UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

May 3, 2009

BANKERS STILL RUNNING WASHINGTON; BANKRUPTCY REFORM

Arianna Huffington - Just this week, the bankers and their lobbyists -- who you might have reasonably thought would be the political equivalent of lepers in the halls of power these days -- have kneecapped substantive bankruptcy reform in the Senate, helped pull the plug on a government-brokered deal with Chrysler, and tried feverishly to throw up a roadblock in the way of credit card reform in the House.

According to Sen. Dick Durbin, the banks "are still the most powerful lobby on Capitol Hill. And they frankly own the place.". . .

The banks scored a lopsided victory when the Senate rejected an amendment that would have allowed homeowners facing foreclosure to renegotiate their mortgages under the guidance of a bankruptcy judge. The measure would have helped 1.7 million homeowners keep their houses, and preserved an additional $300 billion in home equity. . .

But the banking lobbyists went after it with guns a-blazing - even after Durbin and the measure's other backers seriously diluted the bill. . . . And their aim was true -- and deadly. Heading into the vote, those pushing for reform hoped to gather the 60 supporters needed to bring the cramdown amendment to a final vote. Instead, Durbin struggled to find 45 Senators willing to side with consumers. The final tally: Bankers 51, Consumers 45.

Twelve Democrats sided with the banks -- Max Baucus, Michael Bennet, Robert Byrd, Tom Carper, Byron Dorgan, Tim Johnson, Mary Landrieu, Blanche Lincoln, Ben Nelson, Mark Pryor, Arlen Specter, and Jon Tester -- as did every Republican who voted. . .

As for credit card reform, the House's resounding 357-70 passage of Carolyn Maloney's Credit Card Holders' Bill of Rights would seem like a rare defeat for the banking lobbyists who furiously opposed it. But a number of elements of the legislation demonstrate that even when the bankers lose, they still win. For instance, despite the desperate urgency of the situation, all but one of the consumer-friendly provisions of the bill won't take effect for a year. And the bill doesn't contain any cap on credit card interest rates -- an amendment to cap rates at 18 percent never got any traction. And, of course, the bankers will get another crack at derailing credit card reform when the Senate takes up its version of the bill, sponsored by Chris Dodd, later this month.

So no matter how badly the banking industry fails and how much its failures cost us, it continues to be Washington's 800 lb gorilla -- and the greatest risk to Barack Obama's presidency.

0 Comments:

Post a Comment

<< Home