The full HFSC hearing today on private equity (PE) business practices laid bare the demands progressive Democrats will make of the sector during the election. While none of these bills will pass, even small changes to the business model will affect a sector that has become a major large bank borrower. Chairwoman Waters (D-CA) did not directly address high-profile legislation from Sen. Warren (D-MA) and Rep. Pocan (D-WI), but she did suggest banning PE investments in the healthcare and public safety sectors. While Reps. Maloney (D-NY) and García (D-IL), supported the legislation, Reps. Meeks (D-NY), Perlmutter (D-CO), and Foster (D-IL) supported only additional disclosure and more-targeted reforms. Rep. Gottheimer (D-NJ) suggested that the bill could undermine high returns needed by pensions; Rep. Ocasio-Cortez (D-NY) countered that higher returns mean higher risk. Ranking Member McHenry (R-NC) led Republicans in defending PE’s economic contributions and blasting H.R. 3848 as socialist.
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