The Senate has a busy afternoon ahead of them. After they finish their morning impeachment trial of a federal judge, they'll move on to a series cloture votes on some fairly significant domestic policy bills that have been kicking around the Senate for the past several years. As a reminder, cloture is a procedural motion to defeat opposition to debating a bill, and it takes 60 votes to pass. It's basically a vote on preemptively defeating a threatened filibuster.
Today's votes are the Democrats' last chance to move these bills past the Republicans before they lose a handful of seats to them in the next session and finding 60 votes on this stuff becomes all but impossible. Let's have a look at what's on the schedule:Read Full Article
The Obama Administration has appealed the recent court ruling suspending "Don't Ask, Don't Tell." They want a more orderly repeal to be legislated by Congress after the military completes a study on how to prepare for the change. But the problem is that the study isn't due out until December 1, and the Democrats probably aren't going to have the votes to get this done in the next session. So if Obama and congressional Democrats really want DADT to end, they have to stick around in December and get it done.Read Full Article
On August 23rd, five environmental groups petitioned the EPA asking them to outlaw fishing tackle and ammunition made of lead under their Toxic Substances Control Act powers to regulate substances that "present an unreasonable risk of injury to health or the environment." The EPA has rejected the petition as it pertains to ammunition due to special protections written into the law for firearm-related article, but they have yet to rule on lead fishing tackle. In response, Sen. Blanche Lincoln [D, AR] has introduced the Hunting, Fishing, and Recreational Shooting Protection Act, which would make it illegal for the EPA to regulat fishing equipment in the same way it's illegal for them to regulate gun equipment.Read Full Article
The conference committee worked through the night until 6 a.m. this morning to finalize their financial reform bill and, in particular, its critical language regulating the huge and risky over-the-counter derivatives market. I stayed awake until about 3:00 a.m., following along to the extent possible on C-Span and providing updates on Twitter, but I was asleep before any good info or analysis was really available. Now that we have some day-after reporting on what happened in those delirious early morning hours, after all but a handful of people had turned off C-Span, here's what it looks like went down.Read Full Article
The derivatives chapter in the Senate's financial reform bill is stronger than the House's version in just about every way imaginable. Not surprisingly, convincing finical reform conference committee members to choose the House derivatives language over the Senate language has been big-bank lobbyists' top priority in the past few weeks.
The vote on derivatives will take place tomorrow, and despite a lot of centrists recently adopting the banks' position, a trio of relatively moderate House Dems -- Rep. Rosa DeLauro [D, CT-3] (pictured), Rep. Bart Stupak [D, MI-1] and Rep. Jackie Speier [D, CA-12] -- are pushing back hard. They circulated a letter today urging the Senate derivatives language to be kept in tact and implying that any actions by the conference committee to weaken the language could cost Democratic votes from the left. They are asking for Democratic House colleagues to sign on.Read Full Article
Yesterday, Sen. Blanche Lincoln [D, AR] issued a "term sheet" that her spokesperson said sought to clarify the intent of her proposal, Sec. 716, to ban derivatives desks at bank-holding companies from accessing federal subsidies via the Fed discount window and FDIC insurance. Most discussion of the term sheet was focused on the two-year phase-in proposal and a somewhat ambiguous study that would be required, but looking it over myself, I think it may be more of a gutting than a clarification.Read Full Article
Sen. Blanche Lincoln's [D, AR] surprise primary win Tuesday has breathed new life into her financial reform provision to ban banks from getting government assistance for their derivatives and swap trading activities.
The provision, known as Sec. 716, is going to be at the center of the financial reform conference committee that starts today (live feed). It has generally been talked about as forcing banks to "spin off" their derivatives trading activities into separate entities, but that description makes it sound more aggressive than it actually is. This isn't a "break up the banks" provision. The new derivatives entity would still be an affiliate under the same parent company as the bank they were spun off from.
The real effect of Sec. 716 would be to put a firewall between regular commercial banking activities and risky derivatives trading, with banks continuing to have access to government assistance via FDIC insurance and the Fed's discount window on the commercial banking side, but without access to any government assistance for derivatives activities. The idea is to make sure taxpayers aren't liable for banks' risky derivatives trades when they go bad.Read Full Article
The financial reform conference committee kicks off tomorrow. This is where negotiators from the Senate and the House meet to iron out the differences between their versions of the bill and create a final text to be voted on one more time by both chambers.
Though the two versions of the bill are broadly similar (House version, Senate version), when looked at more closely there are dozens of hugely important details that will need to be resolved. For example, will the proposed Consumer Financial Protection Agency be independent, or will it be housed at the Fed and subject to Fed vetoes? Will there be a pre-funded orderly liquidation fund, or will the funds necessary for liquidating failing big banks be put up by the federal government when the time comes? Will banks be allowed to continue getting government backing for their derivatives trades, or will they be required to spin their derivatives activites off into separate entities without access to the Fed's discount window and FDIC guarantees?Read Full Article
Moderate Democrat Sen. Blanche Lincoln [AR] survived a tough run-off primary election Tuesday night against her challenger for the left, Arkansas Lt. Governor Bill Halter. Lincoln's victory tonight means that she will be on the ballot in the November general against Republican challenger Rep. John Boozman [R, AR-3].
So, what are the implication here for life under the dome, particularly with financial reform about to go into conferece committe on Thursday?Read Full Article
According to reports, Blanche Lincoln's tough provision requiring banks to "spin-off" their derivatives trading operations into separate entities that would not have access to discount Fed money and an FDIC guaranteeis going to be dropped next week by the conference commitee negotiating teh final financial reform bill. But the provision is giving reform advocates a chance to push once again for the almost-as-tough Merkley-Levin "Volcker Rule" amendment, which was blocked by Senate Republicans and bank lobbyists from even getting a vote during the Senate debate.Read Full Article
As I reported yesterday, Senate Democrats lost a big procedural vote to wrap up the financial reform debate and move to passage of the bill because two of their own -- Sen. Maria Cantwell [D, WA] and Sen. Russ Feingold [D, WI] -- wanted to hold out and try to strengthen it. I said yesterday that the two were probably hoping to get a vote on an amendment they are co-sponsoring to reinstate the old Glass-Steagall Act firewall between commercial and investment banks. I was wrong. Cantwell's office today released a statement explaining why she voted no, and it's all about improving the bill's derivatives section:Read Full Article
After calling off the 2 p.m. vote as originally scheduled and huddling in an emergency meeting, the Democrats came back this afternoon and tried to pass the cloture motion to wrap up the financial reform debate, but failed. The Senate Dem leadership held the vote open for over an hour to twist arms and try to flip some votes in their favor, but in the end the tally was 57-42. Sixty votes were needed to approve the motion.
Sen. Susan Collins [R, ME] and Sen. Olympia Snowe [R, ME] joined with most Democrats in favor of the motion. But Sen. Maria Cantwell [D, WA] and Sen. Russ Feingold [D, WI] voted "no" because they weren't allowed a vote on their amendment to reinstate a Depression-era rule (Glass-Steagall) requiring commercial banks and investment banks to remain separate. Looks like the Dem leadership will have to let progressives vote on their amendments if they want to wrap up the financial reform debate and move towards a final vote on passage.
So the debate goes on. Amendments will continue to be voted on. Expect another cloture vote tomorrow and each day until it passes. It's probably going to take at least a vote on the Cantwell/Feingold/McCain Glass-Steagall amendmentfor the Dems to get there.Read Full Article
It was a bad night to be an establishment politician and a good night to be a progressive Democrat. On Tuesday, four states -- Pennsylvania, Kentucky, Oregon and Arkansas -- held congressional primaries, and in all the big races pitting D.C.-insider candidates against grassroots-supported "outsiders," the insiders lost or did worse than anyone expected. Here's a quick rundown of what went down.Read Full Article
Remember when everyone was expecting Sen. Blanche Lincoln [D, AR] to use her position as Chair of the Ag Committee to insert a weak, loophole-ridden derivatives section in the financial reform bill, but then she surprised everyone by proposing something that was tougher than anything Congress had even considered considering? Well there's a rumor floating around that Lincoln only proposed such a tough derivatives section in order to boost her liberal/anti-Wall Street cred and help her in a tough primary, and that after the primary is over she'll agree to gut her proposal and give Wall Street many of the concessions they want.
Well, her primary is today, and, like clockwork, reports are out that Lincoln is in private talks to change her derivatives language.Read Full Article
The big Wall Street reform bill (S.3217) could hit the Senate floor as soon as next week. The legislative pieces are falling into place, the White House is staking out its position and the Republicans are firming up commitments of opposition from their more moderate members. Here's a roundup of the latest financial reform news out of the Senate.Read Full Article