A desire to restrain China united Republicans and Democrats on the House Financial Services Committee Tuesday, with lawmakers approving a series of bipartisan bills designed to rein in the country's economic power.
The committee approved 10 bills with broad support, including measures that would have the U.S. government scrutinize financial institutions that serve senior Chinese officials, target Chinese manufacturing of synthetic drugs, and commission a Treasury Department report on the global economic risks associated with China’s financial sector.
The package also featured pro-Taiwan bills that would encourage Taiwan’s membership in the International Monetary Fund and exclude China from the G-20 and other global organizations in the event it threatens Taiwan’s security.
The bills stopped short of major intervention into China's economy, such as restrictions on U.S. investment.
“Let me be clear, these are modest efforts to hold China accountable,” the panel’s ranking member, Maxine Waters (D-Calif.), said.
But Financial Services Chair Patrick McHenry (R-N.C.) said the bipartisan support was notable "in a divided Congress that many pundits have claimed will not accomplish much."
President Joe Biden’s plan to forgive student loan debt for tens of millions of Americans seems to be in danger based on oral arguments at the Supreme Court on Tuesday.
A majority of justices appeared dubious about the Biden administration’s pandemic-related legal justification for the sweeping debt relief program, which offered up to $20,000 of loan forgiveness per borrower. The initiative has been put on hold while the high court debates the case.
During more than three hours of oral argument, conservative justices on the court repeatedly questioned whether the Education Department had the legal authority it claimed to discharge federal student loan debt to help borrowers recover economically from the national emergency spurred by Covid-19.
GOP lawmakers are escalating their war on "woke" capitalism this week, with House and Senate votes to repeal a Biden administration policy that enables investment managers to factor climate change and social goals into retirement savings decisions.
Republicans, with help from at least one moderate Democrat, Joe Manchin of West Virginia, may succeed in passing the rollback and sending it to President Joe Biden's desk, thanks to a law that allows Congress to nullify new regulations on an expedited basis without succumbing to a Senate filibuster. Other moderate Democrats like Sen. Jon Tester of Montana, who is facing a tough 2024 reelection bid, are also weighing whether to back the repeal.
Biden has threatened to veto the rollback, but the move is still providing fodder for GOP lawmakers who are making anti-woke criticism of socially minded big business a centerpiece of their political messaging. House Republicans are expected to pass a resolution to undo the rule on Tuesday afternoon, likely along partisan lines, with the Senate following later this week.
Rep. Andy Barr, the Kentucky Republican who sponsored the resolution, said on "Fox and Friends" Tuesday that the votes will put members of Congress on the record regarding "whether they are going to put their constituents' retirement security first or their own progressive political agenda."
"Whether you're a Republican or a Democrat, we think most Americans don't want politics to be a factor in allocating their capital and determining whether or not they're going to have a secure retirement," he said.
The votes this week are the latest milestone in the GOP's populist turn when it comes to corporate America. Rather than defending the rights of asset managers to offer investment products as they choose, Republicans at the state and federal levels are using tools of government to beat up on Wall Street for its embrace of decision-making tied to environmental and social goals. It has forced major corporations to play defense in Washington and state capitals across the country, scrambling the traditionally friendly dynamic between big business and the Republican party.
The Labor Department rule Republicans are targeting this week was an attempt by the Biden administration late last year to clarify that retirement plan managers can consider environmental, social and governance factors when selecting investments. The rule was intended to reverse Trump-era policy that tried to discourage ESG investments.
While the rule doesn't require that climate and social issues factor into retirement planning, Republican critics argue that it opens the door to the politicization of investing at the expense of returns. It's a critique that's become widely embraced by GOP politicians and conservative groups. Former Vice President Mike Pence’s Advancing American Freedom is among the organizations backing this week's rollback attempt.
"The Department of Labor’s new rule would allow woke asset managers to use the nearly $11.7 trillion in assets from the retirement accounts of over 150 million Americans to fund the Left’s political agenda," Heritage Action Executive Director Jessica Anderson said in a statement.
The Biden administration and most Democrats in Congress are fighting back. The giant labor organization AFL-CIO is among the dozens of outside groups lobbying Congress to vote against the Republican resolution, arguing that incorporating ESG factors in investments "helps protect the hard-earned retirement savings of working people."
The White House said in a statement Monday that reverting to more restrictive, Trump-era policy would "unnecessarily limit the options available to retirement plan participants and investors."
Despite the opposition, the GOP effort has started to attract support and consideration from Democrats up for reelection in 2024 in conservative-leaning states. It means that Republicans may only need one more Democrat in addition to Manchin to pass the proposal in the Senate. The Congressional Review Act, the law that allows lawmakers to nullify executive branch actions, offers a fast-track process that requires only a simple majority vote to undo recently released regulations like the DOL rule.
Senate Democrats hold a one-seat majority, but Sen. John Fetterman (D-Pa.) is out for treatment for clinical depression. Republicans still likely need one more Democrat to support the measure beyond Manchin because of the absence of Sen. Mike Crapo (R-Idaho), according to Sen. Mike Braun (R-Ind.), who is sponsoring the rollback.
Manchin was an early co-sponsor of the Senate GOP's resolution, and he blasted the Biden administration as "irresponsible" for issuing the rule.
Tester, who is likely facing one of the toughest 2024 reelection campaigns among Senate Democrats, said in an interview Tuesday that "I've got my leanings" but that he was still reviewing the policy and wasn't ready to share his position.
“My challenge is this: Why’d the administration put it out?" Tester said. "It seems to me if I’m an investor of money, I’m not gonna put money in things that aren’t good investments. And then I’ve got to figure out if any of it’s mandatory.”
The U.S. government still has not reached a consensus on how the coronavirus pandemic started, National Security Council spokesperson John Kirby told reporters Monday — despite news reports that the Energy Department has concluded the virus most likely leaked from a lab in China.
"The intelligence community and the rest of the government is still looking at this,” Kirby said. “There’s not been a definitive conclusion, so it’s difficult for me to say — nor should I feel like I should have to defend press reporting about a possible preliminary indication here. What the president wants is facts."
The Wall Street Journal reported Sunday that the department had reached a “low confidence” conclusion supporting the so-called lab leak theory in a classified finding shared with the White House and members of Congress. Kirby would not confirm or deny the report, saying he is “not going to get ahead” of the U.S. government’s investigation.
The reported DOE finding gave new life to arguments from GOP lawmakers who have claimed, without evidence, that federal officials have covered up the origins of the virus that has killed more than a million Americans. Other agencies have said evidence points to the virus arising naturally in China before being transmitted to humans.
The Energy Department declined Monday to comment on the article, saying through a spokesperson: "The Department of Energy continues to support the thorough, careful, and objective work of our intelligence professionals in investigating the origins of COVID-19, as the President directed."
During an interview Sunday with CNN, White House national security adviser Jake Sullivan said a “variety of views" exist within the intelligence community about how Covid began.
The investigation is a full government effort and not led by one agency, Kirby said. He added that President Joe Biden has been regularly informed of what agencies have found regarding coronavirus origins.
“The president made trying to find the origins of Covid a priority right when he came into office and he has a whole government effort designed to do that,” Kirby said during a White House press briefing Monday. “There is not a consensus right now in the U.S. government about exactly how Covid started.”
"The president wants to understand that, so we can prevent better future pandemics,” Kirby added.
When the information is available, the administration will brief Congress and the American people, he said.
Staff writers Robin Bravender and Brian Dabbs contributed to this report.
The inspector general that oversees the Transportation Department is auditing Pete Buttigieg's use of government planes since becoming Transportation secretary — a move Buttigieg says he welcomes to help blunt what he called "misleading narratives" from conservatives about whether he abuses them.
"Glad this will be reviewed independently so misleading narratives can be put to rest," Buttigieg tweeted. "Bottom line: I mostly fly on commercial flights, in economy class. And when I do use our agency’s aircraft, it’s usually a situation where doing so saves taxpayer money." DOT spokesperson Kerry Arndt added that Buttigieg "flies commercially the vast majority of the time."
The Transportation Department's inspector general announced on Monday that it will audit his travel; the news was first reported by the Washington Post. The IG probe stems from a Fox News article in December outlining that Buttigieg had used planes owned by the Federal Aviation Administration 18 times since taking office, a practice Buttigieg has defended. A spokesperson at that time told Fox News Digital that 108 of the 126 flights he had taken on official business had been via commercial airplanes.
DOT said in December that the 18 flights Fox News highlighted — to destinations that included Las Vegas, Montreal and Oklahoma — cost taxpayers just under $42,000. The audit was originally requested by Sen. Marco Rubio (R-Fla.) who has since called for Buttigieg's resignation over his handling of the train derailment in East Palestine, Ohio.
Any government official can use the fleet, if they can demonstrate to the satisfaction of the agency's ethics department that the flights will be more cost-effective than flying commercial, or for security or scheduling reasons. FEMA officials and National Transportation Safety Board accident investigators are typically frequent users of the planes, and it is not unusual for top DOT and FAA officials, as well as the heads of other agencies, to use them when warranted.
In 2018, POLITICO reported that former DOT Secretary Elaine Chao took the same FAA-owned planes on seven trips, costing taxpayers an estimated $93,977, including a $68,892 trip to and around Europe for her and five staffers.
The Federal Trade Commission is expected to challenge the $13 billion takeover of mortgage data company Black Knight by financial services giant Intercontinental Exchange, according to three people with direct knowledge of the matter.
A case is expected to be filed some time in March, said the people, who were granted anonymity to discuss a confidential matter. The FTC believes the deal would give Intercontinental Exchange, which also owns the NYSE, too much power in the multi-trillion dollar U.S. mortgage market, and come at the expense of both higher home prices for consumers and competitors in the mortgage data and services industry, the people said.
The FTC has been investigating the deal since shortly after it was announced nearly a year ago and if the companies choose to defend against a possible lawsuit, it could potentially delay the deal’s close into 2024. The timing of a lawsuit could slip and no decision is final until a case has been filed, the people said.
A lawsuit would also be the latest volley from President Joe Biden’s antitrust enforcers, FTC Chair Lina Khan and Assistant Attorney General for antitrust Jonathan Kanter, who have both pledged to rein in corporate consolidation. The FTC is currently challenging deals including Microsoft’s takeover of video game giant Activision Blizzard, and the DOJ is likely to challenge JetBlue’s takeover of Spirit Airlines.
ICE founder and CEO Jeffrey Sprecher is a major GOP donor. His wife is former Georgia Republican Sen. Kelly Loeffler.
Spokespeople for ICE and Black Knight declined to comment. An FTC spokesperson declined to comment.
The ICE-Black Knight merger would bring together the two largest companies offering loan origination software, essentially the pipe connecting brokers with lenders. The companies have offered to sell Black Knight’s loan origination platform Empower, to resolve the so-called horizontal overlap between the companies, one of the people said. That is not enough, however, to allay the FTC’s concerns that the merger would give the combined company too much control over data and technology in the residential mortgage market, that person said.
The FTC believes that just selling Empower though does not curtail all of the head-to-head competition between the companies, two of the people said. Both companies offer a variety of services that operate with the loan origination platform, including the data analytics business Optimal Blue.
Reuters previously reported that Black Knight had hired bankers to help sell Empower.
ICE, which operates major financial exchanges and clearinghouses, has expanded into the mortgage market in recent years. It recently acquired Encompass, its loan origination offering, through its $11 billion purchase of mortgage software company Ellie Mae in 2020. And in 2018 it completed its buyout of Merscorp, which operates a national electronic registry of U.S. mortgages.
In 2019 and 2020, Black Knight bought a pair of companies — Compass Analytics and Optimal Blue — that provide a variety of data and analytics services to lenders to help them price loans. Through those deals it has a leading position in the software used by banks to price loans.
Companies including the government-backed Fannie Mae and Freddie Mac as well as financial technology start-ups like Roostify and Blend rely on the loan origination platforms from Black Knight and ICE.
In another example of the rapidly consolidating mortgage technology market, Roostify was bought last week by CoreLogic, which itself fended off an earlier takeover bid by Black Knight.
“We depend on the interoperability of our platform across third-party applications and services that we do not control,” Blend says in securities filings. While it does not mention either Black Knight or ICE by name, it says it relies on loan origination and pricing tools that the combined company would dominate.
The companies’ Surefire and Velocify services also compete head-to-head in the marketing of mortgage services from lenders.
The deal has faced opposition from lawmakers, consumer groups, customers and competitors, with FTC hearing a number of concerns from companies who rely on Black Knight and ICE that their access will either be lost or degraded after the merger, two of the people said.
The deal “would make ICE the largest mortgage services company in the housing ecosystem” said Rep. Maxine Waters (D-Calif.), the top Democrat on the House Financial Services Committee. The new company “could exert significant market power over loan pricing for consumers, access to and sale of consumer data, and mortgage software pricing,” she said in a late December letter to Khan urging the FTC to block the deal.
Federal Financial Analytics managing partner Karen Petrou urged the FTC to block the acquisition in an early February report, arguing that combining ICE’s “critical mortgage services” with Black Knight would give it “unrivaled power to control the prices set on each mortgage, the terms on which credit is provided, the lenders offered the most advantageous terms, and the extent to which home ownership is available on affordable, equitable terms in rural, urban and majority-minority communities.”
That report outlining Petrou’s case was funded by an anonymous company opposing the deal, but Federal Financial Analytics said it had complete control over the final product.
Zachary Warmbrodt contributed to this report.
