It’s funny how fast the Beltway consensus can change. A few months ago, health care reform was dead. Then it got undead. Financial regulatory reform was supposedly dead too, but now that Republicans have supposedly learned that pure obstructionism is a losing play, it’s being treated as a done deal. Democrats like Obama’s economic adviser Larry Summers and Senate Banking Committee chairman Christopher Dodd are saying it’s going to pass, perhaps as early as next month. So are key Republicans like Senator Judd Gregg of New Hampshire, who recently put the odds of passage at “100%.”
Let’s just say that seems high.
It is conceivable that a new wave of bipartisan cooperation will sweep financial reform into law — even though the House version passed last year with zero Republican votes; even though Dodd’s version passed through committee last month with, yes, zero Republican votes; even though Big Finance is blasting boatloads of money around Washington to block reform. It’s at least plausible, as I’ve written, that if President Obama succeeds at framing reform as a stark banks-vs.-people choice, and enough Republicans get nervous about the political price they might pay for siding with Wall Street, a deal could be cut to get the issue out of the news before November. And the most recent behavior of Republicans — their hopeful rhetoric about reform, their sudden openness to concessions on the consumer financial-protection agency they’ve been bashing for months — is consistent with a desire to cave rather than fight.