Where does Heller stand now on restoring Glass-Steagall?

In the closing days of the oh-so-close 2012 U.S. Senate race between Democratic Rep. Shelley Berkley and then-appointed Republican incumbent Dean Heller, the Heller campaign hit on a winning issue.

Berkley had voted to deregulate the financial industry by voting to do away with the parts of the Depression-era Glass-Steagall Act in 1999. The law created a separation between commercial banks and investment firms, to prevent the kind of gambling with savings that many experts believe led to (or at least exacerbated) the financial crisis of 2008.

The crisis led to the bank bailout of 2008, a nice bi-partisan bookend: Former President Bill Clinton signed the deregulation, and former President George W. Bush’s administration led the bailout. And while Berkley voted for the bailout, then-Rep. Dean Heller voted against it.

So when Heller came to the Review-Journal editorial board in October and – after a few probing questions – came out for the re-institution of Glass-Steagall, he had a ready-made campaign ad: Berkley helped create (or at least worsen) the financial crisis by backing deregulation, and then bailed out reckless banksters, while Heller refused to reward the consequences of risky behavior and favored a regulation aimed at preventing a repeat of the entire mess.

It was made even better after Berkley admitted her vote to deregulate had been a mistake. By contrast, Heller couldn’t have been more plain: "I want to move to going back to Glass-Steagall," he said.

Oddly, Heller’s campaign never made that ad, never used the issue to highlight a clear contrast between the candidate’s records. (It would also have helped to insulate Heller against a charge of irresponsibility, inasmuch as officials in the Bush administration had warned Congress that a bailout of the banks was critical to keeping the U.S. economy from total collapse, a charge Berkley’s side never used to effect.)

Now, of course, the campaign doesn’t matter: Heller won the race by 11,576 votes.

But a funny thing happened since the election. Heller’s been appointed to the Banking, Housing and Urban Affairs Committee in the Senate. And not only that, he’s ranking Republican member of the subcommittee on economic policy and a member of the subcommittee on financial institutions and consumer protection.

"I look forward to drawing from my previous experience on the House Committee on Financial Services and the House Committee on Ways and Means to make difficult decisions that will help set our economy back on the right track," Heller said in a statement after his appointment to the policy subcommittee.

Indeed, Heller pointed out during the campaign that the regulatory reforms enacted in the wake of the financial crisis and the bank bailout are wholly inadequate to insulate the economy from yet another crisis, and the potential exists for yet another bailout. He correctly noted that financial deposits are still concentrated in banks too big to fail, and past could be a very expensive prologue.

So is Heller moving forward with his previous commitment to re-institute Glass-Steagall? It’s a question I’ve repeatedly asked his office over the past two months. But, while Heller’s staff has promptly replied to other requests for information, they’ve simply ignored e-mails and calls on the Glass-Steagall issue.

So whether Heller will introduce a bill to actually move to go back to Glass-Steagall is anyone’s guess.

Let’s hope he does. Because whether he knew it or not at the time, whether he used the issue effectively or not at the time, he’s right on the issue. The economy remains vulnerable and regulations (which Republicans usually disdain) remain inadequate to avert risks. And Dean Heller now happily finds himself in a position to do something about it.

Steve Sebelius is a Review-Journal political columnist and author of the blog SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 387-5276 or SSebelius@reviewjournal.com.