The Senate is already way behind on passing the unemployment insurance and tax extenders bill and it's not clear that any of the pending compromises will bring them to the 60 votes they need. To make things worse, Sen. Tom Coburn [R, OK] is now using an infamous dilatory procedure known as a "clay pigeon" to force votes on dozens of amendments. Roll Call ($) reports:Read Full Article
Included among the financial reforms that may soon become law is an attempt to restrict the Fed's ability to bail out failing companies by changing a small but important paragraph in the Federal Reserve Act: section 13.3. 13.3 gives the Federal Reserve significant latitude in making emergency loans and is, for instance, what made possible the $29 billion loan to JPMorgan Chase in 2008. The financial reform bills passed by the House and Senate both include a number of additions and modifications to the paragraph, and whatever bill is eventually signed would likely significantly reduce the freedom of the Board to make such loans.Read Full Article
Once again, Democrats are downsizing H.R. 4213, the unemployment insurance/tax extenders bill, in order to lessen its impact on the deficit and round up the support to pass it. The bill has been floundering in the Senate for weeks, and yesterday, it officially stalled out after the Democrats failed 45-52 to overcome an important procedural hurdle requiring 60 votes to pass.
According to Sen. Max Baucus [D, MT] and the Senate Finance Committee, these are the big changes in the revised bill:Read Full Article
After two weeks of solid debate -- and two weeks of people having their unemployment insurance cut off because of congressional inaction -- the Senate this morning took their first test vote on passing H.R. 4213, the "American Jobs and Closing Tax Loopholes Act of 2010." They failed miserably. The final vote count was 45-52. Sixty votes were needed to proceed.Read Full Article
Earlier this morning I passed along word of what appeared to be an emerging deal to take a little bit of unemployment insurance money out of the tax extenders bill in order to solidify the Democrats' center-right flank and and pass it by the end of the week. But as the day progresses, that report looks more and more premature. This PM update from CongressDaily, which I'll extract a good chunk of because it's behind a paywall and because I know a lot of folk are watching this closely, illustrates the morass of competing concerns the Senate is still slogging through: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
Peter Cohn at Congress Daily ($) thinks a deal may be in hand: "An amendment from Sen. Jon Tester, D-Mont., to strike $25 a week in extra unemployment compensation from a nearly $140 billion package of benefit payments and tax breaks could shore up support among wavering senators concerned about its deficit impact. [...] Tester's amendment would only trim about $6 billion from that figure. But it could be seen as a gesture toward the position espoused by Blue Dogs and Senate Democrats like Ben Nelson of Nebraska and Evan Bayh of Indiana, who are holding out for cost cuts."Read Full Article
Several bills to address cybersecurity lapses have been introduced in this session of Congress only to stall over concerns that they would give the President broad powers to step in and shut down access to the internet at will. But Sen. Joe Lieberman [I, CT] is taking another stab at writing a bill that he thinks can move forward and become law. He recently introduced the bipartisan Protecting Cyberspace as a National Asset Act of 2010, but does it do enough to assure that civil liberties will be protected in the case of an emergency?
- House Democrats make progress on the DISCLOSE Act by exempting the NRA. (POLITICO)
- The FBI released its previously secret file on the late Sen. Edward Kennedy [D-MA]. (AP)
- Reps. Waxman [D, CA-30] and Stupak [D, MI-1] accuse BP of taking shortcuts with oil well safety, leading to gulf spill. (Reuters)
- Congressional Democrats, worried about a repeat of last summer's enraged health care protests, are avoiding town hall meetings. (NYTimes)
- Progress is being made on the Financial Regulation Bill. (Reuters)
- Rep. Bob Etheridge [D, NC-02] apologizes after a video is released showing him lashing out at an anonymous harassing interviewer. (CNN)
- President Obama presses the GOP to stop blocking the Medicare doc-fix bill. (WallStreetJournal)
- Congress in considering extending the closing date for the first-time homebuyer's tax credit (WallStreetJournal)
- President Obama urges Congress to pass a bill that spends $23 billion to save public worker jobs and $25 billion for additional Medicaid funding. (Washington Independent)
- Sen. Blanche Lincoln's [D, AR] provision to stop banks from getting government subsidies fro derivatives may actually make it into the final financial reform bill. (Financial Times)
It's going to be a busy week on the Hill, with senators trying to break a stalemate on the long overdue unemployment benefits/tax extenders bill (H.R.4213) and a House-Senate conference committee starting to vote on how to resolve dozens of differences between their financial reform bills (H.R.4173). At the same time, the House of Representatives will be working through a full slate of bills, with some big ones possibly coming up for votes later in the week. Here are their schedules as currently posted:Read Full Article
It has now been a full two weeks since Congress left for recess without finalizing their bill to extend unemployment benefits, and there is still no end in sight for the bill. As a result, hundreds of thousands of unemployed Americans have been suddenly cut-off from their only source of income. Most lawmakers from both parties agree that unemployment benefits need to be extended, so what's holding up the bill?Read Full Article
On Wednesday, the House announced its list of thirty-one conferees, and like their Senate counterparts, the House conferees are bringing massive amounts of finance industry campaign contributions to the negotiating table. According to data from the Center for Responsive Politics, for the 2010 cycle alone, these representatives have collected an aggregate of $6,192,618, for an average of over $199,000 each. This number is substantially higher than for the House as a whole, where the average representative has received closer to $113,000, or over 40% less.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
A House Committee looks at legislative responses to long-term unemployment tomorrow. The Senate gets ready to vote on the EPA's authority to regulate carbon. Ken Salazar defends the White House's decision to pause on offshore drilling. And Ben Bernanke warns Congress that current deficits are unsustaibale, but that now is not the time to cut spending. That and more in today's roundup of links on Congress.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