Geithner Presses for Regulatory Overhaul
Thursday, September 24, 2009
Treasury Secretary Timothy F. Geithner on Wednesday once again pressed Congress to pass a comprehensive overhaul of the nation's financial regulatory system, telling members of the House Financial Services Committee that "we can't let the momentum for reform fade as the memory of the crisis recedes."
Geithner spent much of the morning's hearing trying to allay lawmakers' reservations about parts of the Obama administration's reform proposals and to urge them to act before the end of the year.
"Time is the enemy of reform," he said in his prepared statement. "As some normalcy returns to our financial system and our economy, we cannot let it be cause for complacency."
Lawmakers from both parties raised concerns about elements of the administration's overhaul plans, including doubts about a proposed consumer financial protection agency, fears that taxpayers would continue to implicitly prop up "too big to fail" institutions, and questions about the power of the Federal Reserve and how best to provide the government with authority to take over and dismantle troubled financial institutions.
Still, a noticeable party-line split loomed over much of the hearing, with Republicans expressing sharp skepticism over the administration's proposals, particularly the creation of a new agency to monitor financial products such as credit cards and mortgages.
Spencer Bachus (Ala.), the committee's ranking Republican, spoke of his "deep-seated reservations" about the administration's plans, which he said had "failed to achieve anything approaching consensus," either on Capitol Hill or among existing regulators.
"We do need smarter regulation but not necessarily more regulation," Bachus said. "We need enforcement of existing regulation, not another layer of regulation or more government bureaucracy."
Such comments drew a rebuke from Rep. Luis V. Gutierrez (D-Ill.), who said Republicans had unfairly compared financial reform to the health-care debate and labeled the administration's proposals as simply more "big government."
"If we do not include a strong, effective consumer financial protection agency within our regulatory reform legislation, Congress will have failed to address the current and any future economic challenges facing our country," Gutierrez said.
For his part, Geithner reiterated that while the administration had submitted more than 600 pages of proposed legislative language, officials remain open to changes.
"We don't have a monopoly of wisdom on these things," Geithner said. "Our test is: What will work?"
Committee Chairman Barney Frank (D-Mass.) said he is planning an aggressive schedule of hearings over the coming weeks to try to answer that question, with the expectation of producing legislation in the House and Senate by year's end. "This is going to be a very time-consuming committee in October and November," he said.