From the Department of Conjecture: Senator Dean Heller (R-NV) will run a campaign similar to that run by Rep. Mark Amodei (R-NV2) to retain his seat in the U.S. Senate. The campaign will be replete with Sound Bites, Buzz Words, and Talking Points — but unless pressed Senator Heller will be loathe to specify the implications of his policy suggestions. Those who attempt to press him for specifics will be charged with asking “Gotcha” Questions and/or being exemplars of the Liberal Media. Why?
The answer is relatively simple: Senator Heller is no “moderate,” he is a radical Republican. However much he may attempt to distance himself from the Tea Party Caucus in the 112th U.S. Congress, he is philosophically one of them. However much he may attempt to present himself as the champion of small business, his record demonstrates a consistent preference for protecting the interests of multi-national corporations.
He has signed on to a bill that would repeal the financial reform legislation enacted in the Dodd-Frank Act. [DB] He signed on as a co-sponsor of Senator Jim DeMint’s S. 712 which would directly repeal the reforms. House Tea Party Caucus founder Michele Bachmann (R-MN) introduced a similar repeal bill in the House. [BusWeek] The repeal efforts have the imprimatur of Americans for Prosperity. [AFP]
Yesterday’s post [DB] went into some detail concerning the implications of repeal. One of the major issues associated with repealing the reforms is often given in the short-hand phrase “too big to fail.” Opponents of Dodd-Frank assert that the Act doesn’t address the possibility that taxpayers may be required to bail out large financial institutions in the future, despite the fact that the Dodd-Frank Act requires the collection of data on systemic risk, and requires that banks and bank holding companies have a plan for the rational unwinding of their corporations in case they have to file for bankruptcy.
Although many of the provisions do not go into effect immediately the Dodd-Frank Act has already had a modest positive effect:
“When Moody’s downgraded three banks on Wednesday, it gave a big thumbs up to the Dodd-Frank Wall Street reforms that aim to ensure there won’t be any more big bank bailouts. […] FDIC took a big step toward ending “too big to fail” earlier this month, when it issued rules requiring big banks to create their own so-called living wills. The banks must create road maps showing regulators how to distribute assets in the event of a failure.” [CNN]
By July 2012, Wells-Fargo, Bank of America, and Citigroup will be required to file their break up plans in case of insolvency. Needless to say, the American Bankers Association isn’t pleased. As is so often the case with corporate objections to reform legislation, the Bankers rely on arguments based on “unintended consequences” regardless of their probability.
The major banks argue that because enforcement of Dodd-Frank will be expensive therefore: (1) more banks will merge creating more opportunities for “too big to fail” — this ignores the fact that the Act is not an anti-merger bill, it does require banks to have a plan in the event they become insolvent; and (2) the tightening of liquidity requirements will lead to fewer mortgages, tighter credit, and more consumer costs — again ignoring the fact that during the inflation of the Housing Bubble there were too many mortgages, credit was too loose, and some consumers who should never have been approved for loans were given loans and issued credit they could not repay. [ABA]
The current House Financial Services Committee, which has led efforts to dismantle and de-fund the Dodd-Frank Act provisions, is now aligned with the bankers: “According to Opensecrets.org, “The average member of the Financial Services Committee received about 75 percent more money in the last election cycle from industries under their jurisdiction than the average member of Congress.” That included more than $3 million from the American Bankers Association, $1.7 million from JP Morgan Chase, $1.6 million from Bank of America and $1.3 million from Wells Fargo.” [NLR]
Repealing the Dodd-Frank Act would allow banks to indulge in the same kinds of extremely risky (but highly profitable in the short term) activities which created the Housing Bubble and exacerbated the effects of its collapse. In other words, it would put out the welcome mat for another day at the Wall Street Casino. We know how that ended, and we are still dealing with the aftermath.
Senator Heller has made no secret of his intention to repeal the Health Care reform legislation. The code word is “Obamacare.” This word is supposed to bring to mind visions of “Government Takeovers,” and “socialism,” and “Big Government.” The modest improvements made by the Affordable Care Act are nowhere near a government takeover — there aren’t even any public exchanges in the measure, it certainly isn’t Socialism — the public option was never seriously discussed, and it didn’t increase “government.”
However, repealing the Affordable Care Act and the Patients’ Bill of Rights would certainly please the insurance industry. They would no longer have to cover those with pre-existing conditions, they would no longer have to spend 85% of the premiums they take in on providing health care for their policy holders, and they would no longer have to provide comprehensive coverage — they could revert to emphasizing the sale of limited benefit plans, which Consumer Reports rated as “junk.” [ConReports]
Representative Shelley Berkley (D-NV) posts a listing of the benefits accruing to her constituents and small business owners under the provisions of the Affordable Care Act [Berkley] including the CBO estimates of savings to be reaped by the health care reform statute.
Senator Heller would gladly allow the insurance industry to continue to offer those junk “defined benefits” plans, to exclude infants and children with “pre-existing conditions,” to spend less than 80-85% of the premiums they take in on actual medical treatment and services. He would repeal the tax cuts available to small businesses which offer health care insurance to their employees, and would allow the infamous “Do-nut Hole” in prescription medication coverage to reopen.
Senator Heller’s connections with Big Oil are well documented. [NVRDC] To summarize, in July 2010 Heller voted to protect BP from oversight after the Deepwater Horizon spill in the Gulf. [vote 513] He has also voted at least 8 times to protect tax credits for the Big Oil Companies. See votes 153, vote 78, vote 80, vote 1140, vote 835, and vote 40.
Senator Heller is advocating the radical Balanced Budget Amendment in tandem with Senator Jim DeMint (R-SC). One of the worst kept secrets in the Capitol environs is that DeMint has made it easier for the Tea Party radicals to drive the GOP agenda. [Slate] [FDL] [BusInsider] And, the so-called “Balanced Budget Amendment” is one of the pillars of Tea Party ideology. This territory has already been covered extensively in Desert Beacon: “…Bad economics and worse policy;” and “…bogus blather for America;” and “…unbalanced amendment;” and in “…all common sense to the contrary.”
However, voices far stronger than DB have labeled the so-called balanced budget amendment a bad idea. Economist Robert Samuelson compiled his objections in the Washington Post. James Ledbetter explained Three Reasons Conservatives Should Oppose the balanced budget amendment for Reuters. David Leonhardt, economics reporter for the New York Times explains why the BBA is a poor idea. The Herald-Tribune weighed in on the matter, as did conservative blogs Conservative Insights, and Conservatives on Fire. Former Reagan Administration member Bruce Bartlett declared the BBA a “phony deficit solution,” and went further saying “In fact, it’s just more political theater designed to delight the Tea Party.”
And, it’s political theater in which Senator Dean Heller is delighted to participate — no matter if voices from both ends of the political spectrum have proposed valid arguments in opposition. Only a True Believer would continue to espouse this radical proposal.
If his position statements are to be taken seriously, then given his support for the Big Banks, Big Oil, Big Insurance, and the highly dubious Balanced Budget Amendment — Senator Heller is running well right of mainstream America — and directly into the arms of the Anglesque Tea Party contingent.
*For additional information on the ‘de-funding’ of Dodd-Frank see: Desert Beacon, FCIC Conclusions, January 28, 2011. Politico, “GOP tries to slash Wall Street Law, February 18, 2011. The Hill, “Dodd Warns of Efforts to Starve Agencies,” December 20, 2010.