Scheduling May Derail Bush Bill On Bank Reform
The Bush Administration's far-reaching banking bill, which has been roaring down a fast track since spring, suddenly is losing steam.
Treasury officials have argued all year that a move to recapitalize the dwindling Bank Insurance Fund was the "must" legislation that would pull the department's broad industry restructuring package through Congress. If a BIF measure cleared Congress separately, they reasoned, other banking legislation would move to a back burner.
That worst-case scenario may now come to pass.
Emerging from a White House meeting Tuesday with President Bush and Treasury Secretary Nicholas Brady, House Speaker Thomas S. Foley warned that the administration's ambitious timetable for a broad bill might not be met.
"We are generally trying to work as quickly as possible," said Rep. Foley, who refused to say whether a bill could reach the House floor before the month-long August break. "No specific assurances were given on the timetable."
Pressure by September
If the bill cannot be readied for floor action before the recess, pressure will be on when Congress returns in September to deal quickly with the deteriorating Bank Insurance Fund, even if it means delaying action on the comprehensive bill.
House Energy and Commerce Committee Chairman John D. Dingell, D-Mich., and one of his key subcommittee chairman, Rep. Edward J. Markey, D-Mass., said the administration might be forced to accept exactly that approach.
"In terms of the issues themselves, they divide into two neat packages," Rep. Markey said after the meeting with President Bush. "One is the emergency legislation: the Bank Insurance Fund, the |too big to fail' doctrine, regulatory intervention, perhaps with interstate banking thrown in.
One Measure Could Move
"On those issues, we feel that perhaps that piece of legislation could move along quite quickly," he said.
"But when we got to repeal of the Glass-Steagal Act, repeal of huge chunks of the Bank Holding Company Act of 1956, repeal of laws prohibiting the mixture of insurance and banking-there we have very serious questions," he added.
Although a Treasury spokeswoman said the adminstration is continuing to press for one comprehensive bill, Rep. Markey said the administration's opposition to the two-track approach may be softening.
"I do not think I heard a strong objection," he said. "I think [Secretary Brady] considered the conversation which we had to be productive and wanted to use it to establish a working relationship over the next few months."
No Urgency Till Sept. 30
"Our position has been that the FDIC has sufficient funds to last until Sept. 30, so there is no need to act on BIF before then," said Treasury spokeswoman Cheryl Crispen.
Rep. Henry Gonzalez, D-Tex., House Banking Committee chairman, who skipped the White House meeting Tuesday, has argued strongly for dealing with BIF recapitalization before taking up broader legislation.
The White House meeting was "both encouraging and discouraging," chief lobbyist for the American Bankers Association.
"The fact that the President made it a priority and called people down is encouraging," he said. "But our area of concern is that the Energy and Commerce Committee leadership is calling for a two-track approach."