Issue Position: Oversight and Accountability

Issue Position

Our auto companies have been held to strict accountability standards as a condition for receiving government support. It is true that if our auto companies are receiving tax dollars they need to be accountable to taxpayers. However, Wall Street--and our government, for that matter--do not seem to think they need to be equally accountable to taxpayers. I believe that Wall Street financial firms and the government must be held to similarly tough criterion--no double standards. That's why I'm fighting to hold large banks and hedge funds accountable for their actions which pushed our economy to the brink and ensure they cannot endanger our economy again. I also authored legislation to guarantee that large financial firms pay back every penny of their bailout to taxpayers, and am fighting to end government bailouts in the future and make the federal government more open, transparent and accountable for our tax dollars.

-Common Sense Rules for Wall Street
-Transparency and Accountability in Government

Common Sense Rules for Wall Street

After hearing story after story about Wall Street firms giving millions in bonuses to the very people who helped create the financial crisis, many expressed their outrage. It's not enough to simply talk about the egregiousness of these bonuses; it is also incumbent upon Congress to do something. I co-authored legislation to recover egregious bonuses to return them to taxpayers. This is a common-sense approach that constitutional scholars agree is legally sound. That's why the House passed the bill by a bipartisan three-to-one margin and why so many Americans are behind this action.

But the larger issue is whether financial executives who caused this economic crisis will be allowed to continue business as usual. As a condition of receiving federal support, auto companies were forced to restructure to ensure long-term viability. The same should have been required of financial institutions last year. Since coming to Congress, one of my top priorities has been reforming the financial sector to protect taxpayers, get our economy moving and ensure the industry cannot wreak havoc on our economy in the future.

In December 2009, the House of Representatives passed the Wall Street Reform and Consumer Protection Act (H.R. 4173). This comprehensive legislation reins in out of control Wall Street bonuses and executive compensation schemes that lead to excessive risk taking. It ensures that there will be no more bailouts of "Too Big to Fail" financial institutions by giving regulators the power to identify which large, interconnected institutions pose systemic risk to the larger economy and subjecting them to heightened oversight and by giving the government the authority to unwind failing institutions in an orderly fashion so they do not threaten the entire economy. The legislation creates a new Consumer Financial Protection Agency that will shine light on currently unregulated entities like mortgage brokers and payday lenders and provide important protections for consumers in the mortgage market by banning deceptive practices and requiring lenders to offer loans only to customers with a demonstrated ability to repay. The Wall Street Reform Act also regulates the over the counter (OTC) derivatives market. Abuse of these products by AIG and Wall Street investment firms and hedge funds contributed significantly to the recent financial meltdown and ensuing economic crisis.

The Wall Street Reform Act also contained an amendment I authored which ensures that taxpayers will not be on the hook for a single penny of TARP program, also known as the Wall Street bailout. My amendment requires the same large financial institutions that caused the financial crisis to pay for any shortfalls in the $700 billion TARP program.

Congress has already acted to protect consumers against some of the worst practices by passing into law the Credit Cardholders Bill of Rights (H.R. 627). This legislation protects consumers from hidden fees, arbitrary rate changes and other egregious practices. This legislation also included language contained in a common sense amendment that I offered which would require that consumers' payments be applied to the portion of their balance with the highest interest rate first. Previously, a credit card company could require a consumer to pay off all other debt before they allowed the principle with the highest interest rate be paid, unfairly costing consumers money.

I have also authored legislation called the Shareholder Empowerment Act (H.R. 2861) that would allow shareholders--a company's true owners--to vote on executive pay and require the use of independent compensation advisors to make objective recommendations on executive pay. My plan gives shareholders the right to deny golden parachutes to executives who do not perform, and gives them greater authority to recoup bonuses awarded on the basis of fraudulent earnings data.

I was an advocate of these reforms long before outrage exploded over AIG's bonuses. We needed to act to return AIG bonuses to taxpayers, but we must go further to restructure the financial industry. This is central to getting our economy growing again, and protecting folks on Main Street from getting burned by Wall Street.

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Transparency and Accountability in Government

A democracy only functions properly when there is vigilant oversight to continuously make government more transparent, ethical and accountable, and to create vigorous oversight mechanisms to prevent abuse and protect tax dollars. That's why I voted for tough standards to prevent waste and fraud in the American Recovery and Reinvestment Act of 2009 (a.k.a. the stimulus bill). The Recovery Act includes protection of whistleblowers who report waste and a website, www.recovery.gov, to disclose all information on government contracts and spending. No earmarks or pet projects were allowed in the plan and the Recovery Act Accountability and Transparency Board will review management of recovery dollars to ensure they are used efficiently.

To further protect tax dollars, I called for a congressional pay freeze and co-sponsored H.R. 156, the Stop the Congressional Pay Raise Act of 2009, to prevent Members of Congress from receiving a pay increase until at least 2011. Members of Congress should not receive a pay increase while so many Americans are taking pay cuts or losing their incomes altogether. The pay freeze proposed last year has now become law, and I have now cosponsored additional legislation to prevent a pay increase until at least 2012.

In addition to protecting taxpayer dollars, I believe that transparency is at the foundation of good government. Legislation should be available to the public to read and review before Congress votes. I urged House leadership to post the final health care reform bill for at least 72 hours before a final vote, and they have agreed to do so. I will continue to fight for transparent government that is accountable to taxpayers.

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