The White House pressed ahead Wednesday with its campaign to enlist the support of corporate America, with two senior officials urging top business executives to sign on to the Obama administration’s plans for regulating Wall Street and laying the foundation for future economic growth.
The administration dispatched Gene Sperling, director of the National Economic Council, and Elizabeth Warren, President Obama’s pick to set up the new Consumer Financial Protection Bureau, to address the U.S. Chamber of Commerce, which has opposed many of the White House’s initiatives on the economy.
Sperling and Warren stressed areas where the administration and business could cooperate. Sperling said the administration is open to improving regulations being put in place as a result of the Dodd-Frank legislation passed last year to overhaul financial oversight. He did not name a particular regulation.
“Let’s have a vigorous debate. Nobody ever gets it totally right, certainly the first time,” Sperling said. But, he said, “going back to the past that failed us cannot be an option . . . We should put aside any effort to undermine, undercut or underfund the basic mission of restoring confidence to our capital markets.”
Sperling also said it is crucial that corporate America work with the administration as it pursues policies that would reduce the national debt and deficit, but not at the cost of killing programs that promote American economic competitiveness or help the poor.
“We must make sure there is shared sacrifice and that we do not take the easy way out by trying to target any particular group or to put a disproportionate amount of spending cuts on those in our society who have the least political power,” Sperling said.
He said it is important to protect funding for education, transportation, infrastructure, college grants, and research and development.
Warren confronted a hostile audience. The Chamber of Commerce spent heavily on lobbying last year in an effort to prevent the creation of the consumer bureau.
Warren, a Harvard law professor, joked that her visit had been likened to Daniel in the lion’s den or President John F. Kennedy speaking to Protestant ministers.
“I think it’s all in good fun, but I actually think the analogies are wrong,” she said. “I don’t want to minimize our differences, but I think it’s important to find our common ground.”
That common ground, she said, came down to one word: competition. Warren said she believes in competition and free markets, and she argued that only through fair and consistent regulation can those markets function properly.
She had an uphill battle.
Warren’s half-hour appearance was sandwiched between speeches by Rep. Spencer Bachus (R-Ala.), chairman of the House Financial Services Committee, and Tom Donohue, president of the chamber. Both called for major changes to the bureau’s structure, such as subjecting its funding to congressional approval and replacing its independent director position with a five-member commission.
In arguing for a panel, Bachus said that having a single director would give that person too much power to deem certain financial products abusive and to write onerous new rules.
“If George Washington came back today, or Abraham Lincoln, or if Warren Buffett signed up, I wouldn’t give that person total discretion,” Bachus said.
Speaking after Warren, Donohue said that a commission “would provide a lot more balance and accountability” and that such a structure could win support from both parties. “There are a lot of Democrats who would not like to have one Republican sitting in that seat.”
Warren defended the agency in its current form, which involves funding from the Federal Reserve and a single, independently appointed director.
“Not one other banking regulator — not one — is subject to [congressional] appropriations,” she said. “Requiring the CFPB to go into every examination against a trillion-dollar company, knowing that the company could turn its lobbying force against the agency’s funding, is not a prescription for fair and evenhanded enforcement.”
She said that the bureau’s rules could be overturned by a group of fellow regulators and that a panel must review the possible costs of proposed rules. Still, she said, putting in place meaningful new rules and enforcing ones already on the books would permit “honest competition to flourish.”
“We can differ over the form and substance of regulation,” Warren said, “but let’s not deny the important role of regulation.”