Wall Street Doesn’t Lose
Last week the House of Representatives failed to muster the two-thirds vote necessary to pass H.R. 37, a bill that weakens Dodd-Frank and the SEC. Some democrats proclaimed victory. It was a short-lived win. In less than a week, the bill is back on the House floor and will pass by an overwhelming margin some time today. As I wrote last week, (see, “The Financial Services Industry Takes Formal Control of Congress [January 8, 2015],” this bill is exactly the opposite of its description: “to make technical corrections to the Dodd-Frank Wall Street Reform and Consumer Protection Act, to enhance the ability of small and emerging growth companies to access capital through public and private markets, to reduce regulatory burdens, and for other purposes.”
In case you missed it, the House has also passed a measure subjecting government regulation to stricter cost-benefit analysis and broader judicial review. If enacted the bill would make it much tougher for the Consumer Finance Protection Bureau, not to mention the EPA and SEC, to do their jobs. While the President has indicated that he will veto these bills, I am expecting Wall Street to eventually package these measures so that he’ll be forced to sign some version of them.
The Obama administration has its owns cozy relationships with Wall Street that it is intent on preserving. After a wave of opposition from progressive Democrats, most notably Senator Elizabeth Warren, Antonio Weiss withdrew his nomination to be undersecretary for domestic affairs at the U.S. Treasury. I wrote about the nomination in my Sunday column in the News & Observer. Apparently the White House recognized that it would take months to pursue the nomination, so they asked Mr. Weiss to withdraw his nomination. However, Mr. Weiss is still coming to Washington. He will be a special assistant to Treasury Secretary Lew.
Wall Street is persistent and prepared to buy whatever it needs. That strategy works in Washington.