The Corner

Johanns: ‘A Discombobulated Process’

Earlier today, Senate Republicans, along with Sen. Ben Nelson (D., Neb.), voted for the second time in two days to block a financial-regulation bill from moving forward. Sen. Mike Johanns (R., Neb.), a member of the Senate Banking Committee, tells National Review Online that he blames the White House for “really making a mess” of the negotiations. “It’s gotten worse by the day.”

“To be blunt about it, the White House is getting in the middle of what had every possibility of being good legislation,” Johanns says. “Things were going along quite well until ten days ago, when they amped everything up. Now, they’re sending it in a very partisan direction. It’s been a real challenge.”

Johanns says the Democrats’ push to force Wall Street banks to spin off their derivative operations is a key reason for “the mess.”

“I don’t know what they’re thinking,” he says. “An absolute prohibition on banks being able to trade in derivatives is very problematic. It will change marketplace and how risk is managed on everything in the food chain, from farmers’ co-ops to banks, creating more problems.”

Johanns says the GOP still wants to work with Democrats on the “big ideas” of financial regulation, like “managing systemic risk and ending ‘too big to fail.’ On those key policy issues, there really isn’t much of a difference between Republicans and Democrats.” This bill, however, “is not ready for the floor, especially since if it got to the floor, it’d take 60 votes to amend, with a lot of questions still remaining.”

“This is turning into a discombobulated process,” Johanns continues. “We’re getting mixed signals on every level. One level of Treasury says this, another says that.” And what’s the impact of the Goldman Sachs hearings? “They’ve probably had some influence,” he says. “I can’t say that it’s what will carry a bill to the finish line or not, but there sure is a lot of discussion about the timing.”

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