Republicans on Capitol Hill are laying the groundwork for how they will oppose President Biden’s increasingly progressive economic agenda. They will make Wall Street’s top cop their poster child for an administration pushing policies they say are both out of touch with the concerns of average Americans and unconstitutional.
The Securities and Exchange Commission run by a former Goldman Sachs investment banker Gary Gensler has become public enemy No. 1 for many House and Senate GOPers. They say his policies, which include newly proposed rules that force progressive edicts on the environment and other social issues near and dear to Democrats as well as expansive crypto regulation, far exceed his authority.
If the GOP takes Congress, it is planning an all-out assault against Gensler and his leadership at the SEC, Fox Business has learned after interviewing several key GOP lawmakers and others involved in Republican politics.
That is likely to include forcing Gensler to appear before committee hearings and possibly trying to cut the SEC budget, as it has done in the past with a GOP-controlled Congress during the Obama administration.
In the meantime, as the GOP remains in the minority, members are beginning to map out their coming crusade against the agency and Gensler’s leadership.
Republicans on the Senate Banking Committee, led by Sen. Pat Toomey, R-Pa., on Thursday sent a letter to Gensler criticizing him for a lack of transparency concerning the agency’s proposed rule that would, if passed, require public companies to ramp up climate-related disclosures to remain compliant.
The letter follows Gensler’s tepid response to a request last month that the SEC chair provide answers about the costs associated with the proposal and how forcing climate disclosure could have a chilling effect on oil exploration and increase energy prices.
The request, reviewed by Fox Business, even raised the issue that forcing CEOs to take positions on such hot-button political issues could violate their First Amendment rights.
The committee wants the SEC to hand over all communication records pertaining to the proposal between the SEC, the White House and federal agencies.
Gensler’s response did not include specific answers. Instead, he offered to brief committee members about the climate plan, GOP officials tell Fox Business.
A spokesman for Gensler had no comment.
In the latest salvo, Toomey’s new letter called Gensler’s response "wholly inadequate and unacceptable," while pointing out that a member of the public who submitted a Freedom of Information Act request would be entitled to more records than what the SEC has given the Senate committee overseeing the commission.
Toomey also said the GOP believes a recent ruling by the Supreme Court limits the authority of federal agencies, like the SEC, to enact policies Gensler is pursuing. That could mean the new SEC climate disclosure proposal is unconstitutional.
"In West Virginia v. EPA, the Supreme Court ruled that the executive branch and its agencies, including financial regulators, cannot use creative, new interpretations of existing law to pretend they have legal authority to support sweeping policy changes that Congress never intended," senators wrote. "Unfortunately, the SEC appears to be trying to act in precisely this way with its climate disclosure rule."
Toomey is leaving the Senate after his term ends in January, but other GOP members of the banking committee will continue to press the effort. Gensler’s proposals would face even stiffer scrutiny if the GOP controlled the Senate.
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"The GOP smells blood in the water, and this treatment of Gensler is merely foreshadowing of what’s to come," said one former SEC official who spoke on condition of anonymity. "They will surely pull a Mary Schapiro on Gensler if they win the majority."
Republicans routinely targeted Mary Schapiro during extensive hearings over her agenda as President Obama’s SEC Chair after the House turned red in 2010 through the end of her tenure in 2012.
Chairman Gensler is scheduled to appear in front of the Senate Banking Committee for an annual oversight hearing this fall.