- The Washington Times - Sunday, September 6, 2009

The Obama administration’s push to overhaul Wall Street’s regulatory system could face a hurdle if Senate banking committee Chairman Christopher J. Dodd steps down to help lead the health care reform debate, as many expect he will.

With Sen. Edward M. Kennedy’s death last month leaving vacant the chairmanship of the Senate Committee on Health, Education, Labor and Pensions, Mr. Dodd - who led the panel for months in Mr. Kennedy’s absence because of his poor health - has been mentioned as the most likely successor.

If the Connecticut Democrat takes the job, it would leave the door open for the Senate Committee on Banking, Housing and Urban Affairs’ second ranking Democrat, Sen. Tim Johnson of South Dakota, to take over.

Capitol Hill Democrats say that if Mr. Dodd steps down as banking chairman, the job is Mr. Johnson’s if he wants it.

Sen. Charles E. Schumer, New York Democrat and an influential banking committee member, told reporters Thursday that he predicts Mr. Johnson will be named banking chairman if the post becomes available.

“I think Sen. Johnson is next in line,” Mr. Schumer said. “He is a very capable, thoughtful, independent man and will work with the whole committee.”

Jim Manley, a spokesman for Senate Majority Leader Harry Reid, Nevada Democrat, also said Mr. Johnson will be offered the banking committee chairmanship if Mr. Dodd steps down.

Dodd spokeswoman Justine Sessions declined to comment.

Mr. Johnson, careful not to appear to be lobbying for a job that isn’t vacant, has been mum on whether he would accept the banking chairmanship. But Democratic sources say he is interested.

“He’s ready to step up if there’s an opening,” said a source close to the situation.

Mr. Dodd has supported the administration’s push to create a new federal consumer-protection agency, which it says is needed to better regulate financial service markets and help prevent a repeat of last year’s near meltdown of Wall Street. The proposal calls for moving consumer protection duties from the Federal Reserve and other regulators to a new independent agency.

But whether Mr. Johnson, as banking chairman, would usher the proposal through the committee without question - or demand significant changes - is difficult to predict.

Mr. Johnson, a member of Senate banking committee since 1997, was instrumental in the passage of the Safe and Fair Deposit Insurance Act of 2005, which updated the federal deposit insurance system for the first time since 1980.

But while Mr. Dodd has tangled with the banking industry since the looming collapse last year of the financial services market, Mr. Johnson has been less antagonistic with bankers.

Mr. Johnson, whose state’s banking laws make it a favorite corporate home for credit card companies, this year voted against a new law backed by Mr. Dodd that tightens rules on how credit card companies do business.

Mr. Johnson said he opposed the bill because it could “limit access to credit for consumers and potentially jeopardize thousands of jobs in South Dakota.”

The senator, who was re-elected to his third term in 2008, has questioned Mr. Obama’s support for new restrictions on banks that offer exotic financing instruments, which contributed to last year’s financial meltdown.

The South Dakotan also rankled some Democrats last year when he voted against the $700 billion “bailout” of the U.S. financial services system, saying that the program was void of taxpayer protections and lacked accountability for the financial institutions that received government assistance.

Some on Capitol Hill quietly have worried that Mr. Johnson’s health could adversely affect his performance as chairman. The senator, 62, suffered a life-threatening brain hemorrhage in late 2006. He returned to the Senate after months of rehabilitation, though he lost the use of his right arm and uses a motorized wheelchair to get around the Senate.

Mr. Manley, as well as Johnson spokeswoman Julianne Fisher, said the senator’s health was not a factor.

Some consumer advocates of a Wall Street regulation overhaul reportedly have expressed concern that handing the committee to Mr. Johnson would be a serious blow to banking reform.

The liberal Huffington Post Web site last week quoted several anonymous sources who say they would be troubled by a Johnson-led banking committee.

“Everyone is very nervous about it, because he is definitely very, very pro-industry,” said a consumer advocate who wouldn’t speak on the record for fear of alienating the potential chairman, according to the Web site. “As irritating as Dodd can be, carrying their water for years, he’s better than Johnson.”

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide