Lobbyists from across the financial industry have their eyes fixed this week on two House Democrats backing a series of changes to overhaul legislation that could have sweeping implications.
Reps. Paul Kanjorski (Pa.) and Ed Perlmutter (Colo.) are each planning to introduce two amendments to wide-ranging legislation in the House Financial Services Committee. The panel is taking up measures that regulate the industry for “systemic risk” and that overhaul oversight of the insurance industry.
While much of the financial debate this year has centered on panel Chairman Barney Frank (D-Mass.) and Senate Banking Committee Chairman Chris Dodd (D-Conn.), lobbyists for financial firms small and large are also watching Kanjorski and Perlmutter closely.
Kanjorski, the No. 2 Democrat on the committee, wants to broaden government authority even more. In an op-ed on Friday on the Huffington Post, Kanjorski struck a populist chord, referring to the French Revolution, the risks of “unfettered capitalism” and the need for additional regulations.
“I am not suggesting that the American people are anywhere close to a violent revolt, but they have an intuitive queasiness about having a very small number of very huge financial institutions control an enormous amount of this nation’s capital,” he wrote.
Kanjorski’s comments come as he heads into a potentially tough reelection campaign. He has represented his northeastern Pennsylvania district for nearly 25 years, but in the 2008 cycle he faced a stiff challenge from Republican candidate Lou BarlettaLou BarlettaTop Republican: The healthcare bill is dead GOP faces risky decision on ObamaCare vote White House: Steve King now a yes on ObamaCare bill MORE. Kanjorski won reelection by four percentage points amid criticism for supporting the $700 billion bailout package for the financial industry.
Big banks and New York City business interests are pressing hard against the amendment, trying to reach out to members before it is introduced. But small community banks have lent their support.
“We’ll be real supportive of Kanjorski,” said Steve Verdier, senior vice president at the Independent Community Bankers of America (ICBA), which represents roughly 8,000 banks.
Perlmutter is drafting a separate but related measure that would give government regulators new power to separate the investment and commercial banking divisions of financial firms. The effort harks back to the aim of the 1933 Glass-Steagall Act, which was effectively overturned in 1999. Critics argue that the repeal enabled firms to grow into financial behemoths that precipitated the crisis.
“If there is a threat to the system, if an entity is getting to that ‘too big to fail’ level, this allows the oversight council or regulator to step in and shift a portion of their business, sell it, divest it or wind it down, if necessary,” said Leslie Oliver, spokeswoman for Perlmutter.
Meanwhile, Perlmutter is working on a measure that would give a new council of financial regulators greater input on accounting standards. Perlmutter and Rep. Frank Lucas (R-Okla.) are working on an amendment that would give the new council greater say with the non-governmental Financial Accounting Standards Board (FASB), which currently falls under only the Securities and Exchange Commission (SEC).
“What Perlmutter’s legislation does now is to allow a broader viewpoint to look at different approaches when and if there is a threat to the financial system,” Oliver said.
The amendment has split the business community, with some banks in favor of the switch, while accountants, institutional investors and the broader business community have strongly opposed it.
“We believe this would be a very bad and very unprecedented act on the part of Congress to put the government in charge of accounting standards,” said Barry Melancon, president of the American Institute of Certified Public Accountants. The U.S. Chamber of Commerce, Investment Company Institute, Center for Audit Quality and Council of Institutional Investors oppose the idea of shifting the oversight.
The American Bankers Association, Financial Services Roundtable and National Association of Home Builders were among eight large trade associations on Monday that voiced their support.
Apart from the “systemic risk” legislation, insurance lobbyists have been tussling over a measure that creates a new Federal Insurance Office. The issue taps into a long-running debate between companies that favor federal regulation of the industry and those that prefer maintaining the existing state-based system.
Kanjorski circulated an amendment to the bill that made a significant change to a provision regarding the new office’s power on international insurance agreements. In draft language, Kanjorski said that nothing in the bill should be “construed to affect the authority of any federal financial regulatory agency … and to pre-empt state measures.” That appears to favor the state-based interests.
Calendar slips, but climate discussion continues
President Barack ObamaBarack ObamaGraham: Left is 'going insane' after Trump's win President travels again for meetings at Trump golf club in Va. Cotton: House 'moved a bit too fast' on healthcare MORE’s top climate change adviser is sure to face questions on Wednesday about the prospects for global emissions-cutting talks following widespread acknowledgment that next month’s international summit in Copenhagen, Denmark, will not yield a final, binding deal.
Carol Browner, who is the White House climate czar, is scheduled to speak at a two-day conference on the “carbon economy” hosted by The Economist that runs Tuesday and Wednesday at the Ronald Reagan Building and International Trade Center. Browner is scheduled to speak Wednesday afternoon.
The Copenhagen talks are slated to begin on Dec. 7. Administration officials and other negotiators are hopeful the meetings will produce a consensus outline on emissions targets, financing to help developing nations adapt to climate change and other issues.
But the details needed to complete a post-Kyoto deal will have to wait until follow-up negotiations and meetings next year.
Secretary of State Hillary Rodham Clinton told the Asia Pacific Economic Cooperation meeting in Singapore last week that Copenhagen will be a “steppingstone” to a final deal. Meeting in Singapore, President Obama, Danish Prime Minister Lars Loekke Rasmussen and others backed the two-tiered approach.
Senate efforts to pass a sweeping climate and energy bill have been shelved until next year, too, giving lawmakers plenty of time to maneuver around the controversial issue of capping carbon.
Sens. Lamar AlexanderLamar AlexanderOvernight Regulation: Trump's Labor nominee hints at updating overtime rule Trump's Labor pick signals support for overtime pay hike Live coverage: Day three of Supreme Court nominee hearing MORE (R-Tenn.) and Jim Webb (D-Va.) rolled out plans Monday to massively boost subsidies for new nuclear plants. Their plan would provide an additional $100 billion in loan guarantees for new plants and other carbon-free energy projects.
More federal help is at the top of every nuclear energy lobbyist’s holiday wish list. Nuclear advocates have said the $18.5 billion in loan guarantees the Energy Department is currently authorized to provide for new reactors will not be enough to start an industry building spree.
Providing additional support for nuclear power has emerged as a potential linchpin for a bipartisan climate and energy deal. Sens. John KerryJohn KerryCongress, Trump need a united front to face down Iran One year ago today we declared ISIS atrocities as genocide Trump’s realism toward Iran is stabilizing force for Middle East MORE (D-Mass.), Lindsey GrahamLindsey GrahamGraham: 'I'm glad' Ivanka will be working in the White House Trump tweets promotion for Fox News show GOP senators pitch alternatives after House pulls ObamaCare repeal bill MORE (R-S.C.) and Joe Lieberman (I-Conn.) say nuclear provisions can help attract the 60 Senate votes needed to pass a cap on carbon.
Electric vehicle coalition revs up
Those new plants could help charge up demand for electric vehicles if a new coalition helps push them into the mainstream.
A group of power producers, automakers and other companies on Monday launched the Electrification Coalition to promote large-scale deployment of electric vehicles.
Members include NRG Energy Inc., Nissan Motor Co. and PG&E Corp., as well as lithium ion battery company A123Systems Inc., FedEx Corp. and GridPoint Inc., which provides software to enable a “smart” power grid.
The group is emphasizing the potential of electric cars to reduce oil import demand. Its goal is that by 2040, 75 percent of the miles traveled by light duty vehicles — such as passenger cars and pickups — would be based on electric power.