Recess for Congress, relief for Obama

(breakingviews.com) -- The pig of U.S. financial reform will be stuck in the legislative python a bit longer. U.S. lawmakers are about to flee steamy Washington for their month-long summer recess, leaving much of Barack Obama's ambitious agenda hanging.

That's probably good -- remaking the banking world is not a task to be rushed. And the president needs to get it more or less right the first time.

The two principal committees charged with shaping reform legislation -- the House Financial Services Committee and the Senate Banking Committee -- have been holding a welter of hearings on various proposals for the last several months. This is understandable, given the scope and technical nature of the reforms -- plus some lawmakers' belief that they were hoodwinked by the last administration over the Troubled Asset Relief Program.

Along with overhauling the bank regulatory system, Obama is tackling the $600 trillion private derivatives market and backing measures to wrest oversight of the insurance industry from the states. That's in addition to pushing controversial healthcare reform legislation and a cap-and-trade emissions bill. And it comes on the heels of credit card reform legislation that stirred up a hornet's nest of bank lobbyists.

Even individually, each of these initiatives could draw down even a popular president's store of political capital. Obama still has plenty of that left, and influential allies in Congress. And the financial services industry is able only to mount a token defense in public while its reputation languishes and it remains, to some extent, on government life support.

Admittedly, that's one reason for the urgency. But even so, well-rested lawmakers should be equipped to make better laws, so it's probably a good thing that Congress is off to hit the beach. Reform of financial oversight -- and major changes to the derivatives markets -- don't have to be rushed. And while Obama may be able to twist enough arms to get legislation passed, he won't get a second chance to get it right.