Union leaders hail re-regulation bill
WASHINGTON (PAI) – Union leaders and allies hailed the Senate’s 59-39 party-line vote on May 20 that approved a comprehensive financial re-regulation bill. They said the measure would prevent a repeat of the casino gambling and Wall Street excesses that plunged the nation into the current Great Recession.
But the saga of financial reform isn’t over yet. The Senate’s measure, strengthened by its Democratic sponsors’ amendments along the way, must now head for House-Senate bargaining. The House bill is weaker in some respects than the Senate’s measure – and the bargaining gives the financiers yet another chance to try to water the legislation down.
“For the tens of thousands of Americans who marched on Wall Street and rallied on K Street, and for the tens of millions of working families who lost jobs, homes and income at the hands of the big Wall Street banks, the Senate vote for Wall Street reform is a sweet victory,” said AFL-CIO President Richard Trumka in a statement.
Trumka led the Wall Street protest, which drew more than 10,000 people. It demanded the financiers submit to re-regulation – which a Republican Congress and pro-business Democratic President Bill Clinton had dumped a decade ago.
But the marchers also demanded the banks’ repayment of billions of taxpayer dollars they got to survive just over a year ago be redirected to workers and families whom the financial finagling left without jobs, facing foreclosure or both. The banks turned a deaf ear to that demand, and so has Congress.
“Nevertheless, “the Senate took this step to protect consumers despite the swarms of finance industry lobbyists who converged on Capitol Hill and outlays of $1.4 million a day to block reform,” Trumka said. “Now the legislation should be strengthened when the Senate and House begin negotiations.”
Labor-backed Americans for Financial Reform was similarly pleased. Earlier in the week, it released a poll showing two-thirds of respondents would vote against a lawmaker who opposed the crackdown. All the Senate foes were Republicans.
The group’s executive director, veteran activist and mobilizer Heather Booth, called the Senate vote “a major step forward on this historic Wall Street reform bill that will hold big banks accountable for costing 8 million Americans their jobs and bringing our economy to the brink of a collapse.”
She also warned the financiers would continue to try to weaken the bill, notably its regulation of outlandish financial instruments — like credit default swaps and derivatives — that were pieces of paper backed by nothing, and whose crashing value led to the Great Recession and the prior, hated bank bailout.
“Even as the big banks and their buddies in the Senate see the train is leaving the station on Wall Street reform, they are lying down on the tracks, trying to block the engine. While their appalling defense of the big banks has become a predictable pattern, it’s no more tolerable each time it happens. The Senate bill stops banks from recklessly gambling with our money,” Booth added.
Booth and Trumka said the congressional negotiators must add language to the bill tightly regulating derivatives, along with “language to make sure private equity managers are regulated,” as Booth put it. “These measures are important to make sure that reform will function as it needs to, and loopholes are completely closed. We need the strongest bill possible,” she added.
The bill also orders an audit of the Federal Reserve’s rescues of banks when the financial system crashed. Sen. Bernard Sanders, Ind-Vt., who inserted the audit into the Senate bill, was glad the entire measure passed — and said it doesn’t go far enough.
“As a result of the greed, recklessness and illegal behavior of Wall Street, this country was plunged into a horrendous recession. While this bill does not go as far as I would like, it is a strong beginning in the effort to re-regulate huge financial institutions and to bring transparency to their often-nefarious activities,” Sanders said.
Democratic President Barack Obama, who also pushed strongly for the financial overhaul, hailed the Senate’s vote. Lobbyists for the financial industry did not.