The shelves of Bill Posey’s Washington office are adorned by model space shuttles, a reminder of the time he spent working on the Apollo space program through contractor McDonnell Douglas. But the area is more spacious than it has been in years.
That’s because the Florida Republican’s office wheeled out a stack of proposed regulations, totaling around 70 linear feet, that took years to collect. Printed each day by the Federal Register, the publications represent every major rule proposed by unelected regulators in Washington. Most in Congress throw them out. Posey collected them for five years, from April 2011 until April 2016. He said they needed to go because of the prospective safety hazard, but that they represented one of the biggest reasons he ran for Congress.
“You go to Washington and you make laws, but most of the laws are made by unelected people who can’t be voted out of office,” Posey said. “Most of these things are actually unlawful, but the only way you can overturn them is to pass legislation in both chambers and have the president sign it.”
That reality, Posey said, causes suffering for average people around the country. “These mom and pop business are, many times, stuck with illegal laws. Every day someone is saying, ‘You don’t believe this, but somebody is trying to put me out of business.’ That’s what everybody is saying.”
Posey is possessed of the conviviality of a veteran legislator, with stints in the Florida House and Senate that preceded his election to Congress. That institutional knowledge has contributed to Posey’s flexibility in handling issues covered by his membership on the House Finance and Science committees.
Of the issues Posey has worked on, one of the most fascinating came from the convergence of his interest in deregulation and “space law,” which covers topics ranging from space exploration and tourism to asteroid mining. If the federal government can avoid over regulating the final frontier, Posey suggests, it could avoid working on things the private sector could accomplish on its own, and focus instead on driving progress in a more meaningful direction.
“I’d love to see 1 percent of the budget dedicated to human space exploration,” Posey said. “Space exploration is the one thing we can do that is truly for the next generation. There’s no instant gratification.”
Washington Examiner: What inspired you to enter public office?
Posey: The first bill I filed in the state legislature said it would be a third-degree misdemeanor for regulators to pass a rule they didn’t have authorization to make, if there’s nowhere in the statute that gives them authority to write those rules.
I was immediately branded as a right-wing, fringe lunatic. [Democratic] Gov. Lawton Chiles took particular affront, and sent his chief down to tell every Democrat not to let my bill out of committee.
Five years later, Chiles wanted to build a cookshack on his multi-thousand acre hunting plantation. He gave his last state of the state speech holding all of the rules that applied to him building his cookshack and said, “This is insanity, this has got to stop.”
You go to Washington and you make laws, but most of the laws are made by unelected people who can’t be voted out of office, term limits or no term limits. Most of these things are actually unlawful, but the only way you an overturn them is to pass legislation in both chambers and have the president sign it.
He’s not going to sign something to turn over his own regulations, and otherwise you’ve got to have two-thirds to be veto proof. There’s no subject where you have two thirds, so these mom and pop business are, many times, stuck with illegal laws. Every day someone is saying, “You don’t believe this, but somebody is trying to put me out of business.” That’s what everybody is saying.
Examiner: How has that informed your focus on space law and space regulations?
Posey: We just had an astronaut in here. He was talking about how he got into the program in the early ’80s, when we had just about 100 percent of the commercial space market launching out of the United States, and more specifically Cape Canaveral. Through overregulation, we managed to choke that golden goose and parlay that into about 5 percent. Just in the past 10 years we’ve managed to turn some of that around and recapture some of that.
Examiner: What’s been accomplished in that area since you arrived in Congress and what remains to be done?
Posey: The last big space bill we passed, which was the majority leader’s legislation, incorporated a couple of our bills. One of them said NASA and the Air Force and the Federal Aviation Administration need to work together to reduce redundancies and red tape that’s counterproductive.
We tried to help privatization and we had what we called the asteroid mining bill in there. We have companies in our country that want to mine asteroids, and they’ve identified one that has more platinum-based minerals on it than have been mined from Earth in the history of the Earth. They just want assurance that if they go to the potentially multibillion-dollar cost of extracting these minerals and bringing them home, that the government won’t claim them. So we passed probably the largest property rights bill in history, and the first one for outer space, with that idea in mind.
NASA has also proposed moving on to an asteroid, doing all kinds of stuff with asteroids. But we have private companies doing that, so why should we spend federal money to do that? Let the federal money be focused on manned, human space flight, and use everything that they do be a stepping stone towards getting to Mars.
When I’ve talked to groups about space, I start out asking how many people benefit from space at least once a year. The average response is 8 percent. Once a month is 6 percent, once a week is 4 percent, once a day is 2 percent.
Once I tell them how they do benefit from it every day, they say “Wow, how can I get more engaged?”
Examiner: What are the top two or three things that need to be done in that area?
Posey: No. 1, fund it adequately. The public perception is that we spend 20 to 25 percent of the federal budget on space. We spent, probably during the Apollo era, about 4 percent on space. Today, we spend less than one-half of 1 percent on space. But the public perceives that it’s humongous.
I’d love to see 1 percent of the budget dedicated to human space exploration. If you watch Neil DeGrasse Tyson speak, he talks about space exploration as the one thing we can do that is truly for the next generation. There’s no instant gratification.
Someday we’re going to have to leave this planet. We know there’s a catastrophic, extraterrestrial strike every 30,000 years. We know we haven’t mapped all the asteroids. We don’t have a defense system for it. So it’s important for national defense, technological development and it’s important to the survival of the species in a lot of ways that we have a planetary defense system.
Examiner: You’ve done a lot of work on the issue of over regulation, which includes your proposal to exempt premium cigars from the purview of the Food and Drug Administration. What’s the aim of that legislation?
Posey: The cigar bill is a response to the FDA deciding they should treat premium cigars like they do cigarettes, as a hazard to people who smoke them. In order to protect them from themselves, they came up with new regulations to treat them like cigarettes.
The last time they came out with new regulations for cigars, they closed every cigar factory in Florida but one. This one will probably close them. It puts expensive testing on future products in order for them to get them approved.
It’s over regulation. I just saw in the news they decided that all the free cigars that manufacturers send to troops overseas, they can’t do that anymore, because it’s a health hazard. So we have our young men and women in uniform, in war, where they can be killed or maimed, but it’s too dangerous for them to enjoy the simple pleasures of a premium cigar.
No teenager smokes premium cigars, but this is what they’ve chosen to regulate. As a result, they’re not going to allow our troops to have those furnished to them. It’s another example of government run amok.
Examiner: You’ve also been working on the Common Sense Economic Recovery Act, which would treat nonaccrual loans as accrual loans.
Posey: You know, the small banks didn’t cause the meltdown. The big banks caused the meltdown. We’ve tried to get copies of the Justice Department’s consent decrees with the big banks where they go in and say, “He did illegal stuff, they did illegal stuff.”
But here’s the deal. They said, “Give us $4 billion in stockholders’ money and we’ll call it a day.” You have to give so much to this group, so much to that group. La Raza was one that was named. And the Justice Department is refusing to give me a copy of any of the consent decrees.
When I talk to chambers of commerce, I ask, “How many of you think your banker no longer loves you?” Every hand goes up except from bankers. It’s because the regulators really have been causing them a lot of grief. If you’re from Florida, you read regularly about banks that have closed. You see, “They have $750 million in assets, $450 million in liabilities.”
Well, there’s this thing called nonaccrual. If the regulator puts a loan on nonaccrual, it means they cannot earn any interest off of it. Every penny they pay has to go to principal until it’s paid off. Then at the tail end, the banks get their interest. Since banks only operate off of interest, that’s how you bankrupt banks.
They don’t have the same personal examination of individual files at big banks that they do at small banks. At small banks, they start looking at files and see something like, this couple was laid off, and say that’s a bad loan. You say no, their parents made the payments until they had new jobs. The loan was never in jeopardy. Every payment was made on time. They say, “We don’t care, we’re going to put that on nonaccrual.”
So you also have loan modifications here. That’s the sign of a bad loan. You say it’s because we had these people on 12 years ago at 15 percent, we’d have to get 5 percent now. So we modified it so we could keep the business and they would be happy. Regulators say we’re going to call that a bad loan.
One egregious example is a hotel in my district at a community bank. The remaining balance on their loan was $800,000, which was about 30 percent of the value of the hotel. The loan had been in effect for over 12 years. It had never been late. The regulators said we’re going to put this on nonaccrual, because given this economy, we don’t think they should be able to make the payments.
They would eat dirt, but they’ll make their payments. If they were ever behind for 30 cents and a dollar, there’d be a two-mile long line to buy up this asset. I first heard about this from former Rep. Ron Klein, a Democrat on the Financial Services Committee, who asked me to go with him and meet some bankers in Orlando. That’s where I first heard about it.
I said, what you need is an ombudsman. They said no, it really doesn’t work that way. We might win that fight, but then the hornet’s nest would eat us up on the backside. I thought about it for a couple of months and said you know, we’ll try it for two years. I put up a bill and also said that if a loan has been current for 90 days, you can’t put it on nonaccrual.
Every group endorsed it except for two. The CPAs didn’t endorse it, because they said they didn’t want to get in the middle of it. The only other organization was the American Bankers’ Association, because they represent big banks and small banks.
We had 52 cosponsors for the bill from 22 states … It failed in committee, they held the vote for 30 minutes until they had enough votes to kill it. That’s how good ideas do not become law, and that’s the kind of stuff I’m here to change.
Examiner: What’s on your recommended reading list?
Posey: I just read a Profile of Power by Richard Reeves. I love Peter Schweikert’s books, Extortion and Clinton Cash. His book Throw Them All Out is the best, because it names names.
