The New York House Democratic uprising on behalf of Wall Street is fizzling. The effort began last week, when Rep. Gary Ackerman of Queens warned his House colleagues during a caucus meeting that if Blanche Lincoln's derivatives language isn't significantly scaled back, the 26-strong New York delegation would have a difficult time supporting final passage.
Lincoln's derivatives language requires banks to spin off their swaps operations and separately capitalize them, in the hope that if they fail they won't bring down the taxpayer-backed bank itself. The New Yorkers worry that could drive the swaps business off of Wall Street, reducing bank profits and impacting the state's tax revenues.
"Those of us in New York represent not only Main Street, but Wall Street, as well, and understand very much that Main Street is affected by Wall Street," Ackerman told HuffPost last week as he began circulating a letter among the New York delegation putting the Dems' "deep concern" on record. (Read the letter here.)
Ackerman predicted that "almost the full delegation" would sign on, minus the four House New Yorkers on the conference committee: Greg Meeks, Carolyn Maloney, Edolphus Towns and Nydia Velazquez.
Ackerman, however, found only 13 other New Yorkers to sign on to his letter. Considering that the letter does not explicitly threaten to oppose the legislation, the small number of signatories makes the New York delegation a low priority for House and Senate conferees as they negotiate the final details of the bill.
The thirteen New York House Dems to sign the letter: Joe Crowley, Steve Israel, Brian Higgins, Yvette Clarke, Scott Murphy, Daniel Maffei, Eliot Engel, Carolyn McCarthy, Nita Lowey, Anthony Weiner, Michael Arcuri, John Hall and Michael McMahon.
The New Yorkers were the target of an online campaign to dissuade them from joining Ackerman. The Progressive Change Campaign Committee rallied 4,000 of its New York members to contact their members of Congress and ran online ads hitting Ackerman and others in the state.
"Most New Yorkers do not work on Wall Street -- especially Gary Ackerman's constituents in Queens. One by one, members of the New York delegation are realizing that the real way to protect their constituents is to stop Wall Street banks from gambling away people's bank deposits and causing more bailouts," said Aaron Swartz, a PCCC co-founder. "Gary Ackerman's bluff has been called, and it's time for Democrats in Congress to rally around the strongest Wall Street reform possible."
Bank lobbyists had long assumed that Lincoln's derivatives language would be eliminated before the Senate approved its legislation. Yet it survived, and has continued to live on throughout the conference committee negotiations. Wall Street is only left with a few days to kill it. The provision will be debated in conference committee on Thursday.
"Clearly, half the delegation in New York is seeing which way the political winds are blowing -- against Gary Ackerman and other New York Dems who are still willing to stand up for Wall Street special interests over working American families," said Ilyse Hogue, a spokeswoman for MoveOn.org, which urged its New York members to contact their representatives. "The 12 Dems who refused to sign the letter have maintained not only their integrity but also their credibility with voters going into a tough election season."