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Will Senate Democrats let Tim Johnson take over the Banking Committee?


bankingcommittee.JPG

The practical impact of Chris Dodd leaving the Senate this year is that chairmanship of the powerful Senate Banking Committee falls to South Dakota's Tim Johnson. This is, in short, a nightmare for consumers.

If you look at the back of your credit card bill, you'll probably see the return address is in South Dakota (or, potentially, Delaware). There's a reason for that: Credit regulation is handled by states, but credit cards are sold nationally. South Dakota realized it could gain a bunch of jobs by deregulating the industry, so the major players headquartered in the state. Bill Janklow, then governor of South Dakota, is unnervingly honest about the move. "This wasn't a credit card deal, it was a jobs deal," he told PBS. "Citibank actually drafted the legislation."

It worked. Visa is there, as is Citibank's credit card department, and many others. Regulations are virtually nonexistent. And the state's politicians are sensitive to the needs of one of their biggest industries. Last year, Johnson opposed the credit card bill that passed the Senate by a 90 to 5 majority -- which should give you some idea of what a moderate and necessary piece of legislation it was.

Senate Democrats tend to be very reticent about upending seniority, even when it's critical to the party's agenda. House Democrats aren't. They voted to replace Rep. John Dingell as chairman of the Energy and Commerce Committee because of his Detroit-influenced views on global warming. Senate Republicans aren't. They threatened to take Sen. Arlen Specter's chairmanship of the Judiciary Committee after he implied that an anti-Roe Supreme Court nominee wouldn't make it very far. If Senate Democrats are serious about financial regulation and consumer protections, they'll be serious about preventing this succession, at least without dramatic assurances on Johnson's part. If seniority, however, is more important to them than this issue, at this time in the country's history, then it's hard to argue that this issue was ever very important to them in the first place.

Photo credit: By Pablo Martinez Monsivai/Associated Press

By Ezra Klein  |  January 8, 2010; 2:55 PM ET
Categories:  Financial Regulation , Senate  
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Comments

The worst thing is, who's benefited from this regulatory environment, where the banks have been able to do whatever they feel like, and the gov't bails them out if bad things hit fans?

Not consumers.

Not bank shareholders.

Not rank and file bank employees.

Not the economy at large.

No, just executives who have run the banks into the ground.

Posted by: eelvisberg | January 8, 2010 3:32 PM | Report abuse

Any ideas about who would fill the role better? I wouldn't exactly trust Chuck 'Citi' Schumer. I'd love it if the banking committees in both houses were run by unrepentant liberals- Sherrod Brown and Barney Frank running debates about financial industry compensation would be awesome. But I can't imagine that he'd be the one in line unfortunately.

Posted by: tmorgan2 | January 8, 2010 3:41 PM | Report abuse

"Senate Democrats tend to be very reticent about upending seniority, even when it's critical to the party's agenda. "

Another example - letting Blanche Lincoln take control of ag committee despite her views on carbon pricing/climate-change legislation, price supports for commodity crops and livestock production, etc.

Ezra, where are the food-policy columns? Health care's over, yo.

Posted by: fswoboda | January 8, 2010 3:55 PM | Report abuse

"If Senate Democrats are serious about financial regulation and consumer protections, they'll be serious about preventing this succession, at least without dramatic assurances on Johnson's part.."

Dramatic assurances mean nothing. If he's allowed to take the post, he will do whatever he feels he can get away with. The inept handling of the Joe Lieberman situation set that precedent for years to come and reinforced the notion that Senate Democrats have zero spine when dealing with anyone to their right.

Posted by: BigTunaTim | January 8, 2010 4:00 PM | Report abuse

Not that Dodd wasn't equally mobbed up with the financial industry, though perhaps a different sector.

Posted by: ChrisBrown11 | January 8, 2010 4:29 PM | Report abuse

I'm such a complete politico-neophyte ... I actually thought chairpersons were assigned based on experience and skills. Didn't know about that seniority thingy.

Agree with Big Tuna, 'dramatic assurances' mean zip.

Posted by: onewing1 | January 8, 2010 4:30 PM | Report abuse

I'd propose Maria Cantwell for the position, based on a couple of things I've read about her. She sounds like a pretty smart cookie.

Anyone else know much about her?

Posted by: onewing1 | January 8, 2010 4:39 PM | Report abuse

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