By Sean Coit
One piece of pending legislation could define U.S. Rep. Paul Kanjorski’s 26 years in Congress.
That, at least, is how the congressman sees it.
Sipping coffee in his office after returning from the House floor last week, Kanjorski reflected during an interview about his party’s high-profile efforts to reform Wall Street regulations, an effort he has played a major role in, and its importance to his career.
“This legislation is without a doubt the most significant thing I’ve worked on in Congress,” he said.
House and Senate leaders began meeting last week to bridge the gap between their respective regulatory bills, and Kanjorski is positioned to play an important role at the negotiating table. As one of just 16 House conferees (the Senate has 12) and a well-versed veteran of financial legislation, the Scranton-area lawmaker has already crafted four of the eight pieces of the current House version.
With European markets faltering and the G-20 summit in Toronto approaching, an early July deadline has been set before President Obama heads to Canada to meet with the leaders of the globe’s largest economies. Kanjorski, though, isn’t pressed on the deadline.
“It’s not that important, but it makes practical sense for Toronto,” Kanjorski said. “It would be best if we resolved reform before the G-20 meeting.”
Most important is the standard that the potentially sweeping financial legislation sets for global markets, said the congressman.
“The standards we set will set the course worldwide,” Kanjorski said. “It will be a new set of rules and regulations for 50 to 100 years, and it will allow this to be the American Century.”
But his optimism isn’t universal.
Republicans, mostly united in opposition to the bill, have said it creates a cumbersome bureaucracy while ensuring future bailouts. The federal government shouldn’t have bailed out the financial system in 2008, many of them say, and it shouldn’t do so in the future.
That rhetoric is precisely what Kanjorski wants to address. Kanjorski’s well known “Too Big to Fail” amendment is designed to prevent bailouts by empowering regulators to pre-emptively counsel, or even dismantle financial companies that are deemed so interconnected with financial industry that their failure could threaten the economy’s overall stability.
Rather than providing a safety net for those financial companies whose stability directly impacts the nation’s economic health, the Kanjorski amendment would reform regulations currently in place, ensuring that officials could direct or even take apart financial firms that pose systemic risk to financial markets before they approach collapse. The amendment, then, would allow all companies to fail in hopes of avoiding future bailouts.
Selling the merits of the legislation, however, will be difficult in a political climate that’s highly skeptical of government intervention.
For starters, the word “bailout” poses problems, according to Kanjorski. “Lots of people don’t understand the word, but they know they hate it.”
At the root of the issue lies a fear among Republicans, Democrats, and voters alike of another financial meltdown, something that party leaders on each side have distinctly different solutions for. But after being instrumental in the administration’s response to the recession and market collapse, which he described as “a near-death experience,” Kanjorski believes that he is a more effective legislator.
“Going through the crash and coming up with the right judgments was good in a way,” he said. “I was able to clearly define what positions I would take in a tough situation, win or lose.”
Those tough positions were vital to the country’s survival, he said.
“If we hadn’t succeeded, I think we would’ve lost the Republic,” he said. “We would’ve ended our lives living like it was the 16th Century.”
The current bill, which has been propped up by somewhat tenuous support, particularly from a mere handful of Senate Republicans who support it, faces pressure from both sides, as liberal Democratic leaders including Sen. Chris Dodd (D-Conn.) promise not to allow a weakened bill to pass.
And, as “bailout” and “Wall Street” quickly become politically poisonous terms for legislators, the risks involved with these votes are not lost on Kanjorski, who will face a difficult road to re-election in the fall.
Kanjorski’s electoral battles became particularly tough in 2008, when many observers considered Kanjorski’s career all but over. Hazleton Mayor Lou Barletta, a well-known Republican in the district, appeared poised to win in his second run for the seat two years ago, but the longtime congressman survived.
Obama voters in the landmark 2008 presidential election were largely considered to be the force that put Kanjorski over the top, a luxury he will not have as he faces Barletta once again in the fall. Earlier this year, Kanjorski survived a primary test against Lackawanna County Commissioner Corey O’Brien, who fell 15-points short of the longtime incumbent.
Kanjorski, though, remains undeterred.
“This is an issue and a time that tests why you’re in Congress,” he said. “If this costs me my seat, so be it. I came to do the best I could.”