Campaign Promises

Cabinet/Departments -> Treasury -> Regulatory Reform

Regulatory ReformGrade
The Promise: "...a critical step in restoring fiscal discipline is enforcing pay-as-you-go (PAYGO) budgeting rules which require new spending commitments or tax changes to be paid for by cuts to other programs or new revenue."
When/Where: Obama-Biden Plan for America "Blueprint for Change" dated 10/09/08.
Status:Without fanfare, President Obama signed the Statutory Pay-As-You-Go Act of 2010 into law on 02/12/10. The basic premise of PAYGO was that any new spending or tax relief was to be offset through reductions in spending elsewhere or increase in other taxes in order to hold the national deficit at bay.

The law also raised the government's debt ceiling from $12.4T to $14.3T. Since signing the PAYGO bill, new spending measures such as the American Protection and Affordable Care Act of 2010 signed into law on 03/23/10 (and its counterpart Health Care and Education Reconciliation Act of 2010, signed into law by President Obama on 03/30/10) were not offset by "reductions in spending elsewhere".

Under the Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010 (H.R. 4853) signed into law by President Obama on 12/17/10, there are no PAYGO provisions for tax cut extensions for those earning more than $250K ($200K for single tax filers).

So, the typical American taxpayer considered that PAYGO, as codified by President Obama in CY2010, was ineffective as a means to balance new government spending with comparable cuts elsewhere. Another method to arrive at the stated goal would have been via a balanced budget amendment to the U.S. Constitution, a move advocated by the majority of Congressional Republicans. On 11/25/11, the Republican-led House failed to obtain the 290 votes needed for a balanced budget amendment, obtaining only 261 such votes. This initiative expired with the 112th Congress at the end of CY2012.

The Congress was largely ineffective in its application of PAYGO law provisions when they passed spending bills for the remainder of President Obama's two terms in office.

This promise was not fulfilled.
The Promise: "I'll put in place the common-sense regulations and rules of the road...rules that will keep our market free, fair, and honest; rules that will restore accountability and responsibility in our corporate boardrooms."
When/Where: Campaign Speech, Saint Louis, MO, 10/18/08.
Status:Department of Treasury document "Financial Regulatory Reform: A New Foundation" was released on 06/17/09. That document provided the framework for future legislation to (1) promote robust supervision and regulation of financial firms; (2) establish comprehensive supervision of financial markets; (3) protect consumers and investors from financial abuse; (4) provide the government with the tools it needs to manage financial crises; and (5) raise international regulatory standards and improve international cooperation.

President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173) into law on 07/21/10. This law reshaped oversight of the U.S. financial industry, included the creation of a new consumer protection agency, set new limits on banks using capital for trading and investing in hedge funds, and gave the government power to close down troubled financial firms.

Under H.R. 4173, the Consumer Financial Protection Bureau (CFPB) was set up by former Harvard contract law, bankruptcy and commercial law professor Elizabeth Warren, appointed on 09/17/10 as "Consumer Czar" for President Obama and Special Advisor to the Treasury Secretary.

After it opened on 07/21/11, President Obama nominated Ohio Attorney General Richard Cordray to head the CFPB. Mr. Cordray's confirmation was blocked by at least 44 Republican senators who believed that a single director would have too much unaccountable, unchecked power and authority to set his/her own budget and agenda. The Republican senators preferred that the CFPB be headed by a board or commission.

President Obama went against the will of Congress by appointing Mr. Cordray to head the CFPB on 01/04/12, without Senate confirmation, while the Congress was technically and constitutionally in "pro forma" session (the Senate often holds pro forma sessions specifically to prevent the President from making recess appointments to fill vacancies in federal offices that require the approval of the Senate. The Senate eventually confirmed Mr. Cordray's appointment on 07/16/13 for a five-year term.

Since its inception in CY2011 through end-CY2016, the CFPB was credited with (1) collecting over $11.8B from credit card companies, bank and mortgage companies for abusive practices; (2) creating a user-friendly website for consumer complaints; (3) making information on mortgages, student and auto loans more accessible and understandable; and (4) collecting $589M to be paid in civil penalties as a result of CFPB enforcement work.

On 10/11/16, the Court of Appeals for the District of Columbia ruled that the structure of the CFPB was unconstitutional because its director (Mr. Cordray) was only loosely accountable to President Obama and could only be removed from his position for cause. The court directed an amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act so that a president could remove the CFPB Director at will. Predictably, the CFPB disagreed with that ruling and elevated the matter to the Supreme Court. As of end-CY2016, the Supreme Court had not heard this case.

Nonetheless, the basic tenets of this promise were fulfilled.
The Promise: "...will maintain fiscal responsibility and prevent any increase in the deficit by offsetting cuts and revenue sources in other parts of the government..."
When/Where: Obama-Biden Plan: "Helping All Americans Serve Their Country" dated 09/11/08.
Status:Under President Obama, the Office of Management and Budget (OMB) forecasted on 08/22/12 that the U.S. budget deficit would be $1.3B for FY2012, the same as for FY2011,and equal to 7.3% of the nation's Gross Domestic Product (GDP).

Pessimistic about the ability of Congress and the White House to reduce the nation's federal budget deficit, Standard and Poor's reduced the U.S. credit rating from AAA to AA+ on 08/05/11 -- the first credit rating downgrade in the nation's history.

A bipartisan supercommittee (Joint Committee on Deficit Reduction (aka "Simpson-Bowles Commission") was formed under the Budget Control Act of 2011 signed into law on 08/02/11. Although this Act increased the national debt ceiling to $16.4T, the supercommittee was mandated to identify $1.2T over ten years in federal spending cuts by 11/23/11. If the supercommittee failed to agree on these spending cuts, cuts to national defense in the amount of $600B and another $600B from other agencies would be automatic.

On 11/09/11, Republicans on the supercommittee offered a $1.2T package that included new taxes in the amount of $300B in return for maintaining lower tax rates that originated during the Bush presidency. The supercommittee Democrats rejected this package, claiming that the rich would gain a tax windfall and the middle and poor classes would suffer under the Republican plan.

The supercommittee was not so super after all. It announced failure to meet the dictates of its mandate on 11/21/11. President Obama promised on the same date to veto any legislation designed to prevent the above automatic cuts, to take effect in CY2013. At the same time, he indicated that he would ignore most of the supercommittee's recommendations.

On 02/13/12, President Obama presented his $3.8T spending plan. Interpretation of this 10-year plan reveals that annual deficits will exceed $6.7T over the next decade despite an estimated $4T in deficit reduction initiatives. At the same time, the national debt held by foreign investors is projected to grow to $18.7T by FY2021, equivalent to 76.5% of the U.S. national economy.

As of 09/03/12, the national debt which was increased by President Obama by $5.4T since he took office in CY2009, breached the $16T level. To resolve this debt, which grew to $16.5T by 02/13, each of America's citizens would have to pay nearly $53K.

The promise to "maintain fiscal responsibility and prevent any increase in the deficit" has not, as of early-CY2013, been fulfilled. Nor is it apparent to the average American taxpayer that President Obama is committed to eliminating this deficit other than his repeated insistence that the solution lies primarily in the raising of taxes on the so-called 1% "rich" folks.
The Promise: "...will protect workers who fall into bankruptcy as a result of a medical crisis...will create an exemption from the new law's requirement that middle class families extend their debts rather than have them forgiven."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity," dated 09/11/08.
Status:Prior to the Patient Protection and Affordable Care Act (ACA) (Public Law 111-148), signed into law by President Obama on 03/23/10, anywhere from 800K to 1M workers fell into bankruptcy annually due to a combination of loss of job and high medical costs. By some accounts, that number fell to about 643K Americans declaring bankruptcy in CY2013 due to medical bills. That reduction was attributed in part to insurance obtained by workers as mandated by the ACA.

Nonetheless, by end-CY2016, no exemption had been created to forgive debts that led to bankruptcy as a result of medical crises.

This promise was not fulfilled.
The Promise: "...believes that we need to ensure that all Americans have access to clear and simplified information about loan fees, payments, and penalties...he'll require lenders to provide this information during the loan application process..."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity," dated 09/11/08.
Status:The Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173) signed into law by President Obama on 07/21/10 offered expanded mortgage loan terms protection to the home buyer, but did not provide simplified application protections for the types of loans reflected in this promise, which was focused on predatory payday loans.

The Payday Loan Reform Act of 2009 (H.R. 1214) was introduced by Congressman Luis Gutierrez (D-IL) on 02/26/09. This bill would have responded to the basic tenets of this promise but was not enacted and expired with the 111th Congress at the end of CY2010.

While the Consumer Financial Protection Board (CFPB) was known to be working on rules to provide clear and simplified protections for borrowers seeking loans such as payday loans, no rules to that effect were known to have been published by end-CY2016.

This promise was not fulfilled.
The Promise: "...will work with his Secretary of Treasury and the Federal Deposit Insurance Corporation to encourage banks, credit unions, and Community Development Financial Institutions to provide affordable short-term and small dollar loans -- and to drive the sharks out of business."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity," dated 09/11/08.
Status:This specific issue (short-term/small dollar loans) was not addressed in the "Dodd-Frank Wall Street Reform and Consumer Protection Act" (H.R. 4173) signed into law by President Obama on 07/21/10. That law addresses only predatory practices related to mortgage loans.

The Consumer Financial Protection Bureau (CFPB) estimates that interest rates charged by payday loan sharks can reach from 300% to as high as 521% for loans made to the underserved. "Underserved" refers to those without checking or savings accounts with an insured depository institution or have such accounts but cannot secure personal loans for whatever reason.

On 03/26/15, President Obama and the CFPB introduced proposed rules intended to require lenders to ensure that borrowers have access to adequate resources to repay their short-term/small dollar loans such as payday loans, vehicle title loans, deposit advances and other loans. By end-CY2016, the proposed CFPB rules had not been published.

This promise was not fulfilled.