As I write this, the Senate is embroiled in strife over whether to keep the U.S. Government funded through next year or throw its formidable body across the tracks to block changes to the Lincoln push-out provisions in Dodd-Frank. It’s already clear that this battle has moved far beyond a discussion of the actual legislation in question – what’s driving the debate now is initial media coverage saying that to pull back the push-out is to bless the bail out of big banks. This is red meat in front of liberal Democrats like Sen. Warren and conservative Republicans like Sen. Vitter — conservative Republicans with a major ally when Sen. Shelby takes up Senate Banking’s gavel next year. The Fed is already trying to fend off its critics, proposing a G-SIB surcharge that Sen. Vitter said did even the “pro-megabank Fed” proud. Big banks thus face a pincer move from Congress and the Fed that poses their most fundamental strategic challenge since 2008. What’s a big bank to do?

First, I suggest being square with Congress. Big banks can’t at the same time have lobbyists tell Congress that rules like the G-SIB surcharge will end lending to little folk and tell investors not to worry because the bank has loads of capital. Members of Congress don’t just read the comics – lots of them are way smart and, even if they aren’t, lots of them have good staff who read the business pages.

The real truth about rules like the G-SIB surcharge is that none of them is free. Big banks may well come up with the capital to soldier on, but not without changing their strategies in ways with significant impact not just for shareholders, but also broader markets.

In my opinion, the impact of big-bank strategic changes under the full force of all of the new rules is far-reaching. Indeed, some of the requirements raise real challenges to the ability of big banks to function as full-service financial intermediaries. Sure, you say — this will break them up. But, I counter, who then will take on the critical task of protecting deposits and making loans? Small banks can do some of this – so said the Fed when it finalized the G-SIB surcharge – but how much?

Are we really comfortable seeing corporate loans converted into asset-management products? If not, we need to know this fast, because the market is changing dramatically even before key rules are finalized.

What about all the sharp constraints in market liquidity and the near-death experiences so far? Are we good with this and do we understand how much of this stress results from rules, not just market factors Who will operate the financial market’s infrastructure if big banks pull out of functions like clearing?

If the industry does not lay out these questions in clear terms and answer them robustly and analytically, Congress from both the left and right will next year encircle the largest banks and, if they can corral it, the Fed as well. The attack will be merciless. Forestalling it will be hard – the rewrites to big-bank rules already have formidable momentum.

Same old same old has no chance here – taking Congress seriously and responding substantively just might.