On Sept. 18, 2008, with the nation on the precipice of a financial crisis, Treasury Secretary Henry Paulson told House Speaker Nancy Pelosi to gather a bipartisan group of lawmakers that very day. Congress quickly passed the bailout, but it was not until July 2010 that President Obama signed a sweeping overhaul of the financial system meant to prevent another Great Recession.
The story of that overhaul, the Dodd-Frank Wall Street Reform and Consumer Protection Act, serves as a case study of “how America’s essential institution works, and how it doesn’t†â€" the subtitle of the latest book by Robert G. Kaiser, a veteran Washington Post reporter. While reporting the book, “Act of Congress,†Mr. Kaiser had unusual access to Senator Christopher J. Dodd, Democrat of Connecticut; Representative Barney Frank, Democrat of Massachusetts; and, crucially, their staff members. He talked to The New York Times about the roots of his pessimism and his prognosis for a more functional future for Congress.
One of the major takeaways from your book is that there is something fundamentally broken about Washington. But it’s also about Congress responding to a crisis by successfully passing a sweeping bill. Isn’t that how it’s supposed to work?
Yes, indeed, but as I write, you can’t draw any optimistic conclusions from this example. Dodd-Frank was only enacted because of extreme circumstances created by the Great Crash of 2008 and the big Democratic majorities in Congress that it helped produce. The political stars aligned for just long enough to allow for the enactment of health care reform and Dodd-Frank. The 2010 elections wiped out the Democratic majority in the House and reduced it in the Senate, and now, obviously, we have gridlock again.
We usually think of lobbying and campaign cash as the villains in politics â€" your own 2010 book, “So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government,†certainly captured this theme. But lobbyists did not appear to have been particularly influential on the Dodd-Frank bill. What are some of the other obstacles to effective legislation?
Lobbyists, especially those working for the big banks, were weaker this time because their clients were so unpopular. I think my readers may be surprised by how many obstacles there now are. Partisan warfare dominates Congress. Few members have strong policy interests, and even fewer have real policy expertise. Staff has to do most of the work â€" 95 percent of it, Ted Kennedy wrote in his memoir. The inside story of Dodd-Frank confirms the accuracy of Kennedy’s observation. The culture of the modern Congress is hostile to compromise, but compromise is the only route to enacting big bills.
Many members of Congress involved in the Dodd-Frank bill seemed to lack both the expertise needed to understand the complicated financial legislation and the ambition to solve big problems, rather than stick to partisan strategy. Is this really all that different from the past? Have some issues just become too complex for politicians to handle?
When I covered Congress in the 1970s, I think there were many more members with strong policy interests and real expert knowledge. I think the quality of the membership has declined. This isn’t surprising. Being a member today is not an appealing job, especially to the kinds of people I think most Americans would like to have in Congress: smart, practical people who want to address big issues. Instead, the people attracted to run today are more likely to be partisan warriors eager to do battle with the enemy. But, of course, you are right â€" some issues today are enormously complicated.
You shed light on the immense influence of unelected staff members. Do they wield too much power?
What is “too much� In the case of Dodd-Frank, I realized after seeing the bill get put together from the inside, the staff were indispensable. There would have been no bill without them, literally. I was pleased to have the opportunity to give these talented, dedicated people credit for what they did. Usually staff are invisible in accounts of the legislative process. Dodd and Frank allowed their staff members to talk to me throughout the process on the record. This allowed me to give a much fuller account of the real legislative process than reporters can usually get.
There’s a striking moment when a top Democratic aide is appalled by an especially harsh speech by Senator Richard Shelby, which he delivered despite efforts by Mr. Dodd to co-write the measure with him and cultivate a strong personal relationship. “How could you?†the aide asks Mr. Shelby, who replies, “It’s just politics.†How often are such speeches “just politics,†and how can voters tell? Do the politicians themselves always know the difference?
Such speeches are now a routine part of the everyday partisan warfare on Capitol Hill. Bright politicians like Shelby certainly know the difference, but a lot of members are not as bright as he is. I was struck by the way some members could stick to partisan talking points even when they pretty obviously clashed with reality. “Reality†has become another relative term in today’s Congress, sadly.
Do you see any parallels between Dodd-Frank and the current immigration debate that might help predict that bill’s outcome?
I see one possible parallel. Dodd-Frank passed, narrowly, because just enough members thought the political reasons for supporting it were compelling. Immigration reform is a possibility now, I think, only because of the results of the 2012 election. Some Republicans have decided that they are in danger of losing the Latino vote for a generation or more if they can’t show some support for the one issue that most animates Hispanic voters. So politics really matters, and may mean that we get immigration reform. But, obviously, Republican members don’t all agree about this. Will enough agree to pass a bill? Stay tuned.
To become functional again, does Congress need to return to old traditions, or does it need to be innovative, find a new way of doing business?
I think it needs one of two things: either one party has to win enough seats to have effective control of both houses, as the Democrats did in 2009-10, or the Congress needs a new culture, which would have to be based on a profound change in attitudes, and probably in membership. My experience working on this book left me quite pessimistic. As I wrote in the last line of my book, our Congress is broken.
