Ted Cruz and Pat Toomey Hope to Repeal Dodd-Frank Through Tax Reform

Sens. Ted Cruz (R-TX) and Pat Toomey (R-PA) aim to repeal parts of the Dodd-Frank consumer protection act through Republicans’ tax reform package.

Sen. Cruz told reporters that he plans to push to repeal elements of the 2010 Dodd-Frank banking overhaul; he said that he discussed his proposal with Senate leadership.

Cruz said, “We have discussed it, collectively, with a number of senators.”

Sen. Pat Toomey has allied with Cruz to repeal parts of Dodd-Frank through tax reform. Cruz and Toomey hope to include their banking repeal provision in tax reform. Republicans plan to use budgetary reconciliation to allow Congress to pass a tax reform package through the Senate with only a simple majority.

Sen. John Cornyn (R-TX), a member of Senate leadership, remains encouraged by Cruz’s idea, although he suggested that they should focus on passing a tax reform proposal before engaging in other policy debates.

“I personally think we need to take care of business on tax reform and not get distracted by other items, as tempting as that might be. I’m for doing as much as the market will bear, but the main thing I’m concerned about is tax reform,” Cornyn argued.

Senate Finance Committee Chairman Orrin Hatch (R-UT) could serve as a crucial ally to Cruz and Toomey in their efforts to repeal large swathes of Dodd-Frank. Hatch hopes to include Dodd-Frank repeal in the tax reform proposal.

Hatch responded to questions from reporters as to whether he believes the tax reform package could include a Dodd-Frank rollback. Hatch said, “I hope so.”

The 2018 budget resolution contains provisions that would allow for Congress to repeal Dodd-Frank. The Senate budget also includes instructions that would allow for the lawmakers to repeal parts of Obamacare and tax reform at the same time.

The House passed its Dodd-Frank overhaul earlier this year; Dodd-Frank reform has stalled in the Senate.

Republicans have frequently criticized Dodd-Frank, arguing that the bill has curtailed business activity and lending. GOP lawmakers also contend that the bill destroyed the community banking sector, while Democrats argue that the bill contains necessary consumer protections clauses.

Toomey argued in a December 2016 Senate floor speech that there remains precedent for rolling back regulation through reconciliation. Toomey suggested that Republican cut Dodd-Frank regulations and financial regulators’ funding through budgetary reconciliation.

Hatch told reporters that Dodd-Frank is “the worst doggone law I’ve seen — it may even be worse than Obamacare.”