What strange bedfellows were produced last week in the U.S. Congress!
The odd alliances occurred just before the U.S. House passed a $1.1 trillion spending bill, which will fund the federal government through September 2015. The vote was 219 to 206, with 162 Republicans and 57 Democrats voting for it. The seismic shifts happened because of a controversial provision included in the spending bill that would allow banks to trade their riskier financial packages, all backed by taxpayer money if those transactions should fail and prove worthless.
Liberals opposing that provision joined forces with – of all things – Tea Party types. President Barack Obama and House Minority Leader Democrat Nancy Pelosi were at loggerheads over the proposal. Strongly conservative Republican Sen. David Vitter and ultra-liberal Democratic Sen. Sherrod Brown opposed the provision, issuing this joint statement:
“If Wall Street banks want to gamble, Congress should force them to pay for their losses and not put the taxpayers on the hook for another bailout.”
For those suffering memory loss, six years ago taxpayers had to fork over hundreds of billions of dollars to bail out the biggest banks when reckless banking practices brought our economy to the brink of collapse.
It’s a reprehensible shame more in Congress did not side with Brown, Vitter and Tea Party leaders to oppose letting taxpayer money cover the butts of the big banks. It’s yet another example of rich interests leading politicians by their noses.
Here we go again, folks. Time to fasten our seatbelts.
Under the Dodd-Frank Act, which was passed in 2010 as an effort to restrict big banks from taking reckless risks, regulation was added to require banks to conduct their riskiest transactions (such as forms of derivative trading) without the protection of the taxpayer-funded Federal Deposit Insurance Corp. or the Federal Reserve.
Democratic Sen. Elizabeth Warren, who has long tried to reign in the gambling behaviors of Wall Street, warned her colleagues not to undo this provision, claiming once again the taxpayers will be put under a severe risk of having to pay for yet another big bailout.
What’s disgusting about this language in the spending bill to let big banks have taxpayer backing is it’s the brainchild of the giant banking firm, Citigroup, whose recommendations were written almost word for word right into the provision.
According to the New York Times, the four largest banks in America conduct more than 93 percent of all risky derivatives-trading. It’s an outrage taxpayers should have to back such blatant gambling. It’s actually a form of highway robbery, we being the “robbed.”
When the Tea Party was founded during the beginning of the “Great Recession,” its biggest agenda item was, to its credit, opposition to taxpayer bailouts of big banks. That’s before the Tea Party let itself be taken over by La-La Land extremists like Michele Bachmann and Ted Cruz.
It’s still debatable if the taxpayer bank bailouts were actually necessary.
And, by the way, there is another provision in this spending bill – one that will increase by 10 times the amount an individual is allowed to give to political campaigns. Those two provisions – taxpayer backing of reckless banking and increases to funding limits – go hand-in-hand, like kissin’ cousins. They are both perfect examples of how the U.S. Congress is bought and sold, more like a commodities market than a hallowed venue for legislative actions for the benefit of the many rather than just the well-heeled few. And those are two examples of why most of the American people hold Congress in such cynical contempt.
If this is the kind of “change” Republicans – aided by bought-and-paid-for Democrats – will bring us in the New Year, we are in for a big disappointment and big trouble.