GUY RAZ, HOST:
After three decades in the U.S. House of Representatives, Massachusetts Democrat Barney Frank has decided not to seek re-election. He made the announcement yesterday. Frank is perhaps best known as among the first openly gay members of Congress, and more recently as the co-author of a sweeping financial overhaul bill known informally as Dodd-Frank. And Barney Frank joins us now from his office on Capitol Hill. Congressman, welcome.
REPRESENTATIVE BARNEY FRANK: Thank you.
RAZ: You've said that by not focusing on a re-election campaign, fundraising and all the things that go with that, you'll be able to focus on your job for the next year? What will be your top two or three priorities for your last year in office?
FRANK: 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 warfare attacks. I want to try and fight those. Secondly, beginning at the end of the next fiscal year, 2013, we should be dealing with the long-term deficit reduction, and I am determined to do everything I can to make sure that reduction in our excessive worldwide military commitments is a part of that. We should be getting out of Afghanistan and we should be pulling troops out of Europe and whittling down the overly 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, then things like Social Security, Medicare and a whole range of domestic quality of life programs will take too big a hit.
RAZ: Let me ask you about Dodd-Frank, the financial overhaul bill that was signed into law in 2010. It will be fully operational by the end of 2012. First of all, in your view, what is it already doing to prevent the kind of financial crisis that inspired its implementation?
FRANK: Well, 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, of the crisis 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 and who were being given more loan than the house was worth. We outlawed those loans.
Secondly, you had the derivatives placed on these bad loans that AIG and others got into. We now say that if you're going to get into the kind of trading with other banks and financial institutions that AIG had on derivatives, there's got to be capital behind it. There's got to be margins.
So we have substantially reduced - now, that isn't yet fully implemented. The mortgage things are. But within a few months, if the CFDC keeps going, you will not have the exposure that AIG had where they will owe 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 that if they do run into trouble, they're less likely for it to fail.
RAZ: Congressman Frank, if there was one thing you could have included in Dodd-Frank that you just couldn't put in there because it wouldn't have been, you know, accepted by most members of Congress, what would that have been?
FRANK: Well, first of all, I got to say I know this is a common journalistic thing: What's the one thing? I never think that way except when I'm talking to a journalist. With regard to the financial reform, I would have gone further in regulating derivatives and in requiring margin and capital for derivatives, but not in a qualitative way. I, frankly, believe we were pretty successful in getting most of what we wanted into the bill.
My major - let's say a disappointment was that we didn't get funding for a trust fund to build rental housing for low income people. I have had a two-sided view here. First of all, that we have 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 adequately to fund an ongoing rental housing situation was my major disappointment.
RAZ: I want to ask you about a decision you made in 1987. You went public to tell people that you are gay. That was controversial at the time. Are you heartened at the distance America has come?
FRANK: Oh, without question. Without question. It'll be my 25th anniversary and 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, gay, bisexual, transgender. It's not completely gone, but the end is in sight and I am proud of my role in that. I think, frankly, coming out was a big part of it because reality beats prejudice and by presenting people - those of us who are gay, lesbian, bisexual or transgender - with the reality of who we are, we give an alternative to the prejudice and the prejudice loses.
RAZ: Barney Frank, thank you.
FRANK: You're welcome.
RAZ: That's Congressman Barney Frank. He's a Massachusetts Democrat. He's announced he will not seek re-election next year, ending a career of more than three decades in Congress.
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