Update Friday, December 12, 2014: On Thursday night, the House passed the spending bill with the Citigroup-written provision. The Senate is expected to approve the legislation.
A year ago, Mother Jones reported that a House bill that would allow banks like Citigroup to do more high-risk trading with taxpayer-backed money was written almost entirely by Citigroup lobbyists. The bill passed the House in October 2013, but the Senate never voted on it. For months, it was all but dead. Yet on Tuesday night, the Citi-written bill resurfaced. Lawmakers snuck the measure into a massive 11th-hour government funding bill that congressional leaders negotiated in the hopes of averting a government shutdown. President Barack Obama is expected to sign the legislation.
“This is outrageous,” says Marcus Stanley, the financial policy director at the advocacy group Americans for Financial Reform. “This is to benefit big banks, bottom line.”
As I reported last year, the bill eviscerates a section of the 2010 Dodd-Frank financial reform act called the “push-out rule”:
Banks hate the push-out rule…because this provision will forbid them from trading certain derivatives (which are complicated financial instruments with values derived from underlying variables, such as crop prices or interest rates). Under this rule, banks will have to move these risky trades into separate non-bank affiliates that aren’t insured by the Federal Deposit Insurance Corporation (FDIC) and are less likely to receive government bailouts. The bill would smother the push-out rule in its crib by permitting banks to use government-insured deposits to bet on a wider range of these risky derivatives.
President Obama is expected to send his proposed federal budget this week to Congress, where much of the focus will be on strategies for dealing with the deficit.
While this next phase of the budget battles comes at a time when Obama’s overall job approval rating has fallen, our March survey found that Obama continues to engender more confidence on the federal budget deficit than either GOP leaders in Congress or Democratic congressional leaders.
A majority (53%) says they have a “great deal” or a “fair amount” of confidence in Obama when it comes to dealing with the federal budget deficit. By contrast, 39% have at least a “fair amount” of confidence in congressional Republican leaders on the deficit and just 8% have a great deal of confidence — a 14 percentage point difference. Democratic congressional leaders fare only slightly better: 45% have at least a fair amount of confidence in Democratic leaders; 11% have a great deal of confidence.
U.S. President Barack Obama is holding White House talks Friday with the top four congressional leaders as the deadline for avoiding the “fiscal cliff” fast approaches.
Obama will meet with Democratic and Republican Senate leaders Harry Reid and Mitch McConnell, Republican Speaker of the House John Boehner and Democratic House Minority Leader Nancy Pelosi.
If there is no deal by January 1, nearly every American will see his or her taxes go up, along with automatic government spending cuts. Economists fear this could plunge the fragile economy back into recession.
Congressional Republican leaders have also called the House back into session this Sunday evening. The House adjourned last week after failing to agree on a fiscal cliff deal with the White House.
The Republican controlled house of representatives created this cliff, and has spent months burning every possible bridge they could use to cross it. If the house can’t create a budget that will pass without a veto, then they are failing in their prime duty, and probably need to be recalled through the whatever the various mechanisms are in individual states.
If the Representatives can’t muster enough votes to do that, then the house needs to reasonably extend the time frame — since this is just an arbitrary timeline that they created they can also change that timeline before the ten days are up. So there are two easy ways to avert the cliff, that mentioned by the president, and that of extending the deadline. If the house fails, I say recall them.
President Obama sharply curtailed his ambitions for legislation to avert the year-end “fiscal cliff” on Friday, urging Congress to adopt a stopgap measure to keep benefits flowing to unemployed workers and prevent taxes from rising on income under $250,000 a year.
The plan should also “lay the groundwork” for action next year to spur economic growth and rein in the national debt, Obama said at a White House news conference. But with taxes set to rise for virtually every American in just 10 days, Obama conceded that time was too short to enact far-reaching legislation now.
“I am still ready and willing to get a comprehensive package done. . . . I remain committed to working towards that goal, whether it happens all at once or whether it happens in several different steps,” Obama said.
“But in 10 days, we face a deadline,” he said. Protecting unemployed workers and 98 percent of taxpayers is “an achievable goal that can get done in 10 days.”
With that, Obama and his family boarded a flight to Hawaii for Christmas, leaving congressional leaders to untangle a long-standing political knot: how to push a tax hike of any kind through the fractious Republican House.
The real fault line for Republicans is between Norquist-style radicals and Ronald Reagan, who presided over the bipartisan 1986 tax simplification deal by closing loopholes to raise revenues. As Reagan said at the time, “We’re going to close the unproductive tax loopholes that have allowed some of the truly wealthy to avoid paying their fair share.” In addition, the “sainted” Reagan oversaw some 11 tax increases during his administration. To be sure, his overall goal was to slash rates and simplify the system — but he was not nearly as absolutist as his activist acolytes who do not have to deal with actually governing.
Norquist’s hold on the GOP has been loosening as congressional leaders recognize that this extreme, unelected activist is helping to hold a balanced bipartisan deal hostage. The election is over. The time for hatred, ideological obstruction and overheated rhetoric has passed. Reasonable Republicans and Democrats need to take on their respective special interests to get a long-term deficit and debt deal done.
It’s foolish to be afraid of Norquist. The only pledge members of Congress should take is the Pledge of Allegiance.
Top congressional leaders emerged from a meeting with President Obama at the White House on Friday trying to project bipartisan confidence that they would break through gridlock to avert a potential economic catastrophe triggered by budget cuts and increased taxes.
Following an hourlong meeting at the White House, the four top congressional leaders stood by one another outside the West Wing, taking turns calling the meeting ‘very constructive.’ Stocks on Wall Street briefly surged, with renewed optimism that a chief economic roadblock would be removed.
‘It was good,’ said House minority leader Nancy Pelosi. ‘I feel confident that a solution may be in sight.’
Both sides seem to be looking at the same roadmap — Republicans now concede that they will agree to increase tax revenues, and Democrats say they will agree to more spending cuts — but they are still divided over which route to take.
Claiming a mandate from his election romp over Mitt Romney, President Barack Obama announced on Friday that he had invited congressional leaders to the White House next week for talks on how to steer the battered economy away from a “fiscal cliff.” Obama said he was open to compromise with Republicans—but that any final deal needed to raise taxes on the richest Americans.
“This was a central question during the election,” the president said in brief remarks in the East Room of the White House. “It was debated over and over again, and on Tuesday night we found out that a majority of Americans agree with my approach.
“Our job now is to get a majority in Congress to reflect the will of the American people,” Obama said. “I’m not wedded to every detail of my plan. I’m open to compromise. I’m open to new ideas. I’m committed to solving our fiscal challenges. But I refuse to accept any approach that isn’t balanced.”
“The American people understand that we’re going to have differences and disagreements in the months to come. They get that,” Obama said. “But on Tuesday, they said loud and clear that they won’t tolerate dysfunction, they won’t tolerate politicians who view compromise as a dirty word—not when so many Americans are still out of work.
“What the American people are looking for is cooperation, they’re looking for consensus, they’re looking for common sense. Most of all they want action,” the president said. “I intend to deliver for them in my second term, and I expect to find willing partners in both parties to make that happen.
“So let’s get to work.”
After being derided as a “do-nothing” Congress, the House and Senate were poised to vote on a massive legislative package that overhauls highway and transit programs, salvages an estimated 3 million jobs and spares millions of students from higher interest rates on college loans.
Congressional leaders were pushing for quick action Friday on the package, which also would financially shore up the federal flood insurance program. Two deadlines are looming: Federal highway and transit aid programs and the government’s authority to levy federal fuel taxes expire on Saturday, and interest rates on new student loans are set to double on Sunday. Lawmakers also were anxious to begin a weeklong recess.
As the U.S. Postal Service limps along, bleeding billions of dollars every financial quarter, congressional leaders are looking to a group of outspoken rural lawmakers for help with a dramatic restructuring of the agency.
Rural Americans say they regard their local post offices as the centers of their communities. With UPS and FedEx service limited or more expensive in some areas, many rely on the Postal Service to deliver medicines, while families need it to pay bills and small businesses and craftsmen use it to ship goods to customers.
The lawmakers representing these communities have fought bitterly against plans to close more than 3,600 post offices, end Saturday delivery and scale back overnight delivery - moves that have been proposed to get the Postal Service on better financial footing.
Now Republican backers of a controversial bill to overhaul the Postal Service by creating oversight groups to close facilities and cut costs are courting rural lawmakers in hopes of getting a proposal voted on in the U.S. House of Representatives this summer.
The timing is tricky. Members of Congress want legislation to help the service avoid default on two payments totaling $11.1 billion to the federal government before the November 6 presidential and congressional elections, which could quiet talk that a taxpayer bailout of the USPS could be needed.
But lawmakers in tough races, particularly in rural areas, do not want to have to defend voting for legislation that could lead to the closure of post offices in their districts.
“One of the worst things a member of Congress has to endure is an onslaught of protest from people who don’t want their postal facility to close,” said Representative Dennis Ross, a Republican who co-sponsored the bill with Oversight Committee Chairman Darrell Issa.
A growing battle over copyright on the internet came to a head this week as digital protests scuttled two anti-piracy bills, police arrested Megaupload’s millionaire filesharing pirate, and hackers brought down the Department of Justice website.
It was almost as if the thrums of digital artillery could be felt across millions of keyboards.
As some of the internet’s biggest power players, including Google and Wikipedia, protested two fast-tracked anti-piracy bills going through Congress, the US Justice Department launched an attack on one of the web’s biggest alleged scofflaws, Megaupload, and, in a counterattack, the hacker group Anonymous temporarily blacked out DOJ’s website.
Techno-pundits and mainstream observers quickly connected the dots between anti-piracy protests and the Megaupload arrests, notching the dustup as potentially the biggest salvo yet in the multi-billion dollar internet copyright wars pitting, in essence, Hollywood and its Washington lobbyists against internet free speech and its hacker protectors.
“This week has been the week of copyright warfare, but the decision to nuke the king copyright violator so spectacularly only goes to show how little the feds need bigger bombs,” writes Sam Biddle on the tech-scene site Gizmodo.
The Justice Department has not commented on the timing of its arrest of Kim Dotcom (also known as Kim Schmitz), the high-flying millionaire CEO of Megaupload, who is now in custody and being prepared for extradition to the United States from his home base of Auckland, New Zealand. The arrests came after a two year investigation.
Megaupload was perhaps the most brazen of dozens of file-sharing sites, offering cash for particularly lucrative uploads and partnering with some big-name rappers in its barely-concealed bid to dispense and disperse pirated music and film. The site has 150 million members and makes up 4 percent of all daily traffic on the web.
But the decision by the Justice Department to net such a big, obvious fish at this time raised eyebrows among the internet cognoscenti, who posited that it was meant as a retort to populist digital forces that amassed in protest of the fast-tracking of two anti-piracy bills, the Stop Online Piracy Act (SOPA) and Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (PIPA). Citing the protests, Congressional leaders forestalled the bills on Friday, saying they need more work.