What Lame Ducks Might Do
Iain Murray spoke with the Pittsburgh Tribune-Review on Congress' Lame Duck December
Q: With just a handful of legislative days remaining in December, what concerns do you have about potential actions by Congress?
A: There are concerns there might be attempts to sneak a few things through that would have much less chance of getting passed under the new Congress, and there also might be some possibilities that Congress might do a few unwise things, thinking, “It's a lame-duck session. We can get away with it.”
Q: What sort of unwise things?
A: There's a possibility that the House might pass an Internet sales tax as part of its omnibus or “minibus” spending resolution. (The Competitive Enterprise Institute) is very worried about that.
That's partly because it will massively increase the cost of doing business over the Internet, but also because it breaks a central principle as far as we are concerned, which is that you shouldn't be able to tax people who don't have a vote in the levels of taxation. It's sort of like a taxation without representation issue.
We're also very concerned about an extension of the wind production tax credit, which basically subsidizes inefficient energy production and, by doing so, actually raises the cost of energy.
The U.S. Energy Information Administration suggests that the states that have invested the most in wind power are also those experiencing the fastest rise in electricity costs. We think if (Congress) allows the wind production tax credit to expire, we should actually see some relief and energy prices might start to come down for some people who are experiencing higher energy bills than they would like.
Q: Are there any measures you would like to see Congress approve?
A: We'd like to see passage of the Insurance Capital Standards Clarification Act. (The) Dodd-Frank (financial reform law) empowers something called a Financial Stability Oversight Council to designate large financial institutions as systemically important, which means they come under a whole bunch of regulations designed to keep big banks under control, make sure they have enough money to meet their liabilities, things like that.
The trouble is that the council is able to (regulate) large insurance firms that don't have diversified banking operations like AIG did. AIG was the only insurance firm that got caught up in the financial crisis.
But large companies like Prudential and Met Life are insurance companies only, (yet) they are still being designated as systemically important by FSOC. So they are being made subject to a bunch of rules which aren't appropriate for them. They are appropriate for banks, possibly, but they are not appropriate for insurance firms at all.
So there is a bill that's already passed the Senate that would exempt insurance firms from this requirement. All the House needs to do is pass that (to end) the danger of all of this increased and inappropriate regulation being placed on insurance firms, the result being that ordinary people's insurance premiums are going up for no good reason. We think there actually is the possibility for some really good bipartisan action on this legislation.