President Obama’s recent nomination of White House Chief of Staff Jack Lew to replace outgoing Treasury Secretary Timothy Geithner could signify that the administration is stepping away from financial reform in favor of other priorities.
Though the 2010 Dodd-Frank Act passed after the latest financial crisis was intended to eliminate America’s “too big to fail” problem, critics of the legislation maintain that the law benefits the largest financial institutions. Financial reform activists have voiced concern about Lew’s relationship with Wall Street and seeming disinterest in regulation, The Guardian reports.
“The one area of concern is whether or not he is sufficiently committed to quickly and thoroughly implementing financial reform and re-regulating Wall Street,” Better Markets CEO Dennis Kelleher said, according to The Guardian. “This concern arises from Mr. Lew’s past statements suggesting a lack of knowledge about the financial crisis and its causes. He has appeared to minimize the undeniably critical role deregulation played in causing and accelerating the financial and economic crises.”
Lew, who presided over three budget surpluses under the Clinton administration, has a significantly different background from Geithner, the former president of the Federal Reserve Bank of New York who has been portrayed as having strong Wall Street ties. Lew also helped negotiate bipartisan Social Security reform under the Reagan administration.
When President Obama nominated Geithner in 2009, he initially resisted before accepting the nomination. Geithner oversaw multiple taxpayer-funded bank bailouts, a broad economic stimulus package and presided over two debates over raising the debt ceiling.