In many respects, Senator Chris Dodd is more powerful than ever on Capitol Hill these days. After enduring eight years in the political wilderness, the Connecticut Democrat is one of his ascendant party’s senior statesmen, someone who endorsed Barack Obama early on in his presidential campaign and hails from a solidly blue state. As chairman of the Banking Committee, Dodd has played a central role in shepherding much of Obama’s economic agenda, from the second half of the bank bailout to the coming overhaul of regulations governing Wall Street. With his good friend Ted Kennedy sidelined with brain cancer, Dodd has also stepped in to help take a lead role on health care reform. In fact, at one point earlier this year before the Inauguration, Dodd was not only chairman of the Banking Committee, but also de-facto chairman of Kennedy’s Health, Education, Labor and Pensions Committee and Joe Biden’s Foreign Relations Committee.
But at the same time Dodd is looking increasingly vulnerable. The silver-haired father of two young girls is facing his toughest re-election fight ever, and he doesn’t even have an opponent yet. In a January Quinnipiac poll, 51% of Connecticut voters said that they would not vote for Dodd in 2010. “It’s the subject matter — people are watching their tax dollars go into institutions and they wonder when it’s going to get better and they wonder where it’s going,” Dodd says. “I don’t find people trying to elbow me out of the way trying to take over jurisdiction of the Banking Committee.”
Much of Dodd’s current woes stem from a pair of mortgages that he must wish he had never gotten. His reputation still has not recovered from the revelation last year that he received a sweetheart deal on his mortgage, saving upwards of $75,000 courtesy of Countrywide, one of the biggest pushers of the subprime mortgages that have landed the U.S. economy in such dire straits. Connecticut officials say there is no evidence of wrongdoing, and Dodd, who has allowed reporters limited access to his mortgage documents, denies he got any preferential treatment and insists he is going to refinance with a different bank. “I made the mistake of not addressing it earlier,” Dodd concedes in an interview. Still he will not allow reporters to further examine the “hundreds of pages” of mortgage documents, saying, “no one has ever showed as much as we have.” But the scandal has left a bad taste with Connecticut voters; in a January Quinnipiac poll, 56% of them said the Countrywide connection made them less likely to vote for Dodd.
The decision to move his family to Iowa in 2007 to lay the groundwork for what would end up a short-lived presidential campaign didn’t endear him to his constituents either. “How can he identify himself as D-Conn., when he lives in Iowa” asked a Connecticut Post editorial at the time. In the same Quinnipiac poll, his approval rating came in at a dismal 41%; that makes Dodd even less popular than Joe Lieberman, the Independent junior senator who left the Democratic Party after losing his primary and then crossed what was left of his party lines to endorse John McCain for President. “It’s a legitimate question to ask, I’m certainly aware of [the polls],” Dodd says. “But my answer to it is: do your work. And look, that stuff last fall was terribly unpopular — the banking things, the assistance to the automobile institutions. We have never seen mail or emails so hostile to those ideas…But it was the right thing to do.”
All of this has accrued, though, to a general perception that Dodd, who is on his fifth term in the Senate, “has kind of lost touch with voters,” says Jennifer Duffy, who tracks Senate races for the nonpartisan Cook Political Report and rates Dodd amongst the most vulnerable Democrats up for reelection.
Dodd’s aides point to Obama’s dominant 61% victory in Connecticut in an election that saw the defeat of the state’s lone House Republican, Chris Shays. “Connecticut is trending blue, even if Dodd only got 70% of Obama’s voters, he’d still easily win,” says one adviser. “His potential opponent, Rob Simmons, couldn’t even hold Connecticut’s Second District, how is he going to win statewide”
Still, the double distraction of a looming tough reelection battle and the ongoing health-care talks has some worried that Dodd might be neglecting the Banking Committee at a crucial time, or at least be stretched too thin. “Health care is yet another distraction on the list of things that have distracted Dodd from his [Banking] Committee work,” says one Republican senator who has served with Dodd on the committee. “Legislation to regulate the insurance industry and to crack down on Fannie Mae and Freddie Mac languished before the committee while he was on the campaign trail. Then Countrywide distracted him from the housing bill, a bill that had to be overhauled by the Obama Administration this week,” the senator said, referring to the Obama Administration’s changes to the housing program created by Dodd’s bill last summer. The changes, which did not require congressional approval, were badly needed to loosen up the $300 billion fund that had been choked by conditions Congress had placed on the money. “We created a bill that did a lot of good things but made it cumbersome to deal with foreclosures,” Dodd concedes, adding that his committee held 82 hearings “on the foreclosure issue” in the 110th Congress.
Lobbyists from a variety of businesses and groups who work with the Banking Committee express concern at Dodd’s small and overburdened staff: for example, the senator has left vacant the top staff position on the Banking Committee since his chief of staff, Shawn Mawler, left in December to go work for the Obama Administration. “I guess it’s hard to find staff — would you want to go work for someone who might lose his job in two years” says one financial executive who deals with the committee. “He doesn’t have a lot of staff. How he gets work done, that’s been a puzzlement.”
On this point Dodd says that he, too, is frustrated in waiting for responses from the leadership on requests for more space – “we’re jammed,” he says. “I think we’ll need some more people, and we’re bringing more people on… I’m really exhausted, it’s overwhelming the amount of work and trying to stay on top of it and listening to people about their ideas and trying to figure out what the solutions are.”
One thing Dodd has done of late is tack hard to populism. He has held hearings on credit card abuses and introduced stringent legislation to prevent companies from luring consumers into dangerous amounts of debt, and last October Senate Majority Leader Harry Reid took the unusual move of overriding a Democratic hold on a bill after Dodd tried to block an extension of President Bush’s warrantless wiretapping powers over concerns from the left about granting telecom giants retroactive immunity for working with the Administration. Most notably, against the wishes of the White House, he slipped into the stimulus bill tough limits on compensation for Wall Street firms accepting additional federal bailout money. The restrictions were tougher, and more far reaching, than anything Obama had pushed, and White House advisers and the investment banking community claimed that Dodd’s provisions could have the perverse incentive of causing firms that really need help to refuse to accept it. “I was sort of surprised by the blow back on it when nobody offered a counter idea,” Dodd says, noting his amendment passed by a voice vote, with no opposition. As evidence of how much distrust there is of Dodd these days, some commentators reacted to the provisions by claiming the senator was just doing the bidding of his hedge fund constituents in Connecticut by making it easier for them to woo away talent from their more heavily regulated competitors.
But even many of his former hedge fund backers aren’t particularly happy. As Dodd and House Financial Services Committee Chairman Barney Frank work to craft legislation overhauling the nation’s banking and securities regulations, Dodd’s populist ploys give many on Wall Street pause. “The competition for capital and talent is now global — what we saw when the Senate inserted the executive compensation restrictions was a cause and effect,” Tom Quaadman, who works on financial sector issues at the U.S. Chamber of Commerce, says pointing to examples of companies like Deutsche Bank and UBS poaching U.S. talent driven away by the new rules. Looking ahead to re-regulation, “if we’re misapplying solutions and not addressing appropriate problems, this could have long-term unintended consequences for years to come.”
Rounding out Dodd’s bad year thus far was a botched announcement of a book deal. Last month, Crown Publishers announced that Dodd would be the author of “Thirteen Days: How the Financial Crisis Changed the Politics of Washington,” an announcement that was met with much derision by Republicans. “You have to wonder who advised Senator Dodd that striking a book deal on a crisis that he was at least partially responsible for was a good idea,” Brian Walsh, spokesman for the National Republican Senatorial Committee, scoffed in a statement. “A more apt title would be ’13 Weeks: The Senate Banking Committee Chairman’s Time in Iowa While the Housing Market Collapsed.'” After the negative reaction, the editor backpedaled, saying a final agreement had yet to be reached and adding that if and when a deal is reached the book would be more a history of bailouts than an insider’s perspective and the proceeds would go to charity. Dodd says there is still no deal and refused to discuss the particulars of the book except to say it’s “something about last fall.”
The book fiasco seemed yet another instance of bad timing on Dodd’s part. After all, being chairman of the Senate Banking Committee gave him little street cred in the 2008 primaries, where the big issue was still the war in Iraq. These days being chairman serves only to remind voters of his own problems with Countrywide and, fairly or not, makes Dodd the face of two deeply unpopular bailouts of Wall Street and an only slightly less unpopular stimulus plan. All of which may explain why Dodd is spending so much more time on the HELP Committee these days — after all enacting universal health care ahead of the 2010 elections could be the best cure for what ails him.
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