Work on Particulars of Financial Reform is Just Beginning: Lee Hamilton '52
August 15, 2010
August 15, 2010, Greencastle, Ind. — "You might imagine, now that President Obama has signed the massive financial reform package into law, that the issue is behind us. Hardly," writes veteran statesman and 1952 DePauw University graduate Lee Hamilton. "In a way, the president's signature was just the starter's pistol."
In his latest newspaper op-ed, Hamilton says that even though it took many months to craft the legislation -- which totals more than 2,000 pages -- "the financial overhaul measure leaves countless issues to be resolved later by federal regulators and the lobbyists who will try to influence their decisions. It is a textbook example of the limits inherent in a legislative product and of the manner in which Congress relies on a mix of concrete action and ambiguous ball-punting to cobble together a majority."
The Democrat who served 34 years in the U.S. House of Representatives calls the recently approved bill "a grand and sweeping law that nonetheless leaves much room for interpretation in the future. When you have such ambiguities in new statutes -- as is frequently the case -- it amounts to an invitation to further struggle on the part of the bureaucrats who must give shape and form to the ideas contained in the measure, and the lobbyists whose clients have much at stake in the results."
The column continues, "According to an analysis by the U.S. Chamber of Commerce, the measure calls for 350 rules to be formulated, 47 studies to be conducted -- which is Congress' way of signaling action on an issue without actually making any decisions -- and 74 reports. The creation of new entities -- the consumer protection agency, a board of regulators to assess risk in the financial system -- also will engender much executive-branch maneuvering and back-and-forth with Congress. Moreover, lobbyists don't stop work when a law is passed; in some ways, that's when their work truly begins, as they strive to build relationships with the regulators who will oversee their industry and try to influence the regulations that will soon enough begin to flow from various executive-branch agencies."
While Congress is "relatively transparent and accountable," Hamilton writes that the high-stakes work to come will be conducted out of public view where "special interests' influence will grow, and arguments about how to interpret the language contained in the law will blossom -- and, inevitably, spill over into the courts." Still he calls the legislation "a significant gift of power to federal agencies and financial regulators, who now have to make decisions about how they intend to wield their power."
Hamilton concludes, "In the end, that the authority to act is not the same as acting. That is why, while Congress made some important decisions in the process of crafting its bill, the true import of the financial reform package will only reveal itself gradually. There is an old saying in Washington that nothing is ever decided for good there. For legislation, that's certainly true."
You'll find the complete essay at the Web site of the Fort Wayne News-Sentinel.
The author of Strengthening Congress, and How Congress Works and Why You Should Care, Lee H. Hamilton co-chaired the 9/11 Commission and Iraq Study Group and is currently co-chairing the Blue Ribbon Commission on America's Nuclear Future. Read another of his recent columns by clicking here.