The Perlmutter amendment that would allow a regulator to set GAAP is getting a lot of press.  But Congress members have more work in mind for the FASB.  Representative Scott Garrett has proposed an amendment that requires the FASB to study the economic effects of its recent securitization rules (FAS 166 and 167).  Apparently, Garrett is worried that the removal of qualified special purpose entities might dry up securitizations which might also dry up available credit.
A host of questions come to mind.  First, since the FASB is not a government agency, exactly what Congressional power exists to force the Board to undertake such a study?  Second, the FASB does not generally set standards based on economic effects (in fact, Board Members usually eschew dictating debits and credits based on whether they would help or hurt a particular firm or industry); thus who at the FASB would/could do this study?  Third, the amendment suggests that the study consider “the combined impact by each individual asset-backed security” and that the study be completed in 90 days after passage of the bill.  How could anyone study the economic impact on every single asset-backed security in 90 days?  I hope Jeffrey Hales is ready to get the study rolling!
On a bigger picture level, the workings of Washington continue to amaze me.  The US experiences a major financial crisis for which very little of the blame gets laid at the feet of the accountants.  A few people fret about fair value, but most see that as a smoke screen.  But then, as people start trying to reform the system to make it stronger in the future, the reformers want to fix an accounting that was not broken.  Hopefully, cooler heads will prevail.