Oil Spill, Financial Rules Give Democrats Election-Year Political Opening
U.S. President Barack Obama is attacking Republicans for allowing oil companies to damage the environment. Photographer: Brendan Smialowski/Bloomberg
July 1 (Bloomberg) -- Republican Senator Richard Shelby of Alabama talks with Bloomberg's Peter Cook about the outlook for passage of the U.S. financial-regulatory bill, approved by the House of Representatives yesterday. Sixty votes are needed in the Senate to move the merged bill toward final passage. Democrats need to retain votes from at least two of the four Republican senators who voted for the bill. (Source: Bloomberg)
July 6 (Bloomberg) -- David Boies, a partner at Boies Schiller & Flexner LLP, discusses the Obama administration's handling of BP Plc's oil leak in the Gulf of Mexico and the possibility that a drilling moratorium may be reinstated by the government. Boies talks with Erik Schatzker on Bloomberg Television's "InsideTrack." (This is an excerpt. Source: Bloomberg)
July 6 (Bloomberg) -- Fred McCallister, a vice president at Allegiance Capital Corp., talks about the need to waive the Jones Act, a 90-year-old maritime law that bars foreign ships from transporting goods between U.S. ports, to help fight the BP Plc oil spill in the Gulf of Mexico. McCallister speaks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)
President Barack Obama, criticizing oversight of BP Plc’s deepwater oil drilling, is using the Gulf of Mexico spill to help Democrats make an election-year case for tougher government regulation of business.
Obama, seeking to persuade voters that his administration is moving effectively to contain the spill and help victims, is attacking Republicans for allowing oil companies to damage the environment and Wall Street banks to hurt the economy.
“For decades, the oil industry has been able to essentially write its own rules and safety regulations,” Obama said June 30 in Racine, Wisconsin. “On Wall Street, the financial industry and its lobbyists spent years chipping away at rules and safeguards that could have prevented the meltdown” of the economy.
The spill and the congressional debate over financial regulations give Democrats a chance to paint Republicans as too cozy with big oil and bankers. Democrats want to channel voter anger over the spill and the economic crunch to stem Republican gains in the November elections. Republicans reject the notion that Democrats can score political points from the spill.
“It happened on their watch,” said Senator Judd Gregg of New Hampshire.
Obama called House Republican Leader John Boehner “out of touch” for comparing financial regulatory legislation, which passed the House last week, with using a nuclear weapon to attack an ant.
‘Job-Killing Agenda’
In reply, Boehner spokesman Michael Steel said Obama should focus on cleaning up the oil spill and “scrapping his job- killing agenda.”
Democrats are seizing on the oil spill to depict Republicans as more interested in protecting business than workers.
In Pennsylvania’s U.S. Senate race, Democratic Representative Joe Sestak, 58, accused Republican Pat Toomey of advocating oil drilling in Lake Erie, which washes the shores of the state’s northwest corner.
“Pat Toomey cares more about big oil,” the video says. “Even after the BP catastrophe he still wants to put Erie at risk. He even voted to allow drilling in our Great Lakes.”
Sestak is also trying to link Toomey, 49, to Wall Street’s role in the financial crisis, citing his work as a banker for Chemical Bank and Morgan, Grenfels from 1984 to 1990.
‘Wall Street Culture’
“He was part of the same Wall Street culture that nearly took down our economy,” said a Pennsylvania Democratic Party ad.
Toomey’s vote in 2001, when he was a House member, was against a ban on underwater drilling in lakes and rivers “across the country,” said campaign spokeswoman Nachama Soloveichik. Nine other Republicans and Democrats from Pennsylvania opposed it as well, she said in a telephone interview.
When he was a banker “more than 20 years ago” he dealt with derivatives “so common and so innocuous they are not even covered in the current financial regulation bill,” she said.
In Kentucky, an ad for Democratic Senate candidate Jack Conway, 41, featured images of the Gulf oil slick with a voiceover of Republican candidate Rand Paul saying “we need to restrain government.” Paul, 47, is also heard saying the nation should “get rid of regulations” on the coal industry and small business.
Changing Attitudes
Polls since the spill show environmental protection overtaking economic growth as a priority for voters.
A May 24-25 Gallup poll found environmental protection favored over economic development by 50-43 percent. That’s a shift since March, when economic development was favored 53-28 percent. In a June 1-3 CBS/New York Times survey, 51 percent of voters said offshore drilling is too risky, compared to 40 percent who favored it. Last August, 62 percent of voters favored offshore drilling to 28 percent.
Last month, Texas Republican Joe Barton, 60, gave Democrats an opening by apologizing to BP executives for being a victims of what he called an Obama administration “shakedown” to create a $20 billion oil-spill damage compensation fund.
Boehner, 60, and other House Republican leaders repudiated Barton’s comment. Still, House Democratic Leader Steny Hoyer said it reflected “a pattern of the Republican Party believing that regulations and government requirements are not appropriate.”
‘Big Oil’
The Democratic National Committee produced an ad stating that apologies like the one Barton made to “big oil” would be “how Republicans would govern.”
Democrats “who want to make hay” over Barton’s comment “are simply doing so to try and cover up their own failures,” said Representative Pete Sessions of Texas, who chairs the House Republican campaign effort.
The spill gives Democrats a chance to exploit “a distinct difference” between the parties toward regulation, said Virginia Democratic Representative Gerald Connolly.
Republicans “lowered those standards, lessened that protection and, in some cases, abandoned it altogether,” he said.
Republican Representative Mike Castle, running for Senate in Delaware, said Democrats “can try to make an issue” of the consequences of deregulation “but they may be stymied by the fact that they were supportive as well.”
Not all Democrats say the strategy will work, either.
“Republicans are trying to use it to show Democratic incompetence” and “Democrats clearly see this as an example that big business has been trumping environmental policy and fiscal policy for too long,” said New York Democrat Anthony Weiner. “You can see either one of us overplaying our hand.”
To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net.
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