Sen. Charles Schumer has worked quietly but vigorously to shape financial regulatory reform legislation, a delicate exercise that has the New York City resident straddling the fence between his responsibilities as a Democratic Party leader and as a representative of Wall Streets interests.
Schumers decision to support a strong, liberal-minded reform bill rather than rallying to Wall Streets defense has caused intense grumbling and hurt feelings in the New York-based financial services industry, long among the Senators most loyal political and financial backers. Schumers harshest detractors accuse him of taking Wall Streets campaign cash and then turning his back on the industry for the sake of career advancement in Washington, while those less impassioned offer a more balanced critique.
Schumer, in an interview, brushed aside the criticism and defended his actions, arguing that New York City is suffering from 10.7 percent unemployment due partly to Wall Street excesses and that he has advocated policies meant to protect all of his constituents. He contends that his focus on effective reform has prevented the passage of vindictive legislation favored by some Democrats looking to punish the industry for a deep recession still being felt on Main Street.
Its a difficult issue. But Im very comfortable with where I am despite the criticism that I get, Schumer said Wednesday. I believe that there were significant excesses in the financial services industry that led to the crisis. Thats whats motivated me.
Perhaps because Schumer mined Wall Street for contributions so successfully during his two terms as Democratic Senatorial Campaign Committee chairman, the Senator is seen as particularly intertwined with the financial services industry. Schumer in 2006 and 2008 led the Democrats to a total of 14 Senate seat pickups, and he outraised the National Republican Senatorial Committee by leaps and bounds partly because his constituents in lower Manhattan opened their checkbooks.
None of the financial industry sources interviewed for this story suggested Schumer owed Wall Street fealty for all of that support, and some lobbyists working on this issue lauded Schumer and his staff for their availability and assistance as the fight over regulatory reform legislation has heated up. But there appears to be growing frustration in financial services circles, with some arguing that Schumer has failed to adequately protect an industry threatened by politicians looking for an election-year scapegoat.
What I think hes most focused on is, How do I become Majority Leader? said one K Street operative, noting the contest would likely ensue between Schumer and Majority Whip Dick Durbin (D-Ill.) if Senate Majority Leader Harry Reid (D-Nev.) loses his re-election bid.
A Schumer aide dismissed as pure hyperbole the notion that the New Yorkers position on regulatory reform is governed by internal Democratic politics. The Senator is certain Harry Reid is going to be re-elected. The unemployment rate in New York City, one of the remnants of this crisis, is reason enough for him to believe in strong reform, this aide said.