O'Malley Wants to Lead Wall Street Pushback

O'Malley Wants to Lead Wall Street Pushback
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Martin O’Malley never mentioned Bernie Sanders or Hillary Clinton during his get-tough-on-Wall Street campaign event on the fifth floor of a downtown Washington office building Thursday. But they were on his mind.

O’Malley has become a wielder of white papers, a candidate who holds aloft stapled policy plans to try to convey wonkishness and problem-solving after 15 years spent as mayor of Baltimore and Maryland’s former governor. He recently released 10 pages of prescriptions he believes would beef up the regulation and punishment of financial institutions and executives who engage in behaviors that pose economic risks. (On Thursday, he said he will soon outline fixes for America’s transportation and infrastructure problems.)

Sanders is ahead of O’Malley by 16 points, according to the RealClearPolitics average, filling halls with disaffected Americans who applaud the Vermont senator’s vows to break up big banks, punish corporate misdeeds, and levy higher taxes on the wealthy to pay for programs such as free university tuition nationwide. Clinton, her party’s frontrunner by a wide margin, on Friday will deliver a fix-Wall Street speech of her own, advocating, among other ideas, higher capital gains taxes and claw-backs of executive bonuses as part of government settlements with corporate wrongdoers.

Sanders and Clinton revel in their criticisms of Republican presidential contenders and their agendas, but O’Malley ignored his GOP opponents, too.

When a reporter asked O’Malley what benefit he derived by touting a progressive advocacy group’s acclimation that he’s the “first” White House aspirant to “make criminal prosecution of Wall Street bankers a 2016 issue,” O’Malley responded that leading the Democratic pack by days or hours in a race built on ideas made him feel his candidacy is “worthy.”

“And the good news is, that’s also my only path to victory,” O’Malley added, perched on the edge of a chair gazing amiably at an audience small enough to fit in a borrowed conference room.

It was a candid assessment from an aspirant worried that his résumé, his progressive DNA, and a name not associated with a political dynasty has not added up to more than 1 percent support in the polls.

O’Malley, eager to mark the fifth anniversary of the Dodd-Frank financial reform law with vows to protect Main Street, displayed two vulnerabilities during his stop in Washington. First, his knowledge of existing law and the implications of his white-paper proposals appeared recently acquired. As governor, he said he felt the effects of the financial meltdown in his state, but his answers lacked the subject familiarity that some current and former members of Congress gained when it comes to Wall Street financial firms, the history of bank regulation, the Federal Reserve, and independent regulatory agencies such as the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Federal Deposit Insurance Corporation. 

O’Malley has endorsed breaking up the largest Wall Street banks. But asked, for example, if he favored pending measures that would modernize the 1933 Glass-Steagall protections that once barred commercial banks from tapping clients’ deposits for securities trades, the candidate gave a vague answer. Sen. Elizabeth Warren and co-sponsors introduced such a bill in early July.

O’Malley moved his event this week from its original location in the National Press Club, which features a journalist moderator, to a think tank’s office space, with former Democratic congressman Brad Miller serving as moderator. Miller is a veteran of the House Financial Services Committee, and he helped write the Dodd-Frank law. Miller, who filled in details about financial reforms and posed plenty of friendly questions Thursday, told the audience he has not endorsed any candidate in the race.

It was Miller, however, who raised a second challenge for O’Malley, arguing flatly that the candidate’s major Wall Street proposals were unlikely to become law. With Republican control of the House and Senate, “Congress is not going to do that,” he said, ticking off a list of fixes. 

Pie-in-the-sky campaign pledges that depend on tougher regulations, increased appropriations, or triumphs over industry lobbying and higher taxes pose challenges for Sanders and Clinton, too. As rhetoric, the candidates’ assaults on Wall Street are designed to appeal to middle- and lower-income voters who believe corporate America stacked the deck against them. But polls indicate that progressive voters favor the red-meat rhetoric, but remain deeply skeptical that Washington’s politicians can deliver. 

O’Malley -- who said he would seek to legislate tougher capital cushions at large financial institutions, favors “greatly increasing how we tax capital gains,” and wants to bolster SEC and the CFTC resources -- offered a mild rebuttal.

As president, he would “forge a new consensus,” he said. But he offered no details about how, as a self-described Washington outsider, he would accomplish that. 

“These are things that I intend to push as president of the United States, as we build a consensus for these things to pass in Congress,” he repeated. “And once those things happen, I think it will become easier to push some of those things through Congress.”

Alexis Simendinger covers the White House for RealClearPolitics. She can be reached at asimendinger@realclearpolitics.com.  Follow her on Twitter @ASimendinger.

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