"Corruptus in Extremis"
- In the new budget - Democrats agreed to make some of the biggest changes yet to the 2010 financial regulatory reforms. In a deal sought by Republicans, the bill would reverse Dodd-Frank requirements and allow banks to gamble with deposits and have their losses covered by the Federal Deposit Insurance Corporation.
Negotiators seeking to avert a government shutdown had inserted a provision into the compromise agreement that would once again allow the country's too-big-to-fail banks to gamble on derivatives -- the exotic financial instruments that helped precipitate the last crisis -- with funds that are insured by taxpayers.
The amendment in question, which would have repealed a measure known as the "swaps push-out rule," was largely written by lobbyists for Citigroup. It was backed by Republican Rep. Jeb Hensarling, Chair of the House Financial Services Committee. Hensarling's Democratic counterpart, Rep. Maxine Waters, released a statement that said in part:
"I am disgusted that in a back room deal, some members and lobbyists for the largest banks are trying to undo a seminal component of the Wall Street Reform Act ... I'm disheartened that, by trying to pass this repeal, this Congress is risking our homes, jobs and retirement savings once again."Republicans, led by Hensarling, are the bad actors in this week's drama. But party lines get murky where Wall Street money is concerned. The Citigroup amendment was originally introduced by Rep. Jim Himes, a Democrat, and there are Democrats on both sides of this battle. As Rep. Waters declared in her statement,
"Although Democrats enacted comprehensive oversight and changes for our derivatives markets as part of Dodd-Frank, some are using critical legislation that is necessary to keep our government open as an opportunity to ram through harmful deregulation."But, while some Democrats are aiding Wall Street in this effort, others are resisting it. Sen. Elizabeth Warren has blasted the idea, as have Sens. Sherrod Brown, Jeff Merkley, and Carl Levin.
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