Even if Republican presidential nominee Mitt Romney wins the White House this November, his stated goal to repeal the Dodd-Frank Act is simply not going to happen, according to key congressional GOP members gathered in Tampa this week.
Instead, Republicans will try to chip away at what they see as the worst parts of Dodd-Frank, continuing a legislative strategy they began in 2011.
"The word that comes to my mind about what Republicans should do in 2013 is damage control," said Rep. Randy Neugebauer, who chairs the House financial services oversight subcommittee. "And we'll probably do that in pieces."
Republicans are cognizant of multiple factors. For one, those who work on financial policy are acutely aware of the fact that firms have made major changes to their business models in response to the 2010 law. Starting the legislative process over would force companies to adapt again. (It’s also unclear what, if anything, would change in regard to
Then there are the political considerations, given that provisions of the law, and the general idea of reining in Wall Street, are popular with the general public.
There are also practical concerns. Even the most optimistic Republicans don't expect their party to control 60 Senate seats next year, likely limiting their ability to pass broad financial legislation.
Moreover, there's a question of political oxygen in Washington, where the political debate next year is expected to focus on the federal budget deficit, which would leave little room on the agenda for other big bills.
Given those constraints, congressional Republicans say they plan to pass a series of financial policy bills, each of which is relatively small, but which collectively could have a major impact. The strategy has failed to yield victories so far, but that could change if the Republican Party wins at the ballot box in November.
"I think it will mostly be targeted at certain areas. I think that's where we're going to have most success," said Rep. Shelley Moore Capito, R-W.V., who chairs the House consumer credit subcommittee.
"Major surgery" is what Sen. Johnny Isakson, R-Ga., said the Dodd-Frank law needs. "So it's time to call timeout, throw a penalty flag, get the referees on the field, and let's say, let's take a look at this and see where we can make a law that works and doesn't suppress the economy."
Which parts of Dodd-Frank will the GOP target? The best way to understand their agenda for next year is probably to examine the pieces of financial legislation they've moved over the last two years.
During that time, many of the party's proposals involved reining in the Consumer Financial Protection Bureau and weakening derivatives rules. In those areas, plans are on the shelf that could be implemented as early as January if Republicans can wrangle enough votes in Congress.
In contrast, two other priorities—combating the idea that some firms are too big to fail and reforming Fannie Mae and Freddie Mac—appear unlikely for quick action in 2013, largely because GOP members have not reached a policy consensus on how to proceed.
