When Democrats gained a stronger majority in both the House of Representatives and the Senate after the 2008 election, most Americans hoped to see a significant amount of progressive legislation pass and become law. But unfortunately, it hasn’t worked out that way. While the Congress has made some improvements that affect consumers, it simply hasn’t done enough. It appears that even though a number of the members of Congress really want to do the right thing, the powerful, special interests still run the show. In most cases, lawmakers have allowed industries to block legislation that affected them or at least water it down. The effort to bring about financial reform is a classic example of how things work in Congress. We got reform, but it wasn’t nearly strong enough and left too many loopholes.
After the financial sector and the U.S. economy crashed in the Fall of 2008, taxpayers demanded that Wall Street be reined in. The public wanted guarantees that their money would never again be used to bail out an industry that had acted so recklessly. They waited for change, but in many areas of concern, they are still waiting. Legislation that would stop Wall Street and the big banks from ripping off consumers and endangering the economy was introduced. The big banks countered with their own lobbyists to block proposed constraints on their windfall-inducing, risky behavior. Wall Street brought in the troops in an effort to kill or water down the legislation. Organizations in the financial services sector have deployed at least 1,447 former federal employees to lobby Congress and federal agencies since the beginning of 2009, including at least 73 former members of Congress.
Despite the financial industry’s efforts, Congress passed legislation in July to reform the sector. The new legislation, which President Barack Obama signed into law, made many advances for consumers including creating a Consumer Financial Protection Bureau and making the derivatives market more transparent. Public Citizen also helped roll back bad things that industry lobbyists had snuck into the bill, such as a proposal to deregulate existing state insurance solvency and other standards via trade agreement preemption. But, the law omitted meaningful restraints on executive and top trader compensation, a financial speculation tax and rules to break up the biggest banks. Robert Weissman, president of Public Citizen, observed:
Particularly because it does not break up the megabanks, the new financial reform law does not ensure that we will not have a repeat of the financial crisis. Another round of reform will be needed to achieve that objective.
Hopefully, the Obama Administration will realize next year that they must work harder to get their programs through Congress. The President and his team must also work to loosen the “hold” the powerful special interests and their lobbyist have on Congress.
Source: Public Citizen
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