Go Nuclear Harry Reid!

Richard CordrayHarry Reid really needs to go nuclear. Mike Konczal has an excellent article over at Wonk Blog about what is going on with the nomination of Richard Cordray to head Consumer Financial Protection Bureau (CFPB). Just look at that face! How could anyone say no to him? Well, as Konczal explained, it isn’t about him. The Republicans don’t want anyone to head the CFPB. They don’t like the new bureau and they are going to hold their breath until they get their way. Or the political equivalent to it.

This is effectively nullification. And this is brand new. Well, Obama new. The Senate is using its right to “advise and consent” on nominations to strike down laws it simply doesn’t like. This is a very bad situation. Last February, 43 Republican Senators signed a letter saying they would not approve anyone to head the CFPB unless three of their demands were met. Does that sound like anyone to you? “We will kill all the hostages unless our demands are met!”

So what are their demands? First, they want the CFPB to be run by a bipartisan committee to effectively hobble it. Second, they want to be able to budget the CFPB year by year so that whenever they have the power, they can effectively destroy it. And third, they want a “safety-and-soundness check for the prudential regulators.” As Konczal noted:

It’s not clear why this is important to Republicans. A cynical reading would be that since profit-making is one way to achieve the safety and soundness of banks that the CFPB regulates, anything that might get in the way of banks ripping off their customers would hurt safety and soundness. And, indeed, big fines and settlements for illegal practices do, in theory, mean more capital that they’ll have to raise, or lower earnings for shareholders.

Get that? It would basically say as long as banks are making money the government has no reason to punish them.

This is all reminding me of the Republican reaction to every other issue where they had no real leverage. Remember during the Obamacare negotiations, the Republicans would have no part of it. It was all or nothing. (In as much as the Democrats ever offer nothing!) And they got nothing. So after it passed they’ve tried to destroy it. First in the courts and now in the implementation. Here it’s the same thing. The Republicans lost their battle against the CFPB. And now they want a do over. As Konczal concluded:

Republicans had a chance to contribute to the Dodd-Frank law; chances are they could have gotten major changes for just a few Republican votes. Instead they went all-in, hoping to prevent a more liberal bill from passing at all. They failed, and then they failed to set up 2013 as a year in which repealing Dodd-Frank would be possible. The nomination process is meant to vet candidates, not give losing parties a second bite at an apple they rejected the first time. Here’s hoping Reid can make sure it stays that way.

Indeed. For this reason and so many more, Harry Reid needs to go nuclear.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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