The last two years of Obama’s presidency will largely be defined by his defense of key legislation: the Affordable Care Act, caps on carbon emissions and Dodd-Frank. While the broad shape of the first two battles is already known, the war on financial regulation, because of its abstract nature, will often be waged outside of the public eye. In his State of the Union Address last week, Obama said he plans to veto future provisions that would unravel his regulations of Wall Street. These words are welcome, though not as strong as Elizabeth Warren’s call to go on the offensive against the bank lobby. If Obama sticks to his promise, he’ll have a lot of fighting to do, because Republicans are itching to repeal his most important financial reform legislation.
During the haze of holiday parties and shopping anxiety, a repeal of a Dodd-Frank Financial Reform provision, handwritten by and for the financial lobby, was stuck into a critical spending bill, known as the CRominbus. After the holidays came the Terrorism Insurance Act whichincluded sections that exempt companies using derivatives from the possibility of being subjected to rules that would make the derivatives safer. A standalone bill that repealed a menu of derivatives reform provisions and generally reversed securities disclosure regulations failed by to get expedited treatment in the House, but eventually passed the House, even though the President said he would veto it. The bill includes a delay of implementation of the all-important Volcker Rule, which prevents the big banks from risky trading activities, until 2019. By then, they hope, actual repeal of Volcker Rule may be feasible and the banks will once again be allowed to risk the public’s money in the markets.