By Molly K. Hooper - 10/13/11 09:30 AM EDT
Republican presidential candidates are ramping up pressure on House GOP leaders to repeal the 2010 Wall Street reform law.
The issue is politically sensitive for Speaker John Boehner (R-Ohio) because it puts him between a rock and a hard place — the Wall Street reforms are more popular than the healthcare overhaul, and more complicated to explain to voters.
During Tuesday night’s presidential debate, hosted by Bloomberg News and The Washington Post, former House Speaker Newt Gingrich (R-Ga.) said: “I am shocked that the House Republicans have not repealed Dodd-Frank. They ought to do it now.”
Rep. Michele Bachmann (R-Minn.), who has crafted a repeal bill, quickly agreed.
The House GOP has attempted to change parts of the law but has not brought a straight repeal measure to the floor. Senate Republican leaders, who are in the minority in that chamber, support a revamp of what is known as the Dodd-Frank law. However, neither Boehner nor Senate Minority Leader Mitch McConnell (R-Ky.) has made it a high priority.
GOP aides and lawmakers acknowledge they are in a “damned if you do, damned if you don’t” dilemma. If they try to move a Dodd-Frank repeal measure on the House and Senate floors, Republicans will attract criticism for seeking to help Wall Street executives and big banks. But seeking legislation that stops short of repeal has exposed them to attacks from White House hopefuls and the right wing for being inconsistent in their rhetoric on eliminating government mandates.
House GOP leadership aides on Wednesday deferred to the Financial Services Committee on the timing of a vote on the floor, noting they won’t move on any repeal bills until the panel has acted. The House panel has held hearings and moved several bills relating to Dodd-Frank.
Republicans running for president made it clear Tuesday night in New Hampshire that they will not be satisfied with anything short of a full repeal.
Bachmann said the law will force “thousands of small banks” to shut down due to “a huge layer of regulation.”
Gingrich went so far as to suggest that the sponsors of the law be imprisoned.
“If you want to put people in jail … you ought to start with [Rep.] Barney Frank [(D-Mass.)] and [former Sen.] Chris Dodd [(D-Conn.)],” he said, “and let’s look at the politicians who created the environment, the politicians who profited from the environment, and the politicians who put this country in trouble.”
Frank, who co-authored the law, told The Hill that Republicans won’t move a repeal bill because they know that the reforms are popular.
“It shows that they understand that the independent consumer bureau is popular, regulating derivatives is popular. … I go to mark-ups and hearings and [Republicans] say, ‘There’s too many regulations.’ And I say, ‘Which ones don’t you like?’ They won’t tell you,” Frank said.
Asked to respond to Gingrich’s charges, Frank blamed it on the Georgia Republican’s lagging poll numbers.
“I understand the problem — you believe that you are the intellectual free leader of the world, and then you find that you are struggling to get ahead of Michele Bachmann in a poll, and this is very unsettling to you. And it leads you to say anything to deal with that.”
McConnell, Senate Minority Whip Jon Kyl (Ariz.) and other Senate GOP leaders are among the 27 co-sponsors of Sen. Jim DeMint’s (R-S.C.) repeal bill.
DeMint noted that Republicans have tried to offer the bill as an amendment to other legislation in the upper chamber.
“We have to try to minimize the damage … Dodd-Frank is going to create a quagmire of new regulations that are almost impossible to navigate,” DeMint told The Hill Wednesday.
House GOP leaders, however, have not co-sponsored Bachmann’s repeal bill, which has 10 co-sponsors.
The House strategy to move smaller bills as a means of undoing portions of the Dodd-Frank Act stands in stark contrast with that employed at the start of the 112th Congress, when GOP leaders fast-tracked a full repeal of the president’s healthcare law.
House Financial Services Committee Chairman Spencer Bachus (R-Ala.) has favored a more piecemeal approach to unraveling the financial overhaul law. Soon after being appointed chairman, Bachus announced his intention to conduct a “page-by-page” review of the law “to identify all of the job-killing provisions in the Act,” Financial Services Committee spokeswoman Marisol Garibay explained to The Hill.
His committee has held 27 hearings on Dodd-Frank, with 186 witnesses, and produced a 30-page report on the findings on the one-year anniversary of the law this summer, Garibay noted.
At least 18 bills have been introduced to remove or amend portions of Dodd-Frank — three of which have been approved by the House that deal with the law’s Consumer Protection Financial Bureau; four are ready for action on the floor, and the remainder are awaiting action in the Financial Services panel, according to the committee.
A GOP aide close to the committee explained that there are some portions of the law that Republicans were able to influence during conference discussion in 2010.
For example, the final House-Senate compromise included GOP amendments. One offered by conservative Rep. Scott Garrett (R-N.J.) removed small businesses from certain restrictions imposed under an earlier financial reform measure, the Sarbanes-Oxley Act.
“There’s some small parts of Dodd-Frank that are good … it’s a very different animal than the healthcare [law],” the aide said.
Gingrich, meanwhile, has called for a repeal of Sarbanes-Oxley.
Asked why House GOP leaders hadn’t scheduled a vote on repealing Wall Street reform, a leadership aide responded, “Why don’t we move it so that you can write a story on how bad [Republicans] are for repealing it?”
And DeMint cited the law’s complexity: “More of the public understands ObamaCare than they do Dodd-Frank. But you talk to banks and they tell you that there are three regulators for every bank in the nation and it’s getting worse so it’s just a pit of regulations. It’s just a mess.”
With the growing “Occupy Wall Street” protests continuing to take place in major U.S. cities, some contend that Republicans could fuel the movement by appearing too cozy with Wall Street.
But a GOP aide who worked on the Dodd-Frank issue argued that that logic doesn’t make sense.
Repealing Dodd-Frank would end the perpetuation of what many conservative GOP lawmakers believe is the continuation of “too big to fail” policies — that earned notoriety when Congress and then-President George W. Bush approved the Troubled Asset Relief Program (TARP) in 2008, the source said.
“These protesters, the Occupy Wall Street people, hate the banks. What they don’t realize is that Republicans want to end ‘too big too fail’ — which is the whole entire idea that if a bank got into trouble, the government would bail them out — that’s something that the Democrats have kept going with Dodd-Frank because Dodd Frank does not end ‘too big to fail,’ ” the aide added.
This article was updated at 11:32 a.m.