The financial reform bill being drafted by Senate Banking Committee Chairman Christopher Dodd, D-Conn., is turning into a campaign stunt.
Dodd, who faces a difficult re-election fight in the wake of revelations about preferable loan treatment he received from Countrywide Financial Corp. and criticism over his long-cozy relationship with the financial industry generally, is drafting a reform bill that is at odds with the version being crafted by House Financial Services Committee Chairman Barney Frank, D-Mass., and the Obama administration.
Contrary to the House bill, Dodd is insisting that the four federal banking regulators be consolidated into one. Dodd's measure would grant far less power to the Federal Reserve. The House bill calls for merging the Office of Thrift Supervision into the Comptroller of the Currency but leaves the Federal Deposit Insurance Corp. and the Fed as standalone agencies and would grant the Fed sweeping new powers to oversee systemically important firms.
Press reports have claimed Dodd's pending bill will clash with the House and White House, which could derail enactment of reform. That notion is wrong. Instead, Dodd will accept amendments to his bill from other Democrats on his panel that will bring his committee bill closer to the House version. He will capitulate further when the bill is brought to Senate floor and then amended again when brought to conference to work out differences with the House bill. Dodd, no doubt, will scream at each step that his plan is being watered down by greedy financial institutions and turf-protecting government bureaucrats, but his protests will largely be for the newscasts back home.
The Republicans on the committee will be a nonfactor in shaping Dodd's bill because of his need to characterize himself as a recently converted populist and his need to push provisions they find untenable. Whether Connecticut voters see though this poorly veiled attempt at self-preservation remains to be seen. - Bill McConnell
The Washington Post article
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