Waxman-less Committee Likely to Play Lesser Role in Economy Rescue Oversight

3 Dec 2008 // Rep. Henry Waxman’s departure from the Oversight and Government Reform Committee may result in the committee playing a smaller role overseeing investigations into the troubled credit markets and monitoring the government’s response to the crisis.

Stringent oversight was one of House Speaker Nancy Pelosi’s (D-Calif.) key requirements when she and Democrats agreed to help the Bush administration obtain its $700 billion Wall Street rescue package. And when Pelosi made that promise, one of the people flanking her at the microphones was Waxman (D-Calif.), who at the time was chairman of the Oversight panel.

But Waxman, who earned a reputation as one of the toughest Democratic investigators during the 110th Congress, left the helm last month to become chairman of the Energy and Commerce panel — and some have privately raised concerns about his successor.

At the same, Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, is expected to seek a large role in overseeing the bailout, also known as the Troubled Asset Relief Program (TARP).

“Oversight can certainly retain jurisdiction over whatever they want to have oversight over,” Frank’s committee spokesman, Steven Adamske, said. “But Financial Services is the committee of jurisdiction over TARP.”

Aides on the Oversight Committee say Waxman is likely to take much of his healthcare and environmental policy staff — as many as a dozen professional staffers — with him to Energy and Commerce, but leave behind the “general investigations” staff that bore responsibility for the hearings on, among other things, the failing of certain financial institutions and executive compensation.

“Things like TARP, White House e-mails and document requests should stay here, depending on the level of staff and leadership permitting,” a top Oversight aide said. “But these things will have to be decided, and we don’t know what will happen in the end.”

Rep. Edolphus Towns (D-N.Y.), who is expected to lead the Oversight Committee next year, has privately drawn criticism from top Democrats for his numerous absences at full committee hearings, including all but one of the six October recess hearings that Waxman held to investigate the collapses of Fannie Mae and Freddie Mac and Lehman Brothers, and the bailout of AIG.

While top aides said that Democrats may largely be done with looking back now that Bush is out of office, some suggested that Towns’s role may still be far more limited than Waxman’s was on the single issue that will dominate the agenda next year: the economy.

“Financial Services will play a large role, which it has already, with Frank at the helm,” a leadership aide said. “Government Reform will continue to play a role, but look to subcommittee chairs to be more active.”

In a statement, Towns’s spokeswoman, Shrita Sterlin, pledged cooperation between the two committees, but maintained that a Chairman Towns would want to continue the work recently begun by Waxman.

“If Ed Towns is chairman, he will work together with leadership and Chairman Frank on oversight of the economic rescue plan,” Sterlin said.

At the same time, she hinted that Towns is prepared to make the Government Reform arm of the committee his main focus, especially if necessary politically. Aides close to leadership have suggested that such a request may indeed be made of the future chairman when he sits down with Democratic leaders to discuss his “agenda,” perhaps as early as this week.

“The Oversight Committee should focus on costs and competition in Treasury contracting, compensation and recruitment for federal employees implementing the plan and the effectiveness of internal oversight from the Special Inspector General and GAO [and] should also review potential reorganization of federal financial regulatory agencies,” Sterlin’s statement continued.

Elizabeth Warren, the head of the independent panel set up by Congress to monitor the TARP program, told The New York Times that the government still lacks a “coherent strategy for easing the financial crisis” and seemed to be careening from tactic to tactic without explaining how each maneuver fits into an overarching plan.

Such an admission all but assures that Democrats in Congress will have fresh questions of their own for the current and future managers of TARP, even as they continue to probe the root causes of the current financial situation.