Should Congress Rush Finalizing Financial Reform for the G-20?

Does President Obama need financial reform finished this month so he can pressure the leaders of other countries in the G-20 to adopt similar standards in the upcoming meeting? According to a New York Times article from Monday, the White House thinks so. The administration wants a consensus reached by June 24th. That would give the conference committee two weeks to do its work, as it's set to convene on Thursday. Is it worth the rush?

The Times attempts to explain some of the important issues:

The administration has tried to use the summit meeting to foster a sense of urgency among lawmakers. It thinks a deal would give Mr. Obama greater leverage in efforts to persuade other countries to support proposals like a global bank tax and higher capital standards for the largest financial institutions. The higher standards are part of the legislation but would require international coordination.

It's a little unclear how Obama could gather any support for proposals like a global bank tax or higher capital standards, considering the fact that neither of Congress' financial reform bills provide explicit detail on either proposal, despite what the Times may think. But might there be other aspects of new regulation that are relevant globally? Yes, but there aren't many.

As explained here, several of the major aspects of reform are already pretty much set in stone. So really, President Obama doesn't have to worry about consensus on those: he's already got it. As for the more controversial sections, it's fairly likely that only a few could have global implications. They include the proprietary trading ban, the new derivatives regulation, and some details about the resolution authority.

So really, he doesn't need much additional consensus to speak intelligently to the heads of other nations at the G-20 meeting about the U.S.'s intentions for regulation. All he really needs to do is ask House Financial Services Committee Chairman Barney Frank (D-MA) which of the Senate's more controversial provisions he can pass in his chamber, and ask Senate Banking Committee Chairman Chris Dodd (D-CT) the same of the few provisions where the House's bill is more aggressive.

As a result, conference doesn't really need to be anywhere near completed by June 24th to achieve this goal -- and it shouldn't be. These bills are hopelessly complicated. Although they have many similarities, they also have many differences. The notion that conference should be rushed to wrap up in just two weeks for the G-20 meeting is crazy. It's far more important that Congress get the legislation right, even if it takes a little extra time. They'll get it done sometime this summer, but needn't aim for June.