View Kennedy’s full remarks here.
WASHINGTON – Sen. John Kennedy (R-La.) spoke on the Senate floor today about the danger that President Biden’s budget presents to the U.S. economy and about the Federal Reserve’s failure to oversee risk at Silicon Valley Bank.
Key comments from Kennedy’s remarks include:
“I learned that since 2019 until today, the population in the United States has grown 1.8 percent. You know how much our budget has increased? Fifty-five percent. And that doesn't even count the additional half a trillion dollars’ worth of spending that the president has just proposed.”
“I also learned that the president is proposing $4.7 trillion—not billion—$4.7 trillion dollars in new taxes.”
“Gross debt, all of our debt, will rise under President Biden’s budget from $32.7 trillion at the close of this year to $51 trillion by 2033. Only in Washington, D.C.—only in La La Land—can you go around and say, ‘My budget reduces the deficit and debt by $3 trillion’ when it really increases it by $18 trillion.”
“President Biden's bailout of Silicon Valley Bank was the result of bad management by the bank officials but also by bad supervision.”
“Four years ago, the Fed told Silicon Valley Bank that its system to control risk was not up to snuff. Fact number two: Last fall, short sellers and private bank analysts said the same thing.”
“It wasn't a failure of regulation that caused Silicon Valley Bank to go under. It was the failure to enforce the rules that we already have.”
“Now I also learned some of my colleagues are saying, ‘Well, you know, this is all the fault of Congress. It’s the fault of Congress because Silicon Valley Bank was not subject to a stress test. We, as you know, Democrats and Republicans, supported an amendment to Dodd Frank back in 2018 that some say prevented the bank from being stress tested. That’s not true. The bill that we passed in 2018 said categorically and unequivocally . . . the Federal Reserve and the other banking regulators have the authority at any time to stress test Silicon Valley Bank, and they chose not to do it.”
“Now the other point being made by some of my colleagues is that, ‘Well, they weren't big enough to stress test. They had to be $100 billion or more.’ That’s not true. They were over $100 billion bank at the end of 2021. So, they did qualify to be stress tested in 2022.”
“If the Federal Reserve had stress tested Silicon Valley Bank, Silicon Valley Bank would have passed. It would have passed. You know why? Because the Federal Reserve and its stress testing in 2022 didn't stress test interest rate risk. They just stress tested credit risk.”
“So, it wasn't a question of something that Congress did or didn't do. Under the regulations we passed, we put the Federal Reserve in charge of checking these banks for duration or interest rate risk. And the Federal Reserve chose not to do so.”
“The bank’s failure was the result of inadequate supervision by the Federal Reserve and the other banking regulators in the Biden Administration. Congress had nothing to do with it.”
Kennedy’s full remarks are here.