Congressmen, too, feel pocketbook panic
Politicians who want to act rather than talk? That's what a Wall Street dive can do to lawmakers' desire to enact corporate reforms.
It's not hard to tell when a quiet panic is settling in on Capitol Hill. It's when lawmakers who haven't had a good word to say about each other in months sit side by side, nodding in agreement about a bill that only weeks ago was fiercely contentious.
That was the scene at the first meeting of the conference committee to bang out differences between House and Senate versions of a bill to bring greater accountability to corporate America.
As conferees met last Friday morning, the stock market was in another free fall; by day's end, the Dow Jones Industrial Average would drop 390 points. While many around the table in the basement of the Capitol had serious doubts about this bill, they weren't sounding off about them.
With lawmakers' own fortunes diving alongside those other American investors, even the inevitable partisan barbs were wrapped in puff.
"It's interesting that we have such a warm mutual admiration society about what was once so controversial," said Rep. Barney Frank of Massachusetts. As the No. 2 Democrat on the House Financial Services Committee, he watched a plan similar to the current one crushed in April.
But since that April vote, investors in the stock market had lost more than $2.6 trillion. About 2 in 3 of those likely to vote in November elections are invested in the stock market, analysts say. And those soon-to-vote investors had just opened some of the grimmest quarterly statements they had ever seen.
Then, there were daily disclosures of more corporate wrongdoing. More big restatements of earnings are likely before an Aug. 14 deadline for chief executive officers to personally vouch for corporate reports. If that causes markets to tumble further, lawmakers want to be able to say to voters: There is a problem, but we have done something about it.
A similar fast track is being laid for the other public concern of the year: homeland security. After months of meandering on everything from healthcare policy to a bottom line for next year's budget, Congress is surging to finish two of the most ambitious bills in its recent history.
One, aimed in part at restoring shattered investor confidence, rewrites the rulebooks for corporate America. The other reassigns some 170,000 federal employees to a new Department of Homeland Security and wrests authority to oversee them from the most powerful committee chairs on Capitol Hill.
There may be grumbling, late-night sessions, and the heavy hand of leadership on both sides of the aisle. And even serious doubts about many features of these bills. But in the end, something will be passed, and something signed into law. Soon.
What's driving this fury of legislating is a conviction on both sides of the aisle that the public will not tolerate failure to act on either issue: If terrorists attack again or if the stock market slides much further and Congress has done nothing to prevent it lawmakers will be held to account.
For a few hours after a unanimous Senate vote for a Democrat-sponsored bill on corporate accountability on July 15, the House GOP leadership considered slowing down the process. Some spoke of a cooling off period; others, of revisiting the issue at the end of the August break.
But GOP and other polls signaled a dramatic drop in public confidence that made any such move politically perilous. On July 16, the House passed a hastily drafted bill boosting penalties for corporate wrongdoers.
At the same time, President Bush called on House leaders to come to terms with Senate conferees on a bill and vote on it before the House leaves town Friday night. And if they couldn't agree on a bill in conference, vote on the Senate bill, administration officials said. House leaders quietly dropped their objections.
"Once the House decided it wants to get it all over this week, it's now inevitable. But the price of haste is waste," says Sen. Phil Gramm (R) of Texas, once a strong foe of Democrats' accountability plan. But "waste," some say, can be corrected later.
The homeland security department is "not going to be perfect," says Sen. Joseph Lieberman (D) of Connecticut. But "we'll have an opportunity to go back and make it better.... What's important is that we get a strong secretary."
Amid all the lobbying and partisan dynamics, politicians often need "action-forcing events," like the stock market fall, to prod them, says Paul Light of the Brookings Institution. "It's so hard to get legislation enacted under any circumstances."