"Big John" Dingell has been deposed as chairman of the House Commerce Committee, but the panel's antibank traditions live on.
That became clear this week when the committee's new chairman, Republican Rep. Thomas Bliley of Virginia, readied legislation that would authorize states to set limits on the insurance powers of national banks.
The Bliley measure is a potential "killer amendment." If it is attached to the House Banking Committee bill that would repeal the Glass-Steagall Act, repeal is all but dead for this year.
The reason is simple. The insurance lobby is probably strong enough to line up votes on the House floor for the Bliley bill. But the banking industry has enough muscle to block legislation that contains the Bliley language, if not in the House then in the Senate, where the rules make it easier to obstruct a bill.
And there's no doubt that the banking industry would fight a bill that includes the Bliley amendment. Many banks, convinced that they can get all the new powers they want through the courts, the states, and the federal regulatory agencies, are only lukewarm to begin with on Glass-Steagall repeal.
And almost no one in banking is willing to trade away insurance powers for expanded authority to underwrite securities.
For now, there is reason to believe that Rep. Bliley and his supporters in the insurance industry are in a very strong position in the House.
His co-sponsors are expected to include Rep. Dingell - knicknamed "Big John," as much for his imposing size as for the political power he once wielded - and Rep. Gerald Solomon, chairman of the all-important House Rules Committee.
Rules, which serves as gatekeeper for the House floor, will decide whether the Bliley bill is brought before the full House. Rules could make it in order as an amendment to the Glass-Steagall bill or even write it into the text of the measure.
With the Republican takeover, nobody really knows how the floor votes line up on nonpartisan issues like banking, where party affiliation isn't much of a guide. But many people believe the insurance agents increased their strength with the election of a Republican majority that has a decided tilt toward small business.
For the future, the Bliley bill should put to rest the notion that the Commerce Committee - which has jurisdiction over the securities industry - would be a helpful ally for the banking committee in its effort to repeal the Glass-Steagall Act.
It's important to remember that each of the committees has its own constituencies and its own culture. House Banking, with its focus on commercial banks and thrifts, long ago came to the conclusion that it was time to knock down the walls that keep banks out of securities and insurance. In 1991, the panel was prepared to go much further and permit banks to affiliate with industrial companies.
The Commerce Committee, by contrast, is comfortable with the insurance and securities industries that fall within its jurisdiction. Committee members know the lobbyists and industry leaders, and they share their values. As a result, they are predisposed to help securities and insurance in their turf battles with banking.
Rivalry between the two committees is also deeply rooted. Rep. Dingell never made much of a secret of his disdain for the banking committee and its leadership, and many observers have been amused to discover that the bad blood between the two panels survived the Republican transition.
Whatever else it may be, then, the Bliley measure serves as a sort of reality check for an industry that was beginning to believe that Glass- Steagall repeal was in the bag.
