The newly retired Frank gives his typically blunt assessment of the current political scene, financial regulation, and his coming out.

Excerpted from Barney Frank, May 13, 2013.

BARNEY FRANK, Former Member of Congress (D-MA)
In conversation with SCOTT SHAFER, Host, “The California Report,” KQED

SCOTT SHAFER: Does Washington look different now that you’re out of there?

BARNEY FRANK: It doesn’t look different this year from last year. It has been radically different for the past couple of years, [but] not for as long as people say. People say, “Well, it broke down; it doesn’t work.” 

From 2007 to 2010, I was chairman of the Committee on Financial Services. I had to deal with the financial crisis. I went into that committee in 1981 because I care a lot about affordable housing, rental housing. I’ve always felt that we make a mistake by insisting that the only good form of housing for low-income people is ownership; decent rental housing is the most appropriate form for many people, if we do it right. I also cared a lot about the international financial institutions – the World Bank and the International Monetary [Fund]. My crusade has been to show that you can have, both domestically and internationally, good economic growth and fairness; that you don’t have to beat down poor people and lower-middle income people to have a greater gross domestic product.

Then I became, by virtue of the seniority system, in 2003, the senior Democrat on the committee. When you’re anything but the chairman or the minority leader, you can pick and choose what you want to work on. But when you become the leader, then it’s all on your plate. I spent much of the years, beginning with 2007, learning about things in which I had previously not had an interest, and which I am looking forward to ignoring. [Laughter.]

SHAFER: Things like derivatives.

FRANK: You’re exactly right. From 2003 to 2007, I was the senior Democrat, the minority on the committee. The Republican chairmen were Jim Leach of Iowa and Mike Oxley of Ohio, and we differed and we worked well together. We would negotiate. They had more votes than I did, but we tried to work things out. Then I became the chairman in 2007. In 2007 and 2008 I was the chairman under the administration of George W. Bush.

Let me tell you something about your own great congresswoman, one of America’s great leaders, Nancy Pelosi. In 2008, George W. Bush approached Nancy Pelosi and said, “The economy is hurting; we need a stimulus.” They [Republicans] called it a stimulus, but eventually it became a “recovery” bill. Now in my experience, most people would rather be stimulated than recovering. [Laughter.] Anyhow, Nancy Pelosi and Harry Reid worked with George Bush to provide a stimulus. Now, this is the beginning of 2008; it’s the beginning of a presidential election year. It would have been better for the Democrats if the economy was not doing well. But that’s not the way she thinks or the way most of us think. You have the people you most care about suffer economic damage, so she said, “Look, we would prefer to spend more on highways, to give more money to local governments to hire people, but Bush won’t accept that; he only wants tax cuts. But I will make sure in my negotiation with him that they are the most progressive tax cuts possible; that they will be of the greatest benefit to [low-income] people.”

The less money you have the more you’ll benefit from these tax cuts, including what’s called the refundable provision, whereby people on the low end would get money back for the Social Security they pay. She and Harry Reid delivered a stimulus at Bush’s request. Then, later that year, George Bush sent Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to us in September 2008, and said, “The economy isabout to collapse; will you Democrats pass for this Republican administration, one month before the presidential election, a massive spending bill called the TARP which gives us all this discretion?” We said, “Well, we can’t give you quite as much discretion as you want, but yes, we have to save the country.” So the Democrats in 2008, under George Bush, gave him what he wanted.

By the time we get to January 20, 2009, widespread amnesia takes over the Republican Party – they forgot where the crisis came from; they forgot who asked for all the bailouts; and from then on it became Obama’s fault, and Mitch McConnell says, “My number one goal is to defeat him.” That’s when things break down.

SHAFER: You got elected in 1980, along with Ronald Reagan, and you were not out. What was it like being in the closet?         

FRANK: It was hell, and that’s why I [came out.] I got elected to the state legislature in 1972 and I filed the first gay rights bill in Massachusetts history. I had started coming out in the late ’70s and it was awful. You cannot live sort of half in and half out, particularly if you’re prominent. You don’t have the option of just being out and going about your business. I found it difficult.

I started coming out because, when I looked at the political situation in Massachusetts, I didn’t think that the congressman in whose district I lived was going anywhere because he had just become speaker of the House [of Representatives]. I figured, I’m going to come out; I’ll be a prominent gay activist who was a former state legislator. Then the Pope intervened, because the congressman in the district next to mine was a Jesuit priest named Robert Drinan and the new pope, John Paul II, decided that he didn’t want to have a priest in Congress. So he ordered Drinan to leave Congress. Drinan was a lifelong priest, so he did.

I then went back in the closet. I started coming out to friends and family. Then in 1980 when I got to Congress I said, OK, I got a new start here, so I’ll be fully out to the gay community in Washington but I won’t say anything publicly. But it didn’t work; it’s a crazy way to live, so I just decided I had to come out.

SHAFER: When you came out, did most of your colleagues in Congress not know?

FRANK: A lot didn’t know, but some did. Let me tell you, the rule for the media was that you did not identify someone as gay or lesbian unless he or she gave permission or that individual was involved in an unpleasant and unfortunate situation in which his or her sexuality was central. That meant that for a long time the only elected officials whom people knew to be gay or lesbian were people who did things that they shouldn’t have done. I have to say, on behalf of the lesbians, there were more gay guys doing what they shouldn’t have done more than the lesbians. Gerry Studds, who was brought out by an incident, was the first one to say, “OK, I’m gay.” For the others, there was a series of gay members of Congress who’d been involved in things, all of whom implausibly announced that this had happened when they were too drunk to remember what had happened – which would imply a remarkable degree of physical stamina when they otherwise could not stand up [Laughter].

For me, in the ’80s the media began to ask me whether they could write about me being gay [including some gay reporters]. I said “No, not yet.” But finally, when I was ready to come out, I didn’t want to announce it because I was afraid at the time [’87]. I wanted to be able to say that my being gay was no big deal – which, when you think about it, is not a great thing since sexuality is an important part of you. Who wants their sexuality to be no big deal? You want it to be an enriching and warming part of your life as it is for me now with Jim.

So I said to The Boston Globe, which was the key paper there, “If you ask me if I’m gay, I’ll tell you yes.” They said, “We can’t ask you because our rule is don’t ask [and don’t tell].” So a stalemate went on for a couple months where they wouldn’t ask me because it would violate their rule. Finally they got worried that somebody else was going to scoop them, so they sent a reporter down to ask me “Are you gay?” and I gave this very considered answer. I still wanted to say it was no big deal to minimize it because I was afraid of the political consequences. How could I announce something and subsequently announce that it wasn’t important? They’d say, “Why’d the hell you tell us for if it’s no big deal?”

They asked this very capable lesbian reporter named Kay Longcope to ask me “Are you gay?” and I gave my carefully considered answer: “Yeah, so what?” And that was it. But the subsequent reaction was wonderful. [Former Republican Senator] Alan Simpson  of Simpson-Bowles called me up the next day – it was very moving – and said, “You know, I joke around a lot but I hope to hell I never made any anti-gay joke to you because you’re my friend, my pal.” Former [Republican] Senator Warren Rudman – I was in a convenience store on Capitol Hill in Washington and I was in the back, he was in the front, and he saw me as he was leaving and said in a very loud voice so everybody could hear, “Good for you!” So there was really no problem.

SHAFER: Were there any disappointments – Democrats, for example?

FRANK: No, they were fine. [Former Speaker of the House] Tip O’Neill was a wonderful man, ahead of his time, and he did tell his then-press secretary [Chris Matthews of “Hardball”] when the rumors were going around, “All right, Chris, we better get ready to talk to the press. They tell me Barney Frank’s going to come out of the room.” [Laughter.] People were very supportive.

SHAFER: You were a big Hillary Clinton person, and you supported her in the primary in Massachusetts. Her husband, of course, signed DOMA and “Don’t ask, don’t tell.” Bill Clinton has since reversed on those things, but at the time was that an example of a politician doing something expedient?

FRANK: Bill Clinton is an unsung hero of gay rights – including appointing Jim Hormel at a time when that was very controversial.

SHAFER: But how do you explain DOMA and “Don’t ask, don’t tell?”

FRANK: First of all, “Don’t ask, don’t tell” very simply – Clinton promised, when he was running for president, that he would abolish the ban on gays in the military by executive order. He became president and immediately Colin Powell announced that he was against doing this – he was then the chairman of the Joint Chiefs of Staff. While he theoretically was subject to Bill Clinton’s control, he was retiring in June so Clinton couldn’t make him do anything he didn’t want to do.

SHAFER: He could have let him resign.

FRANK: Yeah, and it would have made an even bigger splash against him politically. But what happened specifically was this – and I’m glad I have the chance to explain this, because it’s unfair to blame President Clinton at all. There was a very important bill for the labor movement and the women’s movement – The Family and Medical Leave Act of 1993 – a bill that mandated that employers of people above 50 give people family leave or medical leave if they need it [unpaid], but you wouldn’t have to quit your job to take care of a parent or family member. That bill was coming up in the Senate, and it was the number one priority for organized labor and the women’s movement; and it had been defeated under [President] George H.W. Bush.

A very homophobic, bigoted Democrat named Sam Nunn (D-GA) hooked up with [Senator] Bob Dole (R-KS), the Republican leader, and they announced that when that bill came up they were gonna add an amendment to it that took “Don’t ask, don’t tell” and made it statutorily binding. Bill Clinton would then have had this dilemma, because they had the votes for it, unfortunately, and they would have had the votes in the House. If that bill had passed with that on there, Clinton could have vetoed it only by denying the labor movement, the women’s movement their number one choice, or signing it with this being statutory. They then tried to negotiate a deal that was less onerous, and I was in on those negotiations. At one point Colin Powell said he would sign on to something that was not so bad if at least one of the other chiefs of staff would join him. None of them would. So in the end, “Don’t ask, don’t tell” was marginally better than the existing policy, which was the best Clinton could do, over their objections.

The next year, Clinton did something that was frankly even more important for the lives of many gay and lesbian people. In 1954, [President] Dwight Eisenhower issued an executive order that said if you were a homosexual, under any circumstances, you couldn’t get clearance. It affected people working for the government, people working for law firms, architectural firms, engineering firms with contracts with certain government agencies. Bill Clinton abolished that. In 1994, he put out a new executive order saying sexual orientation won’t count. He also, for the first time, had [then Attorney General] Janet Reno announce that if you were gay, lesbian or transgender and you lived in a foreign country and you were being persecuted, you were eligible for asylum in America. Finally, he said that we won’t discriminate based on your personal characteristics. He strongly supported the Employment Non-Discrimination Act.

Then, in 1996, the Hawaiian Supreme Court looked like it might [legalize same-sex] marriage; they backed off. Bob Dole once again, now a candidate for president, comes up with the Defense of Marriage Act. It passes the Senate with 12 votes against him. It would have passed, sadly, over Clinton’s objection. It passed both houses by three-to-one majorities – I fought against it.

On the other hand, he did repeal the executive order on security clearance, strongly supported non-discrimination and did a number of things that moved it forward. President Obama has also been very good, but repealing “Don’t ask, don’t tell” was not on the agenda very early on and Obama got it done because Nancy Pelosi made it a high priority. I was Nancy’s deputy on that. This was Nancy Pelosi’s initiative. We told the Senate, “You have got to repeal ‘Don’t ask, don’t tell’ or you won’t get a military bill.” That’s what happened.

SHAFER: We have some questions that have to do with Dodd-Frank [the Wall Street Reform and Consumer Protection Act], the financial reform bill that you co-authored. “What do you think of the way Congress is removing the teeth of the financial legislation you sponsored? Will it still be effective?”

FRANK: First of all, Congress is not removing the teeth; the Republicans in the House have tried. They haven’t removed them yet; they’re still teething. The biggest single problem is this: Derivatives was the major area where there was not any significant regulation. The structure by which derivatives are regulated is a terrible one; you have the Securities and Exchange Commission, the financial regulator, Commodities and Futures Trading Commission, the farmers. I would have liked to put them together; it was politically impossible, farmers versus the financial interests in terms of Congress. They are trying to work together.

But what the Republicans did when they took the House was to refuse to fund adequately those two agencies. So the fundamental problem has been that the Commodities and Futures Trading Commission is given this enormous increase in authority over derivatives and no new staff. That’s been part of the problem. Other than that, they are moving ahead; they have been slow to make decisions, but they haven’t made a bad one yet. Part of it is there are new regulators in town now; the Obama regulators are very good people.

SHAFER: There was an article in The Nation last week describing the armies of lobbyists –

FRANK: And they haven’t won one yet!

SHAFER: They haven’t won one yet? They spent something like $600 million lobbying the regulators.

FRANK: They spent that money on us, and they didn’t win big. I wrote back and said, “Yes, that fight’s still going on. I understand that, but no one can point to a specific regulation that’s been adopted in a weakened form.”

There’s one other problem we’ve had; this is where the filibuster comes in. The Federal Circuit Court for the District of Columbia gets a lot of the federal regulatory things sent to it, and it used to be a bastion of liberalism, but the conservatives have taken over that court and have on several occasions now, in a bout of judicial activism, thrown out rules adopted by the regulators.

For instance, the Commodities and Futures Trading Commission under the law, which we passed, put a limit on the amount of a commodity you could own if you had no conceivable use for the commodity. Now why would you buy up a lot of something that you didn’t want to use, except to drive the price up? It’s speculation, and they call it position limits. They adopted a rule imposing position limits on oil, for example, and the court threw it out. They said, “That’s not good economics.” So it’s been a combination of things. I wrote to that guy in The Nation, and he hasn’t shown me one case in which those lobbyists have succeeded.

SHAFER: Another audience question. I’m sure you saw the article yesterday in The New York Times about Maxine Waters, the new ranking Democrat on the committee you once chaired, the Financial Services Committee. The question is: “Maxine Waters seems to be open to weakening Dodd-Frank. Can you offer an opinion or perspective on a potential weakening of these much-needed reforms?”

FRANK: I think you can take for granted that any article in The New York Times in which any politician is pictured is one he will have read; yes, I’ve read it. What it was doing was actually a pretty good thing, which was saying, Look, she is a very serious, thoughtful, responsible person who is not going to do radical and crazy things. She’s doing something I did. The right wing controls the House and she’s gotta hold the Democrats together under great pressure. It’s easier to hold them together when you’re the majority. When I was chairman of the committee, I had the ability to get the Democratic members to do things by working together with them, by helping them sponsor amendments, etc. When you’re in the minority, you don’t have that same power. The minority leader only has some of the tools that the majority has. You then have to pick your battles. Maxine was doing is what I was doing, which is when they come up with some plausible, popular, small cutbacks I didn’t fight them, either. You go back to higher ground. On the major efforts, she’s standing there, and that’s an important thing to do.

When you are responsible for making the policy and trying to get other people to vote for you, you have to compromise with them and yourself. There’s a great, fun role to play in a legislative body being the purist, the one who speaks out. You can play that out outside of the legislative process.

I had an argument with Ralph Nader during the financial reform bill, which I’m very proud of. Nader was attacking us as if we had a magic wand that we could use, and I said, “Ralph, you are luxuriating in the purity of your irrelevance.” [Laughter.] There is a great freedom to say whatever you want. That’s OK to do that; that’s helpful, but don’t attack other people who have a different role. If your job is simply to articulate what you think is best, go ahead and do it and do it well, and maybe you’ll influence people over a longer term. But if your job is to get the votes, to get this bill passed in the foreseeable future, then you have to compromise, give and take, pick out some things that are important to you and not important to you and work with them.