Thanks, Sen. Jeffords! (on topic)

posting this article because Jeffords' defection may have profound implications for the banking/lending industry, changes from which most of us here would likely benefit.

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New York Times
By STEPHEN LABATON

Senate Switch Alters Outlook for Businesses


WASHINGTON, May 24 â?? The return of Senate control to the Democrats after more than six years will have a profound effect on a variety of business issues pending in Congress, slowing some deregulatory measures that had been moving through Capitol Hill and sharply rearranging the legislative agenda.

With the rise of the Democrats, industry hopes have dimmed significantly for new legislation on everything from further deregulation in the banking, energy and telecommunications industries to changes in the nation's tort law system in ways favorable to big business.

Other industries will lose significant clout. Health care, for instance, will come under the purview of a committee led by Senator Edward M. Kennedy of Massachusetts. Drug makers now face increasing likelihood that the Senate will investigate pricing practices with renewed vigor and adopt a patients' bill of rights measure that includes prescription benefits provisions opposed by the industry.

"This is a city about power and what we have witnessed this week is a massive, massive power shift," said Kenneth Guenther, a top lobbyist with the Independent Community Bankers of America.

Traditional power centers in Washington, like organized labor and the government-sponsored enterprises (Fannie Mae and Freddie Mac), will now have important political allies back in positions of leadership in the Senate after coming under heavy assault by the Republicans.

Significant regulatory appointments will also come under greater scrutiny.

One nominee who is likely to face greater scrutiny, for instance, is Mary Sheila Gall, whom President Bush chose to head the Consumer Product Safety Commission. As a commissioner at the agency for the last decade, Ms. Gall had earned the widespread support of manufacturers and sharp criticism from consumer groups for voting against proposed safety rules and blaming negligent parents and consumers instead of faulty designs for injuries. Ms. Gall's nomination has come under attack by a number of public interest groups that have more influence with the Democrats.

Mr. Guenther and other lobbyists across a variety of industries said that if President Bush hoped to get much of his agenda through the divided Congress, he might now have to make far more legislative compromises.

One such area of potential compromise is bankruptcy. Competing bankruptcy measures sailed through the two Houses of Congress in March. Reconciling the measures has been a problem, though, because the 50-50 split in the Senate had created an irreconcilable debate over how to select a conference committee. With the issue of the even split now gone, it may be possible to move ahead and forge a measure in a conference committee, although some lobbyists say that the Democratic Senate may demand new provisions more favorable to debtors and consumers.

One of the Democrats who voted against the bill is Senator Paul S. Sarbanes of Maryland, a liberal who has long supported the requests of consumer groups and who now takes over the banking committee from one of the institution's most conservative Republicans, Senator Phil Gramm of Texas. The focus of the committee is widely expected to shift away from deregulation to issues like curbing predatory lending, increasing the privacy protections of consumers, and beefing up the law that encourages banks to make loans to underserved communities.

While a majority of the banking committee's members have favored greater guarantees of privacy for customers from financial institutions, Mr. Gramm â?? an opponent of such measures â?? has skillfully avoided votes on the issue. But now Mr. Sarbanes will set the agenda, and the issue is likely to arise should the committee attempt to tackle new legislation.

At the Commerce Committee, Senator Ernest F. Hollings of South Carolina would take over the chairmanship from Senator John McCain of Arizona. While the two have worked closely together, they differ significantly on many important policies.

Most notably, Mr. Hollings is certain to play a far more aggressive oversight role over the Federal Communications Commission and make it more difficult for Michael K. Powell, the new chairman of that agency, to pursue his deregulatory agenda. Mr. Powell's biggest supporter in Congress has been Senator McCain.

Mr. Hollings has expressed deep skepticism about proposals endorsed in principle by Mr. Powell to loosen regulations on the nation's largest broadcasters to enable them to both grow bigger and acquire newspapers.

He would also put a sharp brake to legislation proposed by the regional telephone companies. The legislation, which is moving through the House, would make it easier for the companies to enter the high-speed Internet business.

Finally, Mr. Hollings has long been critical of efforts to change the nation's tort and product liability laws in ways that would raise new obstacles for consumers to bring such suits. President Bush has suggested such changes.

The change in leadership will also make it significantly more difficult for President Bush to get his energy package through Congress. The new head of the Energy and Natural Resources Committee is expected to be Jeff Bingaman of New Mexico, who has introduced a bill that would require regulators to impose price caps on electricity, a measure opposed by the administration.

Mr. Bingaman, while supporting the ability of the energy industry to increase exploration, has also come out against the administration's proposal to open the Arctic National Wildlife Refuge in Alaska to oil exploration.