Is Washington likely to break up the country’s biggest banks? No, not right now. But perhaps soon.

Political momentum for dismantling them has been, in recent weeks, overstated. That unanimous vote in the Senate for a budget amendment critical of big banks? It was a nonbinding amendment to end “too-big-to-fail subsidies.” As it happens, there isn’t a line item in the federal budget titled “too-big-to-fail subsidies.” The vote was a freebie against the abstract concept of taxpayers subsidizing Wall Street -- that’s why the outcome was unanimous. It was like a vote against halitosis.

Similarly, in a town starved for bipartisanship, the odd-bedfellows coalition of Senator Sherrod Brown, a liberal Democrat, and Senator David Vitter, a conservative Republican, has attracted quite a bit of media attention. But if you want to see even more bipartisanship, regard the huge, bipartisan effort to leave the biggest banks alone, which counts dozens of senators from both sides of the aisle among its supporters.

That said, those who dismiss efforts to break up the big banks as no more than a populist fantasy are missing the long game -- and for opponents of a concentrated financial sector, the long game is going surprisingly well.

Dramatic Change

Policy change isn’t a predictable process. It follows a pattern political scientists call “punctuated equilibrium,” consisting of long periods of stasis interrupted by brief periods of dramatic change. Much of the real work of policy making, then, is preparing to take advantage of those moments when dramatic change is possible. As Rahm Emanuel, soon to be White House chief of staff, famously said on the eve of Barack Obama’s inauguration: “You never want a serious crisis to go to waste.”

Emanuel was referring specifically to the political opportunities inherent in the aftermath of the financial crisis. Yet peculiarly, that crisis proved more advantageous to health-care reformers, high-speed-rail enthusiasts and champions of large middle-class tax cuts than to financial reformers.

This is because there weren’t many financial reformers working in Washington on the eve of the financial crisis. While the health wonks, train mavens and tax cutters had spent years laying the groundwork for their preferred policies, few in Washington even understood the financial system, much less obsessed over how to change it. Financial reformers didn’t know what they wanted; they let their crisis go to waste.

A package of significant financial reforms did eventually pass Congress, and perhaps it will prove sufficient to forestall another calamity. Wall Street had better hope so. If not, the financial reformers will be ready next time; they know what they want now.

The Capitol today is thick with financial wonks arguing that too-big-to-fail is too-big-to-exist and working to devise the policies that would break the banks into smaller pieces. Some say we need to dismantle the big banks totally. Others suggest levying a hefty tax on assets above a certain threshold so that size is penalized. Still others advocate onerous capital requirements that would make too-big-to-fail banks too cautious to implode. In a future crisis, reformers will have a menu of options to choose from. And, in a development that should worry the financial sector, these ideas have gained traction on the left and the right, among radicals and establishmentarians. It’s an odd issue that unites conservative columnist George Will and liberal Senator Elizabeth Warren. There are reform adherents on the Federal Reserve’s Board of Governors and in the ranks of former Wall Street chief executives. You’ll hear support for breaking up the banks at an Occupy Wall Street meeting and in the halls of the American Enterprise Institute.

The financial industry has noticed. In February, Hamilton Place Strategies, a Washington consulting group that works to advance Wall Street interests, released a report defending American megabanks. The paper touts “the value of large banks to the global economy and their growth over time, the dramatic improvements in safety and soundness over the past three years, and the context of international competition,” and it explores “the consequences of ignoring these facts by breaking up the banks.”

Bank-Breakers

The authors make some good points. But the paper’s very existence suggests that the bank-breakers have been more successful than anyone could have predicted a few years ago.

Wall Street has fought viciously against the Dodd-Frank financial reforms. A remarkable, 10,000-word article in the Washington Monthly by Haley Sweetland Edwards vividly details the coordinated attack the financial industry has mounted through the rule making process. There’s a real possibility that Wall Street will manage what George W. Bush memorably called a “catastrophic success.” If the financial sector is too effective at evading meaningful reforms, then it’s probably only a matter of time before some too-big-to-fail institution self-detonates, putting the entire economy at risk.

That’s when the bank-breakers will have their moment. They’re the only group in town with a persuasive answer if current reforms allow a too-big-to-fail bank to once again threaten the economy. If that threat never materializes, then neither will the reformers’ policies. If it does happen, well, they’re not going to let a second crisis go to waste.

(Ezra Klein is a Bloomberg View columnist. The opinions expressed are his own.)

To contact the writer on this article: Ezra Klein in Washington at wonkbook@gmail.com.

To contact the editor responsible for this article: Francis Wilkinson at fwilkinson1@bloomberg.net.