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The Obama Spending Bill compromise: a Portent of the Future

By   Follow Me on Twitter     Message Scott Baker       (Page 1 of 2 pages)     Permalink    (# of views)   4 comments, In Series: Economic Reform

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Obama just defied most of his Democratic colleagues in the House and Senate to promote passage of the Republican 2015 so-called "spending bill." Before a majority Republican Senate even takes office, this is what Obama has given away, according to the NY Times:

One rider would allow a huge increase in the size of checks that deep-pocketed donors can write to win inner-sanctum clout with the major political parties. A donor now held to a mere $97,200 under party limits would be able to give a staggering $777,600. In a further invitation to luxury shopping, a couple yearning for the inside track could triple-down and give $3.1 million to party committees....
The second rider, custom tailored for the banks of Wall Street, would kill a crucial part of the Dodd-Frank reform law aimed at curbing the banks' reckless speculation in complex derivatives that fueled the banks' ignominious collapse in 2008 and fed the great recession. The rider would effectively put taxpayers back on the hook to cushion the banks' losses in risky derivative deals....

The omnibus bill includes a thicket of other regressive moves, including further budget cuts at the Environmental Protection Agency, always a favorite target of the Republican right wing. Most notoriously, the bill would enshrine a Bush-era rule that allows the mountaintop mining industry to continue dumping toxic coal waste in the streams of Appalachia.

The Internal Revenue Service, another conservative bĂȘte noire, would take one of the harshest cuts, $345.6 million, weakening auditing and taxation. The Fish and Wildlife Service would be banned from adding the greater sage grouse to the endangered species list -- a victory for the gas and oil industry, which covets even more of America's threatened Western landscapes than it already has access to.

True progressives, like Bill Black and Elizabeth Warren have slammed the Administration for agreeing to what is literally a provision written by Citigroup to weaken the already anemic Dodd-Frank law, specifically in how it deals with derivatives.

As Black states:

If Obama gets his way and surrenders to the Republicans on the legitimacy of using bills on other matters to extort Obama and the Democrats into passing obscene provisions like the gift to the Big Five banks that trade virtually all the derivatives, then the Republicans will have for the remainder of Obama term in office a strong Congressional majority, leverage, and the certain knowledge that they are negotiating with someone with rounds heels who falls over when pushed. They will subject him to the death of ten thousands cuts.

Well, Obama HAS gotten his way, which is the way of the spineless, making even milquetoast Democrats like Pelosi look tough and principled by comparison. There is simply no end to the giveaways by our Jello President.

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Senator Warren has even more to say in a sendout to her growing number of supporters:

Date: Wed, 10 Dec 2014 21:45:55
Subject: Urgent Action: Stop the Republicans' Wall Street giveaway

People are frustrated with Congress. Part of the reason, of course, is gridlock. But mostly it's because they see a Congress that works just fine for the big guys but won't lift a finger to help them.

And now the House of Representatives is about to show us the worst of government for the rich and powerful.

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The House is about to vote on a budget deal -- a deal negotiated behind closed doors that slips in a provision that would let derivatives traders on Wall Street gamble with taxpayer money, and once again get bailed out by the government when their risky bets threaten to blow up our financial system.

These are the same banks that nearly broke this economy in 2008 and destroyed millions of jobs. The same banks that got bailed out by taxpayers and are now raking in record profits. The same banks that are spending a whole lot of time and money trying to influence Congress to bend the rules in their favor.

I'm urgently calling on Congress to withhold support of the deal today until this dangerous giveaway is removed from the legislation. Join me right now to stand up to Wall Street.

You will hear a lot of folks say that the rule that will be repealed in the Omnibus is technical and complicated, and that you shouldn't worry about it because smart people who know more than you about financial issues say that it's no big deal. Don't believe them.

Actually, the rule is pretty simple. Here's what it's called -- the rule that the House is about to repeal -- and I'm quoting from the text of Dodd-Frank -- "PROHIBITION AGAINST FEDERAL GOVERNMENT BAILOUTS OF SWAPS ENTITIES."

We put this rule in place after the collapse of the financial system because we wanted to reduce the risk that reckless gambling on Wall Street could ever again threaten jobs and livelihoods on Main Street. We put this rule in place because people of all political persuasions were disgusted at the prospects of future bailouts.

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And now, no debate, no discussion, Republicans in the House of Representatives are threatening to shut down the government if they don't get a chance to repeal it.

That raises a simple question -- why? If this rule brings more stability to our financial system, if this rule prevents future government bailouts, why in the world would anyone want to repeal it, let alone hold the entire government hostage in order to ram through the repeal?

The reason, unfortunately, is simple. It's about money, and it's about power. Because while this legal change could pose serious risks to our entire economy, it'll also make a lot of money for Wall Street banks.

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:

Scott is a former President of Common Ground-NYC (, a Geoist/Georgist activist group. He has written dozens of articles for (more...)

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