Wall St reform bill offers Obama ray of hope in a gloomy summer

As the White House strained to contain an ill-tempered dispute with Democrat leaders on Capitol Hill over the risk of a Republican rout in November, good news at last came with the passage in the Senate late yesterday of legislation that will bring sweeping reform to Wall Street.

Aides indicated that Barack Obama will choose next week to sign the financial industry reform bill into law with grand ceremony, fulfilling a promise made a year ago to eliminate the worst practices of the big banks that were blamed for contributing to the near economic collapse of 2007-2009.

It was a good moment for the President in an otherwise frustrating summer. With unemployment stuck at 9.5 per cent, his latest poll numbers have been strikingly weak – a Public Policy Polling survey this week put his approval rating at just 45 per cent – and he seems to be getting scant political reward for legislative successes on the Hill, including the healthcare reform package, or for the impact of the economic stimulus in limiting job losses.

Even progressive parlour-room gossip in Washington has started to go against him. "Few progressives would take issue with the argument," Eric Alterman, a liberal commentator, posits in the Nation, "that, significant accomplishments notwithstanding, the Obama presidency has been a big disappointment."

Relations between Democrats on the Hill and the President – or at least his advisors – fell into the ditch this week after White House spokesman Robert Gibbs went on television to state what to many may seem obvious: that come the midterms in November, the Republicans may regain the majority in the House of Representatives. "There are enough seats in play that could cause Republicans to gain control," he said.

No one, it seems, was more upset than House speaker Nancy Pelosi, who reportedly accused Gibbs of "political ineptitude". An email released yesterday cited Ms Pelosi essentially rebutting the Gibbs analysis. "Here is what will happen in November. Democrats will keep control of the House. Period."

Mr Obama, who presided over groundbreaking plans for an electric car-battery plant in Michigan yesterday, will try to seek much-needed political advantage from the passage of the Wall Street reforms to show that mending the economy remains his priority.

That job was started for him by Senator Chris Dodd, one of the bill's authors. "I regret I can't give you your job back, restore that foreclosed home, put retirement monies back in your account," he said. "What I can do is see to it that we never, ever again go through what this nation has been through."

The new regulations, which faced stiff Republican opposition, are the most sweeping since the Great Depression. Their passage ends the hands-off attitude towards Wall Street that reigned during the Bush era White House and for many years before that.

The law establishes an array of rules, including protecting consumers from exploitation by credit card firms and limiting how far banks can use depositors' money to grow their own profits.