One Year After Financial Crisis, Banking Reform Looks In Trouble
“I think we’ll pass major legislation, but it won’t be just what the White House wants,” says Rep. Sherman, adding it is likely the House will pass the reforms in pieces and then send a package over to the Senate for a vote. Sherman says that could take until to early next year.
The conventional thinking is that House leaders can probably push through the components of a package, thanks to the Democrats’ overwhelming majority there, but Senate passage will be tricky.
“[Dodd] can only move one piece through committee,” says the industry source. “There aren't 60 votes for any one piece, but, if you put them altogether you might."
Handicapping the Senate odds was recently complicated by the death of Sen. Ted Kennedy, who chaired the Health, Education, Labor & Pensions Committee, a post Dodd—now its senior ranking member—might be tempted to assume. Next in line on the finance committee is Sen. Tim Johnson of South Dakota, who voted against the TARP bill.
(Dodd ended some of the uncertainty Wednesday when he announced he would stay put, saying "we have important work to do on the Banking Committee, and I intend to see it through as chairman.")
Some of those in the Senate who generally support reform are in no hurry to pass legislation.
Corker, like many, says one or two key elements might be worthy of being pushed through—he and others cite resolution authority as an example because it fills an existing hole—but sweeping reform can and should wait.
They cite the rush to write and pass the Sarbanes-Oxley Act earlier in the decade following the corporate accounting scandal and its negative, unintended consequences.
“All of us realize it is very, very complex and if we get it wrong we can do a lot of damage to our system,” says Corker. “We have the benefit of looking more clearly in the rear view mirror—more and more information being available It would be wonderful for our whole process if it were put off next year.”