WASHINGTON Republicans have expanded the new Financial Services Committee into the second-largest panel in the House, but they failed in an attempt to broaden their majority.
A more powerful offspring of the 60-member House Banking Committee, Financial Services will have 37 Republicans, 32 Democrats, and one independent and will exercise jurisdiction over banking, securities, and insurance activities. The new lineup gives Republicans a four-seat majority, the same as in the last Congress.
The new panel is going to be even more cumbersome, said Joe Belew, president of the Consumer Bankers Association. You dont have to deal with two committees anymore, but youll have to deal with this mega-committee. Its going to be a slow process if for no other reason than everyone will want a chance to speak, so its going to make the hearings long.
While agreeing that the panels size could be unwieldy, other industry lobbyists said the size and expanded jurisdiction over securities and insurance activities could prove to be valuable for pushing the committees agenda through the full House.
It will clearly be a more powerful committee, said Edward L. Yingling, chief lobbyist for the American Bankers Association. When issues go to the floor, the committees recommendations are more likely to carry weight.
The Democrats, led by ranking member Rep. John J. LaFalce, successfully resisted efforts to reduce their representation on the committee. Republicans released a plan over the weekend that would have expanded their majority on the panel to five seats, but party leaders announced late Monday that another Democratic seat would be added, restoring a four-seat advantage.
An aide for Rep. LaFalce said the New York Democrat had asked the new committees chairman, Rep. Michael Oxley, R-Ohio, that the ratios be maintained or enhanced. Rep. LaFalce was traveling out of the country and unavailable to comment on Monday.
Democrats are not expected to make their committee assignments until late this month or early next month. Rep. Maxine Waters of California, the fifth-ranking Democrat on House Banking, may give up Financial Services to take a coveted seat on the Appropriations Committee, a committee source said.
Banking industry lobbyists predicted the restructuring committee will attract more moderate lawmakers.
Because of the old Banking Committees jurisdiction over housing issues, Democrats who join that committee tended to be very liberal members from big cities, Mr. Yingling said. With the new jurisdiction, there will be more incentives for moderate Democrats to join the committee, which will be helpful to us on Community Reinvestment Act and consumer issues.
While the chairman and the GOPs rank-and-file members have been named to Financial Services, a cloud of uncertainty remained Monday over the precise definition of its boundaries.
The territorial boundaries between the new Financial Services and Energy and Commerce committees are still being hammered out, and being watched closely by industry officials.
As favored by Energy and Commerce Chairman W.J. Billy Tauzin of Louisiana, health insurance matters are expected to remain with his committee. Capitol Hill sources said Monday, though, that a memorandum of understanding was still being negotiated on the transfer of securities matters.
An Oxley spokeswoman declined to comment on the dispute. Were in the midst of discussing these various points and completing a final agreement, she said.
The assignment of Financial Services subcommittee chairmanships was also unclear on Monday. Rep. Marge Roukema, the vice chairwoman of the committee, said she reiterated to Rep. Oxley on Monday that she wants to continue to head the financial institutions subcommittee, which she hopes will be expanded to include influence over insurance activities.
Right now the business is to reorganize the Banking Committee, and Im strongly in favor of seeing to it that the Financial Services Committee gets off to a really strong start, the New Jersey Republican said.
She shot down rumors that she may be asked to take the less powerful housing subcommittee, and said she has not heard further word from President-elect George W. Bushs advisers as to a position in his administration.
Last week Rep. Roukema turned down what she called a token offer to be named U.S. Treasurer, and said she told Vice President-elect Richard Cheney that the only position she would consider would be a high-level one at the Department of Health and Human Services.
Rep. Richard H. Baker, R-La., who is expected to be named chairman of an expanded capital markets subcommittee, referred all questions about his subcommittee bid to Rep. Oxleys office, which said that a time frame has not been set for naming subcommittee chairmen.
Rep. Doug Bereuter, R-Neb., also may be a contender to head a subcommittee, sources close to the committee said on Monday. Rep. Bereuter, who was passed over in favor of the more senior Rep. Henry Hyde, R-Ill., to head the International Relations Committee, is said to be angling for a top subcommittee slot.
Besides Rep. Oxley, four Republican members off the old House Commerce Committee are joining Financial Services: Rep. Paul Gillmor, of Ohio, Rep. Christopher Cox of California, Rep. John B. Shadegg of Arizona, and Rep. Vito Fossella of New York. Unlike Rep. Oxley, they will retain their seats and seniority on newly renamed Energy and Commerce Committee.
The sixth most senior member of the old Commerce Committee, and a member of its telecommunications subcommittee, Rep. Gillmor served on House Banking from 1989 to 1993.
He served on the conference committee for the Gramm-Leach-Bliley Act of 1999 as a representative of the Commerce Committee, and he has pushed legislation to increase mutual fund disclosures and limit the Federal Reserve Boards authority to supervise and impose capital requirements on nonbank holding company units. He also voted against legislation, which became law in 1998, that eased membership rules on credit unions.
He was on Banking before he went to Commerce, giving him a strong background in financial services issues, Mr. Yingling said.
Rep. Fossella, who will be the only New York Republican on both Financial Services and Commerce, was talking up his new committee assignment on Monday.
I intend to serve as a strong and active voice to ensure that America remains the financial and business capital of the world, said Rep. Fosella, a three-term representative who served briefly on the Banking Committee in 1998. As a member of Congress who represents thousands of individuals on Staten Island and in Brooklyn who work in the financial services industry, I will be a voice for them by serving on both Commerce and Financial Services.
One of the lawmakers completely new to Financial Services banking, securities, and insurance issues will be Rep. Christopher Shays, who is giving up his seat on House Budget for a relatively low-ranking seat on the panel. His southwestern Connecticut district, which includes Stamford and Norwalk, serves as a bedroom community for Wall Street financiers and bankers.
This new committee has jurisdiction over a number of issues that affect his district, his spokeswoman said on Monday.
Other Republican newcomers include Rep. Gary G. Miller of California, and seven freshmen members, including Rep. Felix J. Grucci Jr. of New York.
In other committee news, Rep. Oxley is expected to fill Financial Services top staff positions with former employees from the Commerce Committee. Stephen A. Blumenthal, who most recently has worked as a vice president at the Schwab Capital Markets L.P. Washington Research Group, is expected to be named the panels top lawyer.
Mr. Blumenthal declined to comment.