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Reform reading: Bailout paradox in Nov. 2 election

The momentum propelling Republicans to a likely majority in the U.S. House next week stems in part from Tea Party anger about the U.S. government’s bailout of Wall Street. But in a head-spinning paradox, Salon’s Andrew Leonard tells how those same rescued banks are now bankrolling GOP candidates who declare they will never support another bailout – even though the original $700 billion TARP program was a Republican plan and signed into law by a Republican president.

The anticipated shift in control of the House puts Republican Spencer Bachus in line for chairman of the House Financial Services Committee. The Alabama lawmaker has already said he wants to eliminate the power the Dodd-Frank law gave to regulators to liquidate Too-Big-To-Fail banks. Bachus may also decide to use committee hearings to apply pressure to the SEC, FDIC, and other regulators are they hurry to write scores of new regulations required by Dodd-Frank.

Bachus back in the good graces of Republican leadership

Becoming chairman of the House Financial Services Committee would mark a comeback for Spencer Bachus after a political stumble among the House Republican leadership two years ago. Bloomberg’s Phil Mattingly and Clea Benson report that Bachus, 62, was expected to lead his party’s negotiations in 2008 on the $700 billion bank bailout program but was removed from the role after other top Republicans lost confidence in him.

If Bachus wins the chairmanship – which would be decided by the House Republican leadership after the election – he would likely ramp up his criticism of Elizabeth Warren, the Harvard law professor and special adviser to the White House on setting up the new Consumer Protection Financial Bureau.

United about credit ratings

They’re not exactly singing “kumbaya” around the campfire, but banks, regulators, and even some consumer groups agree that Congress should scale back a ban on banks using credit raters until a more workable plan is ready. Reuters’ Dave Clarke reports that if banks can’t use credit rating agencies to assess state and corporate debt, they may stop buying them because it will be too difficult to prove to regulators that the investments are low risk.