A $1.1 trillion omnibus spending plan that would fund the federal government through the middle of 2015 -- which was approved by the House late Thursday and expected to be approved by the Senate Saturday -- includes a provision revising a key portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
A provision in the 1,600-page bill that would remove the "push-out" regulation that restricts riskier trades by big banks from being backed by the taxpayers was enough to provoke some House Democrats to drop their support for the bill. The 2010 Dodd-Frank rules had, among other things, required banks to move some derivatives-trading activity to affiliates that were not eligible for federal deposit insurance.
Leading the Democratic charge against the bill was Sen. Elizabeth Warren (D-MA), who has urged the Federal Reserve to curb banks from owning commodities businesses, including energy commodities, to prevent them from potentially hurting global supply chains (see Daily GPI, April 21).
The provision "means big money for a few big banks," Warren said on the House floor Thursday. According to Warren, the provision was written by lobbyists working for Citigroup.
"If big Wall Street banks want to gamble with their own money, so be it. Let them take their risks with their own money, and let them live with the consequences of those risks. That's how markets are supposed to work. But they shouldn't get to gamble with government money. And they shouldn't get to run to the government if the deal goes sour."
Also included in the omnibus spending bill is a proposal to increase funding by as much as 10% for both the Commodity Futures Trading Commission and the Securities and Exchange Commission.
In the end, the House passed the omnibus spending bill by a 219-206 vote, just one vote more than the minimum needed for passage. The Senate on Thursday approved a two-day extension of current funding that gave members until midnight Saturday to approve the bill and avoid what would be the second federal government shutdown in less than 15 months (see Daily GPI, Oct. 1, 2013).