As Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) and Sen. Bob Corker (R-Tenn.) prepare to unveil a financial reform bill, the panel’s ranking member is largely sitting on the sidelines — as he has for many of the key committee debates in recent years.
GOP colleagues of ranking member Richard Shelby (Ala.) insist he’s relevant to the debate and predict a bipartisan outcome will prevail.
“I’m confident this bill can get done, and I’m very confident it can be a bipartisan bill,” Sen. Mike Johanns (R-Neb.) said. “I don’t think you get a bill out of Banking if you don’t get the ranking member on board.”
But privately, some Republicans and Democrats have said Shelby’s handling of the issue has caused tension on the panel.
Dodd and Corker, a first-term Senator eager to make his mark on comprehensive legislation, have been working for weeks to reach a bipartisan agreement on financial regulatory reform. The two bonded further last week during a Congressional trip to Central America and have hinted publicly that they are poised to drop legislation next week. The duo met with Treasury Secretary Timothy Geithner on Wednesday afternoon to discuss details of the package. Shelby did not attend.
“We’re working on it. We’re going to get something soon,” Dodd said, leaving the door open to Republicans, and especially Shelby, to come to the table. “This ought to be as non-ideological as it can be.”
With the Dodd-Shelby negotiations at a standstill, Shelby is drafting his own Republican alternative. After working on a bill for more than year, he and Dodd reached an impasse earlier this month when the two could not strike a deal on consumer protection language, a key sticking point for many Republicans. Dodd subsequently announced he was working with Corker to craft a deal, even as he promised to keep the door open with Shelby.
But sources said there was frustration on both sides of the aisle about Shelby’s negotiating style. Republicans felt he was not keeping them in the loop on the status of negotiations, and Democrats felt he was moving the goal posts on deals that had already been made.
Shelby is no stranger to complaints from his colleagues. Republican operatives have long grumbled that he is a lone wolf who is not inclined to put his party over other considerations. He routinely sits on tens of millions of dollars in his campaign war chest, rarely giving to the GOP cause. In the past four years, his campaign has given only $1,500 to the Alabama Republican Party. He has given no money to other candidates this cycle despite having $16.3 million on hand — an enormous sum for a rural state with relatively inexpensive media markets.
His leadership political action committee, Defend America PAC, has disbursed only $283,000 despite having $2.25 million on hand.
Nevertheless, GOP Senators publicly maintain that Shelby represents their interest in the Banking Committee.
“He has a good sense of how to manage the membership,” said Sen. Judd Gregg (R-N.H.), who added that he believes Shelby’s stance in negotiations with Dodd represents the will of most Republicans on the panel.
Corker has said he is willing to buck his party and be the 60th vote to pass legislation on the Senate floor if a suitable deal is reached. That appeared an increasingly likely scenario Wednesday as Corker told reporters that he and Sen. Mark Warner (D-Va.) reached an agreement on language dealing with systemic risk in financial markets.
Like most Republicans, Corker is against placing a consumer protection agency within the Treasury Department, which the Obama administration prefers.
Corker suggested his stance on the Dodd bill could be a bellwether for Republicans. “If a bill passes muster with me, it’ll past muster with a number of Republicans,” Corker said.
Though Dodd and Shelby often start out working together on major bills, their track record has been mixed. In 2007 and 2008, they collaborated successfully on a rescue of mortgage giants Fannie Mae and Freddie Mac, along with a measure intended to slow the rate of foreclosures.
Dodd noted that of 42 bills the committee has produced since he became chairman, 37 became law and most of those were bipartisan deals he struck with Shelby.
But Shelby opposed Dodd’s bill to implement consumer protections for credit card holders. The measure eked out of the committee last year by one vote, but as popular support for the measure grew, Shelby changed course and voted for the bill on the floor.
Dodd acknowledged that the conservative makeup of the panel in general was “a challenge.”
“He’s always been very frank, very honest with me about what he could and couldn’t do,” Dodd said of Shelby. “People come in and out of this process at various stages. … I’m fully expecting Sen. Shelby to be very much a part of this. … I’m confident before it’s all done he’ll be a very positive influence.”
On the financial industry bailout bill, Shelby let Dodd know early on he was not going to be a part of negotiations.
“He was very firmly opposed to any sort of action back in September of 2008. So he said, Just leave me out if you’re going to have any discussion in the Banking Committee. Go ahead and have the discussion,'” panel member Bob Bennett (R-Utah) said.
Sources said some Republicans on and off the panel were annoyed with what they saw as Shelby’s decision to abdicate his duties on the financial bailout.
But Bennett defended his colleague. “I have no problems with what he did in September,” he said. “He was ideologically and philosophically opposed to any kind of action and I don’t think he shirked his duties. He stepped aside and let the thing go forward.”
Indeed, Shelby was passionately opposed to the bailout, but he did not attempt a full-scale filibuster.
Republicans noted that Shelby did not take himself out of the room on regulatory reform, saying Dodd severed the negotiations and reached out to Corker.
Sen. Mike Crapo (R-Idaho), a panel member, said, “It was Sen. Dodd’s call, not Sen. Shelby’s, to say, I think this is breaking down and we’re going to go ahead with a markup.’ … That didn’t mean that Sen. Dodd and Sen. Shelby wouldn’t continue to try to find a way through this.”
Crapo added that Republicans feel they need more time to work out a deal and that Dodd has been pushing forward too quickly.
He said there is “a very difficult set of issues for us to find middle ground consensus on, and I think Sen. Shelby has been doing a very excellent job of trying to work our way through all the difficulties in these processes without conceding issues that we don’t think should be conceded. And I understand that now Sen. Corker is negotiating on it as well, but we are all still working on it in reality.”