Bob Corker, Risk-Lover

The biggest news of the day was that Sen. Bob Corker (R-TN) has agreed to break ranks and negotiate with Chris Dodd on a financial reform bill. This comes five days after Dodd said he and Sen. Shelby—the ranking Republican on the Senate Banking Committee—had reached an "impasse" on financial reform.



Let's be clear: Corker is taking a massive political risk here. He's a first-term Senator, and he's publicly replacing his ranking member at the negotiating table on the biggest, most important piece of legislation that the Senate Banking Committee has seen in a long time. And he's not crossing any ranking member, he's crossing Richard Shelby—the most vindictive, ruthless Senator this side of Tom Coburn. (As I said the other day, what you have to realize about Shelby is that he would literally bomb Oregon if it meant an Alabama company would get the contract to build the bomb.)



Now, even with Corker at the negotiating table, there's still no way we're going to get an independent Consumer Financial Protection Agency (CFPA). That was the main sticking point in Dodd and Shelby's negotiations. No matter how much consumer advocates push, an independent CFPA is off the table in the Senate. The votes simply aren't there: the Dems don't have a supermajority anymore; Ben Nelson always takes his pound of flesh; and "centrists" Evan Bayh and Blanche Lincoln are both in cycle right now. So the Dems are at least four votes shy on this issue. Corker won't agree to an independent CFPA, because even if he did, the Dems would still be at least three votes short, the bill wouldn't pass, and he'd get tons of heat from within his own caucus for having supported it in the first place. But let's be honest: the CFPA is largely a political sideshow in the context of the larger financial reform bill.



What consumer advocates need to do is start thinking about what specific powers and directives they want a consumer financial regulator to have, and then start pushing for a division within an existing agency to be given those powers/directives. Or they can keep stomping their feet and insisting on an independent CFPA, which I absolutely, 100% guarantee will end in massive disappointment. Your choice.



And, I have to point out (since it's my blog, after all), I was ahead of the curve on Corker. After a committee hearing almost a year ago, I wrote: "Am I crazy, or did the most articulate and useful questions for Bernanke in the Senate Banking Committee hearing really come from Bob Corker?" I usually leave important hearings on in the background while I work, and after the first round of questions, when all the members have done their grandstanding and all the ADD journalists have left, there are occasionally some members who stick around and ask serious questions. Corker's questions in that hearing a year ago were almost shockingly well-informed (for a Senator), and were couched in a very non-partisan way. Corker seemed genuinely interested in talking with Bernanke about the nitty-gritty of financial reform. I've since asked around on the Hill about Corker, and the consensus feeling is that while Corker is still a largely unknown entity politically, he's really, really interested in the details of financial reform.



I wouldn't say that I'm a fan of Corker—I still disagree with him on policy. I think of Corker like I think of Hank Paulson: while I think Paulson made a lot of mistakes in the financial crisis, and I disagree with him philosophically, he was clearly acting in good faith, in that he did what he thought was best for the country. You can't say that about many modern-day Republicans.