(Bloomberg) — President Donald Trump's pledge to dismantle the Dodd-Frank financial overhaul is colliding with the same reality as his pledge to gut the Affordable Care Act: The Republican majority in Congress can't decide how to make it happen and Democrats are vowing to fight.
Trump, who last month said Obamacare would be replaced "the same day or the same week," or perhaps "the same hour," acknowledged Sunday that the programs created by the Affordable Care Act aren't going away anytime soon. "We should have something within the year and the following year," told Fox News's Bill O'Reilly.
The Dodd-Frank directive he signed Friday is hitting the same road block on Capitol Hill and at federal agencies.
In both cases, Trump's team has moved swiftly with a flurry of executive orders that largely promise action in the future. But Republicans in Congress aren't close yet. On the House side, there's no agreement on a plan to replace either Obamacare or Dodd-Frank. Even if they reach one soon, it's almost certain to go beyond what Senate Republicans are likely to accept, and it won't be able to attract Democratic votes. And putting forward new regulations will take years.
Trump's executive action on Dodd-Frank has also galvanized Democrats to fight changes to a law enacted in response to the 2008 financial crisis.
"This administration has unleashed a 'Wall Street First'" agenda, House Minority Leader Nancy Pelosi of California told reporters Monday, calling Trump's campaigning against Wall Street "a hoax — just a hoax."
Trump hasn't said how long it'll take to eliminate or water down Dodd-Frank, and even the White House is tacitly acknowledging that change will come slowly, allowing for a 120-day review period in the executive order before making changes.
On Capitol Hill, an ideologically charged House GOP, buoyed by Trump's election, appears ready to pursue a broad-brush effort to undo the 2010 law, led by House Financial Services Chairman Jeb Hensarling.
The Texas Republican introduced his Financial Choice Act last year, which would eliminate the Volcker Rule's ban on certain investments, the Financial Stability Oversight Council's ability to label firms that pose risks to the wider financial system, and regulators' ability to intervene when banks fail. He's set to unveil an updated version as soon as this week. The bill never made it to the floor last year, but it's likely to become the starting point for their efforts this year.
Even if Hensarling gets the bulk of his bill through the House, it won't receive significant consideration when it reaches the Senate, according to Ed Mills, a financial policy analyst FBR Capital Markets. Hensarling acknowledges the hurdle.
"The House will probably move a little quicker and probably move a little bolder," Hensarling said in an interview with Bloomberg Television. "At some point, we will go and deal with whatever the Senate work product will be."
The new Senate Banking chairman, Mike Crapo of Idaho, hasn't yet outlined his own plan, but the Republican prides himself as a dealmaker and wants to work with Democrats. He said he is collaborating with the administration, House and members on the committee to devise a plan. "I haven't made a specific timeline yet," he said in an interview before Trump unveiled his directive
Sherrod Brown of Ohio, the top Democrat on the panel, has said he's eager to work on a bipartisan bill, but not if it entails ripping up core parts of the law that protect consumers. Senators, including Chuck Schumer of New York, the Democratic leader, and Elizabeth Warren of Massachusetts, have also torched Trump's calls to up-end Dodd-Frank.
Senate Republicans would need to woo at least eight Democrats to join them on a bipartisan Dodd-Frank overhaul, but they don't even have a starting point for any negotiations. Having 10 Senate Democrats facing re-election in states Trump won theoretically gives Republicans a chance for bipartisan action, but making life easier for bankers isn't high on the to-do list of any of those Democrats.
A senior Democratic aide said Monday that any bill gutting or repealing Dodd-Frank would unite the party and cast doubt on Trump's promises to rein in Wall Street.
Dodd-Frank rollback blues
Anticipating opposition, some Republicans are already talking about going it alone, and trying to shoehorn changes into a budget reconciliation bill that would require just a simple majority to pass.
Even that path is extremely difficult. At least 50 of the 52 Republican senators would need to stick together, while the Senate parliamentarian would also have to agree that any Dodd-Frank changes would have a measurable impact on the federal budget. Republicans could separately try to push smaller tweaks as amendments to must-pass spending bills, but without Democratic support that would risk a government shutdown.
