Robert G. Kaiser - Act of Congress: How Americas Essential Institution Works, and How It Doesnt

THIS IS A BORZOI BOOK
PUBLISHED BY ALFRED A. KNOPF

Copyright 2013 by Robert G. Kaiser

All rights reserved. Published in the United States by Alfred A. Knopf, a division of Random House, Inc., New York, and in Canada by Random House of Canada Limited, Toronto.

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eBook ISBN: 978-0-307-96218-8
Hardcover ISBN: 978-0-307-70016-2

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Library of Congress Cataloging-in-Publication Data
Kaiser, Robert G., 1943
Act of Congress : how Americas essential institution works, and how it doesnt / Robert G. Kaiser.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-307-70016-2
1. United States. Congress. 2. United States. Dodd-Frank Wall Street Reform and Consumer Protection Act. 3. Financial services industryLaw and legislationUnited States. 4. Global Financial Crisis, 20082009. I. Title.
HG181.K35 2013
346.73082dc23
2012038245

Jacket design and illustration by The Heads of State

Manufactured in the United States of America

First Edition

v3.1

This book is for

Hannah Jopling

Work on this book began in early December 2008 with an appointment in the cavernous office of Congressman Barney Frank of MassachusettsRoom 2252 of the Rayburn House Office Building on Independence Avenue in Washington, D.C., my hometown. I have an unlikely connection to the Rayburn Building, one that came to mind that day, my first visit in several years. In the summer of 1960, just before I started college, I had a construction job helping to lay the Rayburn Buildings elaborate foundations.

Just a year later, after my freshman year, I was a delegate to the National Student Congress in Madison, Wisconsin. One of the most formidable student politicians I met there was a Harvard delegate who talked too fast in a thick, New Yorkish accent, who had mastered Roberts Rules of Order, who seemed to know everything about any topic that came up, and who loved to make wisecracks. That was Barney Frank of Bayonne, New Jersey, then twenty-one years old.

I was just eighteen, but I already knew I wanted to be a reporter. I had spent the previous semester working on my college newspaper, where I discovered that this was the life for me. Frank wanted to somehow participate in politics and public life. We both got what we hoped for, and over the years our paths crossed from time to time. We maintained friendly relations.

A few weeks before I visited him in Rayburn 2252, Frank and I had spoken on the phone about the Great Crash that had just shaken the foundations of the global economic system. As chairman of the House Financial Services Committee, Frank was more than a casual observer.

Your next book should be about this stuff, he had said on the phone. He knew that I had recently finished a book on lobbying and money in Washington, but he didnt realize how timely his suggestion was. At that moment I was eagerly looking for a new project, and this phone call got me thinking.

I did not want to write a book about the Great Crash, an event centered on Wall Street in New York, beyond the world I know best. My subject is Washington and the politicians who inhabit it. That phone call led to the thought that with cooperation from Frank and other members, I might be able to write an interesting book based on Congresss response to this catastrophe. I had long thought Congress was Americas least understood important institution. I had been trying to figure it out for four decades. Maybe I could finally get to the bottom of its mysteries.

When I saw Frank in his office, I proposed that I become the historian of the congressional response to the Great Crash, specifically of the effort I knew Frank and his Senate counterpart, Christopher Dodd of Connecticut, were planninga new rulebook for American high finance. Id heard Frank speak of a new New Deal, a reference to the legislation enacted in Franklin D. Roosevelts first term that helped save American capitalism in the Great Depression. Franks ambitions sounded big, even historic. And a new president shared this goal, so it might actually be achieved. Would Frank talk to me as this story unfolded? Would he allow his staff to tell me what was going on backstage? My ambition, I said, would be to use the story of what he and Dodd did as a kind of case study that would explain the modern Congress.

Frank agreed. More important, he asked nothing in returnno assurances, no right to read drafts of what I would write or to approve the way I used the material he provided. The idea that a reporter he knew would record his effort to make some history evidently appealed to him.

Next I needed to convince Dodd that he should help too. I had first met Dodd in the late 1970s, when he was a popular junior congressman from Connecticut. At the time I was The Washington Posts reporter in the Senate, so did not have a lot to do with the House. I got to know Dodd better in the early 1980s, when he became an active critic of the Ronald Reagan administrations Central American policy. We were just a year apart in age, and had both grown up in the Washington area in the 1950s, when his father was a congressman and senator.

Dodd had given me a revealing interview for my book on lobbying. I realized then that he was an astute student of the Senate. I hoped he would see the merit of helping with this project. I confess it also occurred to me that he might feel a little competitive about Barney Frank, as House and Senate committee chairmen with overlapping jurisdiction tend to do, and would want to make sure that his side of the story was well covered in this book.

We first discussed all this in his hideaway in the Capitol, Room S-236. The room was part of the original Capitol building, built between 1796 and 1800. Room S-236 was a fine space about thirty feet by twenty feet with a high ceiling and a large window that looked west across the Mall toward the Washington Monument and Lincoln Memorial. There were several dozen hideaways in the Capitol for senior senators (and none for members of the House); this was one of the finest, as befit a committee chairman with twenty-eight years of service in the Senate.

Dodd, in his own words, was a believer in symbols. On this occasion he was eager to explain the oil portraits on his walls. This is Samuel Morse, inventor of the telegraph. In 1844, Morse sent one of the earliest telegraph messages from this very room to a convention in Baltimore, about thirty-five miles away. That is the original senator from Connecticut, Roger Sherman, the only one of the founders who signed the Articles of Confederation, the Declaration of Independence, the Constitution, and the Bill of Rights. And that one is Oliver Ellsworth, coauthor of the Connecticut compromise at the Constitutional Convention that created the Senate as an upper house of the legislative branch. Dodd obviously loved this history, and loved the fact that he was a part of it.

He too agreed to be interviewed periodically, and to share information about his maneuverings as the story unfolded. Dodd was somewhat more circumspect than Frank; he wanted to be able to approve quotations attributed to him from our interviews. I agreed, hoping this would prove to be an insignificant condition. It did. Dodd never tried to withhold or alter a quotation that I wanted to use in this book.