By Peter Schroeder - 04/18/12 05:40 PM ET 

 

House Republicans on Wednesday advanced legislation that would roll back portions of the Dodd-Frank financial reform law. 

GOP members of the House Financial Services Committee touted the set of four measures as cutting $35 billion from the deficit. The proposal is part of a broad Republican effort to track down savings to replace the automatic defense cuts that are set to begin at the end of the year.

 

Democrats maintained that the savings were largely illusory, and said the deficit focus was a pretense for dismantling the Wall Street reform law.

 

"You're basically using the budgetary process to gut Dodd-Frank," said Rep. Carolyn Maloney (D-N.Y.).

 

The markup of the GOP package was contentious and filled with accusations and cross-talk between the parties. But in the end, the GOP majority knocked down several Democratic amendments before moving the package through on a party-line vote.

 

The fight marked the latest in the long-running partisan feud over the financial overhaul.

 

As part of the GOP budget from Rep. Paul Ryan (R-Wis.), several committees were charged with finding deficit cuts that could help replace the defense cuts set to take effect at the beginning of 2013.

 

Republicans on the financial panel used the opportunity to target a number of pieces of the reform they have long found problematic.

One GOP measure would repeal the piece of Dodd-Frank that gives banking regulators the ability to temporarily use taxpayer dollars to step in and wind down a failing institution, in an effort to prevent its struggles from bringing down the rest of the financial system. Republicans argued that "orderly liquidation" puts taxpayer funds at risk, and relied on a Congressional Budget Office (CBO) score showing the repeal would save the government $22 billion. 

 

Democrats dismissed those savings as a gimmick.

 

"We save $22 billion in Monopoly money," said Rep. Gwen Moore (D-Wis.), who offered an amendment to scrap the provision.

 

While the CBO estimates the program would cost billions over its 10-year window, the provision, as designed, would eventually recoup any costs by assessing fees on large financial firms.

 

But Republicans took issue with that "bank tax" and the notion of orderly liquidation, arguing that failing firms should be allowed to go into bankruptcy, rather than be subjected to an industry-funded government intervention.

 

"That's not American. American is you eat your own losses," said committee Chairman Spencer Bachus (R-Ala.). "We don't subsidize other people's losses."

 

The sparring spilled over to a GOP attempt to bring the budget of the Consumer Financial Protection Bureau (CFPB) under Congress's control. Republicans long critical of the bureau argue it lacks oversight, due in large part to the fact that Congress does not set its budget. Instead, the CFPB receives a percentage of the Federal Reserve's funds. 

 

Under the GOP proposal, the CFPB's budget would be subject to appropriations, and its funding pot would be halved to $200 million, down from its current budget of $547 million.

 

"No one, not Congress, not the president ... can oversee how the CFPB director spends hundreds of millions of dollars," Bachus said.

Several Republicans cited the spending scandal engulfing the General Services Administration as evidence that lawmakers need oversight powers over federal employees, including at the consumer bureau.

 

"You can't turn on the television and not see bureaucrats gone wild," said Rep. Jeb Hensarling (R-Texas).

 

Democrats contend that moving control of the bureau’s budget to Congress was less about oversight and more about GOP attempts to stifle it.

 

"This is the most blatant attempt to really defang and destroy the agency," Maloney said.

 

At one point, Democrats offered amendments they actually opposed in an attempt to make a point about the GOP provision. Those amendments would have brought other financial regulators, such as the Federal Reserve and the Office of the Comptroller of the Currency, under appropriations. Democrats said the proposals were in line with the GOP arguments for oversight of regulators.

 

The GOP majority defeated the amendments, arguing in part they had not been scored by the CBO.

 

"On balance, this is a bad idea," Rep. Brad Miller (D-N.C.) said of one such amendment he offered that was shot down.

 

Republicans also approved an amendment to the package, which would eliminate the Office of Financial Research, a new entity created by Dodd-Frank that would gather data about the financial system. GOP lawmakers have criticized it as intrusive, and warned that it could endanger privileged information.

 

As part of the deficit-cutting package, Republicans also signed off on the repeal of one of the administration's signature housing relief programs, the Home Affordable Modification Program (HAMP). 

 

The administration has had to rework the housing program as it has underperformed — less than 1 million mortgages have been modified, and the program was originally estimated to help 3 million to 4 million struggling homeowners. Republicans contend it is wasteful and should be killed, and the House has previously passed legislation eliminating it.

 

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