Elizabeth Warren’s Bank Bill Has No Chance; Talking About the Taboo Subject — Social Security Reform
Author: Greg Valliere
March 16, 2023
THERE’S NO CONSENSUS IN WASHINGTON over how — or whether — to deal with this banking crisis. Many Democrats want to toughen standards, applying them to mid-sized banks, while most Republicans blame lax regulations and President Biden’s economic policies. Some even blame a “woke” agenda that has intimidated bank officials.
OUTSPOKEN SEN. ELIZABETH WARREN will fail in her attempt to toughen laws covering smaller banks that won a rollback from regulations in 2018. Warren doesn’t have enough votes to block a Republican filibuster against her bill in the Senate, and she lacks support in the House.
WARREN, 73, IS LIKELY TO FOCUS on winning re-election to her Senate seat next year, but if this crisis persists, she might give the presidency one last shot. Running against the banks has been a populist staple for the past three centuries.
AMID THE FINGER-POINTING comes the most likely target — the Federal Reserve, already under fire for its failure to anticipate inflation. Hearings will begin soon on what appears to be a lax regulatory climate at the San Francisco Fed, where red flags at the Silicon Valley Bank apparently were ignored.
JANET YELLEN, who testifies before Congress at 10 a.m. this morning, undoubtedly will pledge a thorough investigation of SVB, and a likely toughening of regulations. But that won’t satisfy American voters, who are adamantly opposed to “bailouts” that favor the wealthy. If this issue isn’t contained quickly, it will have huge political implications as the 2024 campaign begins.
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AGAINST ALL ODDS, SOCIAL SECURITY is back on the table. Members in both parties have formed ad hoc committees to explore all options: raising the retirement age, hiking payroll taxes, cutting benefits for the wealthy, changing COLA provision, etc.
MOST PRESIDENTIAL CANDIATES will stay away from this issue, fearful of Donald Trump’s wrath against anyone who advocates benefit cuts. But we have been surprised in recent days to hear that the outlines of reform plans are being debated behind closed doors on Capitol Hill.
PASSAGE OF A REFORM BILL is not imminent, but there’s a growing consensus that something has to be done; there’s no hope of meaningful deficit reduction without Social Security reform. Hats off to the brave members of Congress who are willing to talk about this; their proposals will win enactment eventually.
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