Financial services lobbyists are quietly pushing for Sen. Chris Dodd (D-Conn.) to give up his chairmanship of the Banking Committee and take up the gavel of the Health, Education, Labor and Pensions Committee, where he is next in line following the death of Sen. Edward Kennedy (D-Mass.).
Such a move, they say, would remove a thorn from the banking industry, since Dodd has upped his anti-industry rhetoric ahead of his tough 2010 re-election bid.
And it would allow a financial services industry stalwart, Sen. Tim Johnson (D-S.D.), to become chairman of the panel, formally known as the Banking, Housing and Urban Affairs Committee.
So far, Dodd has been playing his gavel choice close to the vest, although he recently signaled that a decision may become public as early as today.
Banking lobbyists say they are confident Johnson would take a less anti-industry tack in the upcoming regulatory reform legislation. In particular, they believe Johnson could help limit the scope of the Consumer Financial Protection Agency.
“Tim has a lot of credibility inside the Beltway with people who have worked on these issues for a long, long time,— one banking lobbyist said.
Johnson has a history as a vocal proponent of pay-day lenders and credit card companies. Industry has also been heartened by Johnson’s vote, as the only Democrat, against the credit card bill earlier this year.
Additionally, Citigroup Inc. is one of the largest employers in South Dakota, with the bank’s credit card division headquartered there.
Johnson, who spent five terms in the House, has a number of former staffers downtown, including his longtime aide Dwight Fettig of Porterfield, Lowenthal & Fettig; Naomi Camper of JPMorgan Chase; and Paul Nash, who recently left Verizon Wireless for a position at the Federal Deposit Insurance Corp.
Johnson’s also no stranger to the banking industry’s pocketbook.
Johnson received $1,407,958 from the finance, insurance and real estate sector from 2003 to 2008, according to Center for Responsive Politics. That accounts for nearly 20 percent of Johnson’s campaign contributions during that time period.
Not everyone is behind Johnson taking over the Banking Committee gavel, however.
There has been some apprehension among Wall Street lobbyists over whether Johnson, who suffered a cerebral hemorrhage in December 2006, can physically take on the challenges of leading the regulatory reform effort.
Johnson was sidelined for several months while recovering, and his speech is still affected from the hemorrhage.
But lobbyists in Johnson’s camp say he’s more than ready to take on the challenge.
Johnson also has a much different leadership style than Dodd, they argue.
Instead of centralizing power like Dodd, Johnson would likely empower subcommittee chairmen, allowing them to write legislation and hold many of the hearings that would be necessary to pass a bill this Congress.
Additionally, K Streeters have speculated that Sen. Jack Reed (D-R.I.), the Banking Committee’s third-ranking Democrat, could be given an expanded role to help assuage any worries about Johnson’s health.
And although consumer groups have also raised questions about how cozy Johnson is with the industry, top Democrats like Sen. Charles Schumer (N.Y.) have indicated that the panel gavel is Johnson’s should Dodd decide to go to HELP.
Health care lobbyists are keeping a low profile on whether Dodd should take the HELP post.
“The lobbying community has a very minimal role in this,— one veteran lobbyist said. “It’s a matter of personal relationships. This is something, in the end, Chairman Dodd has to make a decision about.—
Dodd’s rise as HELP chairman would likely be an easy transition given his position as a central leader on the committee, shepherding the panel’s health care reform bill while Kennedy was receiving treatment for cancer.
While Dodd doesn’t have a large health care following, he has long been close to the insurance industry, which has a large presence in his home state of Connecticut.
Additionally, with most of the health care reform debate happening in the Senate Finance Committee, lobbyists say being close to Dodd is less of a concern for them.
Several Democratic lobbyists also said it would be detrimental if Senate Agriculture, Nutrition and Forestry Chairman Tom Harkin (D-Iowa), who is next in seniority behind Dodd on the HELP Committee, takes over the reigns.
Harkin isn’t seen as an aggressive chairman, lobbyists say. His chairmanship would also concentrate a lot of power over health care, since he is also chairman of the Appropriations Subcommittee on Labor, Health and Human Services, and Education.
But it’s not at all clear whether Harkin would be interested in relinquishing his role as Agriculture chairman.
Health care lobbyists would much rather have Sen. Barbara Mikulski (D-Md.), next in line behind Harkin on the HELP panel, take over as chairwoman, given the pharmaceutical and biotech industry in her home state.