In a sweeping proposal circulated over the weekend, Treasury Secretary Henry Paulson proposed to merge or eliminate institutions of long standing, including the Securities and Exchange Commission, and to create a controversial new role of “super regulator” for the Federal Reserve, the Wall Street Journal reported today. Paulson said that the U.S. regulatory system is broken, a growing sentiment in recent months in Washington, D.C., as each of the nation’s financial watchdogs failed in a different way to prevent the foreclosure crisis and credit-market turmoil from spreading. Little is likely to happen this year amid the fierce presidential and congressional election races, even on fixes that Treasury has designated as short-term items. A new Congress and president will determine the ultimate shape of any regulatory overhaul.