GOP Picks Chafee for Bank Panel

WASHINGTON -- Republicans have named John Chafee of Rhode Island to fill a crucial vacancy on the Senate Banking Committee.

Sen. Chafee, who is identified with the GOP's moderate wing, will take the seat of Sen. John Heinz, R-Pa., who was killed in a plane crash this spring.

Bush Reform Bill on Agenda

Sen. Chafee returns to the banking panel as it prepares to take up the Bush administration's banking reform proposals. In 1988, when the committee considered the Proxmire Financial Modernization Act, Sen. Chafee supported provisions that would have repealed the Glass-Steagall Act.

Although Sen. Chafee's views on the current reform package are not known, the White House is likely to be pleased to see the vacancy filled before the banking bill comes up.

Pennsylvania's Democratic governor appointed a member of his own party to fill Sen. Heinz's Senate seat until a special election in November. As a result, the party balance in the Senate shifted. Because this ratio determines the mix of Democrats and Republicans on each committee, there had been speculation that Sen. Heinz's committee seat could be left open without violating Senate rules.

Democrats on the banking committee outnumbered Republicans 12 to 9, and the loss of Sen. Heinz's vote could have deprived the administration of badly needed leverage.

ABA's View of Chafee

Sen. Chafee is "someone we've always been able to work with," said Edward L. Yingling, chief lobbyist for the American Bankers Association. "I'm sure Treasury is pleased to have him on."

Sen. Chafee's rotations on and off the banking committee reflect a Senate rule that permits members to protect only two committee assignments. Sen. Chafee is the senior Republican on the environment and public works panel, which is important to his home state. He also serves on the powerful Senate Finance Committee, which has jurisdiction over tax law.

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