Let’s be clear, the creation of a federal Consumer Financial Protection Agency (CFPA) is a liberal’s dream. The agency would have the power to regulate businesses of any size. The House passed legislation, authored by Barney Frank, would as Rep Jeb Hensarling (R-Texas) put it in remarks before the House Financial Services Committee “create a brand new, large draconian federal agency with new sweeping powers.”
The bill came to the Senate where Senator Shelby stood strong on principle and won. Negotiations broke down and the Democrats’ big government dream was all but dead. No new agency and (on this issue at least) no new vast government powers.
Then Sen. Corker entered the fray and took it upon himself to negotiate a deal to revive the CFPA with the master of the financial crisis Sen. Dodd.
Before Corker got started, Shelby spokesperson Jonathan Graffeo warned that “Republicans on the committee have several principles upon which they’ve tried to negotiate with Dodd, to no avail” and that “If (Corker) adheres to those principles, he will likely find himself at an impasse as well.”
But now we suddenly hear that Corker and Dodd are nearing a deal. Apparently Dodd wants the agency to be independent but knows such a proposal would never get 60 votes. His compromise with Corker is reported to move the regulatory super agency to house it in the Federal Reserve.
Conservatives are asking themselves, what difference does it make where they put the desks? And why are we even negotiating to have desks? What portions of the CFPA House bill were so important and critical that Corker felt compelled to revive it? And perhaps more perplexing, what Democrat proposals were so good that he felt the need to revive the bill and give it to them. After all, a deal means that both sides get at least some of what they want.
Corker’s staff issued a carefully spun statement today denying that he supports the bailout provisions or that he supports the House passed bill.
There’s a lot of bad information floating around. Senator Corker is NOT working on legislation with Congressman Frank, and he does NOT support the bill the House of Representatives passed last year. Sen. Corker’s proposal would NOT provide $4 trillion to bail out Wall Street. For nearly a year, Senator Corker has been working to end the notion that any company is “too big to fail.” His premise is that if a company fails, it should fail and not be propped up by taxpayers. The bill is still being crafted in the Senate, but please know the substance will be very different than the House bill.
Well, of course he isn’t negotiating with Congressman Frank…he is, after all, in the Senate. This is classic misdirection. However, it is good to see that Sen. Corker now thinks companies who fail shouldn’t be ‘propped up’ by taxpayers. Too bad he didn’t think that when there was an actual vote to, you know, prop up companies who failed with taxpayer funds. At the end of 2008, he was a solid vote in support of the TARP-bank bailout.
But, I’m glad to see he is now against the very proposals he once supported. OK. So, if he doesn’t support those bailout parts of the bill, then what does he want?
Corker’s staff claims that his interest centers on the “too big to fail” provisions of the bill. It is apparently so important to him that he told the Wall Street Journal that he was “absolutely willing to be the only Republican vote” for financial reform.
Even if you believe that the Corker-Dodd deal can pass without the bailout piece, (which sources say will likely be added back in conference committee) the indisputable fact remains that the bill to create a “brand new, large draconian federal agency with sweeping powers” was all but dead. But now thanks to Bob Corker, they almost have a deal to give government exactly those powers and create just such a bureaucracy.
So apparently, what Corker supports and his solution to the “too big to fail” provisions, is almost exactly what the Democrats wanted in the first place–a vastly powerful new government agency.
How is reviving a bad bill to create vast new government powers not the same thing as openly advocating for more and larger government? It is in the real world.
When you take out the congressional doublespeak, it sounds exactly like what it is—more of the big-government Republicanism that got Republicans tossed from the majority in 2006. It’s hard to see how this will help Republicans in November.
This is the “what” of Corker’s recent actions. On Monday, I’ll talk about the “why”.