Taxing authority with no House oversight or involvement? Why, what could go wrong? FOXNews:
It is the most powerful federal agency you’ve never heard of — and lawmakers from both parties on Thursday vowed to keep abreast of its astonishing growth and rein it in, if necessary.
The Office of Financial Research, or OFR, was created by the Dodd-Frank financial services overhaul that President Obama signed into law in July 2010. Technically housed under the Treasury Department, the agency has until now received its funding not from the Congress, but directly from the Federal Reserve.
Starting in July, the OFR Fiscal Year 2013 budget, estimated at $158 million, will be funded entirely through assessments — also known as taxes — on bank-holding firms with consolidated assets worth at least $50 billion.
But as became clear at Thursday’s hearing by the House Financial Services Subcommittee on Oversight and Investigations, a close reading of the law the president signed provides no limit on the growth of OFR’s budget, nor on the taxes the agency can impose on big banks to fund it.
[…]Detractors call it “the CIA of financial regulators,” and conjure “Orwellian” visions of “an omniscient Soviet-style central risk manager.”The agency’s official mission is to collect financial data and funnel it to another Dodd-Frank creation: the Financial Stability Oversight Council. These agencies were designed with the idea of preventing another systemic shock of Lehman Brothers magnitude.
Toward that end, OFR was invested with virtually unlimited subpoena power. It can compel just about any company in America to turn over to the federal government sensitive internal data, even proprietary information.
“We’re only going to be collecting the data that we absolutely need, to fulfill our mission,” testified Michele Shannon, the new agency’s chief operating officer. “We’re trying to fill data gaps. We’re not going to be collecting for collection’s sake. We’re going to be making sure that only those people who absolutely need to have access to sensitive data have that access.”
— If I may translate, that’s bureaucrat speak for “I promise I’ll pull out, honey.”
Republicans on the panel remained skeptical about the potential for abuses of power.
“You’re able to tax corporations without any oversight by the U.S. Congress,” said Rep. Steve Pearce, R-New Mex. “Our Constitution is pretty clear, and so if we’re a little scratchy on our side, just understand it’s because you’re conducting things that we feel like are completely unconstitutional.”
— Wait, “Constitution”? Are you serious? Are you serious?
Rep. Bill Posey, R-Fla., questioned both the need for OFR to exist and its ability to protect adequately the sensitive data it will collect through its subpoena power.
“Your agency…seems to think it can outsmart Wall Street, if they have enough extra people and enough software, that they can see where the next problem is going to be,” Posey said at Thursday’s hearing. “But everyone with half a brain in this country saw the last problem way before it burst. We knew there was a subprime crisis; it was just a matter of how long it would be before it burst.”
Posey also noted that the computer systems of some national defense agencies have been hacked. “I wonder whether or not you’ll be able to have a safer process than some of them did,” he said.
One of the panel’s most liberal members, Rep. Maxine Waters, D-Calif., normally alarmed by unbridled expansions of subpoena power, defended OFR, citing the experience of the Great Recession. “I hope that all my colleagues agree that having, consolidating, and understanding this complex financial data would be key to preventing another systemic risk,” she said.
Seriously, what’s the worry? I mean, it’s not like this is the NSA combing through raw, un-individuated data for information and communication trends that might predict terror threats without first receiving warrants for individual cell phones.
That is governmental overreach. Whereas the turning over of unlimited taxing power over bank-holding firms to a government agency created from whole cloth without any House involvement? That’s just a necessary safe-guard needed to protect the People from the millionaires and billionaires out to screw them.
By, say, sinking the housing market, for instance.
— Oh, wait —
The housing market (their direct involvement specifically) is a great example. Another would be the actual federal budget.
Maybe they tackle that and then someone somewhere would one day actually believe we share the same goals.
Let’s see. An agency who’s very existence, actions it exists to take, and ways of funding such actions are total anathema to the constitution and the well being of a free society.
It is illegal and unconstitutional. Therefore, it has no authority. The entity that has authority in these matters- at least in theory, these days- is the congress. Congress needs to assert their authority and disband this entity.
“Taxation without representation”. The forefathers of this nation felt that to be good enough reason to lay their lives and fortunes on the line and go to war against the most powerful empire on Earth at the time.
I don’t think it too much to ask the ‘leaders ‘of today to open their mouths and risk a few votes.
Why do you distrust the government so much? They always seem to get things right as far as I can tell.
I opt out of this, as well.
The Land of the Decree and the Home of the Slave
Heh, you’re opting out of a lot of things today RI Red.
Don’t feel like ‘falling in line’, or ‘getting with the program’?
That’s not being very helpful.
Keep up the good work.
I marvel that someone could be, I assume, attempting to communicate an idea or thought with that sentence. Truly The Best and The Brightest, eh?
Oh, and we here at the Siwss Insurance Behemoth know all about this (and other) excreable creations of D-F. We are so happy and secure in the knowledge that highly competent, incorruptable and dedicated public servants shall keep watch over us all (please be so kind as to pass my remarks along to Leviathan, m’kay?).
If only I could opt out of that IRS 1040 thing, it would make the other opting out much easier. But I am learning how to spell “Galt”.
A friend of mine refers to Dodd-Frank as the “Hire Full-Time Legal Act”, LTC.
bh – and he is absolutely correct. Our fastest growing and expanding department – “Regulatory Affairs and Compliance”.
I call it the “LMC will have enough frequent flyer miles to buy his own island” act. T think, back in the day, NASD 3010 was the one that scared people.
LTC John, when SOX came out, my Fortune 100 software company (which handles accounting packages for darn near everything) put out an internal memo that said if we couldn’t add 20% to our contract amounts as a result we weren’t trying…. D-F looks like it will be as effective or worse.
“Regulatory Affairs and Compliance”.
My first real job was in just such a department in a company that had to deal with a lot of FDA and USDA compliance. You wanna talk about hidden taxes? Just check out how much compliance costs add to the cost of everything. You might think paying 7% sales tax is a pain in the ass, but that’s just peanuts compared to invisible percentage on the price tag.
“. . . peanuts . . . ”
Back in the late ’80s into the ’90s I had a friend who conducted consulting services to the Fed. Ag. Dept. in regulatory management of . . . peanuts! Made himself a pretty good living jobbing out such services to all manner of branches of the Executive: NRC, Social Security, Post Office, the whole damned alphabet soup.
“Rein it in”…?
No, I think what’s called for is the deed spoofed in a famous Bill Mauldin cartoon from WW2, showing a GI about to give his wrecked Jeep a humane coup de grace.
Mauldin’s cartoon.
That’s the one. Thanks sdferr.
Got that book in hardback, spent hours leafing through it in my yout’.
Me, too, Sdferr. Added a lot to my understanding of WW II.