A Dodd-Frank Retreat Deserves a Veto
Only six congressional Republicans crossed the aisle to support reform one year ago. The GOP is still working to thwart change.
By TIMOTHY GEITHNER
WSJ
Two and a half years ago, with our country on the edge of a second Great Depression, we met with the president in the White House to discuss whether to move in those first months of his administration to legislate fundamental reform of the financial system—or wait until we had put the crisis behind us.
The president made two key decisions. First, he chose to move forward, knowing that the forces of opposition to reform would grow stronger as the memory of the crisis receded. And second, he asked us to write draft legislation rather than propose broad principles. The president did not want the new rules to end up being written by those who brought us to the edge of catastrophic financial failure.
In June 2009, the administration submitted to Congress a proposal that would fundamentally reshape the financial system. It was designed to lay a stronger foundation for innovation, economic growth and job creation with robust protections for consumers and investors and tough constraints on risk-taking. We drew on ideas and insights from reform-oriented thinkers across the political spectrum.
As the Democratic Chairmen of the Senate Banking Committee and the House Financial Services Committee Chris Dodd and Barney Frank initiated negotiations on the bill, we expected backing from both sides of the aisle. Even after that proved impossible in the House, where reform passed initially without a single Republican vote, we remained hopeful that common-sense efforts would garner bipartisan backing. But senior Republican negotiators on the Senate Banking Committee were unable or unwilling to define a core set of reforms they could support. Ultimately, Dodd-Frank passed with only six Republican votes.
(More here.)
By TIMOTHY GEITHNER
WSJ
Two and a half years ago, with our country on the edge of a second Great Depression, we met with the president in the White House to discuss whether to move in those first months of his administration to legislate fundamental reform of the financial system—or wait until we had put the crisis behind us.
The president made two key decisions. First, he chose to move forward, knowing that the forces of opposition to reform would grow stronger as the memory of the crisis receded. And second, he asked us to write draft legislation rather than propose broad principles. The president did not want the new rules to end up being written by those who brought us to the edge of catastrophic financial failure.
In June 2009, the administration submitted to Congress a proposal that would fundamentally reshape the financial system. It was designed to lay a stronger foundation for innovation, economic growth and job creation with robust protections for consumers and investors and tough constraints on risk-taking. We drew on ideas and insights from reform-oriented thinkers across the political spectrum.
As the Democratic Chairmen of the Senate Banking Committee and the House Financial Services Committee Chris Dodd and Barney Frank initiated negotiations on the bill, we expected backing from both sides of the aisle. Even after that proved impossible in the House, where reform passed initially without a single Republican vote, we remained hopeful that common-sense efforts would garner bipartisan backing. But senior Republican negotiators on the Senate Banking Committee were unable or unwilling to define a core set of reforms they could support. Ultimately, Dodd-Frank passed with only six Republican votes.
(More here.)
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