The gumption with which Sen. Bob Corker has broken ranks with his Republican Senate party leadership to collaborate on shaping a bipartisan financial crisis resolution bill qualifies him for a profile in political courage.
No legislative challenge facing Congress is more imperative than preventing a recurrence of the massive bailouts and other desperate measures that barely averted a financial meltdown in the fall of 2008. Legislation aimed at doing so is embodied in a broader bill before the Senate Banking Committee that also seeks to strengthen consumer protection and other financial regulation.
If there is any issue on which you’d think that senators would rise above the partisan strife that has produced near legislative gridlock on so many matters, it is this one. Yet when negotiations between the Banking Committee Chairman, Democratic Sen. Chris Dodd of Connecticut, and its ranking Republican, Sen. Richard Shelby of Alabama, broke down last month, the prospect of another polarized debacle loomed.
“Dodd was getting ready to draft a Democrat-only bill, and the Republicans in response were getting ready to draft a Republican-only bill... and that means a legislative train wreck,” Corker related to an assemblage at the University of Tennessee’s Corporate Governance Center last week.
Before proceeding down that path, however, the veteran Dodd sought out the first-term senator from Tennessee, a relatively junior member of the committee but one who’s earned a reputation as a pragmatist. Dodd and Corker had teamed up last year on efforts to avert a collapse of the automotive industry, and Corker agreed to negotiate with him on financial regulation overhaul.
In doing so, Corker incurred the ire of Shelby, Senate Republican leader Mitch McConnell of Kentucky, and no telling how many other GOP senators whose strategy has seemingly been to just say “no” to the Obama administration and its Democrat-led legislative agenda in hopes that stultifying opposition will lead to Republican gains in this fall’s Congressional elections.
Corker wouldn’t characterize things that way, of course. But he has acknowledged that going it alone has placed him in an “awkward position.” When asked how so, he drew laughs from the assemblage with his response: “It’s only awkward if you like sitting with somebody else at lunch.”
Corker’s goal is to get a bill that will command broad, bipartisan support; and drawing upon his experiences as a highly successful businessman, he believes he has the attributes to do so. “Whenever you negotiate a business deal, you’ve got to hang tough, and you’ve got to want to get to yes.” Without pointing a finger directly at any of his Republican colleagues, Corker added, “A lot of it has to do with whether you want to get to yes or to no.” And he went on to say, “What we really need to do in this country is focus on middle-of-the-road, centrist policies. That’s the way to create bipartisanship.”
One reason Dodd turned to Corker when he did was Republican Scott Brown’s surprise victory in Massachusetts’ special election in January to fill the senate seat long held by the late Ted Kennedy; this deprived the Democrats of the 60-vote majority needed for most legislation under the Senate’s dubious supermajority rules. Corker voices hope that this election will serve as a “wake-up call” for the Obama administration to “put forward some center-of-the-road policies that will bring us together and allow us to work in a bipartisan way.”
As it happens, Corker had already been collaborating for several months with Democratic Sen. Mark Warner of Virginia on key provisions of the bill dealing with the failure of large financial institutions. And he said, “I think we’ve come up with something that Democrats and Republicans can agree with,” providing an “orderly mechanism” for dealing with such failures. “And the word orderly is very important because a highly disruptive, disorderly failure of some of our large financial institutions is a disaster for our country.”
The mechanism would put an end to government bailouts and to the notion that an institution is “too big to fail.” It would involve some bankruptcy law changes and draw upon ways in which the Federal Deposit Insurance Corp. disposes of failing banks while protecting their depositors. But Corker emphasized that “The default provision is bankruptcy,” and “When a large institution fails, it actually fails... and ought to go out of business.”
The stickiest part of his negotiations with Dodd, as Corker sees it, are the bill’s consumer-protection provisions. Obama has recommended, and the House of Representatives has approved, creation of a new Consumer Protection Agency with extensive rule-making authority. While Corker believes more consumer protection is needed against unscrupulous lending practices, he is “absolutely opposed to a freestanding Consumer Protection Agency with unlimited rule-making authority where a financial institution has the master of traditional regulation coming in on the one hand and the master of consumer protection coming in on the other.” But Corker believes this can be avoided by making bank regulators responsible for both.
If the tenacious Corker succeeds in getting a bipartisan financial regulation reform bill through the Senate, he deserves kudos from all Tennesseans. For simply bucking his party’s leadership in an effort to do so, he gets my commendation.