House Democrats Upset Over Proposed Rollback of Wall Street Regulation
House Democratic Leader Nancy Pelosi said Tuesday night that she was “hopeful” the House would pass a bill to avert a government shutdown once lawmakers read the final language. But now it appears that top House Democrats have read the bill, and they’re furious with provisions that roll back the Dodd-Frank financial regulation law passed in the aftermath of the Great Recession.
“Buried in the more than 1,600 pages of the omnibus package Republicans posted in the dead of night are provisions to put hard-working taxpayers back on the hook for Wall Street’s riskiest behavior,” said Pelosi in a statement. “This provision, allowing big banks to gamble with money insured by the FDIC, opens the door to another taxpayer-funded bailout of big banks—forcing middle class families to bear the burden of Wall Street’s mistakes.”
The Dodd-Frank provision in question forces huge commercial banks to “push out” some derivatives trading—like risky credit default swaps—into units that aren’t backed by the federal government’s deposit insurance fund, the FDIC. The top Democrats on the House Budget and the Ways and Means committees, respectively Maryland Rep. Chris Van Hollen and Michigan Rep. Sandy Levin, staunchly oppose the provision’s repeal.
“They should be responsible for their actions,” said Levin of the banks involved in such derivatives trading. “This is a terrible mistake to put it in this bill…It should be taken out.”
“This jumps off the page as something that is inexcusable,” he added.
Pelosi’s office blasted out statements by Massachusetts Democratic Sen. Elizabeth Warren, FDIC Vice Chairman Thomas Hoenig and AFL-CIO President Richard Trumka calling on Congress to drum up support and media attention to preserve the Dodd-Frank provision. Pelosi’s office also sent out an email from campaign finance groups urging members to vote against the bill, as it triples the caps donors are allowed to give to national parties for presidential nominating conventions, building expenses and election recounts. As the WashingtonPost noted, that would allow a donor to give the Democratic National Committee or the Republican National Committee a maximum amount of $324,000, which is ten times the current limit. Pelosi’s sentiment that Democrats should get both provisions out of the bill were echoed by Van Hollen and others.
“The combination again speaks to everything that’s wrong with this process—special interest giveaways and more openings for special interest funding [for] the congressional political committees,” said Van Hollen, who would vote no against the bill in its current form. “As to these two provisions, these are news to me.”
“It’s a bad deal for the public,” he added. “You got a 1,600 page bill and they thought they would be able to tuck these provisions in maybe with nobody noticing. But people notice.”
It’s unclear if the Democratic and conservative opposition is so strong that the trillion-dollar appropriations bill won’t pass as is. Van Hollen said that Democratic resistance is “deep and getting deeper.” House conservatives, meanwhile, have stated that the bill doesn’t go far enough in protesting President Obama’s executive action on immigration temporarily deferring deportations for up to five million immigrants who came to the country illegally. Congress could pass a short-term bill funding the government for a matter of days to avert a shutdown on December 11.
Senate Appropriations Chairwoman Barbara Mikulski, the top Democratic negotiator for the trillion-dollar legislation, said that the bill was a “monumental achievement” both for Congress and their constituents. Knowing that Democrats’ negotiating position would be weaker next year with Republicans taking over the Senate after the midterm elections, Mikulski told her colleagues to “stay steady.”