Frank: A Life in Politics from the Great Society to Same-Sex Marriage (44 page)

A priceless rhetorical opportunity soon arose. After the vote, Eric Cantor issued a very silly statement in which he tried to absolve his party colleagues from responsibility. He explained that many of them had changed their yes votes to no because they’d been deeply offended by Nancy Pelosi’s floor speech, in which she’d blamed Republican deregulatory policies for the crisis. He had obviously not thought this through, and I took advantage of his mistake. When a reporter asked Pelosi to defend herself against the charge, I stepped to the mike. “In other words,” I said, “Mr. Cantor is telling us that some of his Republican colleagues who agreed that passing the bill that their president was strongly supporting was in the national interest, and would keep the economy from further damage, nevertheless voted to kill it because Nancy Pelosi hurt their feelings.” Expressing my surprise at their sensitivity, and their sudden distaste for partisan remarks on the House floor, I made an offer with all the mock sincerity I could muster. “I am prepared,” I continued, “in what I acknowledge is an uncharacteristic display of conciliation on my part, to apologize to all of those offended Republicans, in the hope that this will let them put the national interest ahead of any hurt feelings that remain.” (Since no transcript exists, this is probably not verbatim, but it is everything I said and is very close to the exact form.) Neither Cantor nor any other Republican tried that defense again.

Later that evening, I called Paulson to commiserate, but also to assure him that we would win the next vote. I compared some of the TARP opponents to a young teenager who became so angry at his parents that he decided to leave home, only to get a few blocks away on a cold night and think better of the idea and come back.

I do not claim major credit for the vote switches that passed the bill on Friday, but I am convinced that I helped remove some of the obstacles to the bill’s passage. It is noteworthy that even with a very angry business community pressing the case for the bill, a majority of House Republicans remained opposed. The final vote was 172 to 63 among Democrats, and 91 to 108 among the president’s supposed supporters.

The passage of TARP and its subsequent prompt execution did not solve the crisis, but they did buy time for a series of other measures that collectively kept the meltdown from becoming the deep worldwide depression it had threatened to be.

*

As the 2008 election neared, my next concern was my reelection. My very able, astute chief of staff, Peter Kovar, had alerted me that opposition to TARP was audible in my district. With Dan Payne’s great TV ads, and a Republican opponent who’d served time in prison after violating the probation sentence he’d received for hitting his teenage daughter, I won easily—too easily, because it left me overconfident when I faced a more serious challenge in a much tougher political climate two years later. That same day, Barack Obama defeated McCain, and a new era of Democratic control happily beckoned.

I had not worked closely with Obama before the crisis. I was a strong supporter of Hillary Clinton in the fight for the Democratic nomination, and had even made a radio commercial for her that played in Massachusetts, a state she won decisively. My first dealings with Obama had come when we coordinated our strategy for responding to the financial crisis and, particularly, the meeting at the White House. Things had gone well. As he took office, I did have some concerns that he was going to underestimate the difficulties of working with the Republicans. When he made a comment that seemed to me to put some blame on Bill and Hillary Clinton for the bitter partisan fighting that had marked the 1990s, I thought he was being unfair to them. Knowing as I did how deeply the right wing had entrenched itself on the Republican side, when the presidential nominee said that he intended to govern in a “postpartisan manner,” I said publicly that this had given me postpartisan depression. It was not that I thought working with Republicans was a bad idea; I was simply convinced that it was impossible. In this case, I believe I’ve been fully vindicated.

My relationship with Obama and his administration deepened during the two years we spent writing and passing the financial reform bill. After the Republicans took over the House in 2010, I became concerned that his unjustified hope for “postpartisanship” would be a problem, and I was particularly troubled when he offered to restrain Social Security cost-of-living increases for moderate-income elderly people in the vain hope of getting a deal with the Republicans. Fortunately for good public policy, Republican intransigence took that deal off the table. On the whole, my relations with Obama, and my approval of his approach to governing, were very strong throughout this first term.

In histories of the Great Depression, I had read about the long and fraught interregnum between the defeat of Herbert Hoover and the inauguration of Franklin D. Roosevelt. The result was a constitutional amendment that advanced the incoming president’s Inauguration Day from March 4 to January 20.

But to my dismay, even a shorter transition period turned out to be too long in this crisis. For the first time since 1932, a handover of the presidency from one party to the other was occurring in the midst of a national emergency. And to my regret, our efforts to aid homeowners would be lost in the shuffle.

In the original TARP legislation, we had included strong instructions to the administration to reduce foreclosures. This would be done through the direct use of TARP funds and by using the leverage the program gave us over the banks. Paulson’s refusal to carry out these instructions led to my one major disagreement with him, which I expressed vigorously in a hearing I called for that purpose in November. His response, which I know was entirely honest, was that the imminent threat of total financial collapse required him to focus single-mindedly on the immediate survival of financial institutions, no matter how worthy other goals were.

In what I took as a manifestation of our mutual respect, Paulson agreed to include homeowner relief in his upcoming request for a second tranche of TARP funding. But there was one condition: He would do it only if the president-elect asked him to.

That condition was rejected by Obama, who noted that we have only one president at a time. My frustrated response was that he had overstated the number of presidents currently on duty—a comment that, I was emphatically told, achieved full bipartisan status by irritating the incoming and outgoing chief executives equally. I understood Obama’s unwillingness to take responsibility before he had the concomitant authority, but I believed that the situation justified an exception to that rule.

Throughout my efforts to achieve foreclosure relief, I found Sheila Bair a valuable counterweight to Paulson and Timothy Geithner, whose influence had grown as he went from being president of the New York Fed to secretary of the treasury–designate. I liked, respected, and trusted Paulson and Geithner, and agreed with their general approach. But my instinct was that they felt a greater need to show deference to the financial community than the federal government had to. Bair’s independence was a powerful reinforcement for me, especially given her own intellectual credentials and status as a Bush appointee. When we learned that Paulson and Geithner were likely to ask her to leave the FDIC before her term expired, Chris Dodd and I intervened to object. I told Geithner that he and the other male regulators were coming across like ten-year-olds in the tree house who had posted a sign that said
NO GIRLS ALLOWED
. This did not, however, mean that I was permanently allied with Bair against Geithner. After the crisis, Bair, Geithner, and Paulson would all write generously about me. I know I am regarded in some quarters as a curmudgeon. I offer as strong evidence against this view the fact that I got along with Bair and Geithner much better than they did with each other.

*

Thankfully, I got to spend some relatively unharried time with Jim between the postelection dispute over mortgage relief and the first serious legislative business of the new Congress. Even so, we remained in the spotlight—with sometimes unforeseen consequences.

In December, Lesley Stahl profiled me for
60 Minutes.
For the program, her crew had taped my appearance at a Christmas telethon run by a community action organization in Fall River. As we sat on the couch watching the broadcast, we saw footage of Jim, in his usual protective fashion, doing some needed last-minute repairs to my hair and tie before I went on camera. “The man helping the congressman,” Stahl noted when she reappeared, “was not a constituent. That was his boyfriend, Jim Ready.” Jim had not hidden his sexuality from the people he had been associating with for the past fifteen years, but he hadn’t had occasion to announce it to everyone he had ever known. As of that moment, he wouldn’t have to.

Jim was surprised by the reference, as were others—for example, his teammates from his hockey-playing days and some of his fellow surfers and high school classmates. In fairness to Stahl, she had asked him if it was okay if she mentioned his name, and being new to television, he had said yes without realizing how prominent the “mention” would be. That prominence was elevated by the timing of the segment. It led off a program that came on right after a New England Patriots game, generating a huge audience in our area. Jim’s instant, entirely understandable shock soon became bemused acceptance, and then, to my relief, the enjoyment of the surprised but very supportive reaction of people from his past. My only suggestion was that we immediately call his parents, so that in case they had not been watching, they wouldn’t wonder why their friends were talking about me and Jim in the coming days.

Obama’s inauguration followed soon after. As a committee chairman, I was seated prominently at the front of the platform. Jim was also onstage, seated with the spouses of the other chairs and ranking minority members. At the close of the ceremony, we went to the luncheon—as opposed to lunch—in the Capitol for all of the important people in our government, along with other prominent guests. It was not a first—my late colleague Gerry Studds had brought his partner to the Clinton inauguration when he chaired the House Merchant Marine and Fisheries Committee. But it drew the most public attention, given my post-TARP high profile, and the post-1993 role of social media.

Unleashing our inner tourist, we made sure to memorialize the day. Two photos in particular are prominently displayed in my office. Jim’s seatmate at the ceremony obligingly took a picture of him standing in the aisle during the ceremony, with the new president giving his address in the background. (“Gee, Uncle Jimmy,” his eight-year-old nephew Kyle rebuked him. “You weren’t paying attention.”) And in a reminder that partisanship in Congress is not always personal, the photographer was Congressman Paul Ryan’s wife, Janna. The other picture was taken after Jim had asked Obama for a hug. The president inscribed it, “To Jimmy—showing you love for keeping Barney under control!

*

When the inauguration was over, so was my recess. If I had been able to choose the two-and-a-half-year stretch of my life in which I would work the hardest, with the most at stake, it would not have been as I was turning seventy. But it was what it was.

In the wake of the crisis, Chris Dodd and I agreed on the need for comprehensive regulation of the financial industry. I began the 2009 legislative session eager to get started on this momentous task. But it took a while. As Robert Kaiser correctly quotes me in his book on our bill,
Act of Congress
, we made slow progress because 2008 refused to end.

In March, the country learned that AIG was about to pay $165 million in employee bonuses. Just as I have sometimes found the use of metaphors unavoidable, in this case I can think of no adequate substitute for a clich
é
: all hell broke loose. Infuriatingly to the public, the beneficiaries of this largesse were the employees of its Financial Products unit, precisely the ones who had incurred the $170 billion debt that had precipitated the crisis. Even more infuriating, there was nothing we could legally do about it.

In his memoir
Stress Test
, Tim Geithner, who’d become treasury secretary by then, reports that he called Ed Liddy, the new postbailout CEO of AIG, to remonstrate. Liddy’s response, apparently and very regrettably true, was that the company had signed binding, unshakable contracts, and that if it reneged on them, the employees would sue and win. Liddy was right on the law, but that only made the situation worse on the political side. Voters had seen the executive and legislative branches come together in the recent past to do a lot of things that had no precedent—and that some commentators said were unconstitutional. A large majority of them were wholly unprepared to accept our explanation that we had suddenly become legally impotent. The more popular view was that the political establishment was demonstrating an outrageous double standard: Take extraordinary steps to aid large financial institutions but hide behind dusty legal rules to avoid penalizing their egregious misbehavior.

Never before or since have I seen vehement, universal public anger reach such a white-hot level. I feared that we were in danger of losing our capacity to govern—not just to enact a rational financial reform bill but also to pass any legislation that required public trust in elected officials. The depth of my concern is best illustrated by my response to the AIG flare-up, which included the single stupidest thing I have ever done in my official life.

When Paul Kanjorski, the second-ranking Democrat on our committee, learned of the bonuses, he too called Liddy and then called a hearing of the subcommittee he chaired, which had jurisdiction over AIG. I had the authority to supersede him with a full committee meeting, but he had taken the lead on this issue and was entitled to chair the session. I attended as a member, and when it was my turn to ask questions, I screwed up big time. I asked Liddy to give us the names of the bonus recipients and threatened to initiate a subpoena if he didn’t. He reacted with as much horror as a dignified CEO could exhibit in a formal hearing. He quite rightly refused, pointing out that there had already been death threats leveled against those involved.