The Massachusetts senator, who progressives still hope will jump into the 2016 presidential race, made a splash yesterday when she laid out an ambitious agenda to expand the federal government’s financial regulatory abilities. Her plan calls for setting a limit on the size of financial institutions, levying a new tax on financial transactions, and reviving the barrier between commercial and investment banking that existed until 1999.
Her remarks hardly made waves among her colleagues.
“I never heard it, never saw it, never read any articles on it either,” Sen. Jon Tester of Montana said today in an interview on Capitol Hill.
The banking panel’s ranking member was also in the dark.
“I don’t know about her speech yesterday,” Sen. Sherrod Brown of Ohio, the committee’s ranking member, said in a separate interview.
The same goes for Sen. Robert Menendez of New Jersey: “I did not see her remarks so I couldn’t comment on it.”
In her 33-minute speech at the National Press Club, Warren emphasized that government oversight strengthens, rather than hinders, the effective functioning of the marketplace.
“Rules are not the enemy of markets,” she said at the event sponsored by the Levy Economics Institute. “Rules are a necessary ingredient for healthy markets, for markets that create competition and innovation. And rolling back the rules or firing the cops can be profoundly anti-market.”
Her comments, as well as the blasé reactions from Senate Democrats, could impact future committee legislation.
Sen. Richard Shelby (R-Ala.), chairman of the Banking Committee, is aiming to push through a bipartisan regulatory-relief package of legislation next month. While Warren is unlikely to support a bill that comes out of the Republican-controlled committee, where her fellow Democratic committee members stand is a murkier affair—and will determine the fate of any compromise legislation.
Financial industry associations are hopeful that Democratic opposition does not impede the chances for a bipartisan bill.
“There is a real appetite and desire on both sides of the aisle to help community banks,” James Ballentine, the executive vice president of congressional relations and political affairs at the American Bankers Association, said in an email statement. “It would be unfortunate to lose the opportunity to send these measures to the President.”
Paul Merski, chief economist and executive vice president for congressional relations at the Independent Community Bankers of America, said a bipartisan outcome is still likely.
“Most senators on the committee realize the distinction between a trillion-dollar Wall Street megabank versus a community bank of maybe $50 million, $1 billion or even $10 billion,” he said today in an interview. “As long as the focus is on relief for community banks, I don’t think that’s going to jeopardize bipartisan support.”
The forthcoming banking bill could touch on a range of issues, from loosening restrictions on community banks to requiring governance changes at the Federal Reserve.
That could win support from Sen. Jack Reed of Rhode Island, who earlier this year introduced a bill calling for Senate confirmation of the New York Federal Reserve president.
But Reed didn’t read about Warren’s speech either.
“I must confess, I saw the headline,” he said. “I didn’t go into detail because I’ve been running around.”
The offices of the six other Democratic senators on the committee, including Warren’s, did not respond to requests for comment.