The House Financial Services Committee signed off on legislation Wednesday that would repeal bailout funds under the Dodd-Frank Act and more than half the Consumer Financial Protection Bureau’s (CFPB) budget.
Clearing the legislation by a party-line vote, committee members billed it as a way to slash $35 billion from the national deficit.
“Our nation is in a spending-driven debt crisis. The solution isn’t to tax Americans more, it’s for Washington to spend less,” Rep. Spencer Bachus (R-Alabama), who chairs the committee, said in a statement.
The committee said it rejected an amendment offered by Rep. Barney Frank (D-Massachusetts) to replenish bailout funds for systemically important institutions in the event of another financial crisis.
Just what would the bill accomplish?
According to the nonpartisan Congressional Budget Office, it would save taxpayers $10 billion over the next decade by slashing revenue for federal programs and agencies like the Home Affordable Modification Program (HAMP) and CFPB.
The bill proposed doing away with bailout mechanisms under Dodd-Frank, appropriating only $200 million for the CFPB – which has a current budget of $547 million – for the next fiscal year, and undoing HAMP entirely.
HAMP remains an embattled program. The special inspector general for the Troubled Asset Relief Program – under which lawmakers established it in 2009 – found in a recent report that 782,609 permanent loan modifications fell short of the 3 to 4 million homeowners that administration officials said it would help.
News that it disbursed only $2.54 billion of an available $30 billion to homeowners in distress continues to give ammunition to more conservative lawmakers with a desire to do away with it.
Sources tell us that it is unlikely the bill will become law this year. The House will need to take up the bill for a full-chamber vote and the Democratic Senate will need to conference it with similar legislation
By: Ryan Schuette
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