The financial reform bill that passed both houses of Congress was far less than we needed. But it was a start -- enough of a start that the bankers have spent tens of millions trying to kill it. And now, with the House-Senate conference version of the bill coming back to Senate for final approval, the reform is in jeopardy yet again.
On May 29, the bill passed the Senate, 59-39, just enough to block a filibuster. Four Republicans voted in support and two progressive Democrats voted no to protest its weaknesses. But the banking lobby has used the Congressional recess to work the four Senate Republicans.
And, sure enough, three of the four Republican supporters have gone wobbly. Olympia Snowe of Maine voted for the Senate bill, but is now making equivocal noises about whether she'll support the conference bill (which is weaker in some respects than the Senate's version.) Likewise Chuck Grassley of Iowa.
The always wily Scott Brown of Massachusetts threatened to withhold his vote until the House and Senate leaders agreed to scrap a $19 billion tax on large banks. He voted for the senate bill, but now Brown is warning that he may vote against the final bill anyway. Apparently there is no honor among thieves. The financial industry was the largest donor to Brown's Senate campaign.
Among Republicans, only Susan Collins of Maine is standing firm in her support. The fewer Republicans who are still officially committed to the bill, the easier it is for the banking lobby and the GOP leadership to intimidate or seduce others.
Among the Democrats, Wisconsin's Russ Feingold, suddenly in a tight re-election race against a self-financed Tea Party millionaire, has vowed to vote against the bill because it's not tough enough. It's not clear how that will persuade the Tea Party crowd, who don't much like Wall Street either.
In an anti-incumbent year it seems a little perverse to vote down the only piece of legislation that partly leashes banks. (If you think the bill is not a step forward, ask the bankers' lobby why they are working so hard to kill it. C'mon, Russ, if it's good enough for Bernie Sanders, it should be good enough for you.)
Sen. Maria Cantwell of Washington State, even more than Feingold, was a true hero in the fight to get the strongest possible bill. She cast a protest no vote when the bill was before the Senate, but with the bill hanging in the balance, unlike Feingold she will vote for final passage.
Two weeks ago, Democratic head counters thought they had maybe one vote to spare. But Robert Byrd's death June 28th deprived supporters of that extra margin.
Passage may depend on the vagaries of West Virginia politics. West Virginia Governor Joe Manchin has delayed making an interim appointment for Byrd's seat, pending a final decision on whether the vote to fill the seat is to be held as a special election in 2010 or in 2012 when Byrd's term expires. Manchin wants to run for the seat, but has ruled out appointing himself to fill the vacancy. The White House has been urging Manchin to stop dithering and name Byrd's interim replacement as soon as possible.
At this writing, Democratic Senate Leader Harry Reid has put off calling up the conference bill for a vote pending a better head count. That's how razor thin the margin is.
But with every passing day, the risk increases that Wall Street and the Republicans will kill more than a year's legislative work. A defeat of this bill would mean that all of the carefully negotiated compromises are up for grabs. With Democrats expected to lose seats in November, anything that managed to pass would be even weaker.
This nail-biting finale is like the end-game of the health reform bill all over again, but with one key difference. In that fight, President Obama belatedly got personally engaged, working the phones and twisting arms, LBJ-style -- far from his usual hands-off approach. This time, there are no arms to twist. The undecided votes are all Republicans, with whom Obama has no leverage. And with Russ Feingold in the posture of distancing himself from Washington, D.C., the White House has little influence with him either.
But Obama could be taking his case to the country. In the past few days, Obama has sounded more like a partisan and has gotten off some good one-liners, but has mentioned the stakes of financial reform only in passing. That's a pity, especially with Republicans using the October 2008 vote in favor of the bank bailout (TARP) to whack Democratic incumbents.
This reform bill may be a day late and a dollar short. But starting the process of reining in the banks is the antidote to the bailout and to future bailouts -- both politically and in terms of better policy. And it's Republicans and Wall Streeters who are trying to kill it. That's not so hard to explain. The president should be using his bully pulpit to shame the banking lobby and its Republican toadies, and to associate himself and the Democrats with stronger housecleaning.
If the final bill does manage to squeak through, this is only the beginning of reform. Several key provisions, such as the Volcker Rule separating commercial banking from trading and investment banking and the rules on derivatives, were seriously weakened by amendments. Others, such as the rules on capital requirements, too-big-to-fail, and consumer protection, leave a lot to agency discretion. So the same agencies that are far too close to the bankers, the ones that let this disaster happen, will be in charge of the details of reform.
As the bill has been weakened, bank stocks have been going up. The lead front page story in Sunday's New York Times reported that Wall Street is hiring again. The sector that crashed the economy, and that needs to be drastically reined in, is back in metastatic growth mode. And evidently the bankers have confidence that their chums at the Treasury and the Fed are not going to rain on their parade, reform bill or no.
So we need this bill, but only as a first step. Even more importantly, we need a citizens' campaign to monitor how it is carried out and where the holes are.
The bankers' lobby is at work, night and day, to weaken this reform legislatively and in its implementation, orchestrating grassroots lobbying by local banks and coordinating it with campaign contributions. The counterweights on the progressive side are no match.
One of the few effective official watchdogs, the Congressional Oversight Panel chaired by Elizabeth Warren, may be shut down early as the TARP ends. Americans for Financial Reform, which did heroic work as a coalition of more than 200 consumer and labor groups in pressing for the strongest possible legislation, will close up shop at the end of the summer for lack of funding. If anything, AFR needs to be expanded, so that it can continue to be a citizens' watchdog.
Two years and counting into the most severe financial collapse in nearly a century, bankers still rule. Republicans protect bankers from reform, yet amazingly masquerade as the party of populist backlash. If Democrats let the right play this double game, shame on them. It's only possible because too many Democrats are too cozy with the same bankers.
UPDATE: Late Monday, the offices of Republican senators Scott Brown and Olympia Snowe issued statements indicating that they will vote for the financial reform bill, bringing the number of supporters to 60, just enough to break a Republican filibuster.
Robert Kuttner is author of A Presidency in Peril, co-editor of The American Prospect, and a senior fellow at Demos.
Borrowing from history, what would be the difference between above the law Wall Street and the British colonizers whom the Boston Tea Party was formed to evict? Both oppress, form the core government lobbyists, and are not accountable to the American public. Where does the Republicans' frustration of such bills as Financial Reform fit in this fight?
In truth, is the TEA Party focused and do they truly know what they stand for? Maybe that's the crux of the matter. There is a belief that the Federal govt should create jobs and Wall Street bonuses reduced, which again is dear to the TEA Party's worldview, but I don't see the appropriate anger towards this (I could be wrong here).
Is this Party about oppostion to all things Obama or truly about government reform? This might be why there's a perception, well captured by this article's headline, that they're actually letting the anti-reform Republicans get away with murder.
You are right he is no LBJ...LBJ had leverage regardless of party.
Joe Mustich & Ken Cornet, Justices of the Peace,
Washington, Connecticut, USA.
Democrats face threats from incited right - March 24: Congressman Steve Drieuhaus talks with Rachel Maddow about efforts by right-wing opponents to health reform to intimidate him and other Democrats and the need for Republican leaders to take responsibility for the outrage they've fomented.
http://www.msnbc.msn.com/id/26315908/vp/36027892#36027892
Palin wants America to revert back to 1775 - April 19: Over the weekend, Sarah Palin revealed that she does not want to overturn the U.S. government with a revolution, but just wants the country to revert back to the traditional values it had in 1775 before the American Revolution. The Daily Kos? Markos Moulitsas discusses.
http://www.msnbc.msn.com/id/3036677/vp/36654355#36654355
The big fault of the Dems is not to exploit the misdeeds of the Repugs in the same way as they do.
Voting to stop unemployment benefits, trying to kill SS, and medicare, siding with Banks, insurance companies and big oil companies against the people , keeping the wars going for their own profits thus inceasing the debt of the country ;wanting to keep the tax breaks for the rich but still compalin they are fiscally conservative...let the rich pay their share and tax corporation even more!If they go overseas tax them more and dont let them sell their goods in the USA> there's so much to attack here, why are the DEMS just sitting quietly.... on the dock of the bay...watching the oil spill on the gulf....? when there is enough negatives here to make any man revolt against the GOP!!! Start making NOISE!!!!
politics and money. ugh!
Oil subsidies should be re-routed to support clean energies!!!...no more oil subsidies should be offered by tax payers! NO NO NO!
royalism
capitalism
corporatism
socialism
communism
totalitarianism
but we haven't tried humanism.
.THEY FOUND A FEW FOLLOWERS WHO HAVE A MIXED BAG OF "HATE AND SIDLIKE"....CALLED THEMSELVES "REAL PATRIOTS"..ARE BACKED BY BIG MONEY AND FAUX NEWS ACTORS...VOILA.!!...
.AFTER ALL.EVEN AN OLD WILD WEST BORDELLO WAS BILLED AS A PLACE OF "REST AND COMFORT"........LOL.....
http://exiledonline.com/teagagged-tea-party-protest-silenced-over-organizers-links-to-2008-drill-here-drill-now-astroturf-campaign/
All that need be done is let the free market, unfettered by regulation and corporate cronyism, reign.
That way competently run institutions succeed and competently run institutions fail.
The fact that the two biggest defenders of Fannie and Freddie, Dodd and Frank, when it was heavily engaged in the disastrous sub prime market, wrote this regulatory bill, should tell you exactly how bad it is.
I defy you to accurately match the components of this proposed bill with unique tenets of Karl Marx!
BTW, How does that Republican "tea" taste?
I think it has gone straight to your brain.
We'd soon find out who was making money off of whom.
Obama, Pelosi, Reid, and their supporters, who evidently would rather have people rely on government than have people rely on themselves, need the wealthy more than the wealthy need them. They evidently are too stupid to realize it.