Elizabeth Warren Blasts Policy Riders in the Spending Bill

By David Rosen, Public Citizen

On Wednesday, Dec. 2, U.S. Sen. Elizabeth Warren (D-Mass.) delivered a barn burner of a speech attacking poison pill policy riders attached to the fiscal year 2016 spending bill.

Corporate lobbyists and their Republican allies in Congress are trying to sneak through provisions that would let Wall Street write its own rules and would roll back protections that have been put in place since the 2008 financial crash that triggered the Great Recession.

Rather than try to further characterize the senator’s remarks, let’s just roll the tape…

[youtube height=”300″ width=”500″]https://www.youtube.com/watch?v=JZmm0dpefFk&feature=youtu.be[/youtube]

 

Below is a transcript of Warren’s remarks:

Mr. President, I am pleased to join Senator Merkley, Senator Nelson, and Senator Reed on the floor today. I thank Senator Merkley for pulling us together.

We are here to say no – no to the industry lobbyists, no to their friends in Congress who are threatening a government shutdown if we won’t roll back rules that protect consumers and protect the safety of our financial system.

It is a pretty neat trick. The lobbyists probably know they can’t get a rollback of financial regulations passed out in the open where the American people can actually see what is happening and see which Senators and which Representatives voted to gut the rules that protect working families. So instead they tack rollbacks onto must-pass legislation, such as the upcoming government funding bill, to give their friends in Congress a lot of cover for voting yes.

It is cynical. It is cynical and it is corrupt, but it usually works. Just last year, Citigroup lobbyists wrote a provision to blast a hole in Dodd-Frank. The part of the law that was blown up was called – and I am quoting the title – “Prohibition Against Federal Government Bailouts of Swaps Entities.” The idea behind the rule was pretty simple. If a big bank wanted to engage in certain kinds of risky deals, such as the credit default swaps that had been at the heart of the 2008 crisis, they had to bear all of that risk themselves instead of passing it along to taxpayers. Now the big banks wanted that rule repealed, and the only way to do it was to put it on a bill that had to pass or the government would shut down, and that is exactly what they did.

For 1 year, Congressman Elijah Cummings and I worked to document the impact of that Citigroup amendment, and we finally got what we needed. The FDIC estimates that the provision written by Citigroup lobbyists last year that allows a few big banks to put taxpayers on the hook for risky swaps has an estimated value of almost $10 trillion. And who is gobbling up that $10 trillion of risk? It is three huge banks: Citigroup, JPMorgan Chase, and Bank of America. It is three banks, nearly $10 billion, and $10 trillion is a lot of risky business. These banks will happily suck down the profits when their high-stakes bets work out, and they will just as happily turn to the taxpayers to bail them out if there is a problem. All of this is because the lobbyists persuaded Congress to do just one little favor in a must-pass bill.

Now, a year after the Citigroup amendment, there are rumors of new giveaways in the upcoming funding bill: rollbacks that would make it harder for the government to stop the next AIG from taking down the entire economy, rollbacks that would exempt many of the 40 largest banks in the country from tougher oversight, rollbacks that would undermine the consumer agency’s rules to clean up mortgage- and auto-lending markets, rollbacks that would stop the agency from protecting consumers rights if they are cheated on credit cards or checking accounts, rollbacks that would allow financial advisers to continue lining their own pockets while robbing retirees of billions of dollars.

Why are these rollbacks at the top of Congress’s agenda? Are constituents flooding the phone lines begging their Senators to weaken the rules for financial institutions? Are they writing in by the thousands insisting that their Senators make it easier for people to get cheated?

Of course not – survey after survey has shown that hardworking Americans want stronger regulation of Wall Street and more accountability for CEOs who break the law. But like so many things around here, this process isn’t about doing what hard-working Americans want. It is about pleasing the rich and powerful who are lined up for special favors.

I know some of my Democratic colleagues are frustrated by all of the gridlock in Washington. They say: Wall Street accountability is important, but I just want to get something done around here for a change; so let’s go along with the Republicans and the special interests. Well, yes, I want to get something done too. Who doesn’t? But I didn’t come here to carry water for Wall Street and a bunch of special interests.

If Republicans think it is time to talk about financial reform, then let’s put it on the table. If the industry wants to push rollbacks, then I want to make it easier to send bankers to jail when they launder money or cheat consumers. If the industry wants to chip away at financial oversight, then I want to have a serious conversation on the record about breaking up the biggest banks. If they are too scared to have that conversation out in the open, then Senators shouldn’t be handing out special favors behind closed doors.

The upcoming debate about a government funding bill is going to boil down to one question: Whose side are you on? Are you on the side of working families who got punched in the gut and want stronger rules for Wall Street or are you on the side of the giant financial institutions that broke the economy, got bailed out, and are once again trying to call the shots on Capitol Hill? Well, me, I am with the families, and I am ready to say no to the bank CEOs, no to the industry lobbyists, and no to all of their buddies here in Congress.