House Republicans have relaunched their ambitious effort to amend the U.S. Constitution this year with language that would prohibit the federal government from owning stock in any company.
The effort is a direct reaction to the Bush and Obama administrations' bailouts of auto and financial companies, which saw Treasury take significant stakes in General Motors, Chrysler and major Wall Street institutions.
Rep. Michael Turner (R-Ohio) and key Republican leaders introduced H.J.Res. 22. The resolution would add an amendment to the Constitution that states: "The United States shall not own, subscribe to, or otherwise have any interest in the stock or equity of any company, association or corporation: Provided, That the foregoing prohibition shall not apply to any investments through any pension funds."
In an interview with The Hill Tuesday morning, Turner stressed that the amendment would not prevent the government from helping distressed companies, but would simply prevent the government from taking ownership in them.
"It's the difference between being your banker and your shareholder," Turner said.
Turner said the ownership aspect of the GM and Chrysler bailout raises several complicated questions that argue in favor of ending the practice, including why Ford employees should have their tax dollars used to take public ownership of other auto companies. "The value statement is just wrong," he said.
Turner has close knowledge of the auto bailout, as his father was a GM employee for 42 years and lost his health insurance benefits as part of the restructuring. While any GM restructuring might have had adverse consequences for workers, "it's wrong to have the federal government owning companies and making decisions about winners and losers," Turner argues, since these decisions "become political."
The road to amending the Constitution is tough — it requires the support of two-thirds of the House and Senate, and it must also be ratified by three-fourths of the state legislatures.
But Turner says he likes his chances in the House in light of the prospect of picking up more Republicans this year, as well as early co-sponsorship by House Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.), House Financial Services Committee Chairman Spencer Bachus (R-Ala.) and others. Republican victories in state houses across the U.S. last November would also help, although passage in the Senate would require support from at least 20 Democratic senators.
The resolution was introduced yesterday with 96 co-sponsors, and had 104 co-sponsors in the last Congress.
The White House and GM and Chrysler themselves have credited the intervention by the government with saving thousands of jobs and helping the two companies survive the financial crisis.