EXPOSE OBAMA.com
April 5th, 2010 By MANU RAJU & EAMON JAVERS, Politico
Obama lays down another deadline for Congress
Democrats blew deadline after deadline in the health care debate, and now some on Capitol Hill are bristling at the suggestion from the White House that a massive financial reform bill should be on the president’s desk by Memorial Day.
“Setting deadlines in an arbitrary manner did not help us get health care done, and it will not help us get financial reform done either,” one senior Democratic leadership aide told POLITICO.
With Congress returning to session April 12, top Senate Democrats want to get a bill through the upper chamber as quickly as possible — but some privately questioned whether White House spokesman Robert Gibbs’s Memorial Day push would do more harm than good for negotiations.
The White House offensive on financial reform and other policy priorities reflects the tricky calculus in White House and congressional relations as the midterm elections approach. There’s no clear agreement between the White House and top Democrats on Capitol Hill over whether to push an aggressive, sweeping Wall Street reform bill and effectively dare the Republicans to filibuster it, or whether to push for a more modest bipartisan compromise bill.
The aggressive approach, some Democrats argue, is a political winner for Democrats because they could portray Republicans as being too close to big banks while opposing the reforms that would prevent another financial meltdown.
But other Democrats are worried about another draining partisan debate after the bitter health care saga, saying that a longer timetable — and no tough deadlines — could help win over some Republicans in the Senate. Yet the go-slow tactic has its own risks: Democrats could end up with a watered-down financial reform bill that could turn off House Democrats, who have already passed a much more aggressive version of the legislation.
Two weeks ago, after Senate Banking Committee Chairman Chris Dodd (D-Conn.) and House Financial Services Committee Chairman Barney Frank (D-Mass.) met with President Barack Obama, a reporter asked if they would settle for a watered-down bill — in lieu of blaming Republicans for killing a more forceful measure. Dodd refused to even consider the question, intoning, "We will have a [bipartisan] bill."
But Frank joked that the choice was too close to call.
"That's like asking someone to choose between their mother and father," he quipped.
The White House has its own reasons for pushing for final action by the end of May: Administration officials privately concede that by Memorial Day, Congress will be in full-time campaign mode, making it much harder to have any serious legislative debates before November.
Speaking Friday in Charlotte, N.C., Obama said that "we’re starting to see a framework emerge both in the House of Representatives and in the Senate, where my hope is, is that we can actually get this sometime in the next several weeks.”
But some are dubious that "several weeks" will be enough time to get a bill out of the Senate.
“Memorial Day is a stretch at this point,” said Taylor Griffin, a former GOP Treasury Department aide who is now a partner at Hamilton Place Strategies. “The question of whether they can achieve a Memorial Day timetable is really up to the White House. Republicans have legitimate concerns about the legislation. Will the White House be willing to work with Republicans to resolve them? That is the question.”
Democrats don’t have much margin for error when counting votes on financial reform. Senate Republican leaders will most likely try to unify their caucus against the financial reform legislation, believing it would create more bureaucracy while not addressing the root causes of the 2008 financial meltdown.
But Democrats on the left dislike aspects of Dodd’s bill, saying it may not do enough to protect consumers. Democrats from agricultural states are worried that new regulations on derivatives could impact agriculture commodities buyers and farmers. And some Democratic moderates are worried about the government having too heavy a hand over local and regional banks back home.
House Democrats, who pushed their financial services bill through their chamber in December, are in no mood to see the Senate stall on the issue. Frank said Thursday that he believed “the president will be signing a financial reform bill before Memorial Day.”
“I always think these deadlines are put out for rhetorical reasons,” said one Democratic lobbyist. “The truth is, it’s difficult to get anything through the Senate.”
Democrats are also divided over strategy. In one camp, some Democrats believe continued action after health care reform will show real momentum for their agenda. But others argue that the White House would be better off — politically, anyway — if Democrats could hit the campaign trail in the fall and blame Wall Street-friendly Republicans for blocking the reform bill.
Officially, the White House says that it's solidly in the first camp and wants to see a bill as soon as possible — and at the very least, before September, which will be the two-year anniversary of the economic collapse.
“The White House is just pushing to keep the pressure up,” one financial industry lobbyist said.
Dodd still seems to be angling for GOP support. Before the Senate recessed last week, Dodd lunched with the Banking Committee’s top Republican, Alabama Sen. Richard Shelby, whose support would be critical to getting a broad bipartisan deal.
If Shelby were to come along, Dodd could be in a position to win over other Banking Committee Republicans, such as Sens. Mike Crapo of Idaho, Bob Corker of Tennessee and Judd Gregg of New Hampshire. And Senate Minority Leader Mitch McConnell has put out word to Dodd that if he gets those four senators on board, he can expect much more support from the GOP Conference.
But getting to that point is no small task. Already, some senior Republicans are preparing for the possibility of another big battle on the floor, arguing that Dodd’s bill is nothing more than just another government takeover that would lead to more bailouts of big banks.
Republicans argue that a new consumer protection agency housed at the Federal Reserve would give the government too far of a reach over businesses large and small. They also say that a proposed fund that banks would have to pay into to save “too-big-to-fail” financial institutions would essentially amount to a slush fund for the government. And they argue that regulations on derivatives could inadvertently hurt farmers and other end-users.
The White House has so far shown little willingness to bend on some of those provisions.
“All derivatives must be regulated, and shareholders should have a say not just on pay but also other compensation that rewards risk-taking,” Obama said in a March 15 statement when Dodd announced his bill, adding that he would “fight against efforts to weaken” the bill.
So far, it’s unclear whether political pressure will force the Republicans to cave and back a bill characterized as a crackdown on Wall Street — or if Democrats are merely talking tough now as a negotiating tactic before giving way to a compromise later.
“They will play as tough as they can and later on” they may compromise, said Brian Gardner, a Washington-based analyst with the New York financial services firm Keefe, Bruyette & Woods.
But for now, the White House seems intent on putting its foot on the gas pedal. Gibbs, the White House spokesman, told reporters last week that it’s “not an unrealistic timetable at all” to get a bill to the president’s desk by the end of May.
“Obviously, we’ve got a bill through the House, a bill through [the Senate Banking] Committee, unamended,” Gibbs said. “Nobody on the Republican side even offered an amendment. So I think the next piece of business that the Senate will take up will be financial reform.”
“You mean late May is not unrealistic?" a reporter asked.
“I don’t think that’s unrealistic,” Gibbs said. “I think without a doubt, the president would like to see, with his signature, strong rules in place, certainly prior to the two-year anniversary of the collapse in our economy.”
Glenn Thrush contributed to this report. - Politico.com
