Resisting Wall Street Reform
Jules Witcover

In the approaching Senate vote on Wall Street financial reform, the Republicans who marched in lockstep against President Obama's health care legislation have a much less comfortable political decision to make.

Members of what is often regarded as the party of Wall Street must bear in mind the public hostility toward the financial industry in the wake of the economic meltdown widely attributed to its shady practices. Voting against Wall Street reform regardless of its details will only reinforce that cozy reputation at an unfortunate time.

By coincidence or design, the decision of the Securities and Exchange Commission to sue Wall Street giant Goldman Sachs for alleged fraud in peddling bad housing investments to trusting customers delivered a further black eye to the already beleaguered industry.

The Democratic leadership is well aware that under these circumstances they have an enhanced opportunity to crack the solidarity the GOP exhibited against the health insurance bill. Picking up the few Republican votes to avoid death-by-filibuster should be somewhat less difficult this time around.

Senate Minority Leader Mitch McConnell, unable to argue as he did in the health-care fight that the American public was overwhelmingly opposed to the Democratic bill, at first cast the proposed Wall Street reform as another public bailout of the industry.

But Obama in his regular Saturday radio talk called McConnell's remark "cynical and deceptive," leading the Senate Republican leader to rephrase his opposition by saying "both parties agree" there should be no more Wall Street bailouts.

In a speech at Cooper Union, on the doorstep of New York's financial district, the president spelled out his proposed legislation in the harshest accusatory terms against bad actors in the financial industry, intensifying pressure on Republican senators to side with the aroused public as seen in the polls.

The Senate bill, authored by Sen. Christopher Dodd of Connecticut, chairman of the Senate Banking Committee, would create an independent regulatory entity that would protect consumer interests in mortgage, credit card and other financial dealings against lending abuses.

Through all the maneuvering, Obama has held steadfastly to his goal of achieving a new climate of bipartisanship in Washington, an objective that generally failed in his first year in the presidency. Only his late personal involvement in the health-care debate brought him a narrow victory, as other Democratic leaders hammered at the GOP as "the party of no."

Obama's continuing gestures toward bipartisanship, most notably in his daylong Blair House discussion of health-insurance reform in which Republican leaders called principally for "starting over" on legislation, simply reinforced the GOP resistance.

Now Republican senators, many of them facing reelection challenges in November, must weigh the wide public dissatisfaction -- with official, often-stalemated Congress as well as with the Obama administration -- along with its anger at the titans of Wall Street.

In this political equation, the Republicans because of their party history appear to have the greater challenge. Will they continue stonewalling on Democratic reform legislation, or join in the general opprobrium of the financial industry's irresponsible practices that hit American taxpayers' pocketbooks so brutally?

In the health-care fight, many in the Republican opposition resorted to class-warfare politics. They characterized the eventual Obama plan as "socialism," warning of "government-run" health care benefiting the poor, ignoring the great public support of such social welfare programs as Social Security and Medicare.

This time around in the debate on financial industry reform, aroused public hostility makes it less advantageous politically under the circumstances to tout "capitalism," when its most conspicuously avaricious practitioners on Wall Street have been bleeding investors on Main Street.

In December, the House passed a financial reform bill creating a regulatory entity without Republican support. In the Senate once again, that luxury for the Democrats will not be possible. So three GOP senators, Susan Collins and Olympia Snowe of Maine and Bob Corker of Tennessee, are being targeted particularly. It seems unlikely the Senate Republican minority will in the end be comfortable bearing both labels as the party of no and the party of Wall Street.

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