By Peter Schroeder
Leading Democrats are blasting Republican leaders for including a package of cuts alongside their backup tax plan that would eliminate major pieces of the Dodd-Frank financial reform law.
Rep. Barney Frank (D-Mass.) accused the GOP of trying to sneak the dismantling of the Wall Street overhaul through at the last minute as part of a broader series of spending cuts being considered as part of Speaker John Boehner's (R-Ohio) "Plan B" tax plan.
"To jam fundamental changes into an overall spending bill in the closing days of a lame-duck session, with very little debate and no process of amendment, is a travesty of the legislative process," the ranking member of the House Financial Services Committee said in a statement. "I understand the Republicans reluctance to do some of these things openly, but that is no justification for either the substance or the tactics they are pursuing."
Rep. Maxine Waters (D-Calif.), who will take Frank's seat as the top Democrat on the panel in 2013, was similarly critical, accusing Republicans of exposing middle class Americans to future bailouts.
"It is unfortunate that at end of another session of Congress, the Republicans are again playing "Russian Roulette' with the U.S. economy," she said in a statement.
The cuts the pair objected to are part of a series of spending cuts Republican leaders put together to secure support from GOP members for Boehner's measure, which would permanently extend tax cuts for income under $1 million and is slated for a vote Thursday evening.
The new legislation replacing the sequester cuts is similar to a bill approved by the House in May. It would reduce the deficit by $243 billion, leave cuts to Medicare in place and turn off $72 billion in defense and non-defense spending, while adding $300 billion in new cuts. Only 16 Republicans voted against the bill in the May vote.
Included in that package are a series of cuts, first proposed by Republicans on the House Financial Services Committee in April, that take aim squarely at a number of Dodd-Frank's most contentious provisions.
One measure would bring the more than halve the CFPB's budget and bring it under the power of congressional appropriators. Bringing the bureau's budget under congressional control has long been a top priority of Republicans, who argue the agency's independent budget-setting power makes it unaccountable.
Frank accused the GOP of doing "a big favor for financial interest without having to do so in a way that constituents can identify" in pushing that measure.
Another would repeal a Dodd-Frank provision that gives banking regulators the "orderly liquidation" power to temporarily use taxpayer dollars to step in and wind down a failing institution. The Congressional Budget Office (CBO) has scored the repeal as saving the government $22 billion, but Democrats have cried foul at that accounting. Any taxpayer funds used during a liquidation would ultimately be paid back via fees imposed on the nation's largest financial institutions.
A third measure would eliminate the Office of Financial Research, another Dodd-Frank creation housed in the Treasury Department that collects data on financial markets in an effort to identify threats. A fourth originally cleared by the financial panel would eliminate a cornerstone of the White House's housing relief efforts, the Home Affordable Modification Program (HAMP). The program has failed to live up to original expectations, and Republicans contend it should be scrapped.