Wall Street Journal: Congress Plans Raft of Crisis Hearings
By GREG HITT
WASHINGTON — Congress has slated a wave of hearings on economic, finance and regulatory issues, reflecting Democrats’ growing ambitions in the final weeks of the 2008 election campaign.
The effort is unusual because it comes during a congressional recess. The schedule crests next week when six different House committees plan to hold eight hearings. They include a Budget Committee session featuring Federal Reserve Chairman Ben Bernanke on the economy, a Financial Services Committee look at overhauling regulation of the U.S. financial system, and an Education and Labor Committee field hearing in San Francisco to examine sagging retirement savings.
When Congress is adjourned, the pace of activity on Capitol Hill typically slows. But with Sen. Barack Obama running strong in the race for the White House, Democratic leaders expect to have enhanced majorities after Election Day. They are strongly considering reconvening shortly after the election to act on an economic-recovery package and are girding for action early in 2009 to revamp housing and finance regulations.
‘If we’re going to do something, we need to be laying the basis for it now, and not waiting for the election,’ said House Budget Chairman John Spratt, a South Carolina Democrat.
Republicans have resisted calls for a spending-focused stimulus package, as Democrats envision, and say the hectic schedule is campaigning in disguise. ‘I’ve never seen an immediate crisis solved by a hearing,’ said New Hampshire Republican Sen. Judd Gregg.
Republicans also are starting to stake out ground in the markets debate. They are insisting next week’s Financial Services Committee be broadened to examine Fannie Mae and Freddie Mac, the mortgage giants. Both firms made attempts over the years to cozy up to lawmakers in both parties. But Democrats, more so than Republicans, have stepped forward as defenders of the institutions.
House Financial Services Chairman Barney Frank, who claims Republicans are trying ‘to hijack the committee … in an effort to help out the McCain campaign,’ is preparing legislation to rewrite rules for housing finance and the roles of Fannie and Freddie. The Massachusetts Democrat also wants to tighten regulation of financial services, with hedge funds, private-equity funds and exotic financial instruments such as credit-default swaps likely to face greater scrutiny.
The hearings are designed to frame the debate on the legislation Mr. Frank will eventually push, focusing on the lack of regulation as a root cause of the crisis.
Meanwhile, Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, wants to find out ‘who should be held accountable.’ His recent hearing on American International Group Inc. revealed the company spent thousands of dollars on a retreat for executives shortly after it was bailed out by the government. Mr. Waxman plans more hearings on hedge funds and credit-rating firms.
In the debate over the weakening economy, Democratic leaders hope to use the hearings to pave the way action on a measure designed to boost growth. They envision a bill that would include spending on highways and bridges, extended benefits to unemployed workers, aid to cash-strapped states and a tax cut. House Speaker Nancy Pelosi of California is inclined to support a $150 billion package. A group of economists convened by Ms. Pelosi urged the Democratic leadership to consider a package twice that size.