A test vote in the Senate Budget Committee on Thursday showed stronger support in the chamber for breaking up big banks than had previously been suspected. Sen. Bernie Sanders, an independent from Vermont who identifies as a democratic socialist, introduced an amendment to the budget resolution that would pave the way for the break-ups.
The legislative language was complex, but the vote was understood as a simple question: Should big banks be broken up so that they no longer pose a risk to the financial system?
Eight Democrats and one Republican joined Sanders, but the measure failed by a 12-10 vote. Four Democrats opposed the amendment, standing with the big banks: Budget Committee Chairman Kent Conrad (N.D.), Bill Nelson (D-N.D.), Mark Begich (Alaska) and Mark Warner (Va.).
The vote was first reported in Thursday evening's HuffPost Hill newsletter.
Eight Republicans joined the four Democrats in opposition: Sens. Judd Gregg (N.H.), Chuck Grassley (Iowa), Mike Enzi (Wy.), Jeff Sessions (Ala.), Mike Crapo (R-Idaho), John Ensign (Nev.), Lamar Alexander (Tenn.) and John Cornyn (Texas). (Cornyn said he backed making the banks smaller just last week.)
Sen. Jim Bunning (R-Ky.) was the lone Republican to join the Democrats in support: Patty Murray (D-Wash.), Ron Wyden (Oregon), Russ Feingold (Wisc.), Bob Byrd (W.Va.), Debbie Stabenow (Mich.), Ben Cardin (Md.), Sheldon Whitehouse (R.I.) and Jeff Merkley (Oregon).
Sen. Lindsey Graham (R-S.C.) didn't vote.
The split along party lines is telling, as the GOP has been hammering Democrats for pushing a bill they say would lead to "permanent taxpayer bailouts." The only way to end bailouts, say economists, is to eliminate the existence of big banks that would need to be bailed out if they got into trouble in order to protect the soundness of the system as a whole. For the GOP to stand in lockstep opposition to breaking up the banks -- with the exception of black sheep Bunning -- makes it harder for them to make their case against Democrats.
Major groups pushing for reform have yet to make Too Big To Fail a central part of their lobbying efforts -- although the AFL-CIO's Richard Trumka has been outspoken on it -- but the strong vote from Democrats gives outside groups a sign that the time may be ripe to push the Senate to break up the big banks, reform advocates tell HuffPost, .
Read Sanders' amendment:
Purpose: The amendment would create a deficit-neutral reserve fund for legislation that would break-up too-big-to-fail financial institutions that pose a catastrophic risk to the economy.
At the appropriate place, insert the following:
SEC. ___ DEFICIT-NEUTRAL RESERVE FUND FOR BANKING.
The Chairman of the Committee on the Budget of the Senate may revise the allocations of a committee or committees, aggregates, and other appropriate levels and limits in this resolution for one or more bills, joint resolutions, amendments, motions, or conference reports that would require the divestment of any financial institution the failure of which would pose a systemic risk to the economy, by the amounts provided in that legislation for that purpose, provided that such legislation would not increase the deficit over either the period of the total fiscal years 2010 through 2015 or the period of the total fiscal years 2010 through 2020.