WASHINGTON — House Republicans questioned two financial experts in Congress on Treasury debt markets at a subcommittee hearing, while considering a slate of bills that Republicans say would
According to a committee rule, bills up for markup by the House Financial Services Committee must be debated in a hearing. In this case, the subcommittee on financial institutions and monetary policy listed six pieces of legislation, ranging from a bill that would allow banks to pay certain assessments to the Deposit Insurance Fund with Treasuries and one that would bring the non-monetary policy-related functions of the Federal Reserve Board of Governors into the appropriations process.
"It makes a mockery of that rule if we list bills as getting a hearing here today, and those bills have virtually nothing to do with today's hearing," said Rep. Brad Sherman, D-Calif. "I would hope that we would not view those bills as having had their required hearing when we have witnesses here who are focused on the federal fiscal situation."
Democrats decried these pieces of legislation and argued that the two witnesses at the hearing — Grant Driessen, a specialist in public finance at the Congressional Research Services, and Jeff Arkin, director of strategic issues at the Government Accountability Office — didn't have any expertise in the issues that the legislation addresses.
"This hearing is ostensibly about concerns about the opacity of the Treasury," said Rep. Tom Casten, D-Ill. "In the interest of transparency let the record show that three of the bills noticed in this meeting have absolutely nothing to do with what the witnesses were brought here to testify on. If we care about transparency, if we care about a fulsome debate, let us insist on the same transparency in this body that we seem to be concerned about [with] the Treasury."
Among the other bills listed under the subcommittee's hearing include one that would require the chair of the Financial Stability Oversight Council to provide a contingency plan for a disruption of payment on Treasury Securities, and one that would require testimony and reports from Treasury in anticipation of the federal government reaching its statutory limit.
"Trillions of dollars in Treasuries trades occur each day in the private sector and with the Federal Reserve, through purchases, sales, repurchase agreements, securities lending and more," said Rep. Andy Barr, R-Ky., the chairman of the subcommittee. "Those trades help support the provision of financial services, and they depend on highly liquid, deep, and stable markets for various types of Treasury trades. Stability of markets for transactions involving Treasury securities has been at risk at various times, and Treasury security holdings of financial institutions recently came to the forefront in the form of bank runs and failures."
Barr said that he intends this hearing to be the "first of several" considering Treasuries markets.
The critiques from Democrats come as Republicans are pushing a number of bills through the House. While these aren't likely to be taken up by the Democratic-controlled Senate, it lays the groundwork for what Republicans hope is a GOP sweep in 2024, and an easier environment for the party to legislate.
On Monday, the House passed a number of bills sponsored by Republicans focusing on capital formation, including ones that would expand the accredited investor definition and others that would make it easier for smaller companies to go public.
