With health-care reform passed, the Obama Administration is gearing up to tackle the next item on its agenda: financial reform. The president is expected to push Congress in the coming weeks, hoping to have some progress to show for by the fall when the midterm elections are set to ravish the country’s political landscape.
Treasury Secretary Timothy Geithner spoke on the necessity of financial reform two weeks ago, warning that, without further regulation, “risk will build up again where it is not effectively constrained, and future governments will have to act again to socialize private losses in the interest of preventing catastrophic damage.” It never occurred to him, evidently, that government hasn’t to intervene in the nation’s economy but politically, bashing Wall Street is a good move.
The left is already rallying around reform, with Robert Kuttner of The American Prospect for instance threatening that, “The next generation of bubbles is already incubating.” Fortunately, “It’s not a difficult vote to tighten restrictions on predator banks,” for most people are convinced that they caused the recession. No matter that government intervention is actually to blame; the Democrats can get the people on their side this time, so financial reform will move forward.
Simon Johnson, writing for The Huffington Post, agrees and adds that both economically and politically, it makes sense to impose “binding constraints on our largest banks.” According to Johnson, it should be part of the federal government’s job description to determine which banks are “too big” so that it can forcefully downsize them.
Politico reports that the administration expects to pass new rules for Wall Street by September. Throughout the protracted negotiations over the health-care bill, the president was criticized for giving congressional leaders too much leeway and too little direction. “No more,” notes the website.
With the momentum from the most complex domestic bill to pass Congress in 45 years, Obama now will push Congress to close campaign finance loopholes opened by the Citizens United case, adopt his overhaul of the No Child Left Behind education bill and perhaps even tackle a clean energy bill.
Whether Democrats on the Hill will play ball remains to be seen though. After all, it took well over a year for health-care reform to pass in spite of repeated pleas from the White House. The president’s demand to see full-fledged financial reform on his desk perhaps even before Memorial Day is raising eyebrows in the halls of power of Washington. Some Democrats have privately complained that setting arbitrary deadlines didn’t work for health reform, so why would it work this time?
The frustration reveals a deeper divide between White House and Congress over how best to approach the midterm elections. Should they push for an aggressive Wall Street reform bill that will dare Republicans to filibuster or seek bipartisan support in compromise?
It is common to blame the Obama Administration for pursuing a “radical left-wing agenda” these days and while that may be true for health care, on energy and foreign policy as well as immigration reform, the president, so far, has been pragmatic and a centrist. Nonetheless, Republicans criticize even on these accounts, trying to portray Obama as a weak and ineffective leader.
As tempting as it may be to move to the center, there is gain to be found in standing on principle. Part of voters’ dissatisfaction is not with the Democrats’ agenda per se; it’s with their apparent inability to execute it properly and within due time. The president’s irrepressible quest for consensus is in fact part of his problem. To adopt a more moderate stance and concede to Republican demands in spite of enjoying overwhelming majorities in both chambers of Congress would be an unprecedented sign of defeat that won’t ever translate into electoral victory.