Proof Washington Is Insane

By David Baumann, Editor, Washington CU Daily

House Republican appropriators last week approved legislation that would cut more than $47 billion from the Community Development Financial Institutions program in FY25.

Don’t worry. That proposal is not going anywhere.

Congress likes the CDFI program since it brings money home to their districts, so a cut of that magnitude is highly improbable for a program that allows members to write press releases and hold news conferences announcing funding.

Even House Financial Services Appropriations Subcommittee Chairman Rep David Joyce, R-Ohio, whose subcommittee produced the bill, is a fan of the program.

In November 2022, Joyce announced that the CDFI’s New Markets Tax Credit program had allocated $35 million to the Greater Cleveland Partnership. “Over the years, I’ve seen the positive and lasting impact these kinds of projects have had on northeast Ohio families and am proud to have helped secure the tax credits that support them,” Joyce said, in a press release issued by his office.

In Sept. 2021, Joyce also touted the $50 million in New Markets Tax Credits that Cleveland New Markets Investment Fund II (CNMIF) received. Joyce also noted that he had sent a letter to Treasury Secretary Janet Yellen lobbying for the Cleveland project.

So, why did Joyce’s subcommittee approve a bill that calls for the Community Development Financial Institutions Fund to receive $276 million in FY25? That represents a $47.4 million cut compared to the program’s FY24 funding level.

A good question. Based on past evidence, it is not too cynical to suggest that the appropriations bill represents a political statement rather than a serious piece of legislation that appropriates money.

Even the Trump Administration’s Treasury Secretary Steven Mnuchin accepted the futility of calling for cuts to the CDFI program. The Trump Administration repeatedly proposed eliminating the program, arguing that it had served its purpose. However, testifying before a House subcommittee, Mnuchin acknowledged that that proposal was going nowhere.

Then there are the policy riders in Joyce’s bill.

In yet another demonstration of why Congress cannot function these days, the appropriations bill is filled with proposals that have repeatedly been rejected by the Senate and never have been included in final spending measures.

As a matter of fact, the Senate, on a regular basis, refuses to accept controversial policy riders that are attached to must-pass appropriations bills.

For instance, the subcommittee’s bill proposes to convert the Consumer Financial Protection Bureau into a five-member commission that is funded through the annual appropriations process. In past years, members have argued that the Supreme Court might find the current funding mechanism—the agency draws its money from the Federal Reserve—unconstitutional.

But a few weeks ago, the majority of the court, in a decision written by conservative Justice Clarence Thomas, said the current CDFI funding scheme was constitutional.

Nonetheless, House Republicans are trying again.

And the bill also proposes prohibiting the agency from implementing rules it has issued.

For example, the bill would prohibit the CFPB from enforcing a final rule that would cap credit card late fees at $8. That rule has been challenged in court and the CFPB has been temporarily blocked from implementing it. But if House Republicans have their way, the CFPB would permanently be prohibited from enforcing it.

That is unlikely to be accepted by the Senate and even many House members.

The bill also would prevent the Biden Administration from enforcing several other rules.

During the subcommittee markup, Joyce said that the bill includes provisions that would prevent the Biden Administration from implementing its “overbearing and costly agenda.”

Normally, there is an established way to kill rules; Congress could pass resolutions killing rules using the Congressional Review Act. Of course, President Biden would most likely veto those resolutions, since his administration produced the rule that would be challenged.

A key Democrat said opponents of the House GOP bill should not be too concerned. “This bill is going nowhere,” said Subcommittee Ranking Democrat Rep. Steny Hoyer of Maryland.

So, the bill is highly likely to be a political act of futility. And it’s the type of legislation that has many House members deciding to leave Congress.

Take Rep. Ken Buck, R-Colo., who first announced his retirement from the House and then decided to resign this year before his term ended.

The Washington Post quoted Buck as saying, “This place just keeps going downhill, and I don’t need to spend my time here.”

Then there’s Rep. Carlos Gimenez, R-Fla. CNN quoted Gimenez as saying, “The definition of insanity is doing the same thing over and over again and expecting a different result.”

That pretty much sums up the House Republican Financial Services appropriations bill.