This was a self-selected Prospect article critique for my application to their fellowship program. See this post for more information.
They probably won’t vote for it. But by including GOP ideas in the finance bill, Democrats can make it difficult for Republicans to effectively campaign against it.
Tim Fernholz believes the best strategy for Democrats to win the fight over re-regulating Wall Street is to learn from the lessons of the health care reform. The question is, what exactly are the takeaways from that successful legislative battle?
The first lesson, Fernholz says, is to be assertive. In the wake of Massachusetts Republican Scott Brown’s election to the Senate, congressional Democrats realized they would have to take a strong, cohesive stance to enact health care reform. And with that decision made, they rallied together and passed a controversial bill. Fernholz notes that their assertiveness has boosted both the popularity of their health care reform overhaul and, if the breathless reporting of POLITICO is to be believed, the party’s midterm reelection chances.
Fernholz’s other lesson is that Republicans cannot be counted on to cooperate. “If Democrats want to replicate their health-care success,” Fernholz suggests, “the best strategy for strong reform is to bring a tough bill to the floor and dare Republicans to filibuster it.” But Republicans don’t need too much taunting to call a filibuster. Indeed, with little substantive provocation, the minority party has set a new record for obstinacy this congressional session. And, as Fernholz notes, this is a strategy Republicans have doubled down on in the wake of their crushing health care defeat.
By focusing primarily on the assertiveness Democrats showed at the last moment and the stonewalling of the GOP, Fernholz overlooks perhaps the most important lesson from the battle for health care: the importance of co-opting the best Republican ideas. With so many reasonable Republican proposals worked into the health care reform bill—remember, the Cadillac tax was originally proposed by the McCain campaign—the massive effort is something only the most boneheaded blowhard could hate in its entirety. Even Sen. Brown, who was elected in large part on a platform of opposition to what he calls the “federal government takeover of health-care,” has been careful not to join those on the Tea Party fringe calling for the bill’s complete repeal. In a Boston Globe op-ed written shortly after the passage of the Affordable Health Care for America Act, Brown proposed only to “replace the worst parts of this legislation.”
Including a few reasonable ideas from the right in the financial reform bill might not be satisfying for many of the lefty activists who fought first against the Democratic establishment and then the right wing noise machine to secure Obama’s presidential victory. But as long as the GOP keeps striving to reduce its role in Congress to that of an angry protester on C-SPAN, Democrats should oblige, whenever possible. Running on a platform of “no” can be rather awkward when it is your own ideas that you are now forced to oppose. Although health care reform may not be as sweeping or comprehensive as some activists might have hoped, it has set up a framework for future reforms and given GOP presidential hopeful Mitt Romney another albatross to wear around his neck in his bid for the 2012 Republican nomination.
Any reform of Wall Street must necessarily touch on tax law, and it is here that Republicans have some of the best ideas worth poaching. One example is New Hampshire Sen. Judd Gregg’s desire to strengthen the government’s ability to liquidate failing banks. After he gave a speech at a US Chamber of Commerce summit in Washington last week, Gregg spoke to reporters about strengthening Sen. Chris Dodd’s financial reform bill. “The core of the problem is whether or not you have conservation, or whether you have resolution,” the Huffington Post reported. “In other words… if the company should go into resolution, it should be resolved. It should not survive.” Even including bad ideas that do not gut the essence of the bill can be useful for selling reform to the public as bipartisan in substance, if not in the final vote tally.
Furthermore, if Dems interpret their health care reform victory to be an endorsement of daring Republicans to oppose them, they risk validating the perception—at least in the eyes of the Fox News-watching public—that now financial reform is being “rammed down our throats” by Nancy Pelosi and Harry Reid. Continuing to coax Republicans with kind words and palatable concessions allows the President to contend that he is still trying to achieve that cherished dream of bipartisanship. As Fernholz observes, that is clearly unlikely to happen, but it’s still important for Democrats to be able to say they tried. And if, by some miracle, some GOP legislators do happen to break rank, that’s all for the better.
Fernholtz is exactly right when he says “this Congress may be the last one capable of fixing the financial system for a long time.” Which is why it is so important to make sure that congressional leaders succeed in getting some framework legislation on Obama’s desk before the midterms, when Dems are almost certain to lose some valuable seats. Political points scored during the financial reform debate and any boost from passing the health care bill are unlikely to offset the drag of an unemployment rate that will still be hovering near 10 percent come November.
Like the health care bill, financial reform is more likely to lay the groundwork for future legislation than a sweeping legislative overhaul. To pass it, Democrats will need to show resolve and likely have to pass it on a party line vote. But like in the health care debate, that should not stop party leaders from implementing the best—or the most palatable—Republican measures. If Democrats don’t heed all the lessons from the health-care battle, the financial reform bill will likely fail to pass, leaving consumers and banking regulators without the new regulatory framework they desperately need to begin reigning in Wall Street.
Photo credit: nromagna (via Flickr)