BACKGROUND:

During a time of high unemployment-a twenty-six year high of 10.2 percent, Democrats refuse to enact job creating solutions.  Instead, Democrats continue to advance legislation to increase the government's control of the market, while restricting the access to credit for many small businesses.  On November 9, 2009, the Associated Press reporting on the Federal Reserve's quarterly survey stated, "[M]any banks expect to increase rates, reduce credit limits and raise annual fees for both prime borrowers-those with sound credit histories-as well as more risky ‘non-prime' borrowers, who have tarnished credit...Banks already have been pushing through rate increases in anticipation of the new rules [the Credit CARD Act]...Many people and businesses are still having trouble obtaining loans, a force that is likely to restrain the economic recovery."  Still, the Democrat assault on capitalism continues.  In December of 2009, the full House is expected to consider the following job killing proposals:

JOB KILLING PROPOSALS:

Consumer Financial Protection Agency Act:  This proposal would establish an independent agency in the executive branch to regulate financial products and services.  An unelected "credit czar" would be able to dictate what financial products could be offered and at what terms, drastically reducing the number of financial products available and driving up the cost of credit.  The U.S. Chamber of Commerce, the Business Roundtable, the Small Business & Entrepreneurship Council and twenty-one other industry trade associations have opposed or expressed serious concerns about the Democrat CFPA proposal.  On September 30, 2009, the Chamber, representing over three million businesses, testifying before the Committee on Financial Services stated, "The Chamber opposes the CFPA legislation in its current form because it believes the current bill is the wrong way to enhance consumer protection, and it will have significant and harmful unintended consequences for consumers, for the business community and for the overall economy."

Financial Stability Improvement Act:  The proposal would make permanent the government policies invoked to bailout AIG, Chrysler, GM, Fannie Mae and others by creating a permanent bailout fund and enabling the FDIC to extend federal guarantees and loans to institutions for the sake of "financial stability."  The bailout fund would be initially supported by the taxpayers and assessments on large financial institutions, creating another tax to be passed on to small business consumers in the form of higher prices for credit products.  Since some institutions would be considered "too big to fail" (likely those that are "politically significant"), bailouts are inevitable.  Lastly, the proposal would give government regulators the authority to dismantle large firms even if those firms are economically healthy and well-capitalized.

Over-the-Counter Derivatives:  The use of derivatives encourages job creation and provides customized hedges to help businesses like farmers, grocery stores and energy companies to manage price volatility, so that retail prices can remain low and stable.  The Democrat proposal would authorize government regulators to arbitrarily impose capital requirements for OTC derivatives, and impose new capital requirements for cleared swaps.  Any additional capital requirements imposed by the regulators could cost jobs, reduce investments, increase retail prices and make it less likely that corporations would be able to engage in responsible risk management. 

Investor Protection Act:  The current standards for investment advisers and broker-dealers are well established and interpreted under case law.  The Democrats' new proposed fiduciary standard for broker-dealers would be subject to additional legal interpretation for broker-dealers, unnecessarily creating uncertainty for market participants, and undermining the proprietary model that provides investors with an array of investment choices.  In addition, investment firms would be faced with increased litigation due to the proposal's ban on mandatory arbitration clauses.  The litigation costs would be passed on to consumers, making investment transactions more expensive.