WASHINGTON — There has been much speculation over how well the two new leaders of the House Financial Services Committee — Chairman Jeb Hensarling, R-Texas, and Rep. Maxine Waters, the ranking Democrat — will be able to work together while occupying different ends of the political spectrum.
The panel held its first official vote Wednesday of the new congressional session — a largely ceremonial markup to formally organize the committee — and all things appeared congenial. But Waters and Hensarling's fundamental policy disagreements — specifically about the impact of the Dodd-Frank Act — were already on display following the event.
In a press release after the markup, Waters, a California Democrat, praised the "bipartisan nature" of the vote but also proceeded to criticize a statement by Hensarling from the previous evening. In that statement, which announced subcommittee assignments, Hensarling had repeated an oft-mentioned claim by Dodd-Frank critics that the legislation "enshrined a 'too big to fail' bailout scheme into law."
Waters objected to his characterization by citing provisions of the law, including a new authority for the Federal Deposit Insurance Corp. to wind down failed behemoths.
"Dodd-Frank specifically ends too-big-to-fail by prohibiting the bailout of a failing financial institution. In fact, it mandates the orderly liquidation of such an institution, in which its executives are dismissed and its shareholders are wiped out," Waters said in the release. "The point of this process is to allow institutions to fail without causing catastrophic damage to the larger economy, other companies, small businesses, American taxpayers, and American families."
She added: "We have much work to do, and I sincerely hope that we establish a fair representation of the facts as the basis for a sound, bipartisan working relationship."