Washington, D.C. - This evening, the Wall Street Journal published an editorial supporting the work by Senator Pat Toomey (R-Pa.) to rein in potential bureaucratic overreach. During tomorrow's Senate Banking Committee mark-up of a bill giving federal regulators new powers to scrutinize and block foreign investment in the United States, Senator Toomey will offer an amendment to require congressional approval of any major new regulations produced by the revamped Committee on Foreign Investment in the United States (Cfius).

The amendment is patterned after the REINS Act, which would require the same treatment for any agency regulation producing effects of $100 million or more annually on the economy. The REINS Act (S.21) was introduced by Senator Rand Paul (R-Ky.) and currently has 37 co-sponsors.

Senator Toomey's amendment has earned the support of numerous taxpayer advocacy groups, including the National Taxpayers Union, the R Street Institute, and the Club for Growth.

Read the full editorial:

Editorial: Reining In Investment Reviews
Wall Street Journal
May 21, 2018
https://www.wsj.com/articles/reining-in-investment-reviews-1526946125

Congress is moving to impose new political controls on foreign investment, and that is cause to be on high alert. We're not sure any new political authority is warranted, but if Congress is going to give this to the executive branch it should consider a check on abuses proposed by Pennsylvania Senator Pat Toomey.

Senator Mike Crapo's Banking Committee on Tuesday will mark up legislation to give more power to the Committee on Foreign Investment in the U.S., known as Cfius. That interagency panel, led by Treasury, screens foreign investments for national-security concerns. Senators and the Trump Administration claim that Cfius lacks the tools to stop investment intended to steal U.S. business and military secrets.

The bill would give Cfius the power to vet the purchase of real-estate near sensitive U.S. facilities, as well as greater authority to review investments designed to evade scrutiny-such as purchases done via shell companies. It empowers Cfius to take a closer look at "passive" investors that have control over, say, board seats. And it provides money for a new team within Treasury to review the growing case load.

The good news is that the Senate steps back from some overly aggressive proposals that would have chilled investment. An early draft had expanded Cfius's powers to review outbound investment and joint ventures in which U.S. companies send technology overseas. U.S. companies rightly criticized this potential micromanaging of thousands of transactions, and the new bill instead strengthens export controls on certain technology and products.

Still, foreign reviews are complex, and the bill provides Cfius wide regulatory latitude. This has free-market Members worried that a protectionist Administration could use Cfius to block deals on political grounds. Remember when farm-state Members of Congress in 2013 demanded a Cfius review of a Chinese company's purchase of Smithfield Foods? Bacon is not a national-security threat.

An October 2017 Commerce Department report notes that historically high investment inflows in 2015 and 2016 now mean that there is $6.6 trillion in foreign direct investment in the U.S. on a market-value basis. While Chinese investment has surged, it has yet to break even the top 12 investing countries. Fretting over China shouldn't become an obstacle to capital inflows the U.S. economy needs to grow.

Enter Mr. Toomey, who with Senator Ben Sasse on Friday filed an amendment giving Congress a say over this new Cfius power. The Senators modeled their amendment on the proposed Reins Act, which would require Congressional approval for regulations costing $100 million or more. The Toomey amendment would give Congress the opportunity for an up-or-down vote to approve Cfius regulations of the same magnitude.

Some Republicans fret that the Toomey Amendment will cause Democrats to withdraw support from the overall Cfius bill. But we doubt Democrats will give up a chance to review Trump Administration rules. In any case, the bigger Republican concern should be handing too much power to the administrative state without a chance for review.