Republican and Democratic members of the House Financial Services Subcommittee on Oversight and Investigations sparred Wednesday over the costs of implementing the Dodd-Frank Act.
Republican members of the subcommittee voiced their concerns during a hearing entitled, The Costs of Implementing the Dodd-Frank Act: Budgetary and Economic, about the sheer size of the Dodd-Frank act and, as Rep. Randy Neugebauer, R-Texas, chairman of the Subcommittee, stated in his opening remarks, Dodd-Frank’s “far reaching impacts on our markets and on the cost of doing business and the cost of capital.”
Rep. Spencer Bachus (left), R-Ala., chairman of the full Committee, said that the cost of implementing Dodd-Frank was never “weighed” before the Act was passed into law. The “federal budget and businesses of all sizes will have to deal with the cost of implementing Dodd-Frank for some years to come,” Bachus said, and “Congress will not be able to rein in some of those costs.”
But Rep. Michael Capuano, D-Mass., said that the size of Dodd-Frank isn’t what matters, rather it’s whether the law “works.” Overall, he said, Dodd-Frank “is a good piece of legislation,” but there will be “bumps” during its implementation and Congress must continue oversight.
Rep. Joe Baca, D-Calif., added that Dodd-Frank “restores common sense to Wall Street,” and provides the nation with “the oversight necessary to prevent another collapse of our financial markets.” Baca said the Subcommittee’s hearing should have been entitled: “The cost of not implementing Dodd-Frank.”
As to the cost of Dodd-Frank, Douglas Elmendorf, director of the Congressional Budget Office (CBO), reiterated in his testimony the previous cost estimates released by CBO in June of 2010, which projects federal budget costs of Dodd-Frank to be $1.1 billion over the first 5 years of implementation. However, Elmendorf said that Dodd-Frank would reduce the deficit by $3.2 billion dollars between the 2010-2020 time period.