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Budget Committee Takes Test Vote on Breaking up the Banks

April 23, 2010 - by Donny Shaw

Sen. Bernie Sanders [I, VT] yesterday forced a vote on an amendment on breaking up the big banks in the Budget Committee mark-up of the 2011 budget resolution. The amendment didn’t pass, but it came closer than I think even Sanders expected. It was rejected on a 12-10, bipartisan vote, which Sanders in a press release called “a strong signal of the growing momentum behind proposals to dismantle financial institutions that dominate the U.S. economy.”

The fact of the matter is that Sanders’ amendment is very broad and very vague. It basically just calls for a plan tp identify too big to fail banks and then, somehow, break them up. It reads more like a symbolic resolution on breaking up banks than a realistic plan to end too big to fail.

It’s likely that a more detailed bill that spells out how to actually start shrinking these big banks without causing too much of a shock to the economy, like the SAFE Banking Act that will be proposed as an amendment to the Dodd bill, would get even more support. During the debate, Budget Committee Ranking Member Sen. Judd Gregg [R, NH] said that he though too big to fail was a “huge issue” that needed to be addressed, but that Sanders’ amendment was “way too broad.”

Before the vote, Sanders said that the Dodd bill “absolutely does not” address the problem of too big to fail. “If one of these banks goes down, they are going to take down half the economy and you are going to have to bail them out, no matter what you say now,” Sanders said.

The roll call vote on Sanders’ amendment is below:

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