So often on Capitol Hill, legislators spend weeks or months creating bills under a fair amount of public scrutiny, only to cut a deal behind closed doors in the final hours and push it through both the House and the Senate before reporters and experts have had a chance to examine it. The Wall Street reform bill is supposed to be different: it will be completed in a formal House-Senate conference, in front of cameras and with all votes recorded, thanks to conference chairman Barney Frank. But aides on the hill and outside progressive groups both say there’s still too much room for funny business and are pressing Congress to make the end-stage negotiations even more transparent.
“The key thing we want is we want the legislation put online, the differences put online, the issues they’re going to talk about put online,” says Robert Borosage, co-director of the Campaign for America’s Future. “We don’t want them to make decisions—to take stuff off the table—without doing it in public.”
The fear is that the public deliberations and votes will be largely a charade, if deals are cut off-camera, and then ratified as part of large amendments that haven’t been thoroughly examined by independent experts. To prevent that CAF along with MoveOn and CREDO are enlisting their members to pressure Congress not to succumb to Wall Street pressure.
“Wall Street’s high priced lobbyists are redoubling their efforts to hold the real negotiations in the backrooms,” reads a CAF action alert issued this morning. “They’ll push for cloakroom meetings to cut the deals, reducing the open proceedings to rituals…. Congress must broadcast the proceedings on C-SPAN and put the text of the bill online well in advance of the vote.”
Lobbyists are going to try to find ways to meet with all conferees no matter how transparent the conference is. Two of their chief goals will be to eliminate, or scale back, a provision that would require major financial institutions to spin off their derivative trading desks; and to limit the scope and regulatory authority of a proposed new federal agency that would be charged with protecting consumers from dangerous financial products.
The former will have a tough time surviving in tact—particularly if the conference committee isn’t as transparent as possible. It faces opposition from almost the entire conference including chairman Frank. There is now some talk of replacing the spin-off provision with tightened restrictions on banks’ ability to engage in proprietary trades. But the White House and Treasury only want those rules to go so far—and that has reform advocates worried, too.
Late update: Schumer’s office sends over a note from the reform campaign Americans for Financial Reform thanking him for being a team player on reining in Wall Street. AFR is the biggest regulatory reform umbrella group in the country, and it includes Borosage’s CAF, which is one of its more progressive and high-pressure member groups. That CAF—and a number of other progressive sources—scratched their heads when they saw Schumer’s name on the list of conferees obviously doesn’t imply broad distrust from liberal groups and Democrats. More, it’s an outgrowth of the fact that there are a large subset of progressives who want these Wall Street reforms to be more fundamental, and they don’t think Schumer’s the guy to do that.
But this underscores exactly why outside groups are pushing to open up the process to as much scrutiny as possible. The more transparent it is, the harder it will be for Schumer or anybody else to undercut any of the reforms, and the more incentive they’ll have to actually enhance them.
You can read the whole letter, dated Monday, below.
Dear Senator Schumer,
Thank you for all you have done to hold the big banks accountable. Congratulations on making such significant progress, even as there is more to be done.
You have been an extraordinary champion—thoughtful and dedicated. It was terrific to partner with you and your staff to protect people against predatory practices and the recklessness of Wall Street.
It was especially important and remarkable that you provided this leadership from the position of such an understanding of Wall Street. We owe you such gratitude.
We are so much better off because of your leadership and all you have helped us achieve together.
Americans for Financial Reform
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at email@example.com.