I just attended a blogger briefing at the Treasury, with several prominent senior officials present, including Secretary Timothy Geithner himself. They had some pretty interesting things to say. The topic I was most interested in was financial regulation. I was curious where the Obama administration stood, given the progress (or lack thereof) thus far. In particular, I asked whether the President was holding a very hard line on any specific provisions being included for the bill to get his signature. Their responses were subtle, but sufficiently revealing of their position.

It was pretty clear that the President knows better than to demand a perfect piece of legislation. While there are clearly some priorities that the administration views as extremely important, I didn't get the sense that the absence of any specific provision was a sort of deal breaker. I don't think we'll see a standoff here where the President threatens to veto whatever bill Congress eventually passes if it lacks certain components of his plan.

For example, when it came to the Consumer Financial Protection Agency, officials made pretty clear that, while they prefer it be a new, independent agency, they weren't necessarily against the idea that it be housed in an existing entity like the Treasury of the Federal Reserve. They did, however, insist that it must exhibit sufficient independence so that the regulator can accomplish its mission effectively.

I got the same sort of feeling for the so-called Volcker Rule. I have said that I don't think it has a chance at this point. Given the difficulty the Senate is having with less controversial measures, I just can't see much of this recent proposal making it into the final bill. The Treasury officials, however, didn't appear as pessimistic. They even hinted that they had reason to be optimistic about the Volcker Rule's fate and implied that recommending it wasn't just a political maneuver. The President really expects action on it.

The officials present also indicated that we should remember that it's relatively early in the process. Even though the House passed its bill (which the Treasury strongly approves of), the Senate is drafting its version in committee. Then it has to pass committee; then it has to be debated and passed by the broader Senate; then there's conference. A lot can happen between now and when it reaches the President's desk. So despite the Senate's struggles, the Treasury remains cautiously optimistic. But this also highlights the fact that it could still be some time before a financial reform bill crosses the President's desk.