Lawrence Summers, the director of President Obama's National Economic Council, took aim at industry lobbyists Thursday while reiterating the administration's priorities for regulatory reform.
Speaking at a Pew Financial Reform Project event in Washington, the senior White House economic adviser said the financial services industry's campaign to weaken financial reform has become too aggressive.
He referenced a comment House Republican Leader John Boehner made to bankers recently about not letting "those little punk staffers take advantage of you" and to keep fighting reform.
Summers said that "At a time when industry has spent $1 million on lobbyists per member of Congress and at a moment when there are four lobbyist per member of the House and Senate working on this issue, we in this administration do not believe that the prominent issue is allowing bankers to stand up for themselves. Rather, we believe the events of the last two years pointed something out that is profoundly problematic … a system that is designed to diversify and spread risk has instead been a source of risk."
Though he did not specifically refer to Summers, Sen. Bob Corker, who spoke later at the same event, said mixed messages from the White House have some wondering whether the administration really wants a bill. "The only question I have," he said, is "do they want a bill or an issue?"
The Tennessee Republican credited the Treasury Department for working constructively with Capitol Hill toward a compromise, but he said the "characters" at the department are so divided over what they want in a bill, it isn't clear what they could support.
"The Treasury Department is made up of lots of different characters inside of it that actually have 180-degree different views on lots of things," Corker said. "It's not homogeneous, either. As a matter of fact, I'll bet you couldn't get Treasury to agree."
Corker, who had hoped to reach a bipartisan reform bill deal with Senate Banking Committee Chairman Chris Dodd, said Senate Republicans still want to pass a bill, but he predicted a compromise would not be reached until after a planned committee vote next week.
"This next week in essence it's going to be a partisan markup," Corker said. "The goal is to get the bill out of committee and then make arrangements to come up with a bipartisan bill, hopefully by the time the bill goes to the floor."
For his part, Summers said the administration still requires six key elements for reform that it has laid out.
He said the White House wants to ensure stronger capital and liquidity standards; close loopholes — particularly in the over-the-counter derivatives market — by forcing most swaps on to central clearing houses or exchanges; and stop regulatory arbitrage by not letting institutions pick their regulator.
Summers said that a bill should include an independent consumer financial protection agency and new resolution authority to unwind systemic risk firms and prevent them from growing needlessly risky in the first place, in part by banning profit-seeking proprietary trading.