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Republicans can't count on Democrats backing any major effort to ease banking rules during Donald Trump's presidency, so it could be time for the GOP to go it alone, a key lawmaker said Thursday.
Making big changes to the Dodd-Frank Act that would rein in the Consumer Financial Protection Bureau or limit regulators' ability to provide a lifeline to failing banks probably won't win bipartisan support, Sen. Pat Toomey said Thursday.
That's why Republicans should force through some revisions to the 2010 law through a budget process known as reconciliation that won't require votes from Democratic senators, the Pennsylvania Republican said.
"I don't see much prospect," to persuading enough Democrats to approve legislation, Toomey said at a conference in Washington sponsored by the U.S. Chamber of Commerce. "We need to be willing to proceed using reconciliation."
Toomey has previously recommended using reconciliation to reduce constraints on banks, but his Thursday remarks were the most pessimistic he's been about securing bipartisan support to overhaul Dodd-Frank.
His views could put him at odds with Senate Banking Committee Chairman Mike Crapo, who has stressed the need to work with Democrats on any revamp of financial regulations.
"I expect a bipartisan effort," Crapo, an Idaho Republican, said at the same chamber event Thursday. "We have a lot to do to get our economy back on track," which will require support "from both sides of the aisle," he said.
Crapo said he's optimistic about working with Ohio's Sherrod Brown, the banking panel's top Democrat, to identify legislation that they can move quickly.
He said a package of broader reforms, including on issues like housing and economic growth, is likely to come after the Senate tackles changes to the tax code.
Toomey said Republicans are off to a "rocky" start this year in advancing their agenda, despite the fact that they control Congress and the White House. Last week, they suffered a significant setback when they failed to get a bill to replace Obamacare through the House.
But Republicans can still accomplish a top Trump goal of dismantling some parts of Dodd-Frank if they do it through a budget bill, said Toomey, who is a member of the Senate banking panel.
A top objective is changing the structure of the CFPB — a regulator that Republicans blame for curtailing bank lending — to reduce the power of its director, he said.
Most major pieces of legislation need 60 votes in the Senate, where Republicans have just 52 of the 100 seats. Because approving measures through reconciliation requires just a simple majority, the GOP has tried to use it to achieve goals such as scrapping Obamacare.
Still, Republicans are constrained in what they can do with reconciliation, because they have to show that any legislative changes they are pursuing will have a direct impact on federal spending. Toomey stressed that it would be hard to apply reconciliation to all aspects of Dodd-Frank.
Trump, who has called Dodd-Frank a "disaster," signed an executive order earlier this year instructing regulators to examine financial rules and file a report on their findings, kicking off what the administration has promised will be a broad rewrite.
In the House, Financial Services Committee Chairman Jeb Hensarling, a Texas Republican, is planning to reintroduce a package of legislation that would take a red pen to most of the banking law.
The Senate Banking panel hasn't proposed a plan for revamping Dodd-Frank.