The first year of the revolution is over, and the consensus is that the new Republican Congress didn't accomplish very much. The GOP "Contract with America" is still largely a work in progress, and the contract Rep. Jim Leach tried to forge with the banking industry isn't much further along.
The chairman of the House Banking Committee tried all last year to pass two pieces of legislation that he believed were overwhelmingly helpful to banks: regulatory relief and Glass-Steagall repeal.
However, his efforts foundered on the same rocks that has wrecked financial institutions legislation in the past - the insurance industry's desire to drive banks from its turf. Rep. Leach proposed a few compromises in an effort to break the deadlock between the two industries, and last month assigned an aide to oversee negotiations between the two parties.
Two measures are up in the air: the moratorium on new bank insurance powers sought by the Independent Insurance Agents of America and a provision sought by bankers that would protect the industry from the whims of state regulators.
Rep. Leach finally lost patience with the bargaining process, and this week said he plans to bring the two bills to the floor for a vote as soon as possible - preferably right after the White House and Congress complete work on the budget bill.
In the end, that may not mean very much. The banking bill still looks pretty much dead for this Congress.
But Rep. Leach's decision to move the bill to the floor advances the cause of Glass-Steagall repeal - not very far perhaps, but definitely in the direction of enactment.
First, it puts pressure on both sides to negotiate seriously. Banks - firmly convinced that they don't need a bill this year - had little incentive to bargain as long as they thought an agreement was the necessary precondition to a floor vote.
Second, Rep. Leach can now go to the House leadership and plead that he has done all that is humanly possible to work out a deal between the banking and insurance industries. The House Republican leaders have been reluctant to schedule a vote without an agreement between the two industries, but their patience is not unlimited.
And if Rep. Leach can get the bill to the House floor, he has a few cards to play that could help dispose of the insurance issue. Although his aides say a floor strategy hasn't been settled upon yet, it's not hard to imagine what he might do.
Most likely, he will ask the leadership to approve rules for the floor debate that would permit the House to consider Glass-Steagall and regulatory relief legislation as a package. The insurance issues could be addressed separately in one or more amendments - and that's where the process could get interesting.
Aides to Rep. Leach warn that the insurance industry remains strong on the House floor. Bankers think otherwise. An up-or-down vote on either of the insurance amendments would settle that question, but would be a big risk for banks.
It's also possible that Rep. Leach will go back to an earlier strategy and wrap all the insurance amendments into a single, take-it-or-leave it package. In that case, insurance agents and bankers alike may wish they had worked a little harder when they sat together at the bargaining table.
