Tags: banking | measure | federal | funding | bill | democrats

Dems Irate Over Banking Rules Measure in Federal Funding Bill

By    |   Wednesday, 10 Dec 2014 07:29 PM

Democrats are pushing back against a bipartisan $1.1 trillion government funding bill over a provision tucked into the massive measure that would ease banking rules aimed at avoiding another taxpayer-funded banks' bailout.

"I urge my Democratic colleagues in the House to withhold support for it until this risky giveaway is removed," Massachusetts Democrat Sen. Elizabeth Warren, leader of the opposition in the upper chamber, said on the Senate floor, The Hill reports.

The Democratic rancor is focused on a provision in the funding bill that would partially repeal the 2010 Dodd-Frank rule keeping risky derivatives trading away from government-backed banks.

The provision's last-minute inclusion enraged Democrats, who've spent years fighting efforts to soften the impact of the rule, The Hill notes.

House Minority Leader Nancy Pelosi said the Republican-supported banking proposal threatens middle-class families and must be removed.

"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, The Hill reports.

Congress has to pass a spending bill by the end of Thursday or risk a partial government shutdown.

And, The Hill reports, Democratic support will be crucial to passage in the House, where conservative Republicans are expected to oppose the measure because it doesn't go far enough to block President Barack Obama's executive action that shielded some 5 million undocumented immigrants from deportation.

Along with Warren in the Senate, Ohio Democratic Sen. Sherrod Brown, who The Hill reports could be the top Democrat on the Senate Banking Committee in the next Congress, also blasted the Dodd-Frank revision as a "giveaway to Wall Street."

California Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, said the party was ready to rumble over its inclusion.

"Democrats are now alerted, and they’re paying attention, and I think we can put up a good fight," she said.

The provision was previously passed by the House with bipartisan support, The Hill notes, in October 2013. But the bill stalled in the Democratic-led Senate, and supporters say it's not overly risky.

"There’s huge misunderstandings about what this thing says," Connecticut Democratic Rep. Jim Himes told The Hill.

Himes said the most dangerous derivatives would still be kept away from government-backed banks, and banks would only be allowed to trade "plain vanilla" interest rate swaps.

But its impact could be politically huge: the GOP could use the tactic of tucking a provision into a larger deal as a way to chip away at Obamacare, The Hill notes.

"If liberal Democrats vote for this package it shows that conservatives can use must pass legislation to repeal the regulatory state," an aide told The Hill.

"This is about reckless behavior," Warren said of the revision at a news conference, Bloomberg News reports.

"It’s about a giveaway to the largest financial institutions in this country" and "it is up to the House to strip this out."

"It is just an invitation for another financial disaster," second-ranking Senate Democrat Richard Durbin of Illinois added.

"It is a horrible choice between a bill of over a trillion dollars in spending, with a lot of very important provisions in it, and some absolutely awful language put in by special interests in the House."

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Democrats are pushing back against a bipartisan $1.1 trillion government funding bill over a provision tucked into the massive measure that would ease banking rules aimed at avoiding another taxpayer-funded banks' bailout.
banking, measure, federal, funding, bill, democrats
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2014-29-10
Wednesday, 10 Dec 2014 07:29 PM
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