Funding for the federal government runs out on September 30th unless a new funding bill is passed by both houses of Congress and signed by the President. This “must pass” legislation is key because it enables very important spending that benefits all Americans and the country. For example, it includes the funding for the Department of Defense, including for our troops on the front lines around the world, and for homeland security, including preventing terrorist attacks here at home. It also includes all domestic priorities as well, including health care, the environment, education, research and development, and much more.
But, as many members of Congress from both parties work to come to a bipartisan budget agreement before funding runs out, Wall Street is again trying to hijack the budget bill as a vehicle to put its special interests above the priorities and protection of the American people. It is nothing more than extortion. In effect, Wall Street is taking all of America’s priorities and holding them hostage to its special interest provisions: pass the funding bill with Wall Street’s special interests in it or stop the funding for the entire government.
This is just what Wall Street did with the funding bill last December (called the “CRomnibus”), which repealed a key protection from dangerous high-risk derivatives trading (called the “swaps push out“). How did Wall Street get that special interest? Wall Street’s too-big-to-fail bank lobbyists got their political allies to attach it to the last year’s “must pass” funding bill. Remarkably, the swaps push out repeal was actually written by Citigroup lobbyists and JPMorgan Chase’s CEO, Jamie Dimon, personally called Congressmen to lobby them to support it. That’s because that special interest provision benefited those two Wall Street trading giants (the four biggest Wall Street megabanks do about 95% of all the derivatives trading in the U.S.) and it put taxpayers on the hook for their highest-risk derivatives dealing.
For Wall Street’s biggest, most dangerous megabanks, it was happy days are here again: they get huge bonuses from high-risk derivatives trading and, like in 2008, they get to shift the costs of catastrophe to the American taxpayer if anything goes wrong. This was an indefensible early Christmas gift for Wall Street’s biggest banks just six years after they caused the worst crash since the Great Crash of 1929 and the worst economy since the Great Depression.
And now, Wall Street’s army of high priced lobbyists are again working Washington day and night to use this year’s spending bill for their gain at the expense of the American people. Wall Street views essential, must-pass, nationally important legislation as just an opportunity for them to sneak in their wish list of special provisions.
The industry’s lobbyists and allies are using these backroom tactics because they know that their sweetheart deals would never survive scrutiny in the light of day. Too few members of Congress would openly support such special interests as a stand-alone bill, where voters could clearly see who they were supporting: Wall Street, not Main Street. Sticking these provisions in much bigger, more complex, must-pass legislation enables them to disguise and hide their support for Wall Street and prevent the American people from knowing what they are up to and holding them accountable.
It is shocking and offensive that Wall Street is willing to put funding for every part of the government at risk, no matter how vital and important, just so it can get what it wants, make more money, and put taxpayers on the hook for high-risk activities.
But some are standing up and saying “no” to Wall Street. For example, Senators Schumer, Coons and Merkley joined Deputy Secretary of the Treasury Sarah Bloom Raskin and called on Congress to pass a funding bill without dangerous Wall Street deregulation provisions. Deputy Secretary Bloom Raskin pointed out how “We’ve made our financial system stronger and more stable” since the Dodd-Frank Wall Street reform law was enacted five years ago. As Senator Schumer said, “All those cries that Dodd-Frank was going to ruin our economy of course proved not to be true. Dodd-Frank is working.” That’s why, as Senator Merkley said, “There’s still strong bipartisan support for Wall Street reform.” Senator Coons made clear that Wall Street won’t get its way without a fight, saying, “Ideological riders that are designed to roll back Wall Street reform are a non-starter.”
Wall Street hostage taking was explicitly called out: Senator Schumer, who is both the Vice Chair of the Senate Democratic Conference and Chair of the Senate Democratic Policy and Communications Center, drew an unqualified line in the sand: “Any attempts by Republicans to hold government funding hostage until they roll back consumer protections will be faced with a united Democratic caucus that will not relent.”
Wall Streets’ special interests and loopholes are not more important than the funding priorities of the American people and their protection from Wall Street wilding. That’s why Congress must pass a funding bill that defends financial reform and protects hardworking families on Main Street.
This article first appeared on the Huffington Post here.