The repeal of a banking regulation included in the omnibus spending bill is not a precedent for further attacks on financial reform, top Obama administration economic officials said Thursday.
“The president will not allow Dodd-Frank to be watered down,” said National Economic Council Director Jeffrey Zients.
Speaking at an event hosted by Politico in Washington, Zients said Obama strongly opposed the tweak to the 2010 Dodd-Frank financial reform law included in the government funding bill signed by the president Wednesday. The measure, which drew outrage from liberal Democrats led by Sen. Elizabeth Warren of Massachusetts, undid a prohibition on trading of certain derivatives in banking units that receive insurance from the federal government.
Zients said the Obama administration strongly opposed rolling back the rule. “I don’t want to in any way minimize that we did not like that provision,” he said.
Treasury Secretary Jack Lew seconded that message Thursday morning in comments delivered at the Treasury that the measure “was a step in the wrong direction.”
He reaffirmed that he and Obama are committed to implementing Dodd-Frank and that “nothing has changed that resolve.”
Nevertheless, Zients explained, signing the bill into law was worth it as part of a compromise that staved off the possibility of a government shutdown and provided certainty to businesses over the next year, in addition to funding other liberal priorities.
But the legislative process that resulted in the repeal of the Dodd-Frank provision is not a precursor for other Republican attempts to undo the law, Zients said. Throughout the deliberations of the past two weeks, financial reform advocates including Warren and Dodd-Frank architect Barney Frank warned that lawmakers opposed to the reform would use must-pass bills like the spending bill to chip away at the law in the future.
Instead, the Obama administration will use the veto if necessary to protect Dodd-Frank, according to Zients.
“If something is out of bounds from the president’s perspective, he will continue to express his views — including, if necessary, the threat or the actual veto of legislation that’s inconsistent with his values,” Zients said.
