Wall Street reform passes, Boehner's Republicans immediately call for repeal

The Dodd-Frank Wall Street reform bill just passed the Senate, 60-39. It now goes to the President for his signature. The new law won’t do nearly enough to prevent another Lehman Brothers or Bear Stearns – for instance, there’s no practical way to break up too-big-to-fail – but it improves the status quo at least somewhat and was worth passage.

And yet, the man who would be Speaker if voters choose Republican this fall is already calling for the bill’s repeal. That’s right; John Boehner thinks the government should leave Wall Street in exactly the same regulatory position that allowed it to double unemployment and seize up credit.

I understand the politics of demanding repeal of the health insurance bill. The thing’s unpopular. But voters actually care about the economy; they don’t want to lose their jobs, and they understand that the financial industry is to blame for the economic collapse. What the hell is Boehner thinking?  

“I think it ought to be repealed,” Boehner said at his weekly press conference. “There are commonsense things that you should do to plug the holes in the regulatory system that were there, and to bring more transparency to financial transactions, because transparency is like sunlight. Sunlight is the best disinfectant.”

Boehner doesn’t get it. Transparency works when we’re talking about politicians. If we don’t like what we see, we can vote them out. That’s not true of private corporations. If setting up the economy to fail isn’t illegal, it doesn’t matter how transparent it is; there’s nothing the public can do other than yell louder and louder about completely legal activities. If ever there was an industry that screamed for regulation, it’s the financial sector. Under no circumstances can John Boehner be permitted to become Speaker of the House.

And yet, he’s not alone. Senators Thune, Shelby, and LeMieux:

“If we were in a position to do something, maybe [Boehner] is right," said GOP Policy Chairman Sen. John Thune (S.D.). "We'll see if we can do something about it after the next election."

Sen. Richard Shelby (Ala.), the top Republican on the Banking Committee, said he “absolutely” agreed.

"If you vote against it, you know it should be repealed. It's the wrong bill. It's not reform. It ignores Fannie and Freddie. It's not going to create any jobs. It's going to create a huge bureaucracy,” Shelby said.

Sen. George LeMieux (R-Fla.) said he would look to repeal parts of the legislation.

Also Senators Graham, McCain, and Corker:

South Carolina Republican Lindsey Graham called the bill a "missed opportunity" to control spending and set priorities. And Sen. John McCain (R-Ariz.) was similarly underwhelmed, calling it "business as usual."

"No one can make a convincing argument that this legislation indeed prevents any institution from being too big to fail. You can't make that argument," he told reporters at the Captiol today. McCain's amendment, which would have mandated an end to government support of the failed companies within two years failed, 43 to 56.

Senator Bob Corker of Tennessee, a top Republican player in the financial reform debate, slammed the Democrat-backed bill... One reporter noted that Corker had helped to craft the legislation, negotiating several provisions with Senate Banking Committee Chairman Chris Dodd, and Corker acknowledged his role but quickly pivoted back to his talking points.

(McCain is right that the bill doesn't end TBTF, but mandating that the government ignore rather than break up such institutions wouldn't solve the problem either.)

Senator Alexander and possible presidential candidate Rep. Mike Pence:

TPMDC asked Lamar Alexander (R-TN), the third ranking Republican in the Senate, whether Republicans would make a concerted push to repeal the financial reform bill.

"Well, that's a good -- that's a good, that's a good question," Alexander said. "We're very disappointed with this...If we have a Congress with a majority of Republicans, and there are ways to improve it or fix it, I imagine there'll be an effort to do that."

Pence suggested much the same... What elements of the law would need to be dismantled?

"There's several aspects of that, but I can break that down for you. Let's jump off that bridge when we come to it," Pence said.

What a message. I think Democratic chances this fall just got a lot better.

Obama Threatens Recess Appointments

Obama today:

President Barack Obama is calling on lawmakers to stop blocking the confirmation of government appointees in the Senate by raising objections not related to their qualifications.

In a surprise appearance in the White House briefing room Tuesday, Obama said he will consider making recess appointments if the Senate doesn't act on the confirmation hearings.

Good. Harry Reid already floated the idea last week, but it's Obama's call to make. 

Shelby's blanket hold was ridiculous, but it probably wasn't just about money for Alabama - the Republican caucus is playing a little chicken with the White House. Nice to see the White House pushing back.


Chris Dodd Repeating Max Baucus' Mistakes

Folks who were hoping that a lame duck Dodd would be more inclined to push for more aggressive financial regulatory reform should be disappointed to hear that Dodd, who chairs the Senate Banking Committee, is now considering negotiating away creation of a Consumer Financial Protection Agency in an attempt to win over Republican senators.  Actually, all of us should be disappointed.  What's as discouraging as the move is the motivation: Dodd is saying he wants a financial regulatory reform that Richard Shelby, the ranking Republican on the committee, can support.  He's created a team of four Democratic senators and four Republicans to try to hash out a deal.

Does this sound familiar to anyone?  Dodd and Shelby seem to be reading from the Max Baucus - Charles Grassley script that consumed the healthcare process in the Senate for long enough that now a special election result in January has the chance to blow up the bill again.  What did they get to show for it?  Olympia Snowe voted the bill out of the Finance Committee but then voted with every other Senate GOPer to declare it unconstitutional.

What's most frustrating about this is that it's just bad negotiating.  Chris Dodd only weakens his position by giving Richard Shelby (and thus Mitch McConnell) a veto over financial regulatory reform.  Republicans have no motivation to help Democrats pass a strong bill regulating the banks - first, because Republicans are in bed with the banks, and second, because Republicans want to keep bashing the Democrats for being in bed with the banks (a strategy which is paying off, judging by the polls in Massachusetts).

Even if the Democrats are desperate for Republican votes (whether to give moderate Democrats cover, to make up for Democratic defections, or to earn a bipartisan aura), the best way to get them is to show you're ready to pass a bill without them.  Then there's a shot a Republican offers to support a weaker version.  The worst strategy to win Republican votes is to try to show how reasonable you are by offering them veto power in exchange for being willing to talk to you.  We call that negotiating against yourself.

And as Matt Yglesias observes, there are worse things that could happen than a Republican filibuster of financial regulatory reform.



Let's Hope Evan Bayh Isn't Our Richard Shelby

During the 2006 election cycle, which resulted in Democrats winning back both the House and the Senate, one of the most effective initiatives to spur Democratic fundraising was the Use It or Lose It campaign.  The campaign urged "safe" House Democrats to contribute significant sums to the Democratic Congressional Campaign Committee to put towards bolstering the efforts of Democrats in more competitive races.  The end result, as mentioned, was a solid, new Democratic House majority, to which the Use It or Lose It effort no doubt played a helpful role.  I'm sure it also played a very helpful role in encouraging Democratic donors to contribute all they could, seeing as many Democratic legislators were leading by example.

Republicans, particularly in the Senate, were much stingier when it came to contributing to their campaign committees.  One of my favorite factoids from the '06 cycle was the case of then-Banking, Housing and Urban Affairs Committee Chairman Dick Shelby:

Banking, Housing and Urban Affairs Committee Chairman Richard Shelby (R-Ala.) gave $15,000 to the NRSC, leaving $11.5 million in his account even though he will not face reelection until 2010.

Dick Shelby's actions should be regarded as a cautionary tale.  Back in 2004, Shelby won 68% of the vote against token opposition, spending all of $2.6 million.  Keep in mind that he raised $9.3 million during the cycle, hence his current hefty warchest.  Though Shelby will be 76 on Election Day 2010, we can assume that, due to his stinginess, he is at least planning on keeping his options open for a re-election bid, if he is not already committed to one.  So he will need money.  But, given his ability to raise funds and the relative safety of his red-state seat, he most certainly could have afforded to cough up more than $15,000, which is the absolute minimum amount Senators are traditionally expected to contribute to their respective Party's campaign committees.

Would Shelby chipping in, say, a cool $1 million instead of the mere $15,000 have made a difference in 2006?  Given that the Senate race in Virginia, in which Democrat Jim Webb bested Republican incumbent George Allen, was decided by only 7,231 votes out of over 2.3 million votes cast, and given that the Senate race in Montana, in which Democrat Jon Tester beat Republian incumbent Conrad Burns, was decided by an even closer 2,847 votes out of over 400,000 votes cast, an extra million dollars to spend by the National Republican Senatorial Committee between Virginia and Montana could have definitely made the difference.  It is perfectly rational to suggest that, had Shelby contributed $1 million (that he wouldn't miss anyway) to the NRSC instead of just $15,000, Republicans may have very well held on to both the Virginia and Montana Senate seats and, however slimly, maintained the Senate majority.  And Dick Shelby would still be a Committee Chairman, with a hefty campaign bankroll of $10.5 instead of $11.5 million.

(Much more below the fold.)

There's more...


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