This piece originally appeared on RealClearPolitics on November 30, 2022. 

The environmental, social, and governance (ESG) investing phenomenon is undercutting the core purpose of financial institutions, jeopardizing the economic security of investors, politicizing our capital markets and private enterprises, and threatening the stability of our energy supply.

Simply put, financial firms and institutional investors should be solely focused on delivering maximum financial returns to investors so they can achieve the American dream. ESG funds are antithetical to this goal. For starters, ESG funds carry 43% higher fees on average versus non-ESG funds. Second, a recent study found that over the past five years, global ESG funds have underperformed the broader market by 250 basis points per year, an average 6.3% return compared with an 8.9% return. This means that an investor who put $10,000 into an average global ESG fund in 2017 would have realized a $1,750 lower return than if they had invested in the broader market. This stands to reason since ESG funds are less diversified, light on energy stocks, and overweight on technology stocks, meaning that a year like 2022 is catastrophic for investors because tech stocks significantly underperformed, and energy stocks significantly overperformed the market overall.

Many ESG proponents on Wall Street and in government, such as Securities and Exchange Commission (SEC) Chair Gary Gensler, argue that ESG is investor driven. But a recent University of Chicago and FINRA study revealed that only 21% of investors even know what ESG stands for. That’s why financial advisors and brokers need to focus exclusively on advancing their clients’ pecuniary interests. This is especially true during a time when a historic number of seniors are struggling to retire, and American small businesses and families are being crushed by the highest levels of inflation in four decades.

Even if you don’t own an investment account, ESG is hitting your pocketbook. As we head into the winter, household energy prices are set to hit a ten-year high, costing the average American family $1,200, according to a report from the National Energy Assistance Directors Association. The weaponization of financial regulation coupled with Wall Street’s obsession with ESG has redirected capital away from American energy projects. As a result, investment in oil and gas exploration and production in 2021 was 25% lower than 2019 levels. In less than two years, we have moved from a position of energy dominance to energy depletion precisely because of the radical climate finance agenda.

That is why we are leading the charge against ESG in defense of investors and to restore American energy dominance.

In Kentucky, I (Treasurer Ball) obtained an opinion from Kentucky Attorney General Daniel Cameron confirming that using state pension plans to invest in ESG is not compatible with Kentucky state law. Additionally, I championed a new state law that enables the Kentucky Treasury to prohibit state entities from contracting with companies that are boycotting oil, gas, and coal. The attorney general opinion and this new law will protect the Commonwealth for years to come should one of my successors decide to go down the rabbit hole of ESG investing.

At the federal level, I (Congressman Barr) have introduced the Ensuring Sound Guidance (ESG) Act to supercharge the fiduciary responsibility of investment advisors and Employee Retirement Income Security Act (ERISA) retirement plan sponsors to prioritize financial returns over non-pecuniary factors when making investment decisions on behalf of their clients. In the recently released Commitment to America (CTA), the roadmap for the House Republican agenda in 2023, Republican House Minority Leader Kevin McCarthy (CA-23) included a nod to the ESG Act. Under the “A Future That’s Built on Freedom” pillar of CTA, House Republicans promise to “stop companies from putting politics ahead of people.”

In the coming years, we urge leaders at the national, state, and local level to join us to defeat the dangerous ESG movement and get America back to the basics of investing. American investors depend on their investment plans to save for retirement, send their kids to college, and fund other aspects of the American dream. To restore American energy dominance, protect retail investors, and depoliticize capital allocation, we urge all Americans to join us in defeating the ESG movement and restoring the promise of free enterprise.

U.S. Congressman Andy Barr (R-KY) is a senior member of the House Financial Services Committee.

Allison Ball has served as Kentucky's state treasurer since 2016.

This piece appeared in the Lexington Herald-Leader on October 20, 2022

Less than two years into Joe Biden’s term, his presidency can be defined by a single word: crisis.

An inflation crisis is crushing American households, small businesses, and farmers, all of whom are struggling with the highest cost of living in over four decades. Rising prices are costing the average family over $8,000 annually in reduced purchasing power. Massive overspending in Washington is largely to blame, producing excess demand while discouraging labor supply all at the same time.

Unfortunately, increased competition for labor has not helped workers. Inflation-adjusted average hourly earnings actually decreased a full 3% last year. To make matters worse, this surge in inflation has forced the Fed to aggressively tighten monetary policy, prompting a painful selloff in the stock market. As a result, Americans’ 401(k)s are now down 25% on average, meaning that Biden’s shrinking economy has stolen a combined $2.1 trillion from these retirement savings.

Green New Deal policies and financial regulation intentionally designed to redirect capital away from the American energy sector have caused an energy crisis, constraining the supply of energy, exacerbating inflation, and producing skyrocketing electricity costs and record prices at the pump.

Additionally, the Biden Administration’s open border policies have created a border crisis, resulting in a 300% increase in illegal crossings at our southern border in the last two years. Since President Biden took office, roughly 3.5 million illegal immigrants from over 160 countries have been apprehended at our southern border, including 78 individuals on the terrorist watchlist this year alone. Border officials estimate that nearly 1 million illegal immigrants have evaded Border Patrol apprehension since Biden took office. And drug overdose deaths exceeded a record 108,000 last year, with over 70% of those fatalities resulting from deadly fentanyl that is pouring over our border.

Furthermore, soft-on-crime policies like the defund the police movement and efforts to eliminate cash bail, in addition to congressional Democrats’ proposal to end qualified immunity for law enforcement, have unleashed a crime crisis that is sweeping through American communities. Homicides are up 50%, aggravated assaults are up 36%, and 93 police officers have been shot in ambush-style attacks so far this year.

Finally, the Biden Administration’s embarrassing retreat from Afghanistan, its dangerous attempt to restore sanctions relief to Iran—the world’s leading state sponsor of terrorism, its failure to deter Putin’s further invasion of Ukraine, its reckless proposal to cut defense spending below inflation, and its refusal to hold Beijing accountable for the origins of COVID, economic warfare against the West and the Chinese Communist Party’s unprovoked aggression in the Taiwan Strait, collectively constitute the greatest national security crisis of our lifetime.

We don’t have to live like this. Last month, I joined my House Republican colleagues in making a pledge to you—a Commitment to America—for a better and brighter future, to make sure that the next generation of Americans inherit the best version of our nation.

Should we regain the House majority in November, our promise to you is to advance through the House our Commitment to America agenda to deliver on four key fronts.

First, we will build “An Economy That’s Strong” by pushing legislation to curb wasteful government spending, maximize production of American made energy, and expand U.S. manufacturing to bring home key supply chains from China. These commonsense policies will halt inflation in its tracks and create millions of good paying American jobs.

Second, we will promote “A Nation That’s Safe” by passing legislation to deploy advanced technology, enhance physical barriers, and increase manpower to secure our southern border and cut off the deadly fentanyl drug trafficking enterprise. We will defend, not defund, our law enforcement, and boost resources to local law enforcement to reduce crime in American communities by recruiting, hiring, and training 200,000 new police officers. Unlike this Administration, we will support our troops, invest in an efficient, effective military, establish a Select Committee on China, and exercise peace through strength to counter increasing global threats.

Third, our Commitment to America outlines steps to restore for the American people “A Government That’s Accountable.” We will defund the 87,000 new IRS agents authorized in the Democrats’ most recent spending bill. We will hold unelected bureaucrats accountable for the avalanche of burdensome regulations they are imposing on the American people. We will work to protect constitutionally guaranteed rights such as freedom of speech, religion, and the right to bear arms. These fundamental rights were under siege during the COVID-19 pandemic. For example, while liquor stores remained open for business, Americans attending religious services in-person were threatened with criminal prosecution or civil penalties for doing so.

Finally, our agenda promises to secure “A Future That’s Built on Freedom.” This includes a pledge to stop corporations from putting politics ahead of people. I will lead the House Republican effort to take on environmental, social and governance (ESG) investing, which allows woke investment advisors to politicize capital allocation, discriminate against American energy and sacrifice financial performance in favor of progressive policy objectives.

Because retail investors deserve maximum returns during these difficult times, our agenda includes my bill, the Ensuring Sound Guidance Act, which will bolster the duty of asset managers and retirement plan sponsors to prioritize financial returns ahead of all other factors when making investment decisions on behalf of their clients.

In short, it’s not enough for Republicans to be the opposition party. We must earn the right to lead a majority in 2023. The Commitment to America can unite all Americans in support of a positive roadmap that will result in a stronger, safer, and more free future. I’m proud to support this agenda and will fight to enact it in the next Congress. 

This piece originally appeared in The Hill newspaper on September 13, 2022.

For lifelong Kentuckians like us, Bourbon has been a subject of intense pride all our lives. First distilled in Kentucky’s Bourbon County in the 1800s, this distinctive American spirit has created jobs, supported farmers, and drawn tourists to our state for over a century. But in recent years, these benefits have gone national as craft distillers have popped up from New York to California. The pride of Kentucky has become the pride of America.

Bourbon’s rise has been meteoric. Fifteen years ago, there were fewer than 100 distilleries across the United States. Now there are more than 2,300. Many are run by local artisans who have converted old warehouses into thriving distilleries, helping revitalize their towns. They use ingredients sourced from local farms, boosting agriculture in the process. And for many, a large percentage of revenues come from onsite tasting rooms and tours, which helps support their local hospitality and tourism industries.

It’s no wonder that Congress is taking notice of Bourbon’s importance. When I (Rep. Yarmuth) was first elected to the U.S. House in 2007, Bourbon was often thought of by my colleagues as a local Kentucky interest. There was a Wine Caucus and a Small Brewers Caucus to support these industries, but there was no such caucus for America’s native spirit. So in 2009, I launched the Bourbon Caucus with 17 other founding members. Today, it’s grown to 40 members, reflecting the importance of this industry in states far and wide.

As co-chairs of the Bourbon Caucus, we’re proud of the role our own state has played in helping usher in this industry boom. Kentucky is currently home to more than 10,000,000 barrels of aging spirits—more than two barrels per Kentuckian— representing a 250 percent increase in warehouse inventory over the last two decades.

Nationwide, the distilling sector now supports more than 1.7 million U.S. jobs and counting. The Bourbon Caucus is working to empower American distillers to keep growing and hiring. We supported the Craft Beverage Modernization and Tax Reform Act, a long overdue update to the tax laws that for the first time eased the tax burden for small, craft distillers in the same way that prior tax law had for small brewers and vintners. This legislation, made permanent during the pandemic, has allowed distillers to expand and reinvest in their businesses and contribute even more to their local economies.

We’re also doing everything in our power to help spread the love of Bourbon around the world, where new customers are emerging every day. Today, 44 countries recognize Bourbon as a distinctive product of the U.S., which ensures consumers in those countries enjoy the real thing. American Whiskey is now being exported from 41 U.S. states to regions from Latin America to Europe to the Asia Pacific. Last year, U.S. distilled spirits exports totaled $1.6 billion and American Whiskeys accounted for 62 percent of the total.

These exports would have been even higher if it weren’t for the EU and UK tariffs on American Whiskeys imposed in 2018 as a part of an unrelated trade dispute over steel and aluminum. Earlier this year, these tariffs were suspended and we are already seeing signs that exports are rebounding. We continue to seek a permanent return to duty-free trade by the time the EU suspension is set to end on Jan. 1, 2024. We’re thrilled to see that Bourbon is having its moment, and we’re confident that the moment will prove enduring.

We’re from two different parties, but we’re hardly the first people to be united by our love for Bourbon. Now we want to expand this common cause even further. As the founder and the co-chairs of the Bourbon Caucus, we are actively recruiting new members to our ranks so that Congress will give this spirit the attention it deserves. We have both seen how Bourbon can boost entire economic sectors, especially agriculture, manufacturing, and hospitality—the latter of which continues to need all the help it can get following the pandemic.

We know these benefits of Bourbon, and now the rest of the country is learning them, too. So this Bourbon Heritage Month, let’s raise a glass to this truly American spirit, and its ability to create jobs, revitalize towns and sectors, and help us make new friends— even across the aisle. Cheers to that.

John Yarmuth represents the 3rd District of Kentucky and Andy Barr represents the 6th District of Kentucky.

This piece originally appeared in The Hill on Friday, July 29, 2022. 
As the war in Ukraine grinds on with no breakthroughs in sight, so do Western sanctions on  Russia’s economy. These states of limbo are connected: after responding to Moscow’s invasion in February by imposing restrictions on major Russian financial institutions, the U.S. and its allies have become complacent, allowing a weakened Vladimir Putin to amass enough hard currency to keep on fighting.
A game-changer in the war requires the U.S. to cut off Russia from its oil and gas earnings,  which brought in nearly $100 billion in the first three months of the war. A senior State Department official admitted at a Senate hearing last month that, due to elevated energy prices, Russia’s revenues could now be as high as they were before the invasion, in spite of international sanctions against the country. The ruble is actually stronger than it was a year ago. 
The president shares responsibility for Russia’s resilience. When the U.S. levied financial sanctions earlier this year, including on the Russian central bank, the Biden Treasury Department erred on the side of caution by carving out an exemption for energy-related dealings — from the initial drilling of oil and gas to final sales abroad. This permitted Russia and its trading partners to use the U.S. financial system for transactions involving blacklisted banks. Rather than let this exemption expire in June, Treasury has renewed it for another five months, even as Russia continues to slaughter Ukrainian civilians.
President Biden can stanch the bleeding by closing this energy loophole and extending 
U.S. sanctions to cover additional Russian banks. If his administration is concerned that blocking energy transactions may lead to market disruptions, Treasury could instead place Russia’s energy revenues in an escrow account, where they would remain off limits until Moscow ends its hostilities. This is an approach the U.S. and other countries have applied to Iranian energy sales, and there is no reason the president can’t work with allies in Europe and Asia to replicate it. This would allow oil and gas to continue flowing but withhold proceeds from the Putin regime until Russia changes course.
While Treasury Secretary Janet Yellen had previously expressed openness to an escrow policy, the Biden administration has sent her abroad to shop a different, more convoluted idea. This new proposal aims to reduce Moscow’s energy profits by setting up a buyer’s cartel among U.S. allies — and possibly even China — by lifting EU sanctions on maritime insurers if cargo ships transport Russian oil that is sold below a price cap. Though well-meaning, this plan is unproven: it counts on squeezing Moscow even as it raises demand for bargain-rate Russian crude. Sorting out complex issues of implementation and enforcement will also eat up time Ukrainians don’t have.
Moreover, the Putin government could simply refuse to deliver oil beneath a cap, pushing up  global prices until purchasing countries in the U.S.-led cartel begin to defect. Rivals like China may also gain strategic influence if invited into the buying group, and Beijing could end up benefitting from even steeper discounts on Russian oil than those it already negotiates. Why else would China participate in such a scheme when its foreign minister touted “strategic resolve” in Sino-Russian relations earlier this month?
If the Biden administration wants to punish Moscow but avoid upsetting energy markets,  betting on price controls brings unnecessary dangers. An escrow option would instead incentivize Russia to maintain production by using profits as a carrot and driving a hard bargain for their release. The president also wouldn’t run the risk of providing economic stimulus to Beijing, and he wouldn’t have to ask European governments to undo shipping insurance sanctions they agreed to only a month ago. 
Even as Yellen has been traveling to Asia to drum up support for Russian price caps, her Treasury colleagues back in Washington are busy objecting to virtually any financing from multilateral lenders for fossil fuel projects in developing countries, bending the knee to climate-change groups instead of diversifying long-term supplies away from Russia. Even carbon-free energy generation like nuclear power has been kept off the table for fear of offending environmental extremists.
Five months after Russia’s invasion, the president’s lack of direction is untenable. Ending the Russian assault on Ukraine means an all-out effort to cordon off Moscow from its energy  windfall and reorient the world toward new sources of oil and gas. This is the path to a Ukrainian victory if the Biden administration gets serious. It is not too late.

For over a year, the Biden administration insisted inflation was transitory, played it down as “high-class problems” and implemented policies that made it worse. Now, President Biden finally lays out a plan (“My Plan for Fighting Inflation,” op-ed, May 31).

How does he begin? Blame the Federal Reserve: “My plan has three parts. First, the Federal Reserve has a primary responsibility to control inflation,” the president writes. So much for “the buck stops here.”

Mr. Biden’s plan to lower skyrocketing energy costs and record gas prices? More government subsidies for the green-energy industry: “Congress could help right away by passing clean energy tax credits and investments that I have proposed.”

While I welcome the administration’s epiphany on the threat of inflation, the president’s plan reads more like a “C” economics paper than a road map to break inflation and rescue the middle class.

As the lead Republican on the House Financial Services Subcommittee overseeing Monetary Policy, I would suggest a different approach. First, unleash U.S. energy producers to create an avalanche of reliable and affordable energy that will lower costs at the pump. Second, Congress enacts pro-growth tax and regulatory policies—including making the Trump individual tax cuts permanent. Third, Mr. Biden abandons further big-government tax, borrow and spend packages, such as the Build Back Better agenda. If we do all this, the great American comeback will be on the horizon.

Rep. Andy Barr (R., Ky.)

Lexington, Ky.

This piece originally appeared in the Wall Street Journal on Friday, June 10, 2022. 

As the May 12 front-page article “Oil sales remain Russia’s lifeline” chronicled, Russia’s economy and war in Ukraine are being fueled by its booming energy sector. Though the United States banned Russian energy imports in March, U.S. banks can still process Russian energy transactions to other countries. This major loophole in our sanctions is enabling Russia’s energy industry to flourish.

I introduced the No Energy Revenues for Russian Hostilities Act to end this loophole. My bill creates a carrot-and-stick approach to our sanctions. The legislation imposes a ban on all energy transactions flowing through the U.S. financial system on behalf of sanctioned Russian banks, unless the treasury secretary allows the transaction to go through. If the secretary grants a waiver, funds from the transaction will be placed in an escrow account. The United States could hold these funds as leverage to incentivize Russia to end the war in Ukraine. This is a blueprint our allies in Europe could adopt as well to strike an immediate blow to Russian President Vladmir Putin’s regime.

In a recent House Financial Services Committee hearing, Treasury Secretary Janet L. Yellen said my bill was “an idea worth exploring.” President Biden initially promised the full weight of U.S. sanctions in response to Russia’s brutal and illegal war in Ukraine. Now is the time to pass my bill to help deliver on that promise and cut off the bankroll for Mr. Putin’s war machine.

Andy BarrWashington

The writer, a Republican, represents Kentucky’s 6th Congressional District in the House, where he serves on the Financial Services Committee and the Foreign Affairs Committee.

This piece appeared in the Washington Post on Friday, May 20, 2022. 

The Securities and Exchange Commission (SEC) recently published its long-awaited proposed

rulemaking mandating disclosure by public companies of risks associated with climate change.

Under the proposal, public companies of all sizes would be required to publish reams of

immaterial and unreliable information about the greenhouse gas emissions arising from their

operations, the producers of the energy they consume and even, in some cases, the activities of

their suppliers and customers to the extent the SEC deems those activities to “contribute to

climate change.”

This 534-page monstrosity marks the transformation of the SEC from an independent agency

dedicated to investor protection to an unaccountable and politicized bureaucracy intent on

advancing radical environmental and social policy, over which it has neither jurisdiction nor

expertise. It’s one more chapter in the Biden Administration’s whole-of-government adventure

in weaponizing financial regulation, discriminating against affordable, reliable energy and

redirecting capital away from the American energy sector.

The regulation would be an exercise in arrogant government overreach at any time. But the fact

that Biden officials are pressing forward at this time—when constrained supply has pushed

inflation to a 40-year high, gas prices are skyrocketing and Russia’s invasion of Ukraine has

reminded us how over-dependence on foreign sources of energy threatens our national security—

reveals how astonishingly out of touch they are.

Yet the central planners at the SEC have made it clear that their goal is to choke off financing for

fossil energy, at all costs—even if that means lurching well beyond their authority, politicizing

the allocation of capital and prioritizing unquantifiable environmental, social and governance

(ESG) objectives over investor returns.

The statutory mission of the SEC is to “protect investors; facilitate capital formation; and

maintain fair, orderly, and efficient markets.” Far from achieving these goals, the climate

disclosure proposal would harm investors, destroy capital and produce unfair and inefficient

markets.

From an investor protection standpoint, appropriately tailored disclosures of material information

provide investors with visibility into the current and prospective financial health of public

companies. But disclosure mandates should not advance unrelated policy goals at the expense of

investor returns. And this rule would do just that, steering investors toward higher-fee, less

diversified and, in many cases, lower return investments—all for the ostensible purpose of

disclosing “climate risk.”

In fact, fees for ESG funds are, on average, 43% higher than non-ESG funds. Stocks in many

ESG-related exchange traded funds trade at elevated price-to-earnings multiples because

investment returns are sacrificed for non-pecuniary policy objectives like social justice, diversity

quotas and lower carbon emissions.

As SEC Commissioner Hester Peirce pointed out in her statement opposing the proposal, the

rule, rather than giving investors material information, “forces investors to view companies

through the eyes of a vocal set of stakeholders, for whom a company’s climate reputation is of

equal or greater importance than a company’s financial performance.”

Retail investors will lose under this new reality, as resources are diverted away from corporate

earnings toward skyrocketing compliance and litigation costs. As disclosure mandates have

grown in volume and complexity over time, prohibitive costs have deterred many growing

companies from going and staying public. Injecting even more ambiguous, subjective, or

otherwise ill-defined metrics into securities filings will only increase these costs, giving

enterprising plaintiffs’ lawyers plenty of ammunition to file frivolous lawsuits. Under these

circumstances of liability uncertainty, companies will err on the side of over-reporting rather

than under-reporting to ensure all information is captured, regardless of its materiality or how

well it serves the investing public.

Justice Thurgood Marshall established the materiality standard for SEC disclosures in TSC

Industries v. Northway. In his opinion, Marshall wrote that information is material for purposes

of disclosure if there is a substantial likelihood that a reasonable investor would consider the

information important in deciding how to make an investment decision. He further opined that

“[m]anagement’s fear of subjecting itself to liability may cause it to simply bury the shareholders

in an avalanche of trivial information—a result that is hardly conducive to informed decision

making.”

If this rule is finalized in its current dizzyingly complex form, the threat of lawsuits will force

public companies to inundate shareholders with a torrent of information that a reasonable

investor would find wholly irrelevant to the financial return of the investment. Ironically, it

would also discourage firms from making emissions reduction commitments or forward-looking

statements about their sustainability efforts for fear of being sued.

SEC Chairman Gary Gensler argues that disclosure is needed for both institutional and retail

investors to make more informed investment decisions. But risks from changing weather

patterns are not new, and companies have been managing them for years. Given that public

companies are already required to disclose information that is material to investors, risks

associated with changing weather are already disclosed.

In 2020, 92% of S&P 500 companies voluntarily published “sustainability” or “ESG” reports.

These reports, which are easily accessible to investors and the public via companies ’websites,

outline information such as emissions, sustainability policies and various workforce initiatives.

The government does not compel public companies to publish these reports—they result from

the company’s independent initiatives, or requests from activist stakeholders.

Gensler responds that a top-down, SEC-directed disclosure mandate is needed to substantiate

companies’ ESG claims, and that the agency has “broad authority to promulgate disclosure

requirements that are ‘necessary or appropriate in the public interest or for the protection of

investors.’” But neither the Constitution nor Congress has conferred to the SEC the authority to

redefine materiality to mandate disclosure of every granular detail of emissions data that non-

investor climate alarmists want, no matter how attenuated to the actual business of the publicly

traded company. Furthermore, it is unclear how mandating disclosure of disparate emissions

data—including data unconnected to the actual operations of the firm in question—would

enhance the consistency, comparability or reliability of company climate disclosures.

In addition to harming investors, the SEC’s proposal would stifle capital formation and produce

uneven, unfair and inefficient markets. It would weaponize disclosures to name and shame

politically incorrect companies, pick winners and losers in the capital markets and starve

American energy firms of the capital they need to create jobs, produce affordable and reliable

energy and deliver returns to investors. And it would do so at a time when it’s estimated that the

American oil and gas industry needs an additional $500 billion in annual financing just to keep

up with existing demand.

Let’s be clear. This proposal is not about disclosing financial risk. It’s about creating financial

risk for energy producers unpopular with the political left. By wading into environmental policy

through a top-down, one-size-fits-all climate disclosure rule, untethered to the longstanding

standard of materiality, the SEC has veered beyond its statutory authority and expertise, reduced

its credibility, and prioritized politics over investor returns. That’s why, in the coming months, I

will be fighting to block this rule, protect everyday shareholders from regulators acting on behalf

of non-investor stakeholders, and preserve access to capital for energy producers so they can

lower the price at the pump and restore American energy dominance.

Though every holiday season without my wife Carol will be difficult, this year I am comforted by the fact that her legacy will be enshrined through the Cardiovascular Advances in Research and Opportunities Legacy (CAROL) Act, which passed the U.S. House of Representatives on Wednesday. The CAROL Act makes historic investments in treatments for valvular heart disease to close the gaps in understanding about what risk factors make valvular heart disease a potentially life-threatening condition. 
On June 16, 2020, my and my two daughter’s lives changed forever when my wife and best friend Carol unexpectedly passed away at 39 years old from sudden cardiac arrest. The medical examiner and Carol’s doctors told us that her fatal heart attack was likely brought on by a ventricular arrhythmia. At a young age, Carol had been diagnosed with an underlying condition called mitral valve prolapse (MVP), or floppy valve syndrome—a typically benign condition that results in sudden cardiac death in only .2% of cases. 
What factors placed Carol in the 0.2% versus the 99.8% category? In my discussions with top cardiologists, medical experts, researchers, and advocates following Carol’s passing, I learned the extent to which the medical community seriously lacked answers to this critical question. So, I decided to take action and introduce the CAROL Act, to better equip our medical community with the resources needed to develop predictive models, inform communities, and possibly save the lives of other loved ones.
Specifically, the CAROL Act authorizes a grant program administered by the National Heart, Lung, and Blood Institute (NHLBI), to support research on valvular heart disease, including MVP. This legislation martials the full power of 21st century medical innovation and encourages the utilization of technological imaging and precision medicine to generate data on individuals with valvular heart disease. It is through this research that we can help identify Americans at high risk of sudden cardiac death from valvular heart disease and develop prediction models for high-risk patients, enabling interventions and treatment plans to keep these patients healthy throughout their lives. 
Additionally, the CAROL Act will instruct the Centers for Disease Control and Prevention (CDC) to increase public awareness regarding symptoms of valvular heart disease and effective strategies for preventing sudden cardiac death.
This week, the CAROL Act which has earned 179 bipartisan cosponsors, passed the U.S. House of Representatives. My friend and fellow Kentuckian, Senator Mitch McConnell and Arizona Senator Kyrsten Sinema, whose sister also passed away from valvular heart disease, are leading the companion bill to the CAROL Act in the Senate. We are rapidly approaching the finish line of this legislation becoming law. 
No matter what, Carol Barr’s greatest legacy will always be our two beautiful daughters, Eleanor and Mary Clay. Now, through the CAROL Act, her legacy also offers an element of hope that countless families will not have to experience the tragedy that has so profoundly impacted ours. 
U.S. Rep. Andy Barr is a Republican representing the 6th District of Kentucky.

This piece appeared in American Banker:

The Financial Stability Oversight Council last week released its long-awaited report on mitigating climate risk in the financial sector. As expected, the report is yet another example of the Biden administration’s efforts to weaponize financial regulation to advance partisan, radical environmental goals.

Created after the 2008 financial crisis as part of the sweeping Dodd-Frank financial regulatory reforms, the FSOC brings together the heads of all the federal financial regulatory agencies, essentially forming a superregulator. The FSOC has a very clear mandate: to identify and mitigate systemic risk in the financial sector.

Systemic risk has a specific definition and is distinct from traditional business risk. Systemic risk, if left unchecked, can suddenly, without warning, bring down the financial system. Traditional business risk can be mitigated through the prudent risk management of banks, insurance companies and other financial sector participants.

The 2008 financial crisis is a good case study in true systemic risk. Poor underwriting standards in mortgages and declining asset prices, combined with complicated financial products tied to those mortgages in an interconnected financial system, caused the perfect storm and brought our financial system to the brink of collapse.

With this as context, would a reasonable observer view climate change as truly a systemic risk, analogous to the causes of the 2008 financial crisis? Could changing weather patterns, a process occurring over decades, cause our markets to suddenly seize up and bring down the financial system? I find that difficult to believe, yet that is precisely what this report suggests. At best, it is hyperbole. At worst, it is another disingenuous attempt by the Biden administration to leverage the financial regulatory system to advance extreme environmental policies under the guise of safety and soundness.

To be sure, there are financial impacts associated with extreme weather events. Increased frequency of flooding and wildfires pose risk to insured property. Banks must take risks of extreme weather into account when underwriting loans. The financial sector — banks, insurers, reinsurers — are managing that risk through enhanced underwriting standards, mitigation incentives or higher prices. But this hardly necessitates invoking the powers of America’s superregulator.

Among the FSOC’s authorities is its ability to designate nonbank financial companies as “systemically important financial institutions,” or SIFIs, essentially labeling those firms as too big to fail. Once designated, firms are subjected to enhanced oversight by federal regulators. This regulatory meat cleaver used to be the FSOC’s preferred tool.

Fortunately, under the leadership of former Treasury Secretary Steven Mnuchin, the FSOC shifted its nonbank SIFI designation authority from an entity-based approach, which subjected entire companies to enhanced supervision, to an activities-based approach, which tailors its review of potential risks to specific activities within a company.

To her credit, Treasury Secretary Janet Yellen has publicly stated that she intends to maintain the FSOC’s reliance on an activities-based approach. Unfortunately, she is getting pressure from the radical wing of the Democratic Party, including Sen. Elizabeth Warren, D-Mass., to revert to the FSOC’s “meat cleaver” approach. Congressional Democrats view the FSOC as an underutilized tool to impose burdensome regulations on the financial sector and possibly regulate out of existence industries they despise.

Last week’s climate report suggests Yellen may be giving into progressives’ calls to weaponize the FSOC. Among the recommendations are enhanced climate change disclosures by public and private companies; including climate change scenarios in regulators’ tests for how well banks can handle economic stress; and requiring companies to report their greenhouse gas emissions to name-and-shame firms and bias the market against fossil energy.

Late last year, I led more than three dozen of my Republican colleagues in drafting a letter to Federal Reserve Chairman Jay Powell, cautioning against the Fed injecting ill-defined climate change metrics into its supervision of the nation’s banks. Among other things, the letter raised methodological concerns with incorporating climate metrics into bank supervision, including the fact that climate change is a phenomenon that occurs over decades — a time horizon far beyond what it typically utilized for assessing banks’ ability to withstand stresses. Further, we stated that tying a bank’s performance on supervisory exams to ill-defined climate change metrics will ultimately cause them to decrease their lending to fossil energy companies, effectively starving an essential industry of much needed capital.

In his response, Powell stated that the Fed is not among the federal agencies charged with directly addressing climate risks and that the Fed does not dictate what lawful industries banks can and cannot serve. After reviewing last week’s climate report, it is clear the FSOC didn’t get that memo.

The report makes it evident that picking winners and losers and cutting off financing to the fossil energy industry is precisely the Biden administration’s goal. They realize they cannot pass the Green New Deal through a closely divided Congress, so they are searching for backdoor solutions to achieve that goal. They fail to realize that most Americans care more about energy affordability and reliability than illusory climate change goals. We are in the midst of a global energy crisis, yet the Biden administration is adamant about suffocating American fossil energy.

Financial regulators play an important role. They ensure safety and soundness in our financial system, protect investors and maintain liquid, orderly markets that facilitate access to capital for businesses of all sizes. Financial regulators are not climate scientists and should not be used as pawns for the radical environmental agenda.

The IMF has lost its way

October 11, 2021

This piece appeared in The Hill:

bombshell investigation revealed last month how Kristalina Georgieva, formerly CEO of the World Bank, pressured her staff to manipulate data after Chinese officials complained their economy hadn’t ranked highly enough in the Bank’s Doing Business Report. Now at the head of the International Monetary Fund, Georgieva won’t be able to credibly lead the Fund if these findings are substantiated. What’s more, her problems have only added to preexisting signs of trouble: not content with serving as a lender of last resort, the IMF under Georgieva has reimagined itself as the answer to global challenges ranging from COVID-19 response to climate change. Mission creep has become the mission itself. 

A case in point has been the IMF’s eagerness to help countries fight the pandemic. This summer the Fund approved a $650 billion disbursement of its Special Drawing Rights so that developing economies could obtain hard currency and import medical supplies. This move contradicted the IMF’s rules, which prescribe how SDRs are meant to address a long-term need in world reserves, not hand governments unconditional aid to boost emergency spending. 

In any event, the IMF’s plan won’t end up targeting the needy, with only 3 percent of SDRs being allocated to the poor. Other countries have already admitted their money may not be spent to tackle COVID-19 as intended: middle-income recipients like Argentina have said they might draw on their SDRs to pay off old IMF loans, while Mexico has floated the idea of using its windfall to shore up Pemex, the state-owned oil giant. One can only imagine what brutal dictators in Syria and Belarus will do with their SDRs, though stocking up on personal protective equipment for ordinary citizens seems unlikely. 

The inanity doesn’t stop there. Before Georgieva’s data meddling was uncovered, she was also soliciting China’s help to start a new “Resilience and Sustainability Trust,” which claims to go even further than SDRs by supporting countries’ health care systems and steeling the world against climate change. At best this is the job of World Bank colleagues down the street from the IMF in Washington, but Georgieva couldn’t allow the Fund’s lack of experience in these areas interfere with visions of fundraising wins. 

Spreading itself thinner is all the more senseless since the IMF still wrestles with weaning borrowers from its traditional forms of assistance. While the Fund likes to point to the “catalytic” role of its loans, implying they act as an adrenaline shot to move ailing economies past acute crises, in many cases they bear more resemblance to a morphine drip, with countries as far afield as Argentina, Pakistan, Armenia, and Honduras needing a Fund program on average every three years. IMF shareholders, the U.S. foremost among them, should focus on solving these cases before the Fund volunteers itself to overhaul hospital systems and mitigate rising sea levels. 

Even if the IMF is successful recommitting itself to its core mission, the Fund will still have to navigate its future with China, its third-largest shareholder. As the investigation into Georgieva’s actions at the World Bank showed, trying to cater to China is liable to backfire at multilateral institutions. That’s not because China always demands malfeasance — indeed, the Bank’s investigators found the Chinese didn’t insist on a quid pro quo — but seeking to accommodate the world’s largest dictatorship can only corrupt these organizations’ integrity. 

The Fund’s recent history proves this point. In a 2010 review of its shareholding, the IMF granted China the largest increase in voting power of any other country. Just five years later, the Fund agreed to add the renminbi to an elite basket of currencies determining the value of SDRs, despite the fact that the RMB was under the control of a non-independent central bank and lagged behind the Canadian and Australian currencies in international reserves. The IMF put the cart before the horse by thinking China would become a responsible power if it was first treated as such. 

What actually happened after the IMF gave China a pass? The country went on to impose capital controlsraised the opacity of its overseas lending, cut off foreign investors from a growing number of its companies, and violated international norms through genocide in Xinjiang and a crackdown on Hong Kong’s freedoms. The Fund is now stuck having legitimized a regime that makes a mockery of multilateralism. 

The controversy surrounding Georgieva is an opportunity for the IMF to step back and assess its direction. It should return to an agenda that prioritizes things the Fund is qualified to deliver, whether it’s temporary assistance to borrowing countries committed to economic reform, high-quality data collection and research, or rigorous monitoring of global growth and stability. That’s where the IMF’s advantages lie, if only it would embrace them.