Front row for Wall Street reform
By
Colby Itkowitz, Call Washington Bureau
6:07 p.m. EDT,
June 11, 2010
WASHINGTON
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- For the last year, U.S. Rep. Paul Kanjorski hosted
bipartisan dinners with lawmakers and economic experts.
Over drinks and a meal, members of the financial services subcommittee
Kanjorski chairs met to learn the nuances of a complicated and troubled
economic system. He described what resulted, far away from the C-SPAN
cameras and the politics, as being a thoughtful exchange.
That probably won't be the case now.
Hours before the first of many conference meetings to negotiate the
House and Senate versions of a Wall Street reform bill, Kanjorski said
the only thing that will stand in the way of what he'd consider great
legislation will be politics.
"It's going to be good whatever we do because it's better than what we
have, but we can make it a hell of a lot better if we put the politics
aside," Kanjorski said.
Good luck. Almost immediately U.S. Sen.
Richard
Shelby, R- Alabama,
complained the talks were off to a "rocky start," and likened the
conference to "political theater."
Kanjorski, a Democrat whose 11th District includes Carbon and Monroe
counties, has dealt with financial issues in Congress for 26 years. He's
a vocal advocate for regulating Wall Street and is the author of
language preventing financial institutions from getting so big that if
they fail it would collapse the economy. He drafted a significant
portion of the reform bill that stands to forever change business on
Wall Street.
Republicans
argue that the bill just creates more Washington
bureaucracy, does nothing to address shortcomings of mortgage lenders Fannie
Mae and Freddie
Mac and has provisions that go far beyond the problems that caused
the financial meltdown.
But Kanjorski says that's where the politics take over.
"What I anticipated hearing the most was that government is suddenly
playing the role of Big Brother or becoming communist or socialist or
controlling. But the reality is, I think, this last crisis was so grave,
so fundamental, and when you talk to the titans of capitalism they know
that if we hadn't taken the
rescue
plan, the entire world economy would have disappeared as we know
it," he said.
Kanjorski is one of 43 lawmakers who will meet to hammer out a
compromise on a nearly 2,000-page financial reform - one of the
ObamaMassachusetts
Democratic Rep. Barney
Frank, the conference committee chairman.
administration's foremost priorities. He'll be sitting in the seat
directly to the left of
The goal is to have the bill completed by the July 4 recess and before
President Barack Obama goes to Canada for the G-20
summit.
Sitting in his office on Capitol Hill, Kanjorski acknowledged that one
of the toughest challenges is to explain how the legislation affects the
everyday American. He said Republicans have done a better job of
demonizing "bailouts" and tying this bill to bailouts than the
Democrats
and the administration have done of educating the public.
When Congress passed the bank "rescue plan," as Kanjorski calls it, "we
forgot about the public relations aspect."
"If we hadn't taken that action, the people who would have really paid
the price are not the bankers....We would have had 50 million unemployed
and we would have bombed ourselves back economically speaking to the 16
th
century," he said.
Kanjorski fears that a few politicized issues during the conference will
steal the spotlight from the substantive matters. One, he noted, is a
controversial amendment by Senate Majority Whip
Dick
Durbin of Illinois
that caps the fees debit card companies can charge retailers to process
transactions.
"Hell, up until two weeks ago I never heard of it," Kanjorski said,
although he said it's the issue that his office has received the most
calls about.
For Kanjorski, it's most crucial to ensure the 2008 economic meltdown
doesn't repeat itself. His "too big to fail" language would act as a
"preemptive strike," he said, by giving federal regulators the power to
dismantle financial firms deemed so large and inter-connected that if
they fall it would unravel the entire economy.
The goal, he says, is to ensure that taxpayers never have to bail out
Wall Street again.
Kanjorski's wording appears only in the House version. The Senate bill
contains a similar piece authored by U.S. Sen.
Paul
Volcker, former chair of the Federal
Reserve. Kanjorski's plan would give regulators more power.
The issue is not the most hot-button, as the industry is most opposed to
a provision regulating derivatives. But Republicans still say the "too
big to fail" effort gives Washington too much power over capitalism and
that such power would inevitably lead to more taxpayer money spent
bailing out banks.
Scott Talbott, senior vice president of government affairs at the
Financial Services Roundtable, a policy group made up of CEOs of the
world's 18 biggest financial services firms, including
Goldman
Sachs, Citigroup
and JPMorgan
Chase, has been critical of Kanjorski's measure.
"It will act as a strong disincentive for financial firms to grow and to
be able to serve corporate America," Talbott told Bloomberg News in
November.
But Kanjorski said any firm so big that its risks would damage the
entire economy is just too big.
"It's like a drunk. You're not a drunk or have an alcoholic problem if
you can go to the bar, have two drinks and go home," he said. "If you
can contain yourself...that's what we're saying to corporations. Don't
overdrink. We're not going to allow you to overdrink, get in your damn
car and kill all our people."
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