Yet another new sheriff in town
The Washington version of musical chairs that takes place at the start of each new Congress has yielded another new committee chairman who says he intends to focus his investigative authority looking into the dealings of the financial services industry. Now that Rep. Henry Waxman (D., California) has taken the helm of the House Energy & Commerce Committee, his old post of Chair of the House Oversight and Government Reform Committee has fallen to New York Rep. Edolphus Towns (D).
The committee is a high-profile venue from which Congress can investigate all manner of suspected wrongdoing, whether within the government or in the private sector. Waxman used the post as a bully pulpit to challenge and criticize the Bush Administration on any number of policy decisions.
Now this position shifts to the 74-year-old Towns, a Democrat from Brooklyn. First elected to Congress in 1982, Towns has been a member of the committee during his 26 years in Washington. His ascendency to the chairmanship is largely a product of the House seniority system that often hands the reins of committee power to the person next in line.
Right out of the box, the new Chairman says that he intends to set his sights first on the financial services industry. Towns says that he intends to bring the Wall Street recipients of last fall’s $350 billion federal bailout before his panel to explain in detail how they spent the money and that he’ll be looking at who among the troubled firms continued to take executive bonuses.
Towns will certainly draw lots of media attention if he follows through with his agenda, in part because he has critics within his own party who are anxious to see how he performs in his new position. During the last Congress he racked up an abysmal attendance record, missing 62 of the Committee’s 74 hearings. And just three years ago he was taken to task by then House Minority Leader Nancy Pelosi who threatened to strip Towns of his post on the House Energy and Commerce Committee after he bucked his party and voted for the Central American Free Trade Agreement.
The bottom line is that Towns has a lot to prove and may be looking to use this new platform to bolster his image on the Hill.

Trust or Verify?
This week’s debate in Congress on whether to release the second half of the $700 billion Troubled Asset Relief Program (TARP) funds to Wall Street firms showed the differing approaches of the respective committee chairs from each chamber in trying to do the bidding of the incoming Obama Administration.
In the Senate, Banking Committee Chairman Chris Dodd (Connecticut) is looking to take the new administration at their word that they will make sure that the funds are spent properly and within tougher guidelines. Knowing that a number of GOP Senators will not support the move, he has concentrated on gathering at least 50 solid votes to ensure Democrats’ ability to turn back any move to disallow the spending.
Meanwhile, in the House, Financial Services Committee Chairman Barney Frank (Massachusetts), facing anger on both sides of the aisle over how the first half of the TARP funds were disbursed, is pushing his own bill to impose restrictions on how the second half is spent, specifically requiring that at least $40 billion be used to forestall home foreclosures.
While Frank has said that he would be willing to take the Obama Administration at its word, he believes that setting the policy in stone is the only way to ensure the necessary votes to release the money in the House, despite the fact that Team Obama does not want to have to deal with any new legislative constraints.
Of course, if the Senate does vote to release the cash, it will happen and the whole legislative exercise in the House becomes a moot point.

The impossible job of the SEC
As the Senate this week holds its confirmation hearing on the nomination of Mary Schapiro to head the Securities and Exchange Commission, a recent report by that agency’s Inspector General shows the almost insurmountable task that will likely soon land on her desk.
A review of the IG’s report by Congressional Quarterly notes that the SEC’s 3,500 employees are charged with overseeing the financial activities of 13,000 public companies, 37,000 investment companies, 11,000 registered financial advisors, 677,000 registered broker-dealer representatives, 10 securities exchanges and 9 credit-rating agencies. Daunting odds at best.

Politics 2010: GOP Senate vacancies adding up
Next year’s Senate race cycle is shaping up as another uphill battle for the already torn and frayed GOP. Of the 37 Senate seats up for reelection, the Republicans hold 20 to the Democrats 17. Now, of those, there are only about ten seats that will likely be in some degree of play. And of those, eight are currently in GOP hands.
Right now analysts are looking at three open GOP seats as the most at risk for changing hands. Those seats include Sens. George Voinovich of Ohio, Kit Bond of Missouri and Mel Martinez of Florida, all of whom are joining Kansas GOP Sen. Sam Brownback in not seeking reelection next year.

Political Observations of the Week:
I used to think that being a weatherman was the only job in America where you can get it wrong 80% of the time and still have a job.”
Rep. Edolphus Towns (D., New York), new Chair of the House Oversight and Government Reform Committee, on the salaries and executive bonuses of financial-services executives.

“The chairman [of a committee] – especially with 58 to 59 in the voting caucus – drives the car and chooses the destination. The ranking [minority member] rides shotgun on a good day. On a bad day, he or she is in a carpool with the chairman’s staff.”
Former Nebraska Sen. Bob Kerrey (D), on the current GOP Senate minority.

“The biggest jam since ’32.”
Rep. Dave Obey (D., Wisconsin), Chairman of the House Appropriations Committee, summing up the economic crisis.

“We have one thing going for us that we haven’t had in a while, and that’s fear. You have to be scared these days, unless you’re a total lunatic.”
Former New Hampshire Sen. Warren Rudman (R), suggesting that there’s a good chance both parties can find common ground to work together in the 111th Congress.

“One thing we learned from the Depression is marginal, incentive changes don’t work very well when the economy is falling away from you very rapidly. And that’s what’s occurring here.”
North Dakota Sen. Kent Conrad (D), Chair of the Senate Budget Committee.
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John J. Kohut is an independent political analyst in Washington, D.C. He has been writing about national politics for more than a decade, including stints as an editor at the Cook Political Report and as senior editor at the Rothenberg Political Report.