House Banking Committee Chairman Jim Leach has established an ambitious schedule for lawmakers negotiating financial reform legislation that would culminate in a mid-October vote.
However, key lawmakers immediately criticized Rep. Leach's plan, turning his effort at jump-starting talks into further confirmation of a political morass.
Although supporters were euphoric in July after the House and Senate had approved financial reform in the same year for the first time, progress since then has slowed because of persistent ideological fights over the Community Reinvestment Act and other key issues, procedural tiffs, and a four-week congressional vacation.
With Senate Banking Committee Chairman Phil Gramm in no hurry, Rep. Leach -- the leader of the House-Senate conference committee on the bill -- had to act.
"There is ripening that has a potential to turn rotten if we don't continue with the process," Rep. Leach told the 66-member committee on Thursday at its second meeting and first since early August.
The Iowa Republican proposed that the committee vote immediately on more than 20 noncontroversial items that had been resolved by legislative aides, and then he offered an agenda for the next three weeks.
Under that timetable, negotiators would meet Wednesday and Thursday to debate -- and possibly vote on -- the CRA, privacy, wholesale financial institutions, and Federal Home Loan Bank reform provisions. They would then reconvene the first week in October to hash out the remaining issues: powers for bank operating subsidiaries, the sale of unitary thrifts to commercial companies, and unresolved securities and insurance matters. A final package would be voted on the following week.
Sen. Gramm and key House and Senate Democrats opposed Rep. Leach's effort to impose a tight schedule and consider issues gradually.
"The little issues will fall into place when we have dealt with the big issues," said Sen. Gramm, arguing that the bill will be made or broken on a half dozen major issues that should be voted on simultaneously. "My own feeling is we need to work to come up with proposals on all six."
Rep. John J. LaFalce of New York, the House Banking Committee's ranking Democrat, argued that a strict schedule could be dangerous. "It is too artificial," he said. "It just sets you up for failure if you don't meet that schedule."
And Sen. Paul S. Sarbanes of Maryland, the ranking Democrat on the Senate Banking Committee, and others objected to a vote Thursday on the noncontroversial items because the list had only been distributed a few hours before the meeting.
Rep. Leach agreed to postpone that vote until this week, but he defended the need for an expedited schedule. "I'm just concerned that we begin the process of resolution."
Under coaxing from Sen. Sarbanes, Rep. Leach agreed that if negotiators could not solve all the thorny issues, he would fill in the blanks himself by offering a comprehensive package for a final vote.