In an interview published today with the Wall Street Journal, Sen. Bob Corker (R-TN) — who took the lead on financial regulatory reform negotiations for the Republican side for a few weeks — said that he “absolutely cannot support” the reform bill passed by the Senate Banking Committee last week. “I have no plans to support the current legislation. I hope we’ll get back to the negotiating table,” Corker said.
But interestingly, Corker doesn’t want to actually put his money where his mouth is and take a vote against the bill on the Senate floor:
Democrats have said privately they think it will be hard for some Republicans to vote against new banking rules during an election year. Mr. Corker said he hoped “the administration will not put pressure on the schedule and dare the Senate to vote on the bill.”
Of course, Corker is already on record having voted against this particular bill, since it passed out of committee with zero Republican support. But his plea to keep the bill off the floor until it is sufficiently watered down to garner some GOP support seems to confirm the view of many (including Paul Krugman) that producing a strong bill and forcing Republicans to either support it or show their true colors is precisely what needs to happen.
The GOP — and Corker in particular — have consistently said that they support financial reform and that they expect a bill to be signed into law by the end of the year. Sen. Richard Shelby (R-AL) has even said that his party agrees with 85-90 percent of what Banking Committee Chairman Chris Dodd (D-CT) is trying to do.
However, at the same time, they are actively courting the banking industry and its campaign contributions. In fact, Shelby himself told a crowd of bankers that a good way to prevent an independent Consumer Financial Protection Agency (CFPA) from coming into being is to “elect more Republicans to the U.S. Senate.” “That would help immensely,” Shelby said, while asking the bankers to start with $10,000 contributions to Rep. Roy Blunt’s (R-MO) senate campaign.
The Senate reform bill crafted by Dodd already includes concessions to the GOP, including placing a new consumer protection bureau inside of the Federal Reserve (instead of creating a standalone agency) and more reliance on bankruptcy courts for unwinding failed financial firms (provisions which were crafted by Corker and Sen. Mark Warner (D-VA)). By continually saying that they want to move the bill “back in the middle of the road,” Republicans mean water it down and cut key restrictions needed to rein in the banks.
In the end, the path to getting a good bill may be in doing exactly what Corker is warning against: putting a good product on the floor and daring Republicans to choose between the banks and a secure financial system.