GOP's New Financial Plan a Winner
To be successful, it seems obvious that the GOP needs to be more than just the party of ‘no’.
Thankfully, the situation may be improving. Last week, the Republicans on the House Financial Services Committee released a policy plan for reforming the financial regulatory system. While the plan does include the obligatory nod towards fighting bailouts in the future, it also includes some serious proposals with real teeth.
Perhaps the most controversial measure proposed is a substantial reform of the Federal Reserve that involves realigning the Fed’s mandate towards its original mission of conducting monetary policy and away from regulatory and supervisory activities. To facilitate this, the Republican plan calls for the creation of a Market Stability and Capital Adequacy Board chaired by the Secretary of the Treasury that would be responsible for monitoring the financial system and identifying risks.
Also included is a proposal to phase out taxpayer subsidies of government sponsored enterprises like Fannie Mae and Freddie Mac, and reforms that seek to end the current credit rating agency duopoly by removing the Nationally Recognized Statistical Rating Organization designation.
Substantive and genuinely conservative, this Republican consensus also came at an opportune time. The New York Times reported last Friday that President Obama’s plan to overhaul the country’s regulatory system was losing momentum quickly, as illustrated by the NYT’s coverage of Secretary Geithner’s appearance before the Senate Banking Committee that day:
Senator Jim Bunning, Republican of Kentucky, was almost disdainful. “Your plan puts a lot of faith in the Federal Reserve’s ability to spot risk and exercise its power to prevent the next crisis,” he told Mr. Geithner. “If the Fed and other regulators had been doing their jobs and paying attention to what the banks and other firms were doing earlier this decade, they almost certainly could have prevented the mess.”
As the Times piece pointed out, perhaps the most common reservation that Banking Committee Senators on both sides of the aisle had related to Geithner’s wish to increase the Federal Reserve’s power. The Republican Party’s proposals struck down to the heart of this concern.
At long last, Republicans have produced something more than vehement objection, proposals that politicians and citizens alike can evaluate.
Thankfully, the situation may be improving. Last week, the Republicans on the House Financial Services Committee released a policy plan for reforming the financial regulatory system. While the plan does include the obligatory nod towards fighting bailouts in the future, it also includes some serious proposals with real teeth.
Perhaps the most controversial measure proposed is a substantial reform of the Federal Reserve that involves realigning the Fed’s mandate towards its original mission of conducting monetary policy and away from regulatory and supervisory activities. To facilitate this, the Republican plan calls for the creation of a Market Stability and Capital Adequacy Board chaired by the Secretary of the Treasury that would be responsible for monitoring the financial system and identifying risks.
Also included is a proposal to phase out taxpayer subsidies of government sponsored enterprises like Fannie Mae and Freddie Mac, and reforms that seek to end the current credit rating agency duopoly by removing the Nationally Recognized Statistical Rating Organization designation.
Substantive and genuinely conservative, this Republican consensus also came at an opportune time. The New York Times reported last Friday that President Obama’s plan to overhaul the country’s regulatory system was losing momentum quickly, as illustrated by the NYT’s coverage of Secretary Geithner’s appearance before the Senate Banking Committee that day:
Senator Jim Bunning, Republican of Kentucky, was almost disdainful. “Your plan puts a lot of faith in the Federal Reserve’s ability to spot risk and exercise its power to prevent the next crisis,” he told Mr. Geithner. “If the Fed and other regulators had been doing their jobs and paying attention to what the banks and other firms were doing earlier this decade, they almost certainly could have prevented the mess.”
As the Times piece pointed out, perhaps the most common reservation that Banking Committee Senators on both sides of the aisle had related to Geithner’s wish to increase the Federal Reserve’s power. The Republican Party’s proposals struck down to the heart of this concern.
At long last, Republicans have produced something more than vehement objection, proposals that politicians and citizens alike can evaluate.