Washington INsider
Feb 1, 2013, 4:25 PM EST
Ex-SEC watchdog sees no problem with White's CV
When it comes to cracking down on Wall Street, Mary Jo White has played both ends and the middle.As U.S. Attorney for the Southern District of New York, she gained acclaim for prosecuting white-collar crimes. As the head of the litigation department at Debevoise & Plimpton LLP, she defended Wall Street firms, such as JPMorgan Chase & Co. and Morgan Stanley, and Wall Street titans, such as former Bank of America Merrill Lynch chief executive Ken Lewis.If she is confirmed by the Senate as the next chairman of the Securities and Exchange Commission, she will be walking through the revolving door. The twirl should not disqualify her from the position, according to a former SEC watchdog.“I don't anticipate it will derail things,” said H. David Kotz, a director at Berkeley Research Group and the SEC inspector general from 2007-12. Mr. Kotz was a tough monitor at the SEC. He had members of the staff talking to themselves after... Read full post
Jan 30, 2013, 4:20 PM EST
Without road map, tax reform veers all over
New Year's Eve legislation that averted trillions of dollars of automatic tax increases and spending cuts was brimming with provisions that permanently extended many Bush administration tax cuts. What was missing, however, was language that provided direction on broad tax reform.Many months ago observers had anticipated that the fiscal-cliff agreement would include a roadmap for an overhaul of the tax code, complete with an expedited timeframe to get bills through the House and Senate. Instead, the measure was silent on further reform.Just like nature, politics abhors a vacuum. Within weeks of the opening of the new Congress earlier this month, all kinds of ideas are filling the comprehensive-tax-reform void. One of the efforts to watch is being undertaken by House Ways & Means Committee Chairman Dave Camp, R-Mich. He is in a pivotal position to make reform happen. Last week, Mr. Camp released the opening salvo in the effort, a... Read full post
Jan 25, 2013, 11:44 AM EST
Even a smooth White confirmation will take a while
Even though President Barack Obama has nominated Mary Jo White to be chairman of the Securities and Exchange Commission, that doesn't mean that the tenure of current chairman Elisse Walter will end any time soon.At a White House ceremony on Jan. 24, Mr. Obama announced both Ms. White's appointment and the nomination of Richard Cordray to be the permanent head of the Consumer Financial Protection Bureau. Of the two, Mr. Cordray faces the steeper climb to Senate confirmation.Republicans want Congress to have more control over the CFPB budget and agenda. They may use Mr. Cordray's confirmation process as a way to express their displeasure with an agency that they see as the embodiment of Dodd-Frank overreach. Ms. White, the former U.S. Attorney for the Southern District of New York, hasn't drawn any immediate political push back. But even a smooth confirmation process might not conclude until March, giving Ms. Walter plenty of time to... Read full post
Jan 23, 2013, 12:51 PM EST
SEC might be productive despite 2-2 split
The Securities and Exchange Commission could become one of the surprises of 2013 in Washington by playing against type in a town known for dysfunction.Despite its 2-2 split, the agency may be able to finish some work during the chairmanship of Elisse Walter. Ms. Walter, who was elevated from her position as a commissioner when former Chairman Mary Schapiro departed in December, has started her tenure by demonstrating her skill in finding common ground among disparate views.“I'm … on something of a listening tour — clarifying my own thoughts and keeping an appropriate perspective by listening to ideas, questions and complaints from people in and out of the agency,” she said at the Jan. 18 meeting of the Investor Advisory Committee. Her approach has struck a chord with one of the two Republican commissioners, Daniel Gallagher. After a speech at the Chamber of Commerce last week, Mr. Gallagher told reporters that... Read full post
Jan 15, 2013, 4:45 PM EST
CFP Board turns to CFPB to promote its credential
One of the most controversial creations of the Dodd-Frank financial reform law – the Consumer Financial Protection Bureau – is not supposed to creep into investment-adviser regulation, which is under the aegis of the Securities and Exchange Commission. The CFPB will focus on areas such as credit cards, payday loans and mortgages. For instance, it proposed last week a qualified mortgage rule that would prohibit lenders from providing home loans unless they take reasonable steps to ensure the recipient can repay them.So far, the CFPB is best known as a lightning rod for Republican criticisms of the Dodd-Frank law. The Senate resisted confirming a CFPB head, so the current director, Richard Cordray, is operating under a temporary recess appointment. Although the CFPB doesn't directly touch the investment advice space and is best known for being a political punching bag, advisers should keep an eye on the agency. The Certified... Read full post
Jan 9, 2013, 3:26 PM EST
'Permanent' tax rates? More like ephemeral
One of the features of the fiscal-cliff bill approved last week by Congress was that it supposedly settled the question of marginal tax rates for good. It delivered the permanence to the vast majority of Bush tax cuts that investment advisers and their clients have long sought.Keep in mind, though, that “permanent” is a relative term on Capitol Hill. Any tax, any law, in fact, can be modified whenever Congress pleases. It's perhaps the most important congressional prerogative. The eagerness lawmakers to tinker with the tax code was demonstrated a little more than 36 hours after the House approved the fiscal-cliff bill at 11 p.m. on New Year's Day. At noon on Jan. 3, the new congressional session began. Not long after members of the 113th Congress were sworn in, they began to introduce bills. One of the most popular categories was tax reform. A total of 11 tax bills has been introduced so far, and the House was only in... Read full post
Jan 7, 2013, 4:08 PM EST
How the budget battle greases the skids for a tax overhaul
It took intense last-minute negotiations, early morning and late night votes and hours of politically charged caucus meetings for Congress to do something relatively easy – avert a plunge over the fiscal cliff by approving a bill that preserved tax cuts for nearly 100% of Americans.Even before the final “aye” and “nay” been cast on the fiscal-cliff bill, Republicans and Democrats were girding for the next fiscal war over paring the massive federal deficit and debt. The verbal jousts were amplified this past weekend, as Senate Minority Leader Mitch McConnell, R-Ky., appeared on three Sunday news programs to warn President Barack Obama that the GOP would demand deep spending cuts over the next couple months in order to raise the federal debt ceiling and keep the government operating. In the midst of these battle cries, however, there is a quiet but growing chorus of optimism that Washington can take on an... Read full post
Jan 2, 2013, 3:51 PM EST
Call it the Boehner rally
We could call today's market surge the Boehner rally.Stock prices are giving a strong positive reaction to congressional approval of legislation on New Year's Day that stopped about $600 billion in automatic tax hikes and spending increases. After overwhelming approval by the Senate in the early morning hours, the so-called fiscal cliff bill hit substantial turbulence in the House, where conservatives were incensed by what they said was the measure's failure to address the massive federal deficit and debt.Indeed, even the bill's supporters admitted that the package concentrated almost exclusively on the tax portion of the fiscal cliff. As of Tuesday afternoon, House conservatives were insisting that the bill be amended to include spending cuts. If successful, such a move would have sent the country crashing over the fiscal cliff at least for days and perhaps for weeks. The Senate passed the bill 89-8 and was not inclined to consider... Read full post
Dec 28, 2012, 2:16 PM EST
If deal is struck, Boehner could go over the cliff all by himself
As Washington approaches the precipice of the fiscal cliff, one lawmaker will have to decide whether to take a leap of political faith that could determine the outcome: House Speaker John Boehner.On Friday afternoon, President Barack Obama and Vice President Joe Biden will meet in the Oval Office with Mr. Boehner, R-Ohio, House Minority Leader Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky. It's the first time since the election that all of the principals in the effort to avert the fiscal cliff have sat down together to talk. At this late hour, the most they'll be able to achieve is a limited package to delay the worst of the cliff, which will automatically trigger about $600 billion in tax increases and spending cuts on Jan. Even that small advance will depend on a political decision that has to be made by Mr. Boehner. Last week, he pulled from the House voting... Read full post
Dec 27, 2012, 5:06 PM EST
Will Khuzami be the next SEC chief?
Other than recriminations flying back and forth between Senate Democratic leaders and House Republican leaders over the impending fiscal cliff, for the most part, few creatures are stirring in Washington over the holidays.Generally, that's the time the SEC makes major personnel announcements. The next one may come late in the afternoon this week: Robert Khuzami, director of the Division of Enforcement, is reportedly leaving. His departure would mark the fourth major SEC staff exit in the last few weeks, following the heads of the Divisions of Corporation Finance and Trading and Markets and the agency's general counsel.Personnel issues are rising up the already crowded agenda of the new chairman, Elisse Walter. Since she took over from Mary Schapiro on Dec. 14, Ms. Walter has appointed Lona Nallengara as the acting director of Corporation Finance and John Ramsay as acting director of Trading and Markets. Ms. Walter also elevated Paul... Read full post
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