Sen. Richard Shelby (R-AL)

Under Shelby’s legislation, any new rule for which costs outweigh benefits would be prohibited from final implementation, The Hill reports:

“If a regulation’s costs outweigh its benefits, it should be thrown out,” Shelby said. “By providing a clear, rigorous and consistent process for regulators in making that determination, this legislation will eliminate unnecessary burdens on our economy.”

Shelby’s past efforts to ensure that cost-benefit analyses are performed on new regulations has drawn harsh rebukes from regulators and the Obama administration. “[W]e are seeing a determined effort to slow and weaken reforms that are critical to our ability to protect Americans from another crisis,” former Treasury Secretary Tim Geithner said of such a change in 2011.

Such a proposal may seem benign, but “quantifying costs and benefits objectively is notoriously difficult,” Reuters’ John Kemp wrote in 2012, and “the result tends to depend on who is doing the measuring.” Those analyses would likely throw out many regulations that could protect the nation from future financial crises or from incidences like the rate-rigging scandal that embroiled the financial industry last year. Independent studies have shown that the financial crisis cost the U.S. $22 trillion, including nearly $13 trillion in lost economic output.

And while they have support from the Chamber of Commerce and other financial industry interest groups who have challenged new regulations in court, the analyses are meant not to ensure smart regulations but to slow down or block the regulatory process. “The standard they seek to enforce,” Kemp observed, “would be impossible to meet.”

CFPB Director Richard Cordray

Nearly every Senate Republican voted against the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which established the independent bureau. In 2011, 45 Republicans filibustered Cordray’s nomination, denying him an up-or-down vote, based on their objection to the agency itself. In a May 2011 letter, the Republican Senators made it clear that they would not allow a vote on any nominee unless the CFPB was first drastically restructured and weakened — though they did not attack the former Ohio Attorney General Cordray’s qualifications.

Though President Obama comfortably won re-election and Senate Democrats expanded their Senate majority to 55 seats in November, just 41 members of the Republican majority can again prevent Cordray from even getting a confirmation vote. It appears that might be a challenge, as:

• Sen. Mike Crapo (R-ID), who is likely to be the top Republican on the Committee on Banking, Housing and Urban Affairs, said in a statement: “Today’s decision to re-nominate Richard Cordray to be Director of the Consumer Financial Protection Bureau after using an unconstitutional recess appointment is premature, given the outstanding concerns about the bureau and the legal challenge to the recess appointment. Until key structural changes are made to the bureau to ensure accountability and transparency, I will continue my opposition to any nominee for director, as outlined in a letter signed by 45 Republican Senators to the president.”
• Sen. Richard Shelby (R-AL), the outgoing Ranking Member on the Committee on Banking, Housing and Urban Affairs, through a spokesman said he has “not changed his position” since 2011.
• Sen. Bob Corker (R-TN), a member of the Committee on Banking, Housing and Urban Affairs, said in a statement: “While I respect Richard Cordray as a substantive person who has shown thoughtfulness in writing regulation up to now, I still have reservations about the CFPB’s structure, namely the lack of a board to help ensure sound policy and accountability, and I look forward to discussing with him how to address those concerns.”
• Rep. Jeb Hensarling (R-TX), chairman of the House Committee on Financial Services, said in a statement: “The Dodd-Frank Act places vast, unprecedented and unchecked power completely in the hands of a single person. The CFPB director has the power to decide whether American families can obtain a mortgage, get a car loan or even get a credit card. My hope is that the decision to renominate Mr. Cordray will open the debate about whether some common sense checks and balances will be placed on a massive bureaucracy that is now totally unaccountable to the American people.”

Despite the GOP’s reservations, the Cordray’s CFPB has been a great success, cleaning up the mortgage servicing industry, winning refunds for credit card customers, and preventing wrongful foreclosures. The fears of the industry proved baseless, as Cordray has earned praise for working with banks, credit unions, and consumer groups.

Sen. Richard Shelby (R-AL)

Senate Republicans, in their zeal to prevent the new Consumer Financial Protection Agency from ever getting off the ground, have said that they won’t confirm anybody to be the agency’s director unless Democrats and the Obama administration agree to changes that would deal a body blow to the CFPB’s ability to protect consumers. The Republican members of the Senate Banking Committee — led by ranking member Richard Shelby (R-AL) — all voted against former Ohio Attorney General Richard Cordry’s nomination to head the agency.

The Constitution, of course, provides the president with a way to handle this sort of obstruction: the recess appointment power. But Shelby, in an interview with the conservative Heritage Foundation, said that Obama using this constitutionally sanctioned power to give the CFPB a director would be “devastating“:

Q: Will Senate Republicans block his ability, President Obama’s ability, to make a recess appointment in this case?

SHELBY: That would be up to the leadership, Sen. McConnell will make that call with the caucus. I would hope they would. We have thus far, and I hope we will in the future. I think it would be devastating if we let [Obama] make a recess appointment, but that’s the call of the leadership.

Watch it:

Shelby doesn’t explain how allowing an agency that was approved by law to get up and running would be devastating. But obstructing the confirmation of the CFPB nominee is just one of several ways in which the GOP is looking to prevent the implementation of the Dodd-Frank financial reform law, even as banks go back to making record profits and paying huge bonuses.

When the GOP was obstructing President Obama’s nominees to the National Labor Relations Board, even corporatist Chief Justice John Roberts asked why on Earth Obama wasn’t using his recess appointment power to circumvent Republican intransigence. It would be an even more valid question when it comes to the CFPB, since the GOP has decided that they can prevent any director from taking office, regardless of qualifications, because they disagree with the agency’s very existence.

Sen. Richard Shelby (R-AL)

“My colleagues and I stand by our pledge that no nominee to head the CFPB will be confirmed by the U.S. Senate — regardless of party affiliation — without basic changes to the Bureau’s structure,” said Sen. Jerry Moran (R-KS). “I will not support the consideration of any nominee to be the Consumer Financial Protection Bureau director until the structure of the bureau is reformed,” added Sen. Mike Crapo (R-ID)

But as the Public Action Campaign Fund noted today, the 10 GOP members of the Banking Committee who opposed Cordray’s nomination had about 31 million reasons — having nothing to do with the Bureau’s structure — to ensure that the first federal regulator explicitly charged with only consumer financial protection never gets off of the ground:

All 10 members have received significant campaign cash from Wall Street interests during their time in Congress…Committee Republicans have received at least $31 million from the finance, insurance, and real estate sector (FIRE) during their time in Congress, according to Public Campaign Action Fund analysis of data from the Center for Responsive Politics.

The Banking Committee’s ranking member, Sen. Richard Shelby (R-AL) said that today’s vote — which comes more than 14 months after Dodd-Frank was signed into law — “was premature.” Shelby, remember, received $5000 from Goldman Sachs literally the day after he denounced the CFPB as “dangerous.”

During his press conference today, President Obama explained that Republicans “want to roll back the whole notion of having a consumer watchdog.” “I’m going to be fighting every inch of the way here in Washington to make sure that we have a consumer watchdog,” he added. The GOP though, continues to do Wall Street’s bidding, even as the country struggles to recover from a recession caused, in large part, by Wall Street malfeasance.

Not surprisingly, Republican lawmakers have uniformly come out against President Obama’s plan to pay down the deficit in part by raising taxes on the wealthy. But Sen. Richard Shelby (R-AL) had an usual attack on the proposal, telling NPR that, like the 2009 Economic Recovery Act, Obama’s new plan is just “more taxes and not enough cuts”:

SHELBY: Oh you mean his big tax increase and all that? Absolutely, I have a lot of reaction to it. We’ve seen this movie before. It’s like the son of stimulus. It’s always more taxes and not enough cuts.

Listen here:

As the Senate Banking Committee’s ranking member, Shelby almost certainly knows that the Recovery Act did not raise taxes. In fact, it cut them by $288 billion, mostly through tax credits for 95 percent of working families. There were zero tax increases in the stimulus package, nor were there any cuts, as the entire purpose of the bill was to jumpstart the economy.

Republicans today, as Travis Waldron noted, continued promising to filibuster the nomination of former Ohio Attorney General Richard Cordray to be the first director of the Consumer Financial Protection Bureau, as Cordray made his first appearance before Congress. A spokesman for Sen. Richard Shelby (R-AL), the Senate Banking Committee’s ranking member, said that “opposition to or support of Mr. Cordray’s nomination will become relevant as soon as the President agrees to make the structural changes we’ve requested.” “Until then, Sen. Shelby and his colleagues stand firmly behind the statement they expressed in their May letter: No accountability, no confirmation,” he added.

Few lawmakers have spent as much time trying to block the creation and then implementation of the CFPB as Shelby. And as the Public Campaign Action Fund noted today, some of Wall Street’s biggest players have rewarded Shelby for his efforts:

A day after Sen. Shelby published an op-ed in the Wall Street Journal about his opposition to Cordray, the Alabama Senator’s political action committee (PAC), Defend America, received a $5,000 donation from the Goldman Sachs PAC and $1,500 from the PAC for MFS, a Boston-based investment firm.

In that op-ed, Shelby called the CFPB “dangerous” for businesses and said that its “only a matter of time before [the CFPB's] concentration of power is abused or misused to the detriment of American businesses and consumers.” Of course, the timing could just be coincidental, but during the 2010 election cycle, securities and investment firms were Shelby’s top contributors, giving more than $1 million to his campaign and his leadership PAC.

Richard Cordray

Republicans have requested sweeping structural changes to weaken the agency since it was signed into law as part of financial regulatory reform, demanding that it be run by a board instead of a director, that its budget be subject to congressional approval, and that other regulators have more power than the bureau itself. That means Cordray’s appearance today is an “interview for a job he is unlikely to get,” as the Banking Committee’s ranking Republican, Sen. Richard Shelby (AL), insisted that hearings related to the agency are irrelevant until Obama and Democrats relent on the issues most important to Wall Street banks the CFPB is meant to regulate:

“Opposition to or support of Mr. Cordray’s nomination will become relevant as soon as the President agrees to make the structural changes we’ve requested,” said Jonathan Graffeo, the spokesman for Sen. Richard Shelby (R-Ala.). “Until then, Sen. Shelby and his colleagues stand firmly behind the statement they expressed in their May letter: No accountability, no confirmation.”

Republicans have used various methods to fight the CFPB, harassing Harvard professor Elizabeth Warren (who conceived the idea of the bureau) in Congressional hearings and refusing to allow the Senate to recess in order to avoid recess appointments. That obstruction, which will assuredly continue in Cordray’s hearing today, has been helped by the financial industry’s intense lobbying efforts to block implementation of the reforms and the CFPB in particular. The financial industry, in fact, has spent as much lobbying to block implementation of the Dodd-Frank financial reform law as it did to block the passage of the law itself.

The GOP has benefited from its continued obstruction. The 10 Republican members of the Banking Committee have taken in $31 million from the financial, insurance, and real estate sectors in their Senate careers. Shelby himself has received more than $6.2 million, including more than $1 million from commercial banks, according to the Center for Responsive Politics. Every GOP committee member has signed onto Shelby’s legislation to repeal financial regulatory reform.

Democrats, however, are gearing up for a fight over Cordray’s nomination. Rep. Barney Frank (D-MA) slammed Republican obstruction in an op-ed last week. Banking Committee Chairman Tim Johnson (D-ND), meanwhile, plans to unleash on the Republican Banking Committee members today, blasting them for holding Cordray and consumers hostage. “The purpose of today’s hearing should be to consider whether Mr. Cordray is qualified for [the] job…Instead, a vocal minority is playing games with the process and holding Mr. Cordray’s nomination hostage,” Johnson will say, according to prepared remarks obtained by Politico. “This political gamesmanship is preventing Americans from receiving the consumer protections they deserve.”

A number of Republican lawmakers have recently trotted out the reasons that they favor raising the retirement age for Social Security (which is essentially the most regressive change would-be Social Security reformers could make). Gov. Mitch Daniels (R-IN) said he favored increasing it because young people will start living to 100 by “replacing body parts like we do tires,” while Gov. Tim Pawlenty (R-MN) said that he simply wants to “correlate your retirement…to life expectancy.”

These reasons for suggesting yet another increase in the retirement age, which was also raised in 1983, are quite bad. But according to another advocate, Sen. Richard Shelby (R-AL), raising the retirement age to “perhaps 70 or 72″ is actually a “positive thing,” because people are living longer and are more productive:

“To sit here and tell you it’s (Social Security) going to be actuarially sound for all the baby boomers and young people, that’s nonsense,” Shelby said, adding that the Social Security tax would have to be doubled or tripled to fully fund the system for younger people…“But,” he said, “we can do some positive things to prolong Social Security … will we is a different question, isn’t it?”

Shelby’s house-on-fire rhetoric regarding Social Security’s finances is vastly overblown. With no changes, Social Security will pay full benefits until 2037 and close to full benefits (once inflation is accounted for) for decades after that. Minor changes — including adjusting the rate of benefit growth for the richest beneficiaries and modest tax increases — can ensure full solvency for the program for the next 75 years, complete with benefit increases for the most vulnerable retirees.

Shelby, though, would prefer to just slash benefits for everybody to make his numbers add up. Here’s what his “positive” change would mean for retirees:

– As the Economic Policy Institute calculated, raising the retirement age to 70 would cut benefits for the average retiree by 19 percent, which amounts to about $35,419.

– As the Center for Economic and Policy Research found, if current trends in inequality continue, raising the retirement age to 70 would result in those born in 1973 and after having a shorter retirement than those born in 1912.

Plus, increasing the retirement age in response to America’s rising life expectancy ignores the fact that life expectancy gains have almost entirely benefited rich workers. Low- and middle-income workers haven’t seen the same gains.

While, on the surface, it seems logical to react to increased productivity and longer life expectancy by raising the retirement age, those gains should actually allow retirees to enjoy a longer retirement. “We have more than enough money to buy ourselves some leisure time at the end of our lives,” Ezra Klein wrote. “At least if that’s one of our priorities.” It’s clearly not a priority for Shelby.