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Barney Frank's Two Top Goals: Protecting Wall St. Reform, Social Spending

Rep. Barney Frank, the long-time liberal voice (and a fast-talking, brusque one at that) who announced he won't be running for re-election, discussed with NPR's Guy Raz, co-host of All Things Considered, the items of unfinished business he plans attend to during his remaining year in Congress.

"Well, there are exactly two. One, protecting the financial reform bill from these right- wing efforts to undermine it. They are running particularly in the house, where they control it, a kind of series of guerilla attacks. I want to try to fight those.

"Secondly, the next fiscal year, 2013, we should be dealing with long-term deficit reduction. And I am determined to do everything I can to make sure that reduction of our excessive worldwide military commitments is a part of that.

"We should be getting out of Afghanistan. We should be pulling troops out of Europe and whittling down the excessive nuclear deterrent because there's no more Soviet Union.

"If we don't put the military into the mix of a balanced deficit-reduction plan than things like Social Security and Medicare and a whole range of domestic quality of life programs will take too big a hit."

The financial reform law named for Frank and former U.S. senator from Connecticut Chris Dodd, is the bane of many Wall Street executives who view it as a threat to their ability to book the largest profits and therefore make the biggest bonuses possible.

Republicans have argued that it is a case of regulatory overreach by the Obama Administration and liberal Democrats.

By contrast, some liberals and even a few non-progressives have criticized the law as not going far enough to rein in the financial derivatives that contributed to the 2008 financial meltdown.

Frank said the law is already making a difference.

"It is retarding the kind of irresponsibility. Let me give you the first thing that I know it's doing. the biggest single cause, I believe, was loans made to people who shouldn't have gotten those loans. mortgage loans made to people who were too poor to pay them back, who were being given more loan than the house was worth.

"We outlawed those loans. Secondly, you had the derivatives placed on these loans that AIG and others got into. We now say that if you're going to get into the kind of trading with banks and financial institutions that AIG had on derivatives, there's got to be capital behind it. There's got to be margin.

"So we have substantially reduced — now that isn't yet fully implemented, the mortgage things are.

"But in a few months if the CFTC keeps going you will not have the exposure that AIG had where they owed so much more money than they could possibly pay off.

"Both of those are happening. We are also imposing on banks a requirement that they keep more capital so if they do run into trouble they're less likely to fail.

Frank described as a "major legislative disappointment" his failure to "get funding for a trust fund to build rental housing for low-income people."

"I've had a two sided view here. First of all, we've been making a mistake in making loans available for home ownership for people who couldn't afford them and weren't in some cases frankly prepared to own a home.

"And instead we weren't putting enough money into rental housing. So the failure to adequately fund an ongoing rental housing situation was my major disappointment."

Like many on Capitol Hill in both parties, Frank was a strong defender of the huge mortgage giants, Fannie Mae and Freddie Mac, before their financial problems became so bad that taxpayer bailouts were needed.

Conservatives have often pointed to Frank as one of the chief enablers, saying that his support of the two government-sponsored entities was central to the housing collapse.

Frank has correctly argued that Republicans controlled Congress and the White House when the worst excesses were building up in mortgage markets generally and at Fannie and Freddie specifically.

Still, it's true that Frank was a big booster of expanding home ownership. So his housing comments on All Things Considered had the sound of a mea culpa.

Frank, who was in the vanguard of openly gay members of Congress, said he took pride in the part his coming out in 1987 played in the nation's progress in matters of sexual identity.

"It will be my 25th anniversary. I was very frightened when I did it, it turned out unnecessarily. Yeah, I think one of the great success stories in America is the extent to which we have overcome prejudice based on being lesbian or gay, bisexsual, transgender.

"It's not compeletely gone but the end is in sight. And I am proud of my role in that. I think cioming out was a big part of it because reality beats prejudice and presenting people, those of us who are gay, lesbian, bisexual, transgender with the reality of who we are, we give an alternative to the prejudice, and the prejudice loses."

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Frank James joined NPR News in April 2009 to launch the blog, "The Two-Way," with co-blogger Mark Memmott.