In this case, however, it’s lobbyists that are spilling all over the landscape as the House and Senate attempt to merge their two visions of financial reform.
They’re trying desperately to influence the outcome of the conference in which House and Senate negotiators have been engaged; this to craft the exact language of the reconciled legislation.
There’s an additional element of drama hovering over the events as eight House members, including one of the most vocal of the Republican negotiators, face ethics questions related to this very bill.
The best part: if you’re enough of a political geek, you can actually watch the events unfold, unedited and unfiltered, from the comfort of your very own computer.
So far, it’s been amazing political theater, and if you follow along I’ll tell you how you can get in on the fun, too.
Two cows are standing in a field. One says to the other, “What do you think about this mad cow disease?”
“What do I care?” says the other, “I’m a helicopter.”
--From “Plato and a Platypus Walk Into a Bar”, Thomas Cathcart and Daniel Klein
So the way today’s story starts is with a bit of “Advanced Schoolhouse Rock”: it is not unusual for a Bill to advance from the House to the Senate, where the Senate passes an amended, and therefore different, version of the same Bill. The two versions have to be “reconciled”, after which both sides agree to the final language that will become law.
The House-Senate Conference Committee on financial regulation has been meeting to reconcile the Restoring American Financial Stability Act of 2010; last week’s first three sessions having already been presented, in all their geeky glory, thanks to the good graces of the Members of Congress involved and C-Span.
The exact mechanism of one of these conferences goes something like this:
A single large piece of legislation is not unlike a book, in that there are Chapters, which are organized into Titles, which, together, become an Act.
Conferees work through one Title at a time, beginning with an “offer” presented by either the House or Senate conferees. The Members on the other side debate the offer, amend it as they see fit, and present a “counteroffer” to the other side.
At some point both sides find the language acceptable, and one side “accedes” to the other’s offer. From those offers and counteroffers a “conference report” is prepared; this becomes the legislation’s final language that is sent back to the House and Senate for final votes.
A conference report cannot be amended, by either the House or the Senate. If a filibuster is threatened in the Senate, a “cloture motion” will end debate, allowing a final (simple majority) vote to immediately take place. Passing a cloture motion requires 60 votes. (For the super geeky, a Senator’s “motion to proceed” to voting on a conference report cannot be filibustered.)
Assuming things work out, the now “enrolled” measure will be sent to the President for the signature that changes a Bill to a Law.
The negotiation process has lasted three days now, with both sides agreeing to abolish the Office of Thrift Supervision and give the authority to the Comptroller of the Currency (that was in Title III), establish rules over hedge funds (Title IV), develop new insurance regulations (Title V), create all kinds of new rules for credit rating agencies, the SEC, those who advise on and issue municipal bonds, and those who set executive compensation levels (Title IX), and to address issues related to the Federal Reserve (Title XI).
And it’s this process of finding agreement that is the real “sausage-making” part of the deal, with Republicans such as Texas’ Jeb Hensarling trying to either amend the thing to death or talk the opposition into some kind of compliant stupor.
Unfortunately for the Republicans, House Committee on Financial Services Chair Barney Frank (Surprisingly Average Fundraising For His Position-MA), who is also the lead member of the House delegation to the Conference, has been driving this harder than a Desert Dueler in second place in the Baja 1000—and it has been a joy to watch. (His Senate counterpart is Connecticut’s Chris Dodd.)
Along with Hensarling, Frank duels with Ranking Member Scott Garrett (Jacked Up Real Good-NJ), and the resulting reality TV is funny, infuriating, incredibly frustrating...and incredibly important.
Which brings us to today.
At noon Eastern, the Conference Committee meets again, and the House offer includes Title X language, which is the consumer protection part of the legislation.
As that offer stands right now, the Senate’s version of a new Consumer Financial Protection Bureau would be in this Conference Report, along with rules protecting the States who regulate this stuff more closely than the Feds, new rules on debit card fees, and rules that regulate all sorts of currently unregulated financial activities.
Excepted from those rules would be car dealers and pawnbrokers.
More about that later.
Title XIV, relating to mortgage lending, is also on the agenda. Included is a provision providing emergency mortgage relief for unemployed homeowners.
Finally, rules relating to “risk retention” (how much risk can a regulated institution’s assets represent?) will be addressed.
The rest of the week promises even more fireworks, as the question of how derivative instruments are to be regulated—or not—will be taken up by the group.
Which brings us to car dealers.
We now know that eight members of the House, including at least two who are part of this Conference Committee (Republican Jeb Hensarling and Democrat Mel Watt of North Carolina) are being investigated by the Office of Congressional Ethics for suspiciously timed fundraising related to the very bill we’ve been discussing here.
Watt held a fundraiser on December 9th of last year, and just a matter of a day or so later his proposal to toughen the regulation of those car dealers...was mysteriously withdrawn. Watt himself has no comment, except to say that he is innocent in every way...which seems like a comment, but who am I to be all persnickety about it?
So how about that?
We have a big-time debate over the financial future of this country being played out right in the open for you to watch, with all the dirt and drama of a telanovela whose plot involves trillions of dollars of wealth and divas as far as the eye can see.
There’s corruption, and people who think the fix is in—and people who know that, whatever they do, they’re gonna lose; all of it should be required viewing for anyone who isn’t quite sure why government matters, and even more so, for those who do.
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