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If anyone in the messy financial regulatory reform fight deserves laurels, its Sen. Bob Corker (R-Tenn.) for tireless efforts to achieve bipartisanship and balanced legislation, and for being willing to call out both Democrats and his fellow Republicans for excessive rhetoric.
Not only but perhaps partly because of Corkers importuning, the Senate might actually produce a bipartisan bill, though only after weeks of over-the-top finger-pointing.
On Monday, the former Chattanooga mayor went to the Senate floor to chide both sides of the aisle for trying to herd their folks with language that ... I dont think does justice to this issue, which is very important, very difficult and much needed in our country.
At that point, Democrats and the Obama administration were accusing Republican leaders of trying to kill banking reform in cahoots with Wall Street, and Republicans were accusing Democrats of setting taxpayers up for big bank bailouts.
Corker especially took on his own side for charging that orderly liquidation language would prop up too-big-to-fail banks. Thats not true, he said.
He said he could not support the base Democratic bill because, as he told me and others in interviews, it had a leftward tilt. But he said most flaws in the bill could be fixed in five minutes.
Only the fifth-ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, Corker at times has been rapped by colleagues for intruding into the regulatory fight and especially by Republicans for appearing too accommodating toward Democrats.
But if it had been up to Corker, financial services reform would have been addressed a lot earlier and a lot more smoothly.
Corker started working on financial reform last March, teaming up with Sen. Mark Warner (D-Va.) to conduct more than a dozen deep-dive seminars with financial experts on the origins of the crisis and potential solutions.
Last summer, the two co-sponsored a stopgap bill in case Congress proved unable to produce comprehensive legislation to empower the Federal Deposit Insurance Corp. to close down too-big-to-fail banks that might take the country to the brink of ruin.
The House passed its version of financial services reform in December on a straight party-line vote about the time that negotiations to produce a bipartisan Senate bill broke down.
Senate Banking Chairman Chris Dodd (D-Conn.) had been working with ranking member Richard Shelby (R-Ala.), but their talks reached an impasse and Dodd produced his own draft bill.
At a committee hearing, Corker said he begged Dodd not to abandon negotiations because the Banking Committee has been one of the few places in the Senate where there wasnt that much partisanship, where you could [legislate] like a Senator.
Instead of going the party-line route at least then Dodd formed four bipartisan panels to work on elements of the bill, with Corker and Warner assigned to handle the issues of systemic risk and resolution of troubled banks.
Dodd and Shelby were working on hot-button consumer-protection language, but their talks again broke down in February and Dodd asked Corker on Feb. 9 to negotiate on a broad range of issues.
In late-night, seven-day-a-week talks between the Senators and their staffs, we got to the 5-yard line, Corker told me.
But on March 10, Dodd backed off, pleading that his agreements with Corker were losing Democrats on his committee without guaranteeing any other GOP votes. Corker said he suspects the White House also influenced Dodd.
Dodd introduced his own bill, which took a pretty big leftward slant on consumer protection and grants of flexibility to regulators on whether to shut down troubled banks, Corker said.
Dodd said hed get his bill out of committee on a party-line vote the 1,300-page measure was approved in 21 minutes on March 22 and then try to negotiate a bipartisan bill before it went to the Senate floor.
That process was proceeding fitfully until Majority Leader Harry Reid (D-Nev.) abruptly announced the measure would go to the floor this month presumably to embarrass a few Republicans into supporting the bill.
But all 41 Republicans signed a letter opposing it, suggesting they could defeat it with a filibuster. GOP leadership aides say this was a tactic to gain bargaining leverage.
Republicans attacked a provision for a $50 billion fund collected from big banks to be used to smoothly liquidate a troubled bank as a bailout.
Corker said removing the provision may clear the way for the administration to impose a tax on banks and require collection of close-down funds after a bank needs closing, perhaps in a recession.
But he said there are more important flaws in the bill especially the absence of underwriting standards for mortgages. Until 1982, he noted, borrowers were required to put at least 10 percent down and, in a default, lenders could demand full repayment of a loan.
Also, nothing in the bill will regulate housing giants Fannie Mae and Freddie Mac, now in hock for $400 billion and having new mortgages dumped on them daily by the banks.
Corker and Warners major idea is still in the bill: If a big bank fails, the government will wind down these firms, sell off the assets, make sure the stockholders are absolute toast ... [and] make sure its so painful that nobody wants to go through this.
But would that really happen? If a huge institutions failure could bring down the whole economy and big banks, Corker admitted, are getting bigger by the day would government really close it down?
A future Treasury Secretary might decide its too dangerous, he acknowledged, but hed have to come to Congress to change the rules.
The biggest quandary of all emanating from the current crisis is how to get the smartest young people in America to get into productive work, instead of inventing synthetic financial instruments that have no social value.
Corker, who used to build shopping centers and office buildings that he could drive by with pride, admitted he had no answer to that. Who does, if bonuses at Goldman Sachs still run in the hundreds of millions of dollars?