Reform reading: House Democrats brace for election changes

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Republican Rep. Scott Garrett of New Jersey, a senior member of the House Financial Services Committee, says Republicans will try to change the funding mechanim of the Consumer Financial Protection Bureau. The new agency will “be getting $500 million regardless of what she [Elizabeth Warren] says in committee. I don’t know how that can stand,” Garrett told the Los Angeles Times’ Jim Puzzanghera.

In writing the Dodd-Frank law, Democrats created the consumer agency so that it automatically receives a percentage of the Fed’s annual budget – a mechanism intended to keep Congress from meddling with the agency’s budget. Other financial regulators are not so lucky, and may have their annual funding trimmed or diverted by Republicans, who are widely expected to take control of the U.S. House.

Banks may swing back to Obama in 2012

Wall Street is hedging its bets on the mid-term election, but big banks are likely to return to the Obama camp for the 2012 presidential election, according to a Wall Street Journal op-ed written by Fox business reporter Charles Gasparino.

Why an about-face? Execs like Larry Fink at BlackRock, Jamie Dimon at J.P. Morgan Chase, Brian Moynihan at Bank of America, and Lloyd Blankfein and Gary Cohn at Goldman Sachs are all social liberals who largely support the president’s agenda on health care, taxes and the environment, Gasparino writes. And the big bankers also know that backing Obama is good for their overall business, thanks to Fed policy guaranteeing their debt and taxpayer subsidies behind the purchase of toxic assets.

Architect of consumer agency seen as potent symbol

As President Barack Obama tries to negotiate the changing political landscape, he may want to embrace Elizabeth Warren – a symbol of middle-class populism trying to hold banks accountable for the greed that triggered the nation’s economic meltdown, writes Mother Jones’ David Corn. The profile of Warren suggests that the former Harvard law professor and consumer advocate would be a far more effective economic symbol for the president than Larry Summers or Timothy Geithner.

Corn’s profile also takes note of what Warren has on her bookshelves in her mostly empty office: Rick Warren’s The Purpose Driven Life, Andrew Ross Sorkin’s Too Big To Fail, and a biography of Nelson Mandela.