Shelby: We’re Fine Doing ‘Nothing Up Here’ On Regulatory Reform

Sens. Richard Shelby (R-AL) and Mitch McConnell (R-KY)

Sens. Richard Shelby (R-AL) and Mitch McConnell (R-KY)

In Wednesday night’s State of the Union, Republicans refused to applaud President Obama’s proposed bailout tax on the nation’s biggest banks, and as Ryan Grim reported, House Republicans are working with the Chamber of Commerce to kill the proposal outright. Meanwhile, in the Senate, it seems that pronouncing blanket opposition to every facet of regulatory reform is the activity of the day:

SEN. RICHARD SHELBY (R-AL): I would never support a [bank] tax…If you have a bank tax, you are going to take money out of the banks and then you…don’t have money to lend.

SEN. ROBERT BENNETT (R-UT): We’re firm. A separate consumer protection agency is a nonstarter.

American Banker reported that the senate appears “as divided now on key parts of the legislation as they were last year despite two months of bipartisan talks.” Shelby even told Fox Business that “there’s always a possibility of getting nothing up here because to move a bill of this complexity, we’re going to have the have bipartisan agreement.”

This validates the idea coming from, among others, Paul Krugman, who believes that it’s imperative that a strong financial reform bill be brought to a vote, so we can all see who votes against it. “Expose the hollowness of their populist posing,” Krugman wrote. “In short, take on the banks — and force those who are covering for them into the open.” Logically, this means pushing for the vote even if it means that the measure doesn’t pass the first time.

Yesterday really illustrated how far the GOP is willing to go with its straight opposition to literally everything. For instance, “the Senate took a vote on extending the federal debt ceiling — without which the United States would go into default. All 40 Republicans voted no.” And it also “took a vote on requiring Congress not to pass legislation that it can’t pay for. All 40 Republicans voted no,” despite the fact that some of them had, in the past, bucked their own party to support the very same idea. As Steve Benen put it, “GOP lawmakers are so reflexive in saying ‘no’ to everything, they end up opposing ideas they support, and at that point, reason has no meaning.”

And in the end, some regulatory window dressing that passes with a few Republican votes isn’t going to do much good for the safety of the economy. In fact, it could be totally counterproductive, as the system won’t be shored up, but people will operate under the assumption that it is. Since, at the end of the year, Senate Banking Committee Chairman Chris Dodd (D-CT) is retiring and will likely be replaced by the very bank-friendly Sen. Tim Johnson (D-SD), time is of the essence to get a strong bill crafted in the Senate, and to lay down some benchmarks for which lawmakers are on the side of consumers and which are going to bat for the big banks.