So President Barack Obama hasn’t completely cleaned up Wall Street. But the White House hopes to turn the latest Wall Street scandal into Mitt Romney’s problem.
Last week’s sudden $2 billion loss at JPMorgan Chase & Co. gave the White House a new opening to attack the presumptive GOP presidential nominee for seeking a regulatory environment friendlier to business concerns. But it also raised new questions about the reforms the administration is still writing nearly two years after Obama signed the Dodd-Frank financial reform law.
The White House’s offensive, which came as the Obama and Romney campaigns sparred over Romney’s history at private equity firm Bain Capital, is nuanced given that the president has at times courted Wall Street, including JPMorgan CEO Jamie Dimon — a Democrat who has been friendly with the White House even as he’s pushed hard against parts of financial reform.
White House Press Secretary Jay Carney said Monday the reform law protects taxpayers from ever again having to bail out the banks, saying the losses at JPMorgan will not cost the Treasury. And he said the loss shows that the president was right to pursue tougher new rules despite bankers’ objections.
“It is amazing, given the events that we’ve seen in these last few days, that there are still those who want — who are out there arguing that we should repeal Wall Street reform, that we should let Wall Street write its own rules again,” Carney said. “Those who take them at their word, bankers who say, ‘Oh, we promise that we’ll never let happen what happened in 2008, you can trust us’ — well, look.”
The Romney campaign stressed that the former Massachusetts governor doesn’t just want to repeal laws such as Dodd-Frank and the earlier Sarbanes-Oxley Act. They say he wants to replace them with “modern” and efficient financial rules, including regulation of derivatives.
“Mitt Romney believes in a system of sensible financial regulation,” said spokeswoman Andrea Saul. “On the other hand, President Obama supported legislation that makes another financial crisis more likely, leaving taxpayers on the hook for future bad decisions made by Wall Street banks.”
Romney’s economic plan said that some of Dodd-Frank’s provisions make sense, but he has been vague on what exactly he would do differently.
The problem for the White House is that it’s been nearly two years since the Dodd-Frank law was signed and many of the reforms have yet to take effect, giving Republicans an opening. The so-called Volcker Rule that prohibits risky investments with customer deposits still hasn’t been finalized and won’t take effect until 2014.
And Obama is still courting Wall Street cash, including at a fundraiser in New York on Monday.
But a senior administration official said Monday it’s ironic for Republicans to target the administration’s implementation of the law when they’ve fought vigorously against it every step of the way.
“The fact that we are still working to implement the law shouldn’t detract from all the concrete, tangible progress that’s been made so far,” the official said. “The big debate is frankly between a party that wants to keep the pedal on reform and a party that literally wants to defund all of it.”