Financial Reform Filibuster: Who Blinked To End It?

Threatened with the prospect of having to spend the entire night sleeping on a cot inside the white sepulchre known as the United States Capitol, Senate Republicans have apparently assented to allowing a debate on the financial regulatory reform bill. Victory for Main Street! Unless, of course, Senate Democrats decided to back down on a strong(ish) bill so that the seeds of bipartisanship could be sown. In which case: Victory for David Broder!

No one exactly knows what is happening, but here's what the New York Times is reporting:

Republicans insisted that they had won some crucial concessions from Democrats, including the elimination of a proposed $50 billion fund that would be paid for by big financial companies and would be used to help pay for putting failed banks out of business.

The Obama administration also had expressed opposition to the fund, out of concern that it would complicate efforts to deal with more costly failures of financial companies. And the Democrats already had expressed a willingness to remove the fund from the bill.

Oh, well, that's just great! You know, it seems like only a week ago, Republicans were calling that provision the "permanent bailout fund" because that was the precise lie that Frank Luntz coached them to tell, over and over again. Incensed Democrats complained about this falsehood, over and over again, and actually did pretty well in getting the media on their side. But now, it's just one more thing that nobody really liked anyway, whatever -- hope you enjoyed the Kabuki theater.

Of course, we now have the benefit of viewing Senator Christopher Dodd's FinReg bill alongside the one put forth by the GOP, and can appreciate the ways in which they parted company. (The Washington Independent's Annie Lowrey has a great comparative analysis of which you can avail yourself.) Significantly, the two proposals aren't exactly worlds apart. But one way in which they part company dramatically is in the area of consumer protection. Per Matt Yglesias:

The ugly part of the bill is what it does to consumer protection. On the one hand, it seemingly weakens the independence of the consumer regulator. On the other hand, it has the consumer regulator preempt any and all state regulations. This is a helpful reminder that nobody on the right actually gives a damn about federalism except as a tool to advance conservative substantive policy--federal preemption of strong state regulation is always welcome.

So, if you're worried about what the Democrats had to relent on to move this bill to debate, that's where your area of concern is.

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Comments

[ydiot]

01:49 PM on 04/30/2010

I would propose some measure of caution is helpful when quoting Matt Yglesias. His intellectual errors are ubiquitous! www.ydiot.net catalogs the few that we can.

The Ydiot

[graciesgra]

04:12 PM on 04/29/2010

I'm not sure I understand any of this. Or, at least much of it.

[balance]

01:27 PM on 04/29/2010

Reforms are needed, yes.
Regulation is needed, of course.

However, because there is so much activity, and so such detail to comb through, some of this oversight needs to be off-loaded from the much needed "official" agencies and onto investigative parties that may be more motivated to pursue action.

THEREFORE: Financial reforms should also include a provision to make it easier to SUE conflicted parties on Wall Street, and break contracts that are fraudulent/deceptive. Deceptive financiers like Goldman-Sachs who bet against their own products are conflicted, and such conflicted deals with deceptive and hidden information should be more easily breakable.

In addition, disaster deals that exceeds a high value limit, for example: 10 million dollars, should have a federal legal allowance for clawbacks from the executives responsible.

And the bar for criminal penalties should be lowered.

Financial reform must include provisions for holding INDIVIDUALS RESPONSIBLE, and to more easily allow aggrieved parties (ie: screwed clients) to negate fraudulent deals and to sue for damages.

[mizerello]

01:26 PM on 04/29/2010

Email and call your Senators now, everyday and force them into doing the right thing.

[mizerello]

01:25 PM on 04/29/2010

I simply don't understand how the Democrats don't see that when they fight back and stand for something, they win for the country and politically. Everytime I think, they finally have a clue about political strategy, manipulating the media and forgetting the false promise of "bipartisanship" they take 1 step forward and 2 steps back. Get a backbone folks and maybe you'll get my vote again.

[GrumpyGrandpa]

12:30 PM on 04/29/2010

Why does it always have to be us taxpayers, the little taxpayers, who get the raw end of these deals? Consumer protection is now an endangered species? That is the first hint that the Democratic leadership and the Administration are going to Public Option it. The "winding up the affairs of a 'too big to fail' fund paid for by Wall Street? It's being Public Optioned too! I guess that means that we little guys will be stuck with a surtax on our bank accounts and 401-K's to pay for the crash when these whiz kids screw up again. Why, for once, can't we little guys win one?

[seawillow]

12:29 PM on 04/29/2010

backroom deal

[VietnamVeteran]

12:25 PM on 04/29/2010

New Headline. 50 State Attorney Generals to Investigate, Prosecute, and fine Goldman and others.

Prosecute and fine with extreme prejudice. Watch bank stocks (investment banks and commercial) plummet once again.........Attorney Generals will be charging ahead with fines. Let the bleeding cleanse the fraudulent. Let's jail mainstream the guilty with prison population. This last collapse could have been prevented. No balls (previously) at SEC. No experienced "I give a shot" attorneys working there. Staff standing in awe of the bright shining lie.

CDO’s were underlying assets in at least One TRILLION of bond fund investments, sold to the public by brokers and bankers as less risk and conservative investments.

Join the party; contact your state's attorney general for more justice. States residents who lost money are entitled to recover their loss.

[DrRoberts99]

02:27 PM on 04/29/2010

Sure, why not go ahead and tank the economy as it appears to be poised to make a comeback. Use the shotgun and witch-hunt approach. That'll show'em we mean business and make us populists feel proud. Of course 25% of the populace will be standing in the bread line but what what the hell.

[Rockyman]

02:43 PM on 04/29/2010

It would be sad to think we would withhold accountability of fraud due to FEARS. The lenders pumped the system with fraud and greed. Let the chips fall where they may!

[ylobrkrd]

12:20 AM on 04/30/2010

Well DrRoberts you forgot to include as it seems do most people that we have to witch hunt the congress members that repealed Glas-Stegall. As I recall ALL of them did with the exception of one lone voice. I can't remember but it's on Google. Now you see the real problem..we've left the fox in the hen house and that is why the bankers have little to fear. We need to flush most of congress along with the bankers.

[leftword]

12:21 PM on 04/29/2010

What, another sellout?

I see a pattern here: Democrats beat their chests and make principled stands on rather weak reforms. Republicans just say no, over and over and over and over --- and the Democrats cave in, making concessions to the Republicans in the name of bipartisan support. The result is an even weaker bill, so watered down that it does little good for the citizenry, but enormously helps big corporations. And the process winds up lining politicians' pockets.

Or maybe I'm just hopelessly cynical.

[seakat]

12:58 PM on 04/29/2010

No, you're not hoplessly cynical - just realistic. To make matters even worse, we're paying their (ALL of our legislators) salary, health care benefits, etc. and getting very little for our money.

[rabrophy]

11:49 AM on 04/29/2010

The acting in Washington is getting worse than Mexican Soap Operas!

The banks own both party's so all we are seeing is play acting, so the only reform that will make any difference is Campaign Financing Reform, and I don't know how that will happen.

Congressmen take bribes. That's how they get reelected and get rich.
The American people will elect anyone who can afford a lot of TV ads.
It is ultimately our fault for electing such craven pieces of human garbage, so we get what the banks pay for.

Until there is public financing for political campaigns this dog & pony show will continue.

[SolarPowerGuy]

11:43 AM on 04/29/2010

"So, if you're worried about what the Democrats had to relent on to move this bill to debate,"

THAT is what I'm ALWAYS worried about. I feel exactly the same way about "financial reform" that I did about "health insurance reform." That feeling can be summarized with the phrase, "Great, now exactly what did we win?"

Since the vote for Gulf War One at least, the Democrats have been what the Republican Party used to be: pro-Big Business social moderates. Since the Goldwater days at least -- and it's probably fair to say, since the end of the Civil War -- the Republican Party has always been pro-Big Business. The GOP stopped being socially moderate during the Nixon Administration.

So where does that leave voters who want to see some checks and balances on the abuses of Big Business? Out in the cold.

[Scentedflower]

11:30 AM on 04/29/2010

bipartisan discussions? No . It should be BiCot discussions.

[chillypalmer]

11:26 AM on 04/29/2010

more "Bipartisan" scam from the usual suspects: Messrs. "Angelo" Dodd & Shelby. As such it is guaranteed toxic.

[IneptitudePrideB4Fall]

11:22 AM on 04/29/2010

It seemed to me that the Repubs were planning "to take to the mattresses".

[Joseph Shaver]

10:58 AM on 04/29/2010

This bill is obviously not the ideal version I would like passed, but hopefully it lays at least the groundwork for stronger, more progressive reforms in the future, and will help to get the base motivated for December