Kennedy's Death Impacts Wall St. Reforms

Shifting of Senate Leadership Could Leave Dem from South Dakota, a Credit Card Hub, in Charge of Banking Panel

(CBS)  President Barack Obama's plan to recast how the government regulates Wall Street could be thrown a curve this fall if Sen. Tim Johnson, a Democrat whose home state is a major hub for credit card companies, takes over the chairmanship of the Senate's banking committee.

With the potential shake-up in limbo after the death of Sen. Edward Kennedy, the focus as Congress returns next week from its August break will be on whether Sen. Christopher Dodd, D-Conn., will give up his perch atop the banking panel to become chairman of one of the two committees responsible for overhauling that nation's health care practices.

If Dodd chooses to succeed his friend, Kennedy, as head of the Senate Health, Education, Labor and Pensions Committee, he would have to relinquish command of the banking panel and forgo control of imposing new laws on a financial industry blamed for plunging the nation into the worst economic crisis since the 1930s.

Another option could be for Democrats to leave the health committee chairmanship vacant for several weeks, or enough time for Dodd to finish the financial overhaul package.

Democratic leaders have confirmed that Johnson, a South Dakota Democrat, would be offered the chairmanship of the Banking, Housing and Urban Affairs Committee if Dodd steps down. Sen. Chuck Schumer, D-N.Y., told reporters Thursday that Johnson would be a capable and independent chairman.

Capitol Hill aides said the decision is up to Dodd, who declined to comment. His aides said they have no timetable on when he might make a decision.

Dodd faces a tough re-election fight next year after being embroiled in a sweetheart loan scandal and legislation that allowed bailed-out insurance giant AIG to pay out millions of dollars in employee bonuses.

Dodd has relied on his position as banking committee chairman to push through tough new protections for consumers, including a new law that tightens rules on how credit card companies do business. Dodd also has been drafting a separate bill that would create a new government agency dedicated solely to protecting financial consumers from fraud and abusive business practices.

Johnson voted against Dodd's credit card bill, saying it could "limit access to credit for consumers and potentially jeopardize thousands of jobs in South Dakota." He also has questioned Obama's desire to put new restrictions on banks that offer exotic financing instruments, which contributed to last year's financial meltdown.

"Your proposal seems to create many hurdles for both banks that offer these types of products and consumers that use them," Johnson told an administration official at a July hearing.

Because of its lender-friendly credit card laws, Johnson's home state of South Dakota has become an operational hub for major credit card issuers such as Citigroup Inc. and United National Corp.'s Premier Bankcard.

Complicating matters for Democrats is that Johnson is still recovering from a 2006 brain hemorrhage. He speaks slowly and softly and relies on a powered chair to maneuver the Capitol, leaving some aides and lobbyists to question whether he could physically handle the demanding job of managing a financial regulatory overhaul.

Spokeswoman Julianne Fisher declined to comment on Johnson's potential promotion but said his health has not kept him from being an effective senator.

Jim Manley, a spokesman for Senate Majority Leader Harry Reid, D-Nev., said Johnson would be offered the banking committee chairmanship if Dodd steps down. Manley said Johnson's health was not a factor.

Regardless of any potential shake-up in committee chairmanships, the Senate still plans to consider a financial overhaul bill this fall, Manley said.

Although Dodd has championed much of Obama's plan, including creation of the financial consumer protection agency, he has diverged from the president in other areas.

Dodd has advocated stripping the Federal Reserve of its supervisory powers and creating a new consolidated bank regulator. He also has considered creating a council of regulators to monitor risk across the financial system and regulate firms deemed too big to fail, instead of handing that job to the Fed.

Johnson has said he supports Obama's proposal to give regulators the ability to dismantle large interconnected companies.

"It's my view that we would be much better advised if we simply dismantled gigantic, troubled firms instead of bailing them out," he wrote in a June opinion piece in the American Banker, a trade publication.

[abaur2]

All Senators and Congressmen should be evaluated annually for performance and the results must become public. This is how most Americans have to live and work and that should also hold for public officials. Also, lewt us do away with the Honorable Sen. or Honorable Congessmen. This does not exist anymore if it ever did.

[Hosheen]

"Impacts"? The word this illiterate morons want is "Affects". CBS is leading the way in the dumbing down of America.

Does anyone really think it matter which politician is "in charge" of anything? They are all going to do only whatever they think will help them get re-elected. Nothing else matters even a little bit because nothing they do will affect them personally unless it costs them votes or cash contributions to buy votes.

[hungry1968-16]

by ConstantineXI September 4, 2009 3:58 PM EDT
This is comical. Chris Dodd, the largest recipient of Fannie Mae campaign contributions(the second largest being Barack Obama) are going to fix the financial mess that they helped create by their stupid promotions of Fannie Mae and Freddie Mac.







When are you morons going to acknowledge, that it was RICHARD SHELBY - the REPUBLICAN FROM ALABAMA - that was the chairman of the senate finance committee from 2002 - 2007, while America's financial system was allowed to fall into unregulated disrepair?

You REALLY need to quit listening to Fox News' lies, and get some ACTUAL information in those thick skulls of yours.

[payasyougo]

"Kennedy's Death Impacts Wall St. Reforms"
----
Yet another excuse for inaction.

[quapawsix]

Question if he lets Wall street do business as usual do the American people who voted for change get a kiss or at lest the courtesy of a reach around?

[Hosheen]

When have we ever even gotten a dinner, much less a read around?

[reveal5]

Presidential approval rating is up this week. Real Clear Politics shows all major polls and averages these polls. Presidential approval is up from 51.8% last week to 53% this week as an average of all major polls. Ipsos/McClatchy and CBS show 56% Presidential approval.

[reveal5]

One word seems to keep popping up from talking heads across the political spectrum. The word is being used to describe the viewpoints and tactics of the far right wing fringe in America. The word is ..."INSANE."

[newerdeal]

Next election lets fire them all and show them who is boss.

These jokers got to go !!!!!!!!!!!!!!!!!!!!!!!!

How much longer can our country last with leaders like we have now ! ! !

[newerdeal]

We need change and we need it now.

We need to get rid of the Bush/Obama team. Vote them out ! ! !

[tmittelstaed]

Why would Dodd give up a plum assignment on the banking committee to take an assignment on the health care committee - a committee which will almost certainly end up spinning it's wheels and producing nothing of any value?