vis that proper statutory authority.

For example, if one utilizes data from the American Presidency Project and compares Reagan, Clinton, and Bush 43 with President Obama--all two-term Presidents--one finds President Reagan issued 381 executive orders; President Clinton, 364 executive orders; President Bush 43, 291; and President Obama at an apparently in line 260. But that is not the end of the story. President Obama has utilized a new measure that dodges publicity, transparency, and these statistics of the American Presidency Project: the Presidential memorandum.

By the end of 2015, this most imperial of Presidents had issued 219 memoranda--these are just the ones that have been published in the Federal Register--and the White House memoranda tally at the end of 2015 was 476, for a total of more than 600 executive orders and Presidential directives.

It can certainly be argued that Obama's executive action has far exceeded the scope and breadth of previous administrations. Even The Washington Post editorial board noted that the President's executive action on immigration in 2014 had no precedent and flew in the face of congressional intent. Indeed.

The Federal courts, too, have recognized the excess of this administration with their blocking of the President's 2014 executive order on immigration, nationwide injunctions on the Department of Labor's overtime rule, injunctions on the EPA's waters of the United States rule, and finally, the current legal battle over the Clean Power Plan.

So, while I have certainly seen, in my two decades of being out of the Potomac arena, a growing trend in the administrative state by way of executive actions that skirt the Administrative Procedure Act and public comment, this administration has also aggressively attempted to avoid publicly vetted rulemaking by something even, in my judgment, more nefarious to our constitutional freedoms, and that is creating regulation by enforcement action.

In my first 2 years in Congress, this has happened at the Securities and Exchange Commission and the Department of Justice and clearly skirts the statutory traditions of the United States and the role of the Administrative Procedure Act.

One of the economically chilling issues related to this contains the use of settlement trust funds, whereby the Department of Justice or other agencies of government choose to settle Federal civil actions against companies or individuals through a settlement procedure, as opposed to going to trial, and then assess a major monetary penalty which, instead of being paid to the victims, is paid to politically favored interest groups.

These activists, in turn, bring more lawsuits to feather their own nests. And if this isn't crony coercion, with its pernicious effect on the economy and a chilling effect on all innovation and economic growth, I don't know what is. It is certainly not in keeping with 70, 80 years of tradition under the Administrative Procedure Act.
My former colleague and White House counsel to President Bush 41, Ambassador C. Boyden Gray, stated in his testimony, before the House Financial Services Committee, about the dangers of an executive with access to the Treasury. That is clearly what these slush funds are. The need to ensure separation of powers and power of the purse are firmly in the hands of Congress, not the executive.

Mr. Gray stated: ``Every other constitutional power runs into the appropriations power,'' and that throughout our history, ``presidents have `consistently endeavored to seize the appropriations powers from Congress.'''
This is where you get into the intention that our Founders anticipated. Federalist 51: when one branch of government gets too big for their breeches, it needs to be countered by another branch of government. This overreach by the executive needs to be responded to by the first branch, the legislative branch, and make sure that we, in fact, consistently authorize our appropriations responsibly.

To close this discussion of the administrative state, let's consider a primary example of growth of the state where Congress does not have an opportunity to safeguard its legislative and appropriation and oversight responsibility. People's exhibit A is the Consumer Financial Protection Bureau.
In the Dodd-Frank Act, I mentioned a few minutes ago, in my view, the

Congress mistakenly created a funding source for the CFPB not subject to the appropriations that are actually set aside. Instead, it is a fixed amount of income out of the Federal Reserve system hidden away from Congress' oversight that normally would be paid directly to the Treasury. Instead, it is diverted to the CFPB, and it gives an agency independence like you can't see anywhere else. It is a violation, in my view, of our appropriations responsibility. The Director can't be fired, so it is a violation of our oversight responsibility.
I was pleased, this October, that the Court of Appeals for the District of Columbia unanimously ruled in the PHH mortgage case that the CFPB's sole Director position possesses unchecked ``unilateral power'' and calls the Director ``the single most powerful official in the entire United States Government.'' I am sorry, what? The single most powerful official in the United States Government. Gosh, I thought that was the President, the Speaker of the House. No, no, no. It is a guy at the CFPB. In fact, they acted in an unconstitutional manner.

So I am with the District of Columbia court, and I have no doubt that the pending case, State National Bank of Big Spring, Texas, challenging the CFPB's unconstitutionality will be noted as well. So, Mr. Speaker, these are some of my observations about the growth of the administrative state. I have no doubt that, when I come back to this floor, I will continue this discussion and offer solutions about what we need to do in Congress, in the legislative branch, and in the executive branch to make sure that we are upholding our obligation to our voters, our citizens, the people who have elected us, who have sent us here to represent their interests--hardworking people like Randy Neugebauer that we lauded a few minutes ago for his extraordinary service to the 19th District of Texas. Our administrative state is unmanageable, and it deserves to be reined in.
As a freshman, soon-to-be sophomore, a second-term Member of this body, I am going to fight for those
changes that return the power to the people's House and the people's Senate as it relates to oversight of the executive and the appropriations method.

Mr. Speaker, I yield back the balance of my time.

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