Today’s Times story, for instance, examines the non-role played by President Obama in shaping the legislation and traces the administration’s lack of enthusiasm to Treasury Secretary Geithner.
While Mr. Obama reaffirmed his support for the proposal shortly after becoming president, administration officials barely participated in the negotiations, a factor that lobbyists said significantly strengthened their hand. Lawmakers who have discussed the issue with the administration said that the president’s senior aides had concluded that a searing fight with the industry was simply not worth the cost.
Moreover, Timothy F. Geithner, the Treasury secretary, did not seem to share Mr. Obama’s enthusiasm for the bankruptcy change.
Mr. Geithner was lobbied by the industry early. Two days after he was sworn in, he invited Mr. Fine from the community bankers to his office for a private meeting. The association, with influential members in every Congressional district, is one of Washington’s most powerful trade groups.
A senior adviser to Mr. Geithner said the administration supported the cramdown proposal, but it preferred that distressed homeowners seek to modify their loans through the Treasury’s new $75 billion program, which rewarded banks if they modified home loans, rather than through bankruptcy court.
Mr. Durbin [the Illinois Senator who supported the provision] acknowledges that it was a mistake not to call on the administration for help.
If the recent raft of legislative, rule-making, lobbying and policy stories is an indication that the financial press has learned its lesson from its inattention to how financial policy is made, that’s all to the good.
Even if the policy doesn’t go the way you want, at least you know.