Move aside tea party, Wall St.'s back
Congress sold out to Wall Street Thursday and in the same bill gave the rich and powerful the ability to write much bigger checks and gain greater influence.
"The juxtaposition of those two items is grotesque," said U.S. Rep. Joe Courtney, when asked about the provisions that removed a regulation intended to prevent another massive Wall Street taxpayer bailout while dramatically expanding the amount of money the super-rich can send to national parties.
"It really does damage the country's confidence in its institutions, and that's a big deal," said the Democrat who was recently re-elected in Connecticut's Second District.
That assumes Americans, preoccupied with holiday shopping and politically fatigued from the recent election, are paying any attention. What better time is there to sell out our democracy in plain daylight?
If they are paying attention, there is plenty to anger both liberals and conservatives. Those in the political middle shouldn't be happy either.
To his credit, Rep. Courtney voted no, though the spending bill includes funding for Electric Boat submarine construction.
The gift to Wall Street and the major change in campaign finance rules had nothing to do with the primary legislation, an omnibus $1.1 trillion appropriations bill that funds the federal government through most of 2015.
Who knows what else is in there? To paraphrase former House Speaker Nancy Pelosi, for many lawmakers it was a case of having to pass the bill to find out what was in it.
The 1,764 pages of legislation were full of trade-offs negotiated between the leaders of the major parties to keep their various special interests happy. The provisions were not subjected to any deliberative process or public input. Didn't Republicans campaign against this sort of thing? Yet Republicans were primarily responsible for passage in the House.
Legislation passed in the wake of the 2008 financial meltdown, and subsequent $700 billion TARP taxpayer bailout of Wall Street banks, was intended to prevent the banks from using taxpayer-insured money to gamble in the derivatives market. Finally ready to go into effect next summer, the new regulations would have allowed the big banks to remain in the derivatives market, but only after moving those risky but incredibly lucrative trades to separate affiliates not insured by the Federal Deposit Insurance Corp.
In other words, they would have to assume the risk, not you and I. The banks didn't like it.
The provision passed Thursday, written primarily by Citigroup, effectively eviscerates this taxpayer protection.
"With the top four banks (Citigroup, JPMorgan, Chase and Wells Fargo) responsible for 93 percent of derivatives activities in the United States, there is zero question about which entities will benefit. Nor who will pay when the next financial crisis comes," said the watchdog group Public Citizen.
The budget bill passed the House 219-206 with only 57 Democrats in support, despite heavy lobbying by the White House for Democratic votes. President Obama was all too eager to appease the big banks if it meant getting a spending bill in place before Republicans also take control of the Senate.
As of Friday, approval in the Senate seemed highly likely, with Democratic Majority Leader Harry Reid and his Republican successor, Mitch McConnell, in cahoots.
Ironically, the tea party movement, which helped fuel the Republican resurgence, began not with opposition to Obamacare or even government spending, but with anger over the bailout. Recall that CNBC's Rick Santelli, speaking on the floor of the Chicago Mercantile Exchange, helped launch the movement in February 2009 when he called for a tea party to pitch "some derivative securities into Lake Michigan."
It appears the Republican establishment is ready to move on. On Friday, some tea party activists were criticizing the provision that will increase the amount of money a single donor can give to national party committees. It appeared an obvious ploy to boost the power of party committees and their well-heeled friends who have faced challenges from grassroots conservative groups.
Currently, an individual donor can give a maximum of $32,400 to the Republican or Democratic national committees. With the changes, found around page 1,600, a very rich couple can now give up to $1,296,000 to a political party's various accounts during a two-year election cycle, reports the Washington Post.
Unless the people awake, it's obvious who will be controlling Washington.
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