President Obama’s financial market reform proposals are getting what was known in the Cold War as the “salami” treatment. That’s the name that used to be given to Soviet negotiating tactics, which whittled down the other side piece by piece. So it is with the centerpiece of the market reform plan, a proposed Consumer Financial Protection Agency that would protect the public from unfair Wall Street practices.

Corporate lobbyists have been wielding their knives since the CFPA was proposed last year, and they may be getting their way. Senator Christopher J. Dodd of Connecticut, chairman of the Senate Banking Committee, is going back to the drawing board, and the CFPA may be sacrificed. If so that would be a victory for Wall Street lobbyists and the U.S. Chamber of Commerce, which have been fighting the consumer agency as if it were the modern-day embodiment of the Comintern. That’s to be expected. The Street and the Chamber have long been dogged opponents of anything that would help consumers and investors.

What makes the Chamber’s opposition especially potent—and disagreeable— is that it is purporting to represent the interests of small business. In September, the Chamber launched an ad campaign. One newspaper ad said, "Virtually every business that extends credit to American consumers would be affected—even the local butcher and the credit he extends to his customers."

The word credit is especially effective and evocative, because small businesses, like the consumers they serve, are among the hardest hit by the continual tight credit market. But the Chamber doesn’t want to do anything about that—such as by requiring that recipients of TARP funding make loans to creditworthy small businesses and consumers.

Instead, this business-lobbying group is continuing its longtime goal of quashing effective regulation. Note that its propaganda is straight out of the hard-right playbook: that the consumer agency would be a kind of Big Brother, reaching its claws into the ledger book the local butcher uses to record the lamb chops he sells on credit. Now, personally I don’t know of any butchers that sell on credit nowadays—our neighborhood butcher, Mr. Glucksman, used to give my mother credit, but that was a long time ago—and I doubt that many people do either. Even if they did, this is a bogus argument.

The Chamber is seizing on some sweeping language in the proposal (see page 14) and in Barney Frank’s legislation that would create the CFPA, such as that the new agency would have “supervisory and enforcement authority and jurisdiction over all persons covered by the statutes that it implements, including both insured depositories and the range of other firms not previously subject to comprehensive federal supervision.”

But the consumer agency is aimed squarely at major credit issuers, not neighborhood merchants: “We propose to create a single primary federal consumer protection supervisor to protect consumers of credit, savings, payment, and other consumer financial products and services, and to regulate providers of such products and services,” says the administration’s initial overview of the agency.