) -- There's been a lot of chin-stroking about how Senate Banking Committee Chairman Christopher Dodd's decision not to seek re-election stands to affect the future of financial regulatory reform.
Although partisans on both sides of the debate have used the media to swing headlines one way or the other, it will be impossible to tell how the regulation would have looked otherwise, and it may not have ended up much differently at all.
The House has already passed a version of a bill that would reshape the way financial firms are regulated. Dodd, a Connecticut Democrat, has been working with Sen. Richard Shelby of Alabama, the top Republican on the banking committee, to hammer out kinks, but talks broke down in November and Senate's focus shifted to health-care reform.
Dodd's priority would seem to be passing a comprehensive reform bill before his term is up at year-end. A key sticking point has been a consumer protection agency, which the financial industry vehemently opposes, and some Republicans -- including Shelby -- are against as well, in the current proposal.
Consumer advocacy groups are making the case that, because Dodd doesn't have to worry about getting elected again, he can stick to his guns and be aggressive on pushing through meaningful reform.
"He can worry more about the policy and not the politics," Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group, told the
On the other hand, banking lobbyists and reform opponents think Dodd will be more inclined to compromise just to push the bill through in a timely fashion. Dodd is retiring from his post due in part to allegations that he got a sweetheart mortgage deal from the mortgage lender
which, to put it frankly, screwed a lot of homeowners. Dodd would probably like to take some of the tarnish off his legacy with a parting gift to consumers who suffered at the hands of subprime lending.
Furthermore, while Dodd may not have to worry as much about contributions from the likes of
Bank of America
, the other 22 banking committee members -- not to mention the rest of the Senate -- still do.
Both sides of the reform argument appear to be missing the point: In Washington, policy gets passed, but politics never vanish from the equation. Mere minutes after word spread about Dodd's retirement on Wednesday morning, advocates on both sides of the coin were using it as a platform to shout louder.
If Dodd is more willing to compromise, his left-leaning counterparts may take the opposite tack. If they cave, it could be used against them in their future election bids. If he's unwilling to compromise to preserve his legacy, industry advocates and conservative colleagues may dig in their heels further and prevent a bill from getting passed -- an unlikely, but not impossible scenario.
Another political factor that could affect the political tides is jockeying by potential successors, including Sen. Tim Johnson (D., S.D.), who has a reputation for siding with business and is considered the frontrunner. There are also dark-horse candidates like Charles Schumer (D., N.Y.) Schumer may not throw his hat in the ring, simply to represent a united front, but he's got a long and strong reputation for consumer advocacy.
The point is that Dodd is just one man, even if he's an influential man. And while his legacy may be tied to this financial reform bill, it's worth keeping in mind that an even more influential senator wasn't there to vote recently for a health-care bill he devoted his career to.
The ultimate health-care proposal will be nowhere near the universal coverage that Ted Kennedy sought, and it took decades longer than he would have liked. But both the House and Senate passed bills in November that would greatly expand coverage for Americans, just months after his death on Aug. 25.
Written by Lauren Tara LaCapra in New York