Keep watch on Dodd-Frank implementation: Oversight testimony
The House Committee on Oversight and Government Reform heard testimony from scholars and trade group leaders Thursday on whether new regulations should be reviewed for their effect on employment, particularly when it comes to borrower income and the housing industry.
Unemployment fell to 9% in January, though many critics point out that number does not include the amount of workers who have had pay scaled back or even those who have given up looking. In a House subcommittee hearing Wednesday, academics said the Federal Reserve's monetary policy had done little to spur job growth.
Rep. Darrell Issa (R-Calif.), who chairs the oversight committee, wants to know if overreaching regulations are getting in the way too.
In 2010 alone, 43 major rules were passed by regulators, with 15 of them involving financial regulation, specifically stemming from Dodd-Frank, said James Gattuso, senior research fellow at The Heritage Foundation.
National Association of Realtors President Ron Phipps, who has been touring bank and regulatory offices to reduce toughened mortgage underwriting standards since the crash, said in a blog post Thursday that Congress should continue to support home sales.
"For every additional 1,000 home sales, about 500 jobs are added to the economy," Phipps claims in his post. "In the days ahead, NAR will be reaching out to Congress and the White House to emphasize the clear connection between housing, jobs and the economy."
Gattuso proposed new legislative steps to scrutinize these upcoming rules. He called for Congressional approval of major regulations, a cost analysis of all new regulatory burdens and to review old regulations that "have outlived their usefulness."
Whether or not these rules have a direct effect on employment may be left for debate, but President Obama himself said in his State of the Union speech that regulations should be examined to "help our companies compete" and to "knock down barriers that stand in the way of their success."
More is on the way. Dodd-Frank, he said, will require 243 new formal rulemakings by 11 federal agencies.
Opinions varied on whether or not regulations in this or any other sector has crippled job growth. Jay Timmons, CEO of the National Association of Manufacturers said in his testimony that it definitely has.
"Unfortunately, over the last two years, we have not seen sensible and cost- beneficial regulation being proposed by government agencies," Timmons said. "On the contrary, an aggressive federal bureaucracy has imposed unworkable and excessive regulations with little regard for their impact on job creation and the economy."
Sidney Shapiro, member scholar for the Center for Progressive Reform, said it was a lack of regulation, not too much regulation that was responsible for the collapse of the financial sector in the first place.
"The fact that regulated entities do not like regulation does not mean that it is the cause or even a contributor to our economic and unemployment woes. The evidence to back up these claims is not there," Shapiro said in testimony.
Write to Jon Prior.
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