Wall Street Reform's Tough Sell

And then there were two. Following Obama’s flashy signing ceremony at the Ronald Reagan Building in Washington, the White House added another item to its list of legislative accomplishments. First health care, now “the strongest consumer financial protections in history,” Obama said. With the usual coterie of Democratic leaders standing behind him, Obama signed the 2,300-page Wall Street Reform and Consumer Protection Act.

It was, in some ways, a strange thing to have a grandiose signing ceremony when most of Washington, let alone the country, doesn’t understand what the bill actually does. There’s also a broader lack of comprehension of why the legislation was necessary in the first place, other than the fact that lax regulation somehow caused a global recession over the past two years. Most populist anger over the past year has been in response to outrageous banker salaries and high credit-card fees. But things like credit default swaps and derivatives trading have been slower to permeate the nation’s understanding.

So Obama labored to illuminate just what the bill means. “With this law, unfair rate hikes, like the one that hit Robin, will end for good,” Obama said, referencing one of several “real” people he used in the push for the legislation. It would also, he said, end overdraft fees, make student loans easier to get, and end abusive mortgage practices.

There was a head shake toward Hill Republicans, who feverishly opposed the bill until three Senate Republicans helped Democrats pass it. Very few attended. Obama called them a “partisan minority,” as part of the recent White House effort to increase criticism of GOP members, who have almost unanimously rejected much of Obama’s agenda. He also didn’t win points with top Wall Street executives, many of whom were disappointed about not being invited to the ceremony. Several did attend, including Vikram Pandit of Citi, Bob Diamond of Barclays, and Gerald Hassell of New York Mellon.

By the time Obama sat down to actually sign the bill, the White House spin had begun. An administration tweet called the set of new regulations the “most sweeping reforms since the Great Depression." Yet selling it is a different story. It’s been a tall order for the president to convince voters that health-care reform is the transformative law he claimed it would be. Now he’ll have to do the same with the new Wall Street law. Whether he can make the case that both actually do good things, and aren’t just superfluous expansions of government, will determine his—and his party’s—future.