MILLIONS of Americans are desperate for work, but it's a full employment economy in Washington, where swarms of lobbyists are working feverishly to weaken the financial-reform legislation now in a House-Senate conference committee.
It's also something of a reunion with old bosses and colleagues: 56 industry lobbyists once worked on the personal staffs of the 43 members of the conference committee, according to an analysis by the government watchdog groups Public Citizen and the Center for Responsive Politics. In total, 1,447 lobbyists for the financial industry once worked for the federal government. Among them: 73 former members of Congress.
The lobbyists' influence can be seen in the myriad ways in which both houses of Congress have backed away from the kinds of sensible reforms that could have prevented a financial meltdown like the one in 2008, which still has the nation reeling. In particular, the Senate had a chance to end "too big to fail" - and with it, taxpayer bailouts.
But it voted down an amendment that would have broken up a bank if it controlled more than 10 percent of all insured deposits. In practice, the amendment would have forced the nation's six largest banks to scale back. With that victory, banks likely will continue to engage in risky practices since they know they have a taxpayer-paid safety net to catch them if they fall.
(One sponsor of that amendment - Sen. Ted Kaufman of Delaware - has emerged as a true, unflinching voice of the people on this issue. When Kaufman replaced Joe Biden when Biden became vice president, he committed to not running for the seat on his own. This is one commitment we urge the senator to reconsider.)
Even the weakened financial-reform legislation now in committee could represent a small step toward where the nation needs to go, which is why Wall Street wants to make it as feeble as possible.
The Senate bill, which is actually somewhat stronger than the House bill, is the starting point. Here are a couple of key provisions that must be made as strong as possible:
* It's called Section 716 for short. A surprisingly
strong amendment to the Senate bill would require banks to put their more risky investments (derivatives) into a separate entity that wouldn't qualify for a taxpayer bailout if it failed.
This would require the banks to raise millions to cover the risks - and seriously reduce their profits. No wonder 716 is No. 1 on Wall Street's hit list. Sen. Blanche Lincoln, D-Ark., sponsored this amendment and used it to win in a Democratic primary last week. If she'd lost, Democrats surely would have dropped the language. Lincoln won and the amendment is picking up support, including endorsements from two regional Fed chairmen.
* Both the House and Senate bills would create a Consumer Financial Protection Agency.
The House bill would make it fully independent. The Senate version would make it part of the Federal Reserve. Either way can be made to work as long as the agency has its own budget, with its rulings not subject to veto by other agencies, as well as a leader appointed by the president. Special interests, especially car dealers, must not be able to get a "carve out" exempting them from oversight.
Unlike most conference committee deliberations, these are being televised on C-SPAN. (They resume today at 11.) The actual deals will be made in private, of course, but at least the members of the committee will have to vote on them in public.