With the Obama administration and the Democratic leadership declaring historic victory on health care reform, the next big item could be fixing the troubled banking system.
It could make the battle over health care look like a walk in the park. The financial industry, Republicans and Blue Dog Democrats are all lined up to kill or weaken it.
They’ve already succeeded in getting Sen. Chris Dodd to weaken his reform proposal, which the Senate Banking Committee passed Monday on a 13 to 10 party line vote. Here’s the Atlantic’s take, including what Dodd had to say Monday.
Getting Dodd to soften his stance probably wasn’t that tough. He’s traditionally a staunch ally of Wall Street and only took a strong stance when it looked he was going to have to face angry voters. But then Dodd dropped out of the race, became a lame duck and returned to form as the financial industry’s best friend.
For example, Dodd has abandoned support for a strong independent financial consumer protection agency, instead placing it within the Federal Reserve, which has ignored consumers in the past even though it had authority to protect them. In National Journal’s Clive Crook’s assessment, Dodd’s proposal will enshrine “too big to fail” banks in law rather than fix the problem.
Now the full Senate will consider it. Here’s Barry Ritholtz’s analysis of what should be on the final bill.