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The Mechanics of Legislation: Congress, the SEC and Financial Regulation

The Other Players

Executive Action and Inaction

October 28, 1997 President William J. Clinton and Speaker of the House Newt Gingrich; courtesy of the William J. Clinton Library

The U.S. Securities and Exchange Commission is an independent regulatory commission, separate from Presidential administrations. It would be a mistake, however, to assume that Presidents do not also assert influence on securities and financial legislation.

Presidents, like Congress, must respond to the impulse of current events and act to avert crises. Economic crises, especially those that affect the investing public and their financial interests, compel Presidents to act. When that happens, the administration in power seeks to work with Congress and the SEC to implement legislation to address public concerns.

Some Presidents, as part of their economic policy or philosophy, support more fundamental changes, moving the pendulum to either greater or lesser regulation. President Reagan came into office on a platform that advocated eliminating layers of government regulation, including those affecting the financial markets, as one of his pillars of economic recovery.¹⁶ A President’s agenda may create a conflict between members of Congress and the SEC, when administrative policies come into conflict with the objectives of Congress or the Commission.

However, not all Presidents take a proactive role in financial legislation. Initially, President Clinton was not an active participant in the on-going debate over the repeal of Glass-Steagall. It was only after a push from Congress that he formed the President’s Working Group on Financial Markets in a belated attempt to shape the administration’s position and influence the proposed Congressional reforms.

The process of legislating becomes more complicated when bills which may be favored by the SEC are opposed by the President. The President’s veto power significantly diminishes prospects for enactment for any legislation which the President opposes. ¹⁷

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Footnotes:

(16) Thomas O. McGarity, Regulatory Reform in the Reagan Era, 45 Maryland Law Review 2 (2012).

(17) Transcripts from Presidential Oral History Program, Miller Center, University of Virginia.

Related Museum Resources

Papers

January 8, 1970: Workings of White House staff and Comments on Executive-Legislative relationship - Bryce N. Harlow
transcript pdf (Courtesy of the Carl Albert Congressional Research and Studies Center, University of Oklahoma, Norman, Oklahoma)
January 25, 1983: Memo to Fred Fielding from Shannon Fairbanks on issue coordination between SEC and White House Office of Policy Development
transcript pdf (Courtesy of the Ronald Reagan Library)
February 23, 1983: Memo to Roger Porter and Shannon Fairbanks from Fred Fielding on issue coordination between SEC and White House Office of Policy Development
transcript pdf (Courtesy of the Ronald Reagan Library)
1993-2001: A History of the Council of Economic Advisers During the Clinton Administration
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
January 21, 1993: Memo from David Caplan with revised draft of the National Economic Council charter
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
January 25, 1993: Executive Order 12835 - Establishment of the National Economic Council
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
February 17, 1993: Talking Points on the Economic Plan
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
March 24, 1993: Organization of the National Economic Council
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
December 1, 1993: Memo for President Clinton from Mark Gearan with interview storylines
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
December 27, 1993: Memo for President Clinton from Robert Rubin with year-end thoughts on National Economic Council
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
November 30, 1994: Memo for Robert Rubin and Bo Cutter from Peter Yu with mid-term assessment of National Economic Council
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
January 12, 1995: Memo for National Economic Council Policy Staff from Peter Yu with transition materials
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
March 29, 1995: Presentations by President Clinton and Secretary Rubin at the Southern Regional Economic Conference Session One: Review of the Regional Economy
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
June 15, 1995: Memo to Leon Panetta from Laura Tyson on long range plan for economy
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
July 1995: Memo to Erskine Bowles from Laura Tyson and Gene Sperling on National Economic Council
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
July 17, 1995: Memo for Laura Tyson from Erskine Bowles with comments on National Economic Council long-range plans
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
August 12, 1996: Memo for Gene Sperling from Eric Toder on tax initiatives for urban revitalization
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
September 11, 1996: Fax to National Economic Council from Ellen Seidman with SEC memo on technical assistance with Securities Investment Promotion Act of 1996
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
September 19, 1996: Memo to Chief of Staff from John Hilley on potential bill signings
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
October 4, 1996: Memo to Laura Tyson on National Economic Council record on international trade
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
October 7, 1996: Memo to Tom O'Donnell from Ellen Seidman on National Economic Council's successes and failures
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
October 7, 1996: Memo to Tom O'Donnell from Mark Mazur on National Economic Council planning issues
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
October 11, 1996: Memo for Don Baer and Mark Penn from Michael Waldman on President Clinton upcoming speeches
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
October 13, 1996: Memo to Tom O'Donnell from Tom Kalil on National Economic Council accomplishments and areas for improvement
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
March 21, 1997: Memo to President Clinton from Gene Sperling with National Economic Council weekly reports
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
April 30, 1998: Draft of President Clinton remarks on the economy
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
May 1, 1998: Memo to President Clinton from Gene Sperling with National Economic Council weekly report
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
March 1, 1999: Memo to President Clinton suggesting threat of veto of financial services modernization bill
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
March 24, 1999: Draft remarks by President Clinton on consumer financial protection
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
May 3, 1999: Draft: The Clinton-Gore Plan for Financial Privacy and Consumer Protection in the 21st Century
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
May 3, 1999: Email to Lowell Weiss from Sarah Rosen Wartell with notes on financial protection for consumers
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
May 3, 1999: Memo for President Clinton on financial privacy and consumer protection event
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
May 3, 1999: Treasury Department comments on President Clinton's remarks on financial privacy and consumer protection
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
May 4, 1999: Email to Lowell Weiss from Roger Ballentine on Senator Bryan attendance at financial privacy event
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
May 4, 1999: Remarks by President Clinton on financial privacy and consumer protection
image pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
May 4, 1999: The Clinton-Gore Plan for Financial Privacy and Consumer Protection in the 21st Century
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
October 22, 1999: Memo for President Clinton from Gene Sperling with National Economic Council weekly reports
transcript pdf (Courtesy of the William J. Clinton Presidential Library & Museum)
November 20, 2000: Draft: A New Economy
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