Related topics

Proxmire: Weakened by Retirement Announcement or Stronger Than Ever?

August 31, 1987

WASHINGTON (AP) _ Senate Banking Committee Chairman William Proxmire is, according to two views, either a lame duck who shouldn’t have announced his retirement so soon or a strong chairman who will be stronger than ever.

″There are two schools of thought,″ says Bert Ely, a banking analyst in Alexandria, Va.

″Some say he’s a lame duck and that’s going to hurt him and others say the Senate will give him what he wants in recognition of his 30 years of service,″ Ely said in an interview last week.

Proxmire, 71, cited his age in announcing Thursday that he will not seek a sixth term in 1988.

Mark Clark, senior vice president of the U.S. League of Savings Institutions, said Proxmire’s influence is unlikely to fade soon.

″It seems to me it would be a bit too risky to count on being able to strike a better deal (after Proxmire retires) for anyone to figure he didn’t have to pay attention to what the chairman was trying to do,″ Clark said.

But a House banking committee source, who asked not to be identified, said the Wisconsin Democrat’s status as a lame duck will tempt senators who disagree with him to throw ″reopeners″ into legislation in the hope of striking a more favorable deal after Proxmire is gone.

″People on the Hill know you don’t get anything done right away. ... They can always put in a provision to stall things,″ the source said.

″The field is wide open now and the chemistry will change greatly. ... ″I’m suprised he announced his retirement. I would have kept it close to my vest until the last minute.″

One of the chief issues facing the committee in the months ahead will be the question of allowing banks to expand into real estate brokering, insurance and securities underwriting.

Banking legislation signed three weeks ago by President Reagan put a moratorium on any changes in banking powers until March. That gives Congress six months to strike a compromise between those who say new powers are essential to the industry’s survival and those who believe allowing banks to branch into other areas would endanger deposits or be unfair to businesses not protected by federally backed insurance.

Proxmire has said he will support some new powers for banks, but in general he has been one of the leading opponents of relaxing the barriers between banking and commerce as erected by the Depression-era Glass-Steagall Act.

″My sense is that in his heart of hearts he doesn’t want to see Glass- Steagall knocked off the books,″ Ely said. ″But we may see some tinkering. ... In some selective areas they will chew at the boundaries.″

Sen. Alan Cranston, D-Calif., is in line to chair the Banking Committee if Democrats maintain control of the Senate in the 1988 election. But to take over Banking, Cranston would have to give up the reins of the Veterans Affairs Committee.

After Cranston, the next-ranking Democrat is Sen. Donald Riegle, D-Mich., who served as top minority member of the committee from 1980 to 1986 when it was chaired by Republican Jake Garn of Utah.

Cranston, who is traveling in Asia, has been unavailable to comment since Proxmire’s announcement, according to his spokeswoman, Martha Phan.

Proxmire’s departure will leave not only the chairmanship of the Committee on Banking, Housing and Urban Affairs up for grabs, but also will vacate a senior seat on the powerful Appropriations Committee.

Only two senators - Democrat John Stennis of Mississippi and Republican Strom Thurmond of South Carolina - have served in the Senate longer than Proxmire.

The 86-year-old Stennis, Appropriations chairman, finishes his seventh six- year term in January 1989. Senate Majority Leader Robert Byrd, D-W.Va., follows on the committee’s seniority list but, by tradition, does not hold a chairmanship. Proxmire is next.

His retirement would leave Sen. Daniel Inouye, D-Hawaii, in line to head the committee, through which all spending bills must pass.

Cranston, who chairs Banking’s housing and urban affairs subcommittee, hasn’t been as active on banking issues as he has on housing, beyond looking out for his home state savings and loan institutions.

Riegle shares many of Proxmire’s views on securities issues and is co- sponsoring Proxmire’s bill to slow down hostile takeovers. However, he is viewed as leaning more strongly toward banking deregulation than Proxmire.

″Riegle is very close to the banking industry. ... The expansion of bank powers would have a better chance of seeing the light of day if Riegle has more say,″ the House committee source said.

Proxmire’s departure also will mean the loss of a strong advocate of community banks. In the recent banking legislation, Proxmire championed a provision - favored by Cranston - curbing limited service banks owned by large non-banking companies. He viewed them as a threat to small, locally owned banks.

Update hourly