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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Dems’ Trump Card: GOP’s Dilemma on Financial Reform

Michael Bocian and Andrew Baumann of Greenberg Quinlan Rosner Research have a post, “Aggressive Wall Street Reform: A Win-Win-Win for Democrats” at GQR‘s web page (via Politico), which should give GOP leaders a headache. Up until now the Republicans have had Dems cornered on financial reform, as the authors explain:

Politically speaking, Democrats should relish a debate over Wall Street reform…Democrats remain in a dangerous position heading into November. Their deteriorating position is driven almost entirely by a drop in their standing — not by any improvement of the Republicans…A lot has to do with the public’s worries about spending and government, coupled with their continued economic struggles.
But it is exacerbated by the voters’ views that Democrats have put Wall Street’s interests ahead of their own. For example, almost 48 percent of voters said “government’s policies to deal with the economic recession” helped big banks a lot, according to an Economic Policy Institute survey, conducted late last year by Peter Hart, the Democratic pollster.
Just 3 percent agreed that government’s policies helped “the average working person” or “you and your family.” Our own recent poll for Democracy Corps found that a 46 percent plurality of voters think Obama and Democrats put bailing out Wall Street ahead of creating jobs for ordinary Americans.

But, with health care reform out of the way, Dems can now focus on improving their image with respect to reforming Wall St. Baumann and Bocian present some convincing data pointing to a Democratic advantage:

A high-profile Senate debate about Wall Street reform could help reverse this. The political benefits could be even broader, according to bipartisan survey for Pew last month.
It revealed that voters want action that holds banks accountable…Indeed, 42 percent said “making big Wall Street banks repay the bailout money they received” was “one of the most important things for Congress and the president to work on.” In a list of 8 possible priorities, only “creating jobs” (43 percent) was higher.
The House bill includes an amendment that requires the banks to repay TARP funds. It looks politically smart for Senate Democrats to include a similar provision…In fact, a robust debate about Wall Street reform would have multiple political benefits for Democrats. Our polling reveals that pro-reform messages generate intense responses from Democratic voters, while also appealing to independents.

Further,

After hearing arguments for and against a strong reform bill…64 percent of voters favored reform, according to recent national survey of 1000 registered voters that we conducted with YouGov…Fully nine-in-ten of Democrats backed the measure, including 55 percent who did so strongly, while independents favored reform by a solid 55 to 45 percent margin. Even 39 percent of Republicans supported the bill.

Strong Wall St. reform is a certain victory for Dems, argue Bocian and Baumann, because it “puts Republicans in a terrible position — forcing them to give in and hand Obama another victory. Or to side with Wall Street banks and their lobbyists — whom the public loathes” and generate headlines like “Republicans Huddle With Lobbyists to Kill Financial Reform Bill.”
All of which gives Dems some much-needed leverage for improving their overall image and their creds with respect to financial reform in particular, while opposing Republicans will be forced to defend the institutions that the public believes is responsible for the meltdown. Should be fun to watch.

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