U.S. Politics

Republicans eye strategy for repealing Wall Street reform

Republicans eye strategy for repealing Wall Street reform

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THE HILL

Republicans on Capitol Hill are turning their attention to repealing another signature accomplishment of President Obama: the 2010 Wall Street reform law.

Key lawmakers are eyeing a special budgetary to pass repeal legislation in the Senate on a simple majority vote, bypassing Democrats.

Sen. Richard Shelby (R-Ala.), a senior member of the Senate Banking Committee, says the budgetary process known as reconciliation, which can be used to circumvent the filibuster, should be considered as a tool to roll back burdensome Obama-era regulations on the financial sector.

Some Republicans say that rolling back the Wall Street reform law should be one of their highest priorities.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) told Bloomberg television last month that the law is “worse than ObamaCare.”

“I think it’s one of the worst bills that’s ever been passed through Congress,” Hatch said, adding that he did not think any of its provisions were worth saving.

Senate Democratic Leader Charles Schumer (N.Y.) in November said he had enough votes to block any Republican efforts to repeal key parts of the Wall Street reform law, known as Dodd-Frank.

But it would be considerably harder for Schumer to stand in the way if Republicans use reconciliation to repeal the parts of Dodd-Frank that affect government spending and revenues.

Democrats “don’t have to agree to everything on reconciliation,” Shelby noted.

Asked whether congressional committees would be given instructions to repeal parts of the Wall Street reform law in a budget resolution later this year, Shelby said, “We’ve been talking about a lot of stuff.”

The effort has been kept largely quiet, however. It was not one of the items highlighted on the 200-day agenda that Republicans discussed at their annual retreat in Philadelphia, and President Trump did not mention Wall Street during his address to a joint session of Congress on Tuesday.

Senate Majority Leader Mitch McConnell (R-Ky.) has announced that the second budget resolution that Republicans plan to pass this spring will have instructions to protect tax reform from Democratic filibusters.

But it’s possible to include multiple instructions so that the resolution includes the Banking Committee, which has jurisdiction over financial industry regulations, as well as the Finance Committee, which is in charge of taxes.

Budget Committee Chairman Mike Enzi (R-Wyo.) said reconciliation instructions affecting the Wall Street reform law could be included in the next budget resolution, which will cover fiscal 2018. But he declined to tip his hand about whether that was a certainty.

“I just work the problem until I’ve got a solution,” he said.

Trump signed an executive order early last month giving the Treasury Department authority to change key provisions of Dodd-Frank to align with several goals laid out by his administration, such as to make regulation “efficient, effective and appropriately tailored.”

The president said regulations created under the 2010 law have chilled economic activity.

“I have so many people, friends of mine, that have nice businesses that can’t borrow money,” Trump said. “The banks just won’t let them borrow because of the rules and regulations in Dodd-Frank.

Democrats say the Republican plan to gut the reform law with only 51 votes would likely run afoul of the Senate’s Byrd rule, named after the late Sen. Robert Byrd (D-W.Va.), which limits what legislation can be passed under reconciliation.

“How would they use reconciliation? It’s not budgetary,” said a Senate Democratic aide.

A former Democrat aide who served in the Senate during passage of the Wall Street reform law seven years ago, however, said Republicans could attempt to target spending on regulation of the financial services industry.

“They could target provisions in Dodd-Frank that govern funding such as that they might have been charging or fines they were imposing on banks. That sort of thing they could go after,” the Democratic source said.

The Congressional Budget Office estimated in 2011 that the Wall Street law would increase government revenues by $13.4 billion and spending by $10.2 billion over a 10-year period. It projected the law would reduce deficits by $3.2 billion.

Sen. Pat Toomey (R-Pa.), a veteran member of the Banking Committee, is leading the review of the budget rules to determine what parts of the law can be undone with 51 votes.

“We need to make a number of really substantial reforms to Dodd-Frank,” Toomey told the Wall Street Journal in December. “I am very much in favor of making sure we have all the tools to do this.”

Aside from the challenge of getting the Senate parliamentarian — who decides what’s eligible for special budgetary protection — to sign off on the plan, Shelby and Toomey may have trouble convincing some moderate Republicans to go along.

Schumer in November predicted in November that some Republicans would side with Democrats in blocking efforts to weaken the law. Yet Republicans could try to make up for lost votes by targeting red-state Democrats who are up for reelection in 2018.

Republicans from agricultural states say tighter regulations on banks has made it tougher for farmers to obtain financing now that commodity prices are slumping.

ALEXANDER BOLTON

2 thoughts on “Republicans eye strategy for repealing Wall Street reform

  1. These reptiles won’t be happy until 97% of people (e.g. middle and lower economic classes) can be incarcerated back to poor houses again. They are not interested in a republic, they long for an absolute autocracy with them calling every shot. We can only hope they get their just rewards next year before they irretrievably damage the country here and abroad.

    Like

  2. Thank you for this well written and important essay.
    One of my concerns in the use of farmers as an example being used to weaken the law, is that citizens and representatives have images of farmers that simply do not reflect the reality of the huge corporate factory farming prevalent in those agricultural states, and the over 1,000 lobbyists pushing their agenda.
    All my best to you. 🐞

    Like

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