After Republicans took over the House of Representatives in November 2010, the incoming House Financial Services Chairman, Rep. Spencer Bachus (R-AL), said he believes Washington’s role is to “serve the banks.” And the GOP has done its best this year to follow that directive, by denying regulators the money they need to implement the Dodd-Frank financial reform law, trying to repeal or water down some of the law’s key provisions, and blocking Obama administration nominations to regulatory posts.
In the budget deal that averted a government shutdown last week, the GOP kept it up. While the Securities and Exchange Commission was granted a desperately needed increase in funding, the Commodity Futures and Trading Commission, which is given the Herculean task of policing the derivatives market by Dodd-Frank, was not so lucky:
Under the new deal, the Commodities Futures Trading Commission will get $10 million more for staffing, thus making layoffs for the agency less likely in 2012. But that money won’t come through a funding increase: In the end, Republicans refused to budge on the overall funding level for the agency, which will stay at $205 million. Instead, $10 million for staffing will be shifted out of the agency’s budget for information technology. The overall level of funding falls significantly short of President Obama’s own request for the CFTC — $308 million, which would be an increase of almost 50 percent — as well as the Senate Democrats’ request for $240 million.
Senate Republicans have also put a hold on a slew of nominations to fill financial regulatory positions, ostensibly to ensure that President Obama doesn’t make recess appointments:
Several of Obama’s picks are waiting to be confirmed by the Senate, including Martin Gruenberg to be chairman of the Federal Deposit Insurance Corp, Thomas Hoenig to be the FDIC’s vice chair and Thomas Curry to lead the Office of the Comptroller of the Currency.
But Republicans refused to sign off on the list, complaining that the White House did not give them assurances Obama would not use a long congressional recess to make temporary appointments.
These kinds of actions have the effect of undermining Wall Street reform and preventing regulators from ensuring that the 2008n financial crisis doesn’t have a sequel. The end result is that Bachus’ marching order gets fulfilled, as the GOP helps the banks go right back to the same practices that brought down the economy in the first place.