Last night I had the chance to speak with Mark Warner and Ted Kaufman, two Democratic senators engaged in the debate over how to reform Wall Street. They had some differences, particularly on whether or not to break up the banks, but both were confident that the dynamics of this issue are different from what we saw during the debates over health-care reform and even the fiscal stimulus package a year ago. They're making the case that Republicans ought to find common interest in fixing finance, even as they betrayed some exasperation with the opposition's tactics.
Kaufman:
Where were the populists from? Sen. Johnny Isakson of Georgia, who I really like a lot, he and John Cornyn of Texas, and Sen. Shelby of Alabama came out a few weeks ago and said we really should look at breaking up the banks. The kind of alliances that went on with the recovery act and health-care reform aren't really operational for this issue.Just looking at the Republican states, see what the folks in those states feel about Wall Street banks. Clearly there's a Republican Party position, but I think they're in for a big surprise when a whole bunch of folks who are on the more progressive side of the spectrum come together with people on the very conservative part of the spectrum and all agree we've got to stop "too big to fail" from happening again. What it's going to take is going after the Wall Street banks.
Warner:
There are some members of my caucus who may not agree with me that we've got to get a broad bipartisan bill. For the sake of predictability for the market and the notion that we ought to have rules of the road that are going to last for decades, not for a year or two, if we can find common ground, we ought to do it. I don't think these issues traditionally break down on a Democrat/Republican continuum. If you start with the same goals, so much of this gets technical, people can work through it.If you get it past the talking points, I think we can get something resolved here. I go up to my Republican colleagues and say, "Where's the bill say that?" Eighteen months after the meltdown on Wall Street, I've got to believe most elected officials think its pretty much the right time to set new rules of the road.
Keep an eye out for Kaufman's argument, aimed at legislators leery of breaking up the banks, that his proposal is anything but radical, and Warner's idea to resolve the debate over regulator discretion with tripwires around business' behavior.
-- Tim Fernholz
