Imagine a Senate where Ted Kaufman's no-nonsense fin-services speech is the norm, and where Joe Sestak could take his stands
Tomorrow night I'm going to toss in my two cents' worth of lamentations about the pathetic state of the U.S. Senate, from what I think is a slightly different angle. Maybe I should leave the outcome in suspense, but I don't want to mislead anyone into thinking I'm going to arrive at a conclusion any less hopeless than everybody else.
However, for tonight I want us to indulge in the luxury of a harmless little fantasy.
(1) A TEMPORARY SENATOR TAKES ON THE MEGABANKS
Ted Kaufman, of course, is only a temporary U.S. senator, having been appointed to fill the Delaware seat vacated by Vice President Joe Biden until a new senator is elected this November. (The general speculation, you'll recall, was that Kaufman, Biden's Senate chief of staff for almost a decade, would be a place-holder for the veep's son, state AG Beau Biden. But Beau took a good look at this year's election climate and decided to sit the race out.)
Yesterday the senator delivered a speech, Ending Too Big to Fail, whose text left a lot of people gasping in disbelief, going beyond the question of where a new consumer regulatory commission should be placed to the proposition that no regulatory commission could deal effectively with the megabanks that fall into the "too big to fail" category, and that bringing them under some basic regulatory control is crucial to our economic well-being.
Here's just the start of the speech:
[T]here is little in the current legislation that would change the behavior or reduce the size of the nation's six mega-banks. Instead, this bill invests its hopes in two ideas: First, that chastened regulators (who failed miserably in preventing the crisis) will this time control these mega-banks more effectively – today, tomorrow and decades into the future. And, second, that a resolution authority designed to shield the taxpayers from yet another bail-out will be able successfully to unwind incredibly complex mega-banks engaged across the globe.
In the midst of the Great Depression, Congress built laws that maintained financial stability for nearly 60 years. Through the Glass-Steagall Act, which included the establishment of the Federal Deposit Insurance Corporation, Congress separated investment banks, which were free to engage in risky behavior, and commercial banks, whose deposits were federally insured. As I described in a previous speech, during the last 30 years, that division was methodically disassembled by a deregulatory mindset, leading to the reckless Wall Street behavior that caused the greatest financial crisis and economic downturn since the 1930s.
What walls will this bill erect? None. On what bedrock does this bill rest if the nation is to hope for another 60 years of financial stability? Better and smarter regulators, plain and simple. No great statutory walls, no hard divisions or limits on regulatory discretion, only a reshuffled set of regulatory powers that already exist. Remember, it was the regulators who abdicated their responsibilities and helped cause the crisis.
Thus far, on the central aspect of “too big to fail,” financial reform consists of giving regulators the authority to supervise institutions that are too big, and then the ability to resolve those banks when they are about to fail. Upon closer examination, however, the former is virtually the same authority regulators currently possess, while the latter – an orderly resolution of a failing mega-bank – is an illusion. Unless Congress breaks up the mega-banks that are "too big to fail," the American taxpayer will remain the ultimate guarantor in an almost certain-to-repeat-itself cycle of boom-bust-and-bailout.
The senator went on to discuss in detail the problem of the "too big to fail" banks and the kind of congressionally mandated control he thinks needs to be included in serious financial reform legislation to deal with it, with no pussyfooting around the issues or trying to make nice to institutions that have a lot of political clout -- and throw around a lot of political cash.
Chris Dodd has many outstanding personal and political qualities. But among his liabilities is a worrying closeness to the financial-services industry which made a lot of people uneasy about his role as the Senate's point man on any reform legislation, especially when the Republicans have made it clear that they will fight tooth and nail against any kind of regulatory reform, not just as part of their "Just Say No" strategy but as a matter of faith. As Howie put it earlier this week, "For Conservatives The Best Bank Regulation Is No Regulation."
There seemed some possible grounds for hope when Dodd announced that he won't run for reelection this year. Maybe now he would feel free to legislate free of electoral "pragmatism." Maybe now he would want this bill to be his congressional "legacy."
Sadly, it doesn't seem to have worked out that way, and in retrospect it's not hard to see why. After all, the senator will still have a family and a lifestyle to support after he leaves the Senate. It appears that retirement is not a time when you suddenly begin biting hands that have been feeding you for a long, long time.
Still, just for tonight, close your eyes and imagine that the speech Ted Kaufman gave yesterday wasn't given by someone who was just passing through the Senate. No, no, imagine harder. I know we here live in that dreary "reality-based" world, but just for this brief moment, let it go.
(2) A SENATE CANDIDATE ESTABLISHES HIS VOICE
As I've mentioned before, Rep. Joe Sestak's insurgent campaign to wrest the Pennsylvania Democratic Senate nomination away from Dem-for-a-day Arlen Specter is on fire with no-nonsense, serious discussion of a vast array of crucial issues, staking out forceful positions that I'd be only too happy to have held by my senator. Of course he has staff to work on these position papers, but they certainly bear the candidate's stamp, and they certainly represent a commitment to run the kind of no-holds-barred campaign-on-the-issues we enlightened folk always claim we're so eager to see.
Yesterday I plucked out three Sestak campaign e-mails from my e-mailbox, and I've added a fourth from this morning. I'm just going to reprint them, so you can read as much or as little as you like. I'm as impressed by how they say what they say as I am by what they say. I get a real sense of a voice emerging here.
Subject: SUNDAY 1:15: Sestak to hold Health Care Town Hall in PhiladelphiaSUNDAY 1:15 PM: Joe Sestak to Hold Health Care Town Hall Following Historic Vote in Congress
Continues Dialogue With Voters On Vital Issue for Working Families
Democratic U.S. Senate candidate Congressman Joe Sestak will hold a town hall meeting this Sunday at 1:15 at the Baptist Worship Center in Philadelphia to have an open discussion about health care reform.
Just as Joe was the first member of Congress to hold a health care town hall during last year's August congressional recess, he plans to be the first member to convene a town hall after the historic votes in the House and the expected vote this week in the Senate. Joe believes it is part of an elected official's duty as a public servant to explain his positions and provide people the opportunity to have their questions answered.
"The voters didn't send us to Washington to duck the tough issues -- they sent us to take them head-on, both before and after the votes are cast. We must enact the right policies for America's working families and stand accountable for our votes before the American people. Americans deserve transparency in their public servants, and I will continue to explain why I support this health care reform effort and how it will benefit Pennsylvania's working families. This is the right thing to do. I'm proud of our work, and I look forward to standing accountable for it before the people of Pennsylvania."
WHO: Democratic U.S. Senate candidate Joe Sestak
WHAT: Town Hall on Health Care Reform
WHEN: Sunday, March 28, 2010 at 1:15 PM
WHERE: Baptist Worship Center, 4790 James Street, Philadelphia, PA 19137
Subject: Sestak: Time to End Workplace DiscriminationSestak: Time to End Workplace Discrimination
Urges Committee to Move on Legislation to Protect LGBT Employees
Democratic U.S. Senate candidate Congressman Joe Sestak wrote today to House Education and Labor Committee Chairman George Miller urging him to bring the Employee Non-Discrimination Act (ENDA) to a vote during the remaining months of this session of Congress. ENDA -- of which Joe is an original co-sponsor -- would protect Americans from being fired or discriminated against in the workplace because of real or perceived sexual orientation or gender identity. Currently, it is legal in 29 states to fire workers simply because of who they are. A committee vote on ENDA was set for last November, but was unexpectedly postponed and has not been rescheduled.
"This fundamental piece of civil rights legislation is long overdue. We should not delay this markup any further," Joe wrote. "My position on this issue and my support for the Employment Non-Discrimination Act is borne out of my experience in the military. While commanding men and women in harm's way during my 31 years in the Navy, we knew, because of public surveys, that a certain percentage were lesbian and gay service members. Having seen their dedication, their allegiance, and their sacrifices, how can I -- or anyone -- not say that these individuals deserve equal rights when they return home."
Subject: Sestak Supports START Follow-On TreatyJoe Sestak Supports START Follow-On Treaty
Former Admiral Calls on Senate to Move Swiftly Towards Ratification of Historic Nuclear Weapons Agreement
Democratic U.S. Senate candidate Congressman Joe Sestak responded to today's announcement that the United States has reached an agreement with Russia on a new nuclear arms treaty which will be signed next month in Prague.
"President Obama should be commended for his willingness to engage with other nations who have interests that at times are adverse to ours. His efforts to 'push the reset button' on U.S.-Russian ties after eight years of tension under President Bush, particularly over missile defense, have led directly to today's monumental achievement," said Joe.
On December 5, 2009, the historic Strategic Arms Reduction Treaty (START) expired. START was the largest arms control agreement in history and was ratified after a decade of negotiations with the Soviet Union. This landmark agreement was instrumental to reducing Cold War nuclear tensions and establishing precedents for inspection and verification measures that provide both sides with confidence about the other's arsenal.
Under the terms of the treaty announced today, the United States and Russia will cut by one third their numbers of deployed strategic weapons. The agreement contains stringent verification regimes which, according to Defense Secretary Robert Gates, provide our intelligence community the tools they need to assess Russian compliance with the treaty's terms.
"The goodwill that these arms control measures generate has historically provided both sides with the confidence and political capital to cooperate in a number of other areas. There are a multitude of challenges that require collaboration with our Russian counterparts, such as the pursuit of multilateral sanctions against Iran in the U.N. Security Council. Today's remarkable diplomatic breakthrough demonstrates that we have the ability to reach agreement with Russia on divisive issues and can continue to pursue their cooperation on future initiatives," Joe continued.
The future of this landmark agreement is by no means certain, as it must be ratified by both the United States Senate and Russian Duma. Senator John McCain, a key Republican voice on foreign policy, said this week that there would be no GOP cooperation on anything in Congress because the Obama White House had 'poisoned the well' with its health care effort.
"Although Senator McCain has since walked this statement back, I remain concerned that some may play partisan politics with our national security. Similar recalcitrance prevented ratification of the Comprehensive Test Ban Treaty during the 1990s, which has continued to provide other nations with justification to operate outside the international mainstream on nuclear issues," said Joe.
"Signals from the Senate on this issue in coming weeks may have a direct impact on Russian ratification. Additionally, they will also weigh on the appearance of our commitment to nuclear non-proliferation at this spring's nuclear security summit in Washington, where President Obama will host more than 40 heads of state, and at the Nuclear Non-Proliferation Treaty review conference in New York which will follow," said Joe. "This may have a direct bearing on the willingness of non-nuclear states to continue to operate within the tenets of the Nuclear Non-Proliferation Treaty, and with this in mind, I urge the Senate to move quickly towards ratification of today's treaty."
Joe also supports the Comprehensive Test Ban Treaty and President Obama's stated goal of the eventual eradication of nuclear weapons. In September 2008, he voted against the U.S.-India nuclear deal, which would allow trade of nuclear materials with India, because of his concern that the agreement would exacerbate India's nuclear arms race with Pakistan.
Subject: Sestak Backs Administration's Effort to Prevent ForeclosuresSestak Backs Administration's Effort to Help Americans Avoid Foreclosure 2.25 Million Could Lose their Homes this Year Without Aggressive Action
Democratic U.S. Senate candidate Congressman Joe Sestak released the following statement today following the Obama Administration's plan to implement incentives for principal reduction as a means to decrease the number of foreclosures across the country:
"Since the outset of this housing crisis, I have called for a broad program to help the most vulnerable homeowners - those with homes valued at less than their mortgage," said Joe. "Over a year ago, I introduced H.R. 1356, the Homeownership Vesting Plan, to take similar steps to those the Administration proposed. Similarly, the Homeownership Vesting Plan would have reduced the principal for these 'underwater' homeowners through a new Federal Housing Administration-backed mortgage. It also included incentives for lenders to forgive portions of a mortgage to prevent more foreclosures, which would harm the overall economy. "
Although I hoped that the Administration would have taken this action sooner, this marks an important step forward. Initial estimates suggest that anywhere between 1 million and 1.5 million homeowners could be helped by this program. The program also provides incentives to support lenders who temporarily reduce mortgage payments for unemployed homeowners. Moody's Chief Economist Mark Zandi-- with whom I worked closely to craft the Homeownership Vesting Plan -- projects that approximately 2.25 million homeowners could lose their homes this year in foreclosures or short sales. We must take aggressive actions, such as those outlined by the Administration today, not only to help those Americans with underwater mortgages, but also to prevent the decrease in property values of surrounding homes that result from foreclosure. "
I have repeatedly called for this action because the housing market's stability is the key to our overall economic stability. February's housing numbers have rightly given pause to many policy makers. Without action to incentivize premium reduction, we risk a further decline in the housing market which could pull our economy into a 'double-dip' recession and force even more families into foreclosure. This announcement will bring us a step closer to rebuilding the economic security of Pennsylvania's working families."
And yet, even though there's hardly any sort of case to be made for Senator Specter, unless you measure him against the unimaginably debased standard represented by the likely Republican nominee, Club for Growth quack Pat Toomey, whose surging support in this Year of the Teabaggers caused our Arlen to bolt the GOP in the first place, knowing that he had virtually no chance to win a Republican primary.
So Arlen, self-involved opportunist that he is, isn't as benighted as the politically demented Toomey. Is this really a standard we want to apply to candidates? Whereas Sestak, the onetime admiral, who seems to me to be doing all the things we say we want in a serious candidate, can't seem to be making any headway in the polls.
But once again, this is our night for making believe. Let's pretend that the media covering the Pennsylvania Senate primary suddenly woke up and decided to, you know, cover the news, as opposed to merely reporting the latest political race-track odds. And/or that the Sestak campaign found a way to really make Pennsylvania Democratic primary voters hear what the candidate is saying.
Go on and pamper yourself. Doesn't that feel just a little bit good? Like when you get a massage, you don't expect to feel better permanently. You know that by a day later, maybe even an hour later, you're going to feel crummy again. But you do it anyway (well, no, I don't, but a lot of people seem to), for that brief blessed relief.
It's the weekend. There's plenty of time for reality afterward. I'm prepared to offer you a whole day. (That's the best deal I've got.)