Politics

On financial reform, House Republicans fear sell out from Senate GOP

Jonathan Strong Contributor
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Sen. Bob Corker of Tennessee says he “want[s] to see” financial reform legislation pass the Senate. But his fellow Republicans in the House fear exactly that.

Publicly, House GOP leaders says they’re staying out of the Senate’s affairs. House Minority Leader John Boehner “is the leader of Republicans in the House. He leaves the Senate to [Minority Leader] McConnell,” Boehner’s spokesman, Michael Steel, told the Daily Caller.

But privately, House Republican aides say the stakes are high – politically and for the country — and that House Republicans have been quietly trying to stop Corker, McConnell and Sen. Richard Shelby, who leads the GOP in the pivotal banking committee, from moving forward as they flirt with a bipartisan deal.

At the House GOP’s weekly conference meeting last week, one aide said Boehner “railed” on the Senate GOP for its discussions with Democrats. Boehner’s spokesman, Steel, said that’s not true – Boehner “definitely railed against the bill. But not” against Senate Republicans.

In other words, he didn’t blast them – just the bill they’re actively considering supporting.

Two key aides say the political calculus for House Republicans is that if financial reform gets, say, 80 votes in the Senate, you can expect a large number of Republican defections in the House, too, when the bill comes back for a final vote.

In the Senate, discussions took a turn south this weekend when Corker said Republicans are still prepared to block the bill, not having reached an agreement with Democrats.

The legislation faces a key procedural test vote Monday night, which could reveal whether any Republicans are ready to actually support the bill as it is, rather than professing optimism about supporting what it might become.

One House GOP aide, who works for a conservative member of the financial services committee, says he doesn’t expect a deal to come of the talks.

While Corker has most loudly professed his desire for a bipartisan deal on the bill, the aide said Corker “likes to get his name in the paper” and won’t let himself be “outflanked to his right” by Shelby or the other Republicans.

Shelby has thus far been a “goal post” for the right on the legislation, holding firm, the aide said. But House Republicans are warily watching him more closely than Corker, because Shelby, who switched to the Republican party in 1994, has long flirted with liberal policies in the name of consumer protection.

For instance, Shelby led Senate Republicans in striking a deal with banking committee Chairman Chris Dodd opposed by the most conservative House Republicans. Shelby’s deal ended up taking the bill further than a House-passed version of the bill.

For the credit card bill, about 70 House Republicans voted no. That was before Obamacare sapped much of the Democrats’ political capital. Now that Democrats are facing possible landslide electoral losses, Republicans are both less wary of opposing them and mindful they could get a much better deal after November. When Democrats passed the House financial reform bill in December, every Republican voted no.

Even while steadfastly opposed to the bill, conservative Republicans in the House say there is common ground for a deal. They just don’t expect Democrats to go there.

Despite the political attacks about whether the argument is a poll-tested talking point, aides say they are deeply worried the bill that could encourage further bailouts. They want to put more controls on the new bureaucratic agency Democrats want so it doesn’t turn into another Environmental Protection Agency, which they see as agitating for ever more red tape. And on “derivatives,” a complex financial instrument, both sides want new government controls, but Democrats could easily overreach.

While discussions about the bill have been ongoing for months, the situation is far more urgent now because once the bill hits the Senate floor, talks become far more dynamic. Like sand, allegiances can shift quickly.