The Financial Meltdown And A Civics Lesson

On Thursday, I wrote that Republicans talked a good line in 2003: that September, both the President and the chairs of the House and Senate banking committees said that Fannie Mae and Freddie Mac needed attention. (Freddie Mac had an accounting scandal that July.) The committee chairs promised bills; neither delivered.

Those are facts.

In the comments of that post, some readers are castigating me because I did not talk about the Democratic Party flaws in 2003. Indeed, some Democrats, like Rep. Barney Frank (D-MA), insisted that "Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis." But the Ds weren't the party in power.

That's the civics lesson: the party that controls Congress has the power to walk over the opposition if they want to, up until a vote in the Senate, where the minority party can exercise a filibuster. There was no filibuster because no bill ever made it out of committee.

The focus of Thursday's piece was on the Republicans because they controlled both houses of Congress and the White House. Republicans flexed their muscle on issues of little national importance: think about the circus that was the Senate, being called in on a weekend to use the power of the federal government to override a medical decision; think about the Senate Majority Leader rhetorically committing malpractice when he diagnosed from the Senate floor. So don't tell me that the Republicans were powerless in the face of Democratic opposition.

The only bills introduced after President Bush; Rep. Michael G. Oxley, chair of the Financial Services Committee; and Sen. Richard Shelby, chair of the Senate Banking Committee all promised to do something ... were by Democrats, members of the minority party.

Actions, in this case, speak louder than soundbites. Republican leaders promised and failed to deliver. That's a lack of leadership.

1. S.1656, introduced 23 September 2003 by Sen Jon S. Corzine (D-NJ).
   Title: A bill to address regulation of secondary mortgage market enterprises, and for other purposes.
   Latest Major Action: 9/25/2003 Referred to Senate committee. Status: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
2. H.R.3507 introduced 18 November 2003 by Rep. Brad Sherman (D-CA,27).
   Title: To expand homeownership opportunities in States having high housing costs.
   Latest Major Action: 1/2/2004 Referred to House subcommittee. Status: Referred to the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.

Both bills were referred to committees chaired by our rhetorical supporters of reform: Oxley in the House, Shelby in the Senate. Neither bill moved out of committee ... nor did any of the flurry of bills that were introduced after the July scandal. Of those earlier bills, four were introduced by Republicans, one by a Democrat. Four were in the House, one was in the Senate.

The 108th Congress sent 590 bills to the President for signature (according to THOMAS). You'll remember at least two of them, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 [H.R.1.ENR] and The Partial-Birth Abortion Ban Act of 2003 [S.3.ENR].

Others included:

• the 21st Century Nanotechnology Research and Development Act [S.189.ENR]
• the Adoption Promotion Act of 2003 [H.R.3182.ENR]
• the Asthmatic Schoolchildren's Treatment and Health Management Act of 2004 [H.R.2023.ENR]
• the Brown Tree Snake Control and Eradication Act of 2004 [H.R.3479.ENR]
• the Intellectual Property Protection and Courts Amendments Act of 2004 [H.R.3632.ENR]
• the National Windstorm Impact Reduction Act of 2004 [H.R.2608.ENR]
• the Prison Rape Elimination Act of 2003 [S.1435.ENR]
• the North Korean Human Rights Act of 2004 [H.R.4011.ENR]
• the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 [H.R.1828.ENR]
• the United States-Australia Free Trade Agreement Implementation Act [H.R.4759.ENR]
• the United States-Chile Free Trade Agreement Implementation Act [H.R.2738.ENR]
• the United States-Morocco Free Trade Agreement Implementation Act [H.R.4842.ENR]
• the United States-Singapore Free Trade Agreement Implementation Act [H.R.2739.ENR]
• the Working Families Tax Relief Act of 2004 [H.R.1308.ENR].

President Bush vetoed nary a one. And none dealt with the financial crisis hinted at by the July 2003 Freddie Mac accounting scandal.