Now that the Democrats have a bit of swagger back, Senate Democrats have picked up the pace on Wall Street reform — another issue that definitely needs to be addressed. Yesterday, Sen. Chris Dodd (D-Conn.) passed a financial overhaul bill out of committee on a straight party-line vote.
Meanwhile, Treasury Sec. Tim Geithner warned bankers and other Wall Street maestros to stop fighting so hard against financial reform. That, too, is a reflection of the Democrats’ increased confidence. They are reminding bankers that can pass signifiant legislation without GOP support. From the WSJ:
The 13-10 vote in the Senate Banking Committee comes as Republicans and business groups rethink their strategy about how to shape or derail the financial bill, which some of them argue would reduce credit and potentially cost U.S. jobs. Some Republicans have faulted the White House for pressuring congressional Democrats to push forward without a bipartisan deal.
“Have things been about as dysfunctional as they could be as far as things coming out of committee?” asked Sen. Bob Corker (R. Tenn.). “Yes, and certainly there’s plenty of fault to go around.”
Treasury Secretary Timothy Geithner, in some of his most forceful comments to date, warned on Monday policymakers and the public to “be careful whose voice you listen to” in the debate over new financial rules. His comments, in a speech at the conservative American Enterprise Institute, appear squarely aimed at Wall Street executives and other business leaders who have warned about the unintended consequences of the bill.
“Listen less to those whose judgments brought us this crisis,” he said Monday. “Listen less to those who told us all they were the masters of noble financial innovation and sophisticated risk management. Listen less to those who complain about the burdens of living with smarter regulation or who oppose having to pay a fee for the costs of this or future crises.”
Mr. Geithner’s pitch came a day after the White House cleared a huge hurdle by marshaling its overhaul of the health-care system through the House of Representatives. With that debate largely settled, much of Washington’s focus is expected to shift to reworking financial-market rules. In an illustration of the White House’s growing presence in the process, close to 10 administration officials sat through the Senate panel vote.
Democrats and White House officials, emboldened by the belief they have public support for efforts to rewrite financial rules, have intensified their push in recent weeks. They have stepped up their warnings about the consequences of inaction, with Mr. Geithner saying Monday that “risk will build up again … and future governments will have to act again to socialize private losses in the interest of preventing catastrophic damage.”