Guest Commentary

Reversing Washington’s financial squeeze on Missourians

Washington is helping Wall Street make another money grab that hurts Missouri, rigging the system and limiting our ability to make our communities stronger.
Washington is helping Wall Street make another money grab that hurts Missouri, rigging the system and limiting our ability to make our communities stronger. AP

Missouri has a Washington problem.

Or, to be more specific, every individual and every family that lives in Missouri — especially those of us who live in Kansas City — has a Washington problem. Maybe more than one.

The concern I’m talking about is hitting Kansas City residents financially on a very local level, and it’s threatening our momentum.

We’ve seen this before, with D.C.’s response to the 2008 financial crisis that saw so many Missourians hurt by Wall Street’s greed while the banks were bailed out.

Unfortunately, they’re at it again. And this time they’re hurting our ability to improve our roads, build new hospitals and schools, and provide the everyday services Missouri’s taxpayers deserve and expect.

As a member of the Kansas City Council, it’s my driving purpose every day to improve the lives of the taxpayers I serve. That means investing in our local economies, being prudent with your money, and making my voice heard when it can make a difference in our communities and the lives of our local families.

That’s why I’m speaking out now, because Washington is helping major Wall Street firms make another money grab that hurts Missouri, rigging the system and limiting our ability to make our communities stronger.

While the issue is a bit obscure — a 2016 Securities and Exchange Commission rule dealing with money market funds — the real-world consequences for state and local governments have been significant.

For years, municipal governments relied on money market funds to be the largest purchasers of the short-term debt typically used to fund infrastructure and development. They have been a go-to investor in bonds that financed the building of the schools, hospitals, utilities and critical infrastructure that Kansas City’s economy depends on for growth.

Unfortunately, this 2016 SEC rule has essentially dried up the market for exactly the type of debt state and local governments are likely to issue. With no ready investors, and interest rates at the Federal Reserve on the rise, the result has been catastrophic. Investors have shifted $1.2 trillion out of funds that invest in state and local debt.

The result: Washington’s giveaways are working to drive up borrowing costs, which are in turn passed on to Missourians by making it more difficult to invest in projects that generate jobs and economic opportunity.

Kansas City and Missouri are not alone. State and local governments and small businesses around the country that need access to low-cost financing have seen their costs jump. That’s why a growing coalition of mayors, city councilors, county treasurers and business leaders calling out this expensive Washington misstep.

Thankfully, some of our leaders are listening. There is currently a bipartisan effort in Congress that would reverse the SEC rule and make a real difference for Missouri’s local governments and businesses. At a time when little is moving on Capitol Hill, this measure is actually gaining momentum, adding cosponsors and bipartisan support.

Locally, U.S. Reps. William Lacy Clay, Emanuel Cleaver, Billy Long and Ann Wagner are all cosponsors of the legislation, while Rep. Blaine Luetkemeyer supported it when it passed a House committee. With this in mind, I am encouraging all members of Missouri’s congressional delegation to support this crucial piece of legislation that will make a real difference in the lives of Missourians.

I also urge all Missouri residents to contact their representatives in Washington and remind them that they’re there to serve Missouri’s Main Streets. While a handful of Wall Street firms are aggressively lobbying to keep this cash cow in place, our senators and representatives need to know that we support their efforts to invest in Missouri’s future.

This time, Congress can do something to benefit our local communities and job creators, both here in Missouri and around the country. That’s why we need to call on all of our elected leaders to make this a top priority in 2018.

Jolie Justus represents District 4 on the Kansas City Council.