Read time: 3 minutes

Budget Deal May Blow Up Over Derivatives Rider

There are a lot of reasons why this budget deal shouldn't happen, but gutting Dodd-Frank might be one of the biggest.
Budget Deal May Blow Up Over Derivatives Rider

Yes, Democrats. Please do blow up a bill that guts a key part of the Dodd-Frank legislation passed after bankers robbed us all blind last time. This particular provision is one that was written by Citibank.

The Hill:

Sen. Elizabeth Warren urged Democrats Wednesday to withhold support for a massive government funding bill, as opposition on the political left mounted over a set of changes to the Dodd-Frank Wall Street reform law buried in the legislation.

“I urge my Democratic colleagues in the House to withhold support for it until this risky giveaway is removed,” Warren (D-Mass.) said during remarks on the Senate floor.

Among the host of provisions included in the $1.1 trillion funding measure is one that would partially repeal a Dodd-Frank rule aimed at ensuring risky derivatives trading happens away from banks that have a government safety net.

The last-minute inclusion, hammered out by party negotiators, is outraging several Democrats who have spent years fighting back against GOP efforts to reduce the impact of the 2010 law.
The titular sponsor of the law, retired Rep. Barney Frank (D-Mass.), is calling on his former colleagues to defeat the funding bill because of the “stealth attack” on his namesake legislative achievement.

House Minority Leader Nancy Pelosi (D-Calif.) said Democrats are “deeply troubled” by several provisions included in the roughly 1,600-page bill posted Tuesday evening and highlighted language stepping back tougher rules on financial derivatives.

“This provision, allowing big banks to gamble with money insured by the FDIC [Federal Deposit Insurance Corp.], opens the door to another taxpayer-funded bailout of big banks — forcing middle class families to bear the burden of Wall Street’s mistakes,” she said in a statement.

Several top-ranking House Democrats immediately identified the financial reform law tweaks as a major concern, after the group huddled Wednesday morning.

While Pelosi stopped short of saying she would vote against the measure without changes, Rep. James Clyburn (D-S.C.), the third-ranking House Democrat, said he would oppose the bill as is, and Rep. Steny Hoyer (D-Md.), Pelosi’s top lieutenant, singled out the Dodd-Frank portion as “very dangerous” to taxpayers.


↓ Story continues below ↓

Congress has had plenty of time to get stuff done. They think waiting until the last minute and slipping in poison pills like this will slide by unnoticed, or that we can't possibly think about the torture report and the budget at the same time, I guess.

There are some things worth shutting government down over. This is one, because we just spent the last six years trying to recover from bankers' perfidy during the Bush years. The pension provisions in the budget bill are terrible, but this is even worse.

The Congressional Progressive Caucus just issued this statement:

“Republicans, who learned nothing from the financial crisis of 2008, included a provision that allows Wall Street to engage in some of the same risky practices that crashed the world economy. The short-term funding of the Department of Homeland Security sets up another government shutdown battle in February and is motivated by Republicans who refuse to fix our broken immigration system. Continuing cuts to education and environmental protections while spending billions on endless wars is the wrong priority for American families. Sneaking in last minute provisions, like turning our democracy into an auction house by raising campaign contributions, is the wrong way to govern.

“Republicans are once again using a potential crisis with the federal budget to hurt working families. The Progressive Caucus stands with the American people and opposes the bill.”

Take it out, or shut it down.

Comments

We welcome relevant, respectful comments. Any comments that are sexist or in any other way deemed hateful by our staff will be deleted and constitute grounds for a ban from posting on the site. Please refer to our Terms of Service (revised 3/17/2016) for information on our posting policy.