After regulatory reform garnered a grand total of zero Republican votes in the House, attention moved to the Senate, and in particular the Senate Banking Committee, where Chairman Chris Dodd (D-CT) has organized several working groups of one Republican and one Democrat to mull over specific issues. The goal is to try getting GOP members on board as the bill takes shape, to avoid some of the more acrimonious moments that occurred during the heath care debate.
Gregg said in an interview that the House measure on financial regulation is among the worst he has seen. He called elements of the House bill wacky and socialist, citing provisions that would enable the government to break up companies deemed too big to fail, and to create a Consumer Financial Protection Agency. “The House bill is irrelevant to what we are doing in the Senate,’’ Gregg said. “It is an entirely different approach in the Senate.’’
If this is the attitude for a key compromise figure, things are not looking very good. After all, Gregg is outright dismissing two of the more important pieces of the House bill: the CFPA and a provision — included by Rep. Paul Kanjorski (D-PA) — allowing the government to dismantle financial institutions that pose a threat to the wider economy.
Of course, Gregg has already made it clear that he doesn’t understand the Kanjorski provision. He likes to say that it would allow the government to break up Coca-Cola and Wal Mart, when the actual language clearly shows that only financial institutions can be affected, and only after they have been subjected to stricter oversight and capital standards.
Creating the CFPA was always destined to be a long, hard slog in the Senate, and last week, Sen. Richard Shelby (R-AL) came right out and said that his opposition to the new agency arose because safety and soundness of banks “should be number one.” Gregg seems to believe the same, and has decided that having an agency within the regulatory framework that is primarily focused on consumers — as opposed to banks — is “socialist.”
As it originally stood, Dodd’s regulatory reform discussion draft was more ambitious than its House counterpart. The GOP slamming the House effort as socialist and irrelevant doesn’t seem to bode well for Dodd’s chances of finding Republican support for his version.