Regulatory tide

There is not one lawmaker, Democrat or Republican, who is pro-bailout.

There have been many bailouts over the last year, and there is no guarantee that there will be no bailouts in the future. But the focus on Capitol Hill is shifting from the day-to-day steps to prop up the nation’s financial system to making sure that what happened in the fall of 2008 and into 2009 will never happen again.

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House Financial Services Committee Chairman Barney Frank (D-Mass.) is preparing a legislative package of massive regulatory reforms to the financial sector. Frank is a shrewd legislator. So shrewd, in fact, that Financial Services GOP panel members, frequently outmaneuvered by the Massachusetts lawmaker, have mounted a group effort to counter his legislative initiatives.

Committee Republicans have more to worry about than Frank. The political winds on regulation are against them. In the wake of the financial meltdown, people have an appetite for more oversight of the sector.

President Obama and congressional Democrats are seeking to capitalize on the moment by pushing significant financial reforms that extend beyond firms receiving bailout funds.

Former Massachusetts Gov. Mitt Romney (R) told The Hill in April that his party needs to take a fresh approach to government regulations

Romney said, “We as Republicans misspeak when we say we don’t like regulation. We like modern, up-to-date, dynamic regulation that is regularly reviewed, streamlined, modernized and effective.”

House Minority Whip Eric Cantor (R-Va.), meanwhile, said Americans don’t necessarily want more government. They want government that works.

Democrats differ, and polls show they have the upper hand in this argument.

House Republicans on the Financial Services Committee offered their alternative on financial reforms on Thursday.

The guiding principle of the proposal is “no more bailouts.”

Rep. Tom Price (R-Ga.) said the plan “promises that taxpayers will never again be forced to pick up the tab for the failures of others.”

Another key facet of the plan is that Republicans, unlike some Democratic-floated proposals, want to lessen the power of the Federal Reserve. It would immediately combine the Office of the Comptroller of the Currency and the Office of Thrift Supervision into one agency and shift the supervision functions of the Federal Reserve and Federal Deposit Insurance Corporation to that agency.

The Republican proposal is going nowhere, but it is aimed at showing the GOP is not the “party of no,” as Democrats have charged.

In order to defeat Frank’s yet-to-be-introduced bill, Republicans will need to convince the public that more government is not necessarily better government. It will not be an easy sell.