It sounds like one of those fundraising emails Democratic groups kept sending out during the last election season, warning of imminent impeachment and other inflated threats: “Listen, I'm pleading.” “CRUSHING blow.” “Disaster.” “Kiss all hope goodbye.” “SHOCKING news.”
It sounds like it, but it's not. We really have an emergency on our hands. This is not a drill.
The budget deal hammered out this week between Republican and Democratic negotiators literally imperils the economy. If it becomes law, our nation's biggest banks will once again have a green light to gamble on the derivatives that helped create the 2008 financial crisis. Congress is doing Wall Street's bidding with this budget, and it needs to be stopped.
Listen, I'm pleading.
More importantly, so is Sen. Elizabeth Warren, who spoke Wednesday about the proposed “cromnibus” deal (the name is a portmanteau of “continuing resolution” or “CR,” and “omnibus”), calling it “a deal negotiated behind closed doors that ... would let derivatives traders on Wall Street gamble with taxpayer money and get bailed out by the government when their risky bets threaten to blow up our financial system … “
“The provision that's about to be repealed requires banks to keep separate a key part of their risky Wall Street speculation so that there's no government insurance for that part of their business,” said Warren, adding: “As the New York Times has explained, 'the goal was to isolate risky trading and to prevent government bailouts' - because these sorts of risky trades - called ‘derivatives' trades - were 'a main culprit in the 2008 financial crisis.'
“The House of Representatives is about to show us the worst of government for the rich and powerful,” concluded Warren. She's right. This partial repeal of Dodd-Frank is a giveaway to the five or six banks that remain too big to fail. It's also an invitation for them to engage in additional risky behavior.
We can't afford another financial crisis. Using very conservative methodology, the Federal Reserve Bank of Dallas estimated the cost of the last crisis at between $6 trillion and $14 trillion. That comes to a minimum of $50,000, or as much as $120,000, for every single household in the country.
This deal shows us what can happen when government is put up for sale to the highest bidder – and that brings us to another one of its terrible provisions: The agreement increases the amount rich donors can give to political parties in each election cycle more than sevenfold, to $777,000 per person or more. As the New York Times reports, it also “(creates) new designated accounts to pay for presidential nominating conventions, legal fees and the cost of buying or renovating office space.”
This would give billionaires even more influence over both major parties. In a mordantly amusing side note, the Times noted that “neither party’s lawmakers would take responsibility for inserting the provision” into the deal.
And yet, there it is.
It shouldn't matter if you're a Democrat, a Republican, or an independent, whether you're on the left or the right. If you believe in democracy, you should oppose these provisions. And if you believe in the free market, you should oppose giving a few banks an unfair competitive advantage.
That's not all that's objectionable in this deal. Another provision would result in pension plan cuts for an estimated 1.5 million retirees. The IRS budget would be slashed, reducing enforcement on billionaires, corporations, and political groups claiming to be “educational” in nature.
The deal would also end the voter-approved legalization of marijuana in the nation's capital. That's too bad. While I haven't indulged in ages, trust me: Folks there are gonna need it if this deal goes through.
(More details on the overall “cromnibus” deal can be found here.)
But wait, some timorous souls will say. Republicans might shut down the government if they don't get their way. Their opponents should respond to that threat with one voice: Let them. Voters are weary of shutdowns and shutdown threats. Any party that commits such an unpopular and destructive act – especially when it's for the sole purpose of helping big banks and billionaires – will pay a steep price for it.
As I wrote Wednesday, Wall Street is moving in for the kill, and so is the rest of corporate America. A quote in TheHill.com today, attributed to an unnamed “senior GOP Senate aide,” reinforces that conclusion. “If liberal Democrats vote for this package,” said the aide, “it shows that conservatives can use must-pass legislation to repeal the regulatory state.”
In other words, victory on this deal will bolster corporate-state politicians into holding more “must-pass” legislation – and therefore, government itself – hostage to their patrons' demands. These threats will become a tool for dismantling a century's worth of regulations – on the environment, working conditions, public safety, and a host of other issues.
So, yes, this budget deal is “shocking news,” and its passage would be a “crushing blow.” Tell your representative and senators: It must be stopped, now.
The Campaign for America's Future has a petition calling on Congress to reject "any bill that rolls back Dodd-Frank and gives Wall Street a free pass." You are also urged to call your member of Congress to register your opposition: The main Capitol switchboard is 202-224-3121, or you can find your representatives via USA.gov.