Sen. John McCain’s work with Sen. Elizabeth Warren to revive the Glass-Steagall financial reform law is just the latest attempt in the Arizona Republican’s years-long battle to bring back the regulatory law.
Progressive Massachusetts Democrat Warren, a Banking Committee member and leading crusader for financial reform, introduced a bill Thursday to revive Glass-Steagall, the law passed in 1933 that separated commercial banking and investment banking. Glass-Steagall was repealed in 1999 by President Clinton, but progressives and some Republicans favor its reinstatement.
Warren’s bill would separate banks that provide checking and savings accounts from investment banking firms and hedge funds in an attempt to safeguard against another financial crisis. Conservatives are already lining up to oppose the bill.
“If Elizabeth Warren is leading the way on this bill, considering her views on [banking], then it’s probably not going to be a bill that conservatives will support in any way,” Richard Manning of Americans for Limited Government told The Daily Caller.
Warren’s bill is co-sponsored by McCain, Democratic Washington Sen. Maria Cantwell, and freshman Sen. Angus King, a left-leaning first-year independent from Maine who caucuses with the Democratic Party.
“Sens Warren and McCain introduce a bill to resurrect Glass-Steagall. Applause,” tweeted former Clinton administration Labor Secretary Robert Reich, a Berkeley professor and member of President Obama’s economic transition advisory board in 2008.
But though Warren is leading the charge to bring back Glass-Steagall, she and her fellow freshman King are merely shiny new additions to an effort that has been underway for years by McCain and Cantwell.
McCain and Cantwell, described as an “odd couple,” joined in 2009 to support a re-introduction of Glass-Steagall. The bipartisan pair eventually introduced a Glass-Steagall revival in the Senate in March 2010 that was initially co-sponsored by five House Democrats.
“Now, I know the 2008 financial crisis did not happen solely because the wall of Glass-Steagall was knocked down. But, I strongly believe the repeal of these core provisions have played a significant role in changing the banking system in negative ways that contributed greatly to the 2008 financial crisis and I believe this culture of risky behavior is still in play,” McCain said in remarks on the Senate floor Thursday.
“The 21st Century Glass-Steagall Act may not end ‘Too Big to Fail’ on its own, but it moves the large financial institutions in the right direction by making them smaller and safer. This bill would rebuild the wall between commercial and investment banking that was successful for over 60 years and reduce risk for the American taxpayer,” McCain said.
McCain has recently faced harsh criticism from the right for his left-leaning policy views and statements. His sharp-tongued characterization of conservative Republican senators Rand Paul and Ted Cruz and libertarian-leaning congressman Justin Amash set off a social media firestorm, with conservative commentators calling for the 76-year-old McCain to retire.