GOP Looks To Weaken Wall Street Reform On Senate Floor
Republican drop filibuster without bipartisan deal in place. W. Post: "Reid said he would allow votes on numerous GOP amendments ... Shelby and Dodd agreed that they had made headway ... Dodd agreed to drop a proposed $50 billion fund paid for by the financial industry that could be used to shut down failing firms ... Still, the two never reached reach agreement on the creation of a consumer financial protection bureau ... Shelby also expressed reservations about the sweeping new rules to govern the derivatives market in the Dodd bill."
Conservatives plan to begin weakening effort with attack on derivatives rules today. Bloomberg: "Today’s opening debate ... involves a provision offered by Senator Blanche Lincoln, an Arkansas Democrat, to require commercial banks to wall off their swaps-trading desks. Senator Bob Corker ... said he wanted to eliminate that clause. 'What is the point of doing that?' he told reporters yesterday. 'All it does is lower the amount of capital available in America for actual lending.' Lincoln’s provision is 'toast' ... Republicans also may offer amendments to ease a measure requiring regulators to ban proprietary trading at U.S. banks; eliminate language removing the Fed’s authority to oversee banks with less than $50 billion in assets; and preserve the power of federal regulators to override states in applying consumer- protection rules at national banks."
Few believe Dem Sen. Ben Nelson's explanation why he's voting for obstruction. W. Post: "... Sen. Christopher J. Dodd (D-Conn.), added further doubts by saying that Nelson raised concerns about a provision concerning exotic financial instruments called derivatives. That provision has drawn fire from Berkshire Hathaway, the Omaha-based company of billionaire Warren Buffett, and Nelson's biggest donor over the past decade."
Goldman's lobbyists getting cold shoulder in Washington, but firm still seeks to influence bill. NYT: "In seeking to make its case to lawmakers and their aides, the bank has been largely relying on trade groups, like the Securities Industry and Financial Markets Association, the American Banking Association, or the Financial Services Forum, to plead its case about concerns in the financial legislation, industry officials said." More from W. Post on Goldman's high-powered lobbying team.
The GOP's financial reform propostal is alot like the Dodd bill, and Ezra Klein thinks that's not necessarily good news: "...if you basically liked the Dodd bill but were looking to give regulators just a little bit more discretion, then the Republicans are here for you ... But what if you think that the financial sector itself is broken, and even good regulators can't fix a broken sector?"
But Matt Yglesias says the GOP alternative is bad for consumer protection: "On the one hand, it seemingly weakens the independence of the consumer regulator. On the other hand, it has the consumer regulator preempt any and all state regulations. This is a helpful reminder that nobody on the right actually gives a damn about federalism except as a tool to advance conservative substantive policy..."
Senate Republicans may have relented on the financial reform debate, but Steven Benen says they're not done obstructing: "Republicans will continue to obstruct every step forward, and will no doubt filibuster the bill itself, filibuster attempts to choose members of the conference committee, and then filibuster final passage. This afternoon's news is encouraging, then, but we still have a long ways to go."
Loop 21's Devona Walker takes on the zombie narrative that minorities caused the financial crisis: "...the biggest reason this whole blame-the-minority line does not hold is water is that it has been proven time and time again through smaller lending programs that there is nothing inherently risky about lending in working-class or minority communities."
FT's John Gapper says it's time to rein in the ratings agencies: "The financial reform bill ... has placed other priorities, such as derivatives regulation, above them. That is unfortunate. If the crisis proves anything, it is that the agencies enjoy too much authority among investors and regulators."
Deficit Commission Confident It Can Spread Fear
HuffPost's Dan Froomkin writes that the Deficit Commission's real goal is spreading deficit hysteria: "Asked about the prospect of a deadlock, [commission co-chair Erskine] Bowles, sounding reconciled to it already, declared 'that won't be victory, but we will have made real progress.' The progress, Bowles said, will come in having educated the American people about the dangers of the deficit. And that, judging from the co-chairs' rhetoric, will involve scaring the heck out of people."
At Peterson event, Obama econ aide Paul Volcker talks up higher retirement age for Social Security, while EPI's Larry Mishel stresses jobs. NYT: "[Said Volcker,] 'There might not be any savings at all in the short run, but I think that psychologically, the fact that it would have a real impact over time is reassuring' to global markets and to foreign holders of American debt ... 'We’re in a crisis,' said Lawrence Mishel ... reflecting the frustration of many on the left that the increasing focus on deficit reduction ignores the need to keep spending to stimulate the economy. 'Our first thing to do is generate jobs,' Mr. Mishel said."
Dean Baker questions why Volcker fears a rebalanced currency market: "According to the NYT, Volcker said that: 'He [Volcker] and other speakers expressed fear that without some action in the next year or two that reduces deficits for decades to come ... the dollar could lose value ... ' A drop in the dollar is the only plausible way to get our trade deficit closer to balance. A large trade deficit, by definition, means that the United States must have low national savings [which] means that we must either have large budget deficits or very low private savings, or some combination."
Cap of 99 weeks for jobless aid may leave 1 million without help. Bloomberg: "Democrats who have pushed through the past extensions agree there’s insufficient backing to go beyond 99 weeks, largely because of mounting concern over the federal deficit, projected to reach $1.5 trillion this year. 'You can’t go on forever,' said Senate Finance Committee Chairman Max Baucus ... The challenge for lawmakers is that while benefits have reached record lengths, so has long-term unemployment ... Representative Jim McDermott, a Washington Democrat who supports another extension of benefits, said there’s so little support for the idea that he hasn’t bothered to introduce legislation."
Climate Bill Quietly Takes Next Step
Kerry-Graham-Lieberman compromise takes next step, without high-profile roll-out. NYT: "Although the senators did not release the draft and no formal legislative language exists yet, the E.P.A. modeling is a crucial step that must be completed before the bill can be brought to the Senate floor for debate ... The E.P.A. analysis is expected to take four to six weeks."
Sen. Maj. Leader Harry Reid will take up climate bill, then immigration, this year. Graham hit by immigration advocates. The Hill: "Rep. Luis Gutierrez (D-Ill.) said Graham had 'changed his mind and undermined the whole process.' ... The tone marked a shift for Gutierrez, who earlier this month said he echoed Graham’s criticism of the Obama administration’s approach to immigration reform."
First offshore wind farm approved by Interior Department. Boston Globe: "Cape Wind Associates, the developer, said it planned to begin construction of the 130 turbines about 5 miles off Cape Cod by the end of the year, even as the main opposition group announced that it would immediately file a lawsuit ... [Gov. Deval] Patrick said ... Cape Wind will create 1,000 construction jobs and help the state in its goal to be a national clean energy leader ... Senator Scott Brown, however, called Salazar’s announcement misguided. 'With unemployment hovering near 10 percent in Massachusetts, the Cape Wind project will jeopardize industries that are vital to the Cape’s economy, such as tourism and fishing,'"
Treehugger's Brian Merchant cheers the approval of the first offshore wind farm: "This is huge news, as it marks the US's entry into offshore wind. European nations already have thousands of offshore turbines generating hundreds of megawatts of power, and one study has shown that the United States could meet every last kilowatt of its power demands if offshore wind was properly utilized."
Dems Look For New Immigration Partner
Dems shop outline for immigration reform, seeking new GOP partner. Politico: "The effort is an attempt by Senate Majority Leader Harry Reid to get around the roadblock caused when Graham ... threatened to withdraw his support from both measures unless Reid agreed to table immigration this year ... The framework ... contains many of the elements already negotiated with Graham."
Border security measures come before pathways to legalization in new proposal. Bloomberg: "[The draft] would require that more money first be poured into boosting the number of border officers and U.S. Immigration and Customs enforcement agents ... The legislation would also require the Social Security Administration to administer a new system of biometric cards that could be used to prevent hiring of illegal immigrants in U.S. workplaces ... [Undocumented workers] could be provided with a 'lawful immigrant status' that lets them to work and travel outside the U.S. Later, eight years after current visa backlogs are cleared, they could petition to become permanent U.S. citizens..."
Marjorie Cohn, from the Thomas Jefferson School of Law, says Arizona's new law effectively legalizes racial profiling: "When asked what an undocumented person looks like, Arizona Governor Jan Brewer, who signed SB 1070 into law last week, said, 'I don't know what an undocumented person looks like.' The bill does not prohibit police from relying on race or ethnicity in deciding who to stop. ... This law unconstitutionally criminalizes 'walking while brown' in Arizona."
Washington Monthly's Benen writes that Arizona's new anti-immigration law separates conservatives "according to their political and moral seriousness": "...the serious GOP contingent is quite small, but it's slowly growing. Former Florida Gov. Jeb Bush (R) criticized Arizona's awful new immigration law yesterday, and was soon followed by former DHS Secretary Tom Ridge and California gubernatorial hopeful Meg Whitman. Florida's Marco Rubio also doesn't care for the odious Arizona measure, and even former Rep. Tom Tancredo of Colorado believes it goes too far. But all of those Republicans have one thing in common: none of them currently hold public office."
Nearly $1B spent by lobbyists so far this year. USA Today: "Lobbyists spent an average $305 million a month from January to March to influence policy this year — more than double the monthly rate of spending a decade ago ... Health care interests spent the most ..."
Insurers relent, will end "recessions" earlier than new law demands. The Hill: "The move by insurers is intended to show they are committed to working with the new healthcare law..."
2005 bankruptcy law trapping student loan recipients. W. Post's Michelle Singletary: "Before, the only loans that couldn't be canceled by filing for bankruptcy were federally backed student loans, as well as loans where nearly all the funds came from a nonprofit institution ... In the case of the federal loans, this made sense. The government backs the loans, and defaults are a direct hit to the federal budget, meaning we all pay for those who can't. But in 2005, during a major overhaul of the bankruptcy code, private student loans were given an elevated status and thus couldn't be discharged. This didn't make sense. If we are going to have a fair bankruptcy system, private education loans should be treated the same as other private consumer debt."
Obama to pick "doves" for Federal Reserve slots. Bloomberg: "Obama today plans to announce his choice of San Francisco Fed President Janet Yellen ... Sarah Bloom Raskin, Maryland’s commissioner of financial regulation, and Peter Diamond, an economics professor at the Massachusetts Institute of Technology ... 'This will be a group of doves slanted toward job creation and growth, increasing the likelihood of rates staying low for a long time,' said former Atlanta Fed research director Robert Eisenbeis..."
TNR's Norm Ornstein fires back at Newt Gingrich for calling Obama administration a "secular-socialist machine," point-by-point: "Using Gingrich’s examples, I thought of a whole fraternity of former presidents who could say, 'We are all socialist machine presidents now.'"