House May Shuffle Committees to Quell Chair Disputes

Sources on Capitol Hill have suggested the possibility of a restructuring of the House Banking Committee, to move oversight of the securities and insurance industries from the Commerce Committee to Banking, in order to create a "supercommittee" with jurisdiction over all financial fields.

The House currently operates under Depression-era rules that divide banking oversight from securities and insurance. But with passage of last year's Gramm-Leach-Bliley Banking Act – which eased rules prohibiting banks from entering the securities and insurance markets – a restructuring seems likely.

"It does make sense," said Pete Blocklin, a government affairs officer with the American Bankers Association. "Everyone in this business has known for a while that it is inefficient to have jurisdiction divided up over several committees."

That would be good news for Rep. Richard Baker, R-La., a high-ranking member of the House Banking Committee who has waged a yearlong campaign against the government-sponsored enterprises Fannie Mae and Freddie Mac. Baker claims the quasi-private agencies use an implicit guarantee of government backing to exceed reasonable debt ratios in their lending and are placing the U.S. government at risk of a major bailout of the secondary mortgage market.

If the House Banking Committee assumes the added jurisdiction, Baker would likely chair a powerful subcommittee with oversight of Fannie Mae and Freddie Mac. He has vowed to introduce a new version of his Housing Finance Regulatory Improvement Act, which died in committee last year.

The bill would impose new caps on lending amounts and repeal a Treasury Department line of credit now available to Fannie and Freddie.

That would leave moderate Republican Marge Roukema of New Jersey in line to become House Banking Chairman. But some on Capitol Hill say Hastert may pass over Roukema – who is significantly to the left of the House leadership – in favor of Rep. Michael Oxley of Ohio, who is in his own battle with Rep. Bill Tauzin of Louisiana over control of the Commerce Committee.

Oxley and Tauzin have been in contention all year, after Rep. Thomas Bliley of Virginia, chairman of the powerful committee, announced he would retire after this term.

Earlier this year, Oxley allies accused Tauzin of holding up a bill on religious radio broadcasters that the Ohio congressman had championed.

"Clearly, there's some old-fashioned politicking behind some of this," an industry lobbyist said at the time. "Tauzin would like nothing more than to see any bill with Oxley's name on it go by the wayside."

With a deal being worked out, Tauzin is likely to chair Commerce. But many insiders say he is resisting the attempts to strip oversight of the securities and insurance industries away from his committee.

"Billy Tauzin is hopping mad about this," said a lobbyist with a national insurance industry association. "He'll lose a major source of clout and contributions if these jurisdictions are moved."

Representatives for the House members involved declined to comment directly on the possibility of a restructuring deal.

"At this point, it's all in the Speaker's hands," said Peggy Peterson, Oxley's spokeswoman. "Everyone asks if we're confident, but our level of confidence doesn't really matter. It's his decision."