The Late, Late, Late Government Shutdown Megathread

[CountDeMoney]

Less than 3 hours to shutdown. 

If the government shuts down, it will be the Demcrats' fault this time, and with goddamned good reason. 

You sneaky GOP rat bastard sunsabitches, you can't get that shit past a fully ARMED and OPERATIONAL Elizabeth Warren.  Wall Street does not get taxpayer cover for their little table games anymore.

House faces close vote on $1.01 trillion spending bill

Congress plunged itself into another standoff Thursday night as a last-minute Democratic revolt against a spending package put the government on the brink of another shutdown.

With government funding expiring at midnight, House Republicans were poised to settle for a stopgap bill of almost three months and send it to the Senate for passage, where it was likely to pass and avert the second shutdown of the Obama administration.

The swift collapse of support for the sweeping $1.01 trillion spending bill was evident by midday Thursday, when every Democrat present in the chamber voted against a procedural motion to begin formal debate. In a dramatic standoff, GOP leaders scrambled to find just enough votes to allow debate to begin.

The White House followed by quickly announcing President Obama's support for the legislation, even as it criticized lawmakers for using the 1,603-page bill to weaken some Wall Street regulations and loosen campaign donation limits.

But House Minority Leader Nancy Pelosi (D-Calif.) then dealt a stunning public rebuke to Obama, using a floor speech to announce her opposition. She said that Democrats were "being blackmailed" by Republicans to pass the measure with just hours before a shutdown.

"I'm enormously disappointed that the White House feels that the only way they can get a bill is to go along with this. That would be the only reason I think they would say they would sign such a bill," she said.

Pelosi's outrage was shared by a majority of her caucus also infuriated by several policy changes tucked inside the omnibus agreement released late Tuesday.

Rank-and-file Democrats reviewing the legislation had lashed out Wednesday at language in the bill undoing a signature piece of the Dodd-Frank financial regulatory overhaul and allowing banks to more easily trade the investments known as derivatives. The financial overhaul enacted in 2010 ranks among the biggest domestic achievements of the Obama presidency and the formerly Democratic-controlled Congress.

Another controversial provision in the spending bill would permit a wealthy couple to give three times the current donation limits to the national political parties.

At a closed-door leadership meeting Thursday morning, Pelosi and her team said they would try again to extract concessions from House Speaker John A. Boehner (R-Ohio). Exiting the meeting, Rep. Charles B. Rangel (D-N.Y.) said Pelosi was telling members to "keep your powder dry." Summarizing the tug felt by many Democrats, the 84-year-old lawmaker said that he didn't like the bill, "but I absolutely don't like shutting down the government."

Pelosi and Boehner spoke twice by telephone during the day, but Pelosi's attempts to make last-minute changes were rebuffed, according to aides to both leaders.

In a scramble to shore up support, Obama, Vice President Biden and other administration officials, including Jeffrey Zients, chairman of Obama's National Economic Council, began phoning wavering Democrats. Some lawmakers said they also received calls from Democratic members of the Senate Appropriations Committee, including its chairwoman, Barbara A. Mikulski (D-Md.), and Sen. Christopher A. Coons (D-Del.).

White House Chief of Staff Denis McDonough was dispatched to the basement of the U.S. Capitol to plea for support in person. Asked about the Wall Street and campaign finance provisions in the bill, McDonough told the Democrats, "We learned about these [two] provisions when you did," according to aides in the room.

Entering the meeting, Pelosi rebuffed suggestions that Democrats would be responsible for another spending impasse. "We're not going to shut down the government," she told reporters.

Rep. Steve Israel (D-N.Y.), a close Pelosi ally, said that McDonough had tried to assuage Democratic concerns by arguing that the economy needs the "certainty" and "consistency" of a one-year bill. But he said many rank-and-file members vocally expressed their concerns with the bill.

"We've got to draw a line in the sand," he said, adding he was open to passing a stopgap bill instead.

"I think anything would be preferable" to the bill in its current form, he said.

Over the past two years of GOP control, minority Democrats have usually waited, wondering how intra-party squabbles might unfold. But in a rare political role reversal, Republicans spent most of Thursday on the sidelines.

Exiting Boehner's office just as House Democrats began meeting Thursday night, Rep. Robert Pittenger (R-N.C.) said Republicans still intended to pass the bill despite Democratic disagreements.

"I hope we don't have to change anything to it," he said, adding later: "Let's go govern."

Republican support appeared to grow throughout the day despite the objections of dozens of conservatives that the legislation would not punish Obama hard enough for using his executive authority to change immigration policy.

Rep. Bill Flores (R-Tex.), the incoming chairman of the conservative Republican Study Committee, predicted that at least one-third of his group's 170-plus members would vote no. He said he would be against the bill because "my constituents are telling me that they're against it. I think that it would be hard to totally stop the president's unlawful amnesty action, but I think we could try a little bit harder to fix it."

The wave of Democratic opposition in the House appeared backed in part by Sen. Elizabeth Warren (D-Mass.), a popular figure on the left who voiced concern on Wednesday that the bill would sharply increase the influence of wealthy campaign donors. She said the bill reflected "the worst of government for the rich and powerful."

Others, such as Sen. Bernard Sanders (I-Vt.), who is traveling to Iowa on Monday as he mulls a 2016 presidential bid, said that he would vote against the bill. While it includes increased funding for veterans' health care — one of Sanders's top priorities — he called the changes in Wall Street regulations "totally absurd."

"It's more austerity for working people," he said. "It's a budget that does not reflect the needs of the working families of this country."

Moderate House Democrats eager to approve the spending bill faulted Warren for stirring up trouble on the other side of the Capitol.

"That's what you do when you run for president," said Rep. James P. Moran (D-Va.), a senior member of the Appropriations Committee. "You get out front knowing that there are a whole lot of people who are not going to let anyone get to the left of them." Moran added that Warren "knows as [House Democrats] know that their constituents have no clue about what this derivatives issue is all about. It's a very complex issue."

[MadImmortalMan]

So Warren is gonna shut down the government?

[Kleves]

Dunno about the derivatives stuff, but isn't it much preferable that the wealthy give directly to the parties rather than through PACs? The parties generally aren't the ones funding the nutjobs.

[CountDeMoney]

Dunno about the derivative,

You better know about it:  it's your money that Yi and Minsky's clients want to cover their gambling losses with.

The item that is blowing up the budget deal
By Steven Mufson and Tom Hamburger
Washington Post

The acrimony that erupted Thursday between President Obama and members of his own party largely pivoted on a single item in a 1,600-page piece of legislation to keep the government funded: Should banks be allowed to make risky investments using taxpayer-backed money?

The very idea was abhorrent to many Democrats on Capitol Hill. And some were stunned that the White House would support the bill with that provision intact, given that it would erase a key provision of the 2010 Dodd-Frank financial reform legislation, one of Obama's signature achievements.

But perhaps even more outrageous to Democrats was that the language in the bill appeared to come directly from the pens of lobbyists at the nation's biggest banks, aides said. The provision was so important to the profits at those companies that J.P.Morgan's chief executive Jamie Dimon himself telephoned individual lawmakers to urge them to vote for it, according to a person familiar with the effort.

The White House, in pleading with Democrats to support the bill, explained that it got something in return: It said that it averted other amendments that would have undercut Dodd-Frank, protected the Consumer Financial Protection Bureau from Republican attacks, and won double digit increases in funds for the Securities and Exchange Commission and the Commodity Futures Trading Commission. "The president is pleased," said White House spokesman Josh Earnest.

Earnest said that Democrats were upset about "a specific provision in this omnibus that would be related to watering down one provision of the Wall Street reform law.  The President does not support that provision.  But on balance, the President does believe that this compromise proposal is worthy of his support."

But "that provision" isn't just any provision. It's one that goes to the heart of the Dodd Frank reform because it would let big banks undertake risky activities with funds guaranteed by the federal government and, hence taxpayers.

The omnibus appropriations bill would do that by undoing the Dodd Frank provision that ordered banks to move their riskiest activities -- such as default swaps, trading commodities, and trading derivatives -- to new entities so that deposits guaranteed by the Federal Deposit Insurance Corp. would not be in danger.

House Minority Leader Nancy Pelosi (D-Calif.) pointed to this item as the main reason she would vote against a bill backed by her own president.

"What I am saying is: the taxpayer should not assume the risk," she said. She said the amendment went "back to the same old Republican formula: privatize the gain, nationalize the risk.  You succeed, it's in your pocket.  You fail, the taxpayer pays the bill.  It's just not right."

It isn't only liberal congressional Democrats up in arms about the proposed change. "It really is outrageous," said a former senior Obama Treasury official, who asked for anonymity to preserve business relationships. "This was the epicenter of the crisis. This is what brought AIG down, what brought Lehman Brothers down."

The nation's biggest banks -- led by Citigroup, J.P. Morgan and Bank of America -- have been lobbying for the change in Dodd Frank, which had given them a period of years to comply. Trade associations representing banks, the Financial Services Roundtable and the American Bankers Association, emphasized that regional banks are supportive of the change as well.

The banks have long argued that the Dodd Frank provision will limit their ability to extend credit to clients and that setting up separate entities to engage in derivatives and commodities trading isn't practical. The ABA's top lobbyist, James Ballentine, executive vice president of congressional relations and political affairs, said in an e-mailed statement that the requirement that banks move some swaps in to separate affiliates "makes one stop shopping impossible for businesses ranging from family farms to energy companies that want to hedge against commodity price changes."

But the regulatory change could also boost the profits of major banks, which is why they are pushing so hard for passage, said Simon Johnson, former chief economist of the International Monetary Fund and a professor at the MIT Sloan School of Management.

"It is because there is a lot of money at stake," Johnson said. "They want to be able to take big risks where they get the upside and the taxpayer gets the potential downside," he said.

Johnson said the amendment of Dodd Frank only affects a small portion of derivatives.  "I don't want to make a mountain out of a molehill on this," he said. But he added that "on a forward looking basis this could become very big."

The effort to enact this language has been years in the making. Language that was written and edited in part by the major banks was originally inserted in a House bill that called for relaxation of the push out rules in 2013. Citi declined to comment on the role its lobbyists played in developing the legislation, which was originally disclosed in an e-mail exchange reported on by the New York Times. However, a blog post written in 2013 by the bank's head of global public affairs, referred to the effort to modify this portion of Dodd-Frank as "a great example of how the industry and Congress can work together to find common ground."

The banking lobby has always been a powerful force in Washington. The banks that could benefit from this change -- Citigroup and J.P. Morgan -- are among Washington's most influential corporate players. Each firm, for example, spent over $5 million a year lobbying in recent years, both of them ranking in the top 90 firms for lobbying expenditures, according to data prepared by the Center for Responsive Politics.  In addition J.P. Morgan contributed over $5 million to federal candidates and parties in 2012, compared with  $2.6 million in the last election cycle for Citigroup. And both firms have strong connections on Capitol Hill and the White House. Citi, for example, includes among its stable of lobbyists former House Speaker Bob Livingston (R-La.) and former Senators John Breaux (D-La.) and Trent Lott (R-Miss.).

Former House Financial Services Committee Chairman Barney Frank on Wednesday also urged his former colleagues to reject the omnibus appropriations bill. He called the amendment inserted into the bill "a substantive mistake, a terrible violation of the procedure that should be followed on this complex and important subject, and a frightening precedent that provides a road map for further attacks on our protection against financial instability."

Frank added that "ironically it was a similar unrelated rider put without debate into a larger bill that played a major role in allowing irresponsible, unregulated derivative transactions to contribute to the crisis." He said people could disagree about how best to regulate derivatives but that the way to do that was "not for a non-germane amendment inserted with no hearings, no chance for further modification, and no chance for debate into a mammoth bill in the last days of a lame-duck Congress."

[garbon]

Elizabeth Warren. What a joke.

[CountDeMoney]

House monkeys pass the spending bill, 219 to 206, fling it to the Senate.

[MadImmortalMan]

Ah I see. So there's a couple of poison pills in there that Obama was all right with but Pelosi and the House Dems don't want. And I guess Warren is criticizing it too.

The White House, in pleading with Democrats to support the bill, explained that it got something in return: It said that it averted other amendments that would have undercut Dodd-Frank, protected the Consumer Financial Protection Bureau from Republican attacks, and won double digit increases in funds for the Securities and Exchange Commission and the Commodity Futures Trading Commission. "The president is pleased," said White House spokesman Josh Earnest.

Eh, so the President hammered out the compromise and didn't tell Pelosi and Warren about it, or they know but are rebelling. I smell presidential campaign




Infighting between Democrats.




MISSION ACCOMPLISHED

[Ed Anger]

Warren needs a rectal tube.

[Admiral Yi]

The obvious compromise solution is to let the presidential hopefuls vote no and round up enough remaining votes for it to pass.

I'm feeling much better about my bet now that the Democratic field is filling in.

[MadImmortalMan]

The obvious compromise solution is to let the presidential hopefuls vote no and round up enough remaining votes for it to pass.

I'm feeling much better about my bet now that the Democratic field is filling in.

They don't need the House Dems so that's probably what will happen. Actually they can probably have the Senators who lost re-election vote for it and save everyone else.

[CountDeMoney]

Ah I see. So there's a couple of poison pills in there that Obama was all right with but Pelosi and the House Dems don't want. And I guess Warren is criticizing it too.

No, let's not look out for the American economy or the taxpayer or anything. 

I hope all of you mindless monkeys lose everything the next time the market melts on derivatives.  Each and every one of you reduced to cans of dog food.  Suckers.

[garbon]

Ah I see. So there's a couple of poison pills in there that Obama was all right with but Pelosi and the House Dems don't want. And I guess Warren is criticizing it too.

No, let's not look out for the American economy or the taxpayer or anything. 

I hope all of you mindless monkeys lose everything the next time the market melts on derivatives.  Each and every one of you reduced to cans of dog food.  Suckers.

Yeah cause lord knows that if we just all dutifully followed Pelosi and Warren - why everything would be just peachy.

[CountDeMoney]

Yeah cause lord knows that if we just all dutifully followed Pelosi and Warren - why everything would be just peachy.

Modification of Dodd-Frank in an appropriations bill is nothing short of sneaky, and you fucking know it.

[garbon]

Sounds like business as usual.

[Admiral Yi]

No, let's not look out for the American economy or the taxpayer or anything. 

I hope all of you mindless monkeys lose everything the next time the market melts on derivatives.  Each and every one of you reduced to cans of dog food.  Suckers.

You don't really know what Dodd-Frank does to derivatives, you have know idea what would change under this bill, but you're absolutely sure it's a terrible idea.