Sen. Bob Corker expresses doubt that Americans are still mad at Wall Street
Cast this debate as big banks versus big government.
Despite lingering public anger at Wall Street, most congressional Republicans oppose the tougher financial regulations that Congress is expected to send to President Barack Obama this week.
The GOP is betting that the bill’s ambitious goals will be lost on voters and instead feed an election-year narrative that Democrats stand for bigger, more intrusive government.
Republicans are throwing up a final procedural roadblock to the bill Thursday. The sweeping regulatory overhaul is expected to make it through with the minimum of 60 votes. Only three Republicans have voiced their support.
Not too long ago, senators from both parties imagined a bill with broad bipartisan support that reflected a consensus that the financial sector needed a new set of rules. These days, though, Republicans liken the legislation to Obama’s health care legislation and the $862 billion economic stimulus package — two initiatives that have not rallied public support.
“There’s a lot of fatigue on the part of the American people with regard to what they see as an overly aggressive power grab on so many different fronts,” said Sen. John Cornyn of Texas, the head of National Republican Senatorial Committee.
The bill still bears Republican fingerprints. Senate Banking Committee Chairman Chris Dodd negotiated several provisions with key committee Republicans such as Richard Shelby of Alabama and Bob Corker of Tennessee. Neither, though, intends to vote for the bill.
Corker, in an interview, said he saw no political downside to voting against the bill.
“The rage that they have about Wall Street will still exist — if they have it,” he said. “And now they will be highly discouraged, more discouraged, about our ability to even deal with the core issues that created this problem because we don’t do that in this bill.”
Only three Republicans voted for the bill last month in the House. In the Senate, Olympia Snowe and Susan Collins of Maine and Scott Brown of Massachusetts are the only Republicans to announce their support.
“The others need to explain why they don’t want us to move forward with financial regulatory reform,” Sen. Dick Durbin, D-Ill., said Wednesday. “They have to explain why they want to stand for the status quo, leave the laws as written and run the risk of another recession and another day leading to millions of people losing their jobs and businesses failing.”
On Wednesday, Republican Sen. Charles Grassley of Iowa, who had voted for the Senate version of the bill in May, said he would oppose the final legislation. He said Senate negotiations last month with the House diluted provisions he had supported, including restrictions on certain securities trades by banks and on the selection of risk rating agencies.
The 2,300-page legislation is a complicated, far-reaching piece of lawmaking that has unfolded while the public’s attention has been far more fixed on the economy, the Gulf oil spill, even an old-fashioned Russian spy swap.
In that environment, both parties are trying to fashion simple selling points.
The Democrats’ line: The bill reins in big banks and protects consumers.
The Republicans’: The bill is a government overreach and it doesn’t help create jobs.
Republican operatives believe the complexity of the bill gives them an advantage.
“This bill, in the minds of most Americans, is just a big amoeba,” said John Feehery, a Washington-based GOP strategist. “Because this bill is so complicated, it makes it easier for Republicans to oppose it, and by opposing it, call it a job killer.”
While passage would mark a major achievement for Obama, even Dodd concedes that the public must be persuaded that it works to the benefit of average Americans. Dodd in an interview worried that the banking bill could follow the path of health care, which he said will have long-term benefits but has become a short-term liability.
“We’ve got a marketing job to explain exactly what we’ve done, to get out and talk about it, not just in a political context but why it’s valuable,” he said.
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After thirty years in which the principle that markets know best ruled economic policy-making in the United States, the great financial crisis of 2007-2008 brought the deregulatory era to a shrieking halt. The challenge now facing lawmakers and the Obama administration is whether they can craft a new set of rules that will prevent an out-of-control Wall Street from dragging the entire global economy into the gutter once again.
But expectations for bank reform are low. The proposals being debated in Congress don't do enough to solve the problem of too-big-to-fail financial institutions, or to protect consumers. Even worse, to gain enough Republican votes to guarantee passage, Democrats will likely make compromises that further weaken the bill. Despite the greatest financial crisis in more than 70 years, the U.S. government still doesn't have much appetite for meaningful reform.
See also: Bank Bailouts, Ben Bernanke, Goldman Sachs, Mortgage Crisis, Timothy Geithner, U.S. Economy, Wall Street
of rules that will prevent an out-of-control Wall Street from dragging the entire global economy into the gutter once again.