Chairman Frank talks of learning on the job

As his Democratic colleagues basked in their historic victory in November, Rep. Barney Frank experienced an emotion not usually associated with the quick-witted Harvard graduate: fear.

The Democrat from Massachusetts, considered one of the smartest and most intimidating members of Congress, wasn’t sure he was ready to become chairman of the Financial Services Committee.

{mosads}“I had a situation I never anticipated. I had more power than knowledge,” Frank said in an interview last week with The Hill , adding that his first couple months on the job were stressful.

“I knew housing very well. I knew banking pretty well. I knew the international stuff, the World Bank and the IMF. But this committee only had jurisdiction over securities and insurance for six years, and for two of those years I was not the ranking member…. So I’ve had to learn a lot about these things.”

That’s one reason Frank has no qualms about the power concentrated in the hands of House Speaker Nancy Pelosi (D-Calif.). Frank, in his 14th term, has said that Democratic chairmen had too much authority before the GOP took control of the lower chamber in 1995.

“Worrying that I’ve got too little power is the furthest thing from my mind. Trying to exercise it responsibly is the key,” Frank said, adding, “I think it’s very important that the Democrats have a coordinated position.”

It helps that Frank is a fan of the Speaker, whom he talks to “three or four times a day.” He says he has seen her grow in
her new role, suggesting that she now shows a toughness and cleverness in public that she largely reserved for her private interactions while she was minority leader.

Like many women of her generation, Pelosi was probably discouraged from showing her intellect, Frank surmised. “I think she can still hear in her head people saying to her, adults saying to her, ‘Nancy, the boys won’t like a girl who’s too smart,’” he said.

Since rising to become Speaker, Frank said, the public Pelosi is starting to look a lot more like the private Pelosi: “Publicly, there was a girly aspect,” Frank said. “Finally, that started to change.”

The Speakership, Frank reflected, is tough on its inhabitants. “The only Speaker [in recent history] who went out better than he came in was [Rep. Tip O’Neill (D-Mass.)],” Frank said, predicting, “Nancy will be the first genuinely successful Speaker since Tip.”

Frank has a liberal voting record and appears to relish partisan debates, but he has worked with Republicans on a range of financial issues over the last several years.

And he is not shy about criticizing powerful members of his own party. In 2001, Frank lambasted President Bill Clinton’s pardon of Marc Rich; more recently, he said Pelosi’s endorsement of Rep. John Murtha (D-Pa.) over Rep. Steny Hoyer (D-Md.) for majority leader was “a mistake in judgment.”

As Financial Services chairman, Frank has driven an aggressive agenda that is in sharp contrast to the more measured approach of his counterpart in the Senate, Chris Dodd (D-Conn.). Dodd, the Banking Committee chairman, is saddled with a slim majority on his panel, exacerbated by the absence of Sen. Tim Johnson (D-S.D.), and has been somewhat distracted by his dark-horse presidential run.

Frank has guided to passage bills to create a new regulator for Fannie Mae and Freddie Mac, bar non-financial companies from owning banks and give shareholders an advisory vote on executive pay. They haven’t moved in the Senate, but Frank insists he isn’t bothered, and suggested he could even benefit from the delay if it allows time for Johnson to return.

“Why get it through at 50-50 when you can get it more your way by waiting a while?” he said.

In the meantime, Frank is pressing ahead with bills to add wind coverage to the national flood insurance program, extend the federal backstop to insurers for terrorism risk, and create a federal affordable housing trust fund. He plans to unveil legislation to beef up consumer protections in the banking area as well as a bill to rein in sub-prime mortgage lending abuses.

But he is most energized when talking about what he sees as one of the top challenges confronting his party: Gaping income inequality and the growing economic unease of the middle class.

Frank applauded the bolder populism Democratic candidates and the party’s leaders have been showing this year, remarking that it’s now “intellectually respectable” to talk about the unwanted consequences of globalization and technological progress.

Asked how Democrats should remedy the ill effects of such strong forces, Frank replied, “The answer, I believe, is not to stop them, but to accompany them with methods that take some of the wealth they create and ease the pain.”

He advocates legislation to strengthen unions, spending more on education and healthcare and offering better unemployment insurance “so that if you lose your job, you don’t have to worry for a year or so.” The existing trade adjustment assistance program is too narrow, he argued: “If you lost your job to outsourcing in services, you aren’t even eligible.”

If Frank is worried about scaring away would-be donors from Wall Street and big business with such ideas, he doesn’t betray it.

He praised several Democratic presidential candidates for backing a proposal to raise taxes on the hedge fund and private equity industries, scoffing at the notion that such a move would dry up financial support for his party: “I think that is a false problem. … I don’t think you have to buy [Wall Street’s] support with outrageous tax breaks.”

He also brushed off criticisms that the Democratic leadership hadn’t done anything bold since seizing control of Congress, citing the House passage of the first significant gun control legislation in years. He said the House had done what it could to put an end to the Iraq war and blamed the razor-thin majority in the Senate while crediting Majority Leader Harry Reid (D-Nev.): “Harry’s been punching above his weight on this issue all year.”

Frank is optimistic that Democrats will control the White House and Congress in 2009, though he is not making bold predictions or using terms like “permanent majority” that House Republicans employed in their 12-year reign. Asked whether he saw the House being controlled by Democrats for the next decade, Frank responded, “A decade is a long time.” However, he is confident Democrats will continue their control “for the foreseeable future.”

Frank, whose sister, Ann Lewis, works for Sen. Hillary Rodham Clinton’s (D-N.Y.) campaign, has not endorsed a 2008 White House hopeful, but suggested he will do so this year.