WASHINGTON – Republicans criticized a government report on the causes of the 2008 financial crisis as biased and political on Wednesday. Democrats fired back that Republicans want to roll back federal regulations of the financial industry.
That exchange came as the House Financial Services Committee examined a study issued last month concluding that the near economic collapse was avoidable and was caused by failures by the financial industry and their federal regulators.
The differences between the two parties underscored the partisan gap as the GOP-run House begins a year in which one goal is to block new regulations required by the financial overhaul law that Democrats and President Barack Obama enacted last summer.
The Financial Crisis Inquiry Commission's report was endorsed by the panel's six Democratic commissioners. Its four Republicans dissented, saying the study played down factors such as how federal policies aimed at increasing home ownership encouraged the use of high-risk subprime loans.
Rep. Robert Dold, R-Ill., said Democrats used the report "to support pre-established political philosophies." Rep. Michael Grimm, R-N.Y., said "some members of this commission were more interested in following an ideological agenda."
Some of the harshest criticism came from former Rep. Bill Thomas, R-Calif., who was the top Republican on the commission.
"From the beginning, I thought that the commission was created for political purposes," Thomas told the committee. He said commission staff used their time "to find gotcha documents to support provocative headlines,"and that information was leaked to embarrass commission Republicans.
Thomas was among several Republicans who criticized Democrats, who controlled the House and Senate last year, for approving the overhaul legislation before the commission's report was issued. One reason for that haste, he said, was the impending retirement of then Senate Banking Committee Chairman Christopher Dodd, D-Conn., a 35-year veteran of Congress.
"When someone is spending that much time in Congress and wants to move a product, it's very difficult to say no," Thomas said.
The committee's top Democrat, Rep. Barney Frank, D-Mass., said Democrats pushed the legislation quickly due to pleas from worried Bush and Obama administration officials that "you really need to get this done quickly," and warnings from Wall Street that prolonging the legislative work would create uncertainty.
Rep. Maxine Waters, D-Calif., said GOP criticism was an attempt to undermine the financial overhaul law and "return the financial services industry to a nostalgic age" of less regulation.
The commission's chairman and top Democrat, former California state treasurer Phil Angelides, said the report was written fairly. He said full implantation of the financial overhaul law "is critical and will help prevent a future crisis."