Senator Warren Urges Republicans to Oppose Bailout Provision in Government Funding Bill
Video of the Senator's remarks available here
WASHINGTON, DC - In a speech on the Senate floor this afternoon, Senator Elizabeth Warren urged her Republican colleagues to oppose a provision added to the government funding bill that would increase the chance of future bailouts. Video of the Senator's remarks is available here, and the text of her speech as prepared for delivery follows:
Mr. President, yesterday I came to the floor to call on House Democrats to withhold their support from the omnibus spending bill until one provision is removed. The provision was slipped in at the last minute to benefit Wall Street. In fact, it was written by lobbyists for Citigroup. That provision means big money for a few big banks. It would let derivatives traders on Wall Street gamble with taxpayer money - and, when it all blows up, require the government to bail them out. Just to be clear, I want to read the title of the part of the law that will be repealed if this provision is not stripped out of the omnibus: PROHIBITION AGAINST FEDERAL GOVERNMENT BAILOUTS OF SWAPS ENTITIES.
I'm here today to ask my Republican colleagues - who don't want to see another Wall Street bailout - to join our efforts to strip this Wall Street giveaway from the bill.
This is not about partisanship. This is about fairness. This is about accountability and responsibility. This is about preventing another financial collapse that could again wipe out millions of jobs and take down our whole economy.
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.
Opposition to government bailouts of Wall Street is not a liberal or a conservative issue. The current law - the one about to be repealed - was put in place years ago - because after the 2008 financial collapse, people of all political persuasions were disgusted at the prospect ever again having to use taxpayer dollars to rescue Big Banks from their own bad decisions.
This morning, Senators from both parties - Sherrod Brown, a Democrat from Ohio, and David Vitter, a Republican from Louisiana, called for this provision to be taken out of the spending bill. Here's what they said:
"If Wall Street banks want to gamble, Congress should force them to pay for their losses, not put taxpayers on the hook for another bailout. Congress should not gamble on a possible government shutdown by attempting to tuck this controversial provision into a spending bill without having been considered by the committees of jurisdiction, where it can be subject to a transparent and rigorous debate."
Senators Brown and Vitter are absolutely right. This provision has no place in a must-pass spending bill.
Conservative activists have jumped in as well. They are raising their voices today to say that this provision has no place in a must-pass spending bill. Here's what one frontpage contributor on the conservative blog RedState said this morning:
"I have no way to refute the basic point that Democrats are making about the CRomnibus fight right now. In fact, I might even go so far as to say they are right .... (W)hat possible good faith reason can the Republicans have for threatening to gum up the whole works over doing a favor to Wall Street? ... (G)enerally speaking, if Nancy Pelosi is opposed to something then instinctively I know I should be for it. Beyond that I haven't the slightest clue why the proposed tweak to Dodd-Frank ought to be anything resembling a Hill the Republicans should die for."
These conservative activists are right. If you believe in smaller government, how can you support a provision that would expand a government insurance program and put taxpayers on the hook for the riskiest private activities? If you thought the Ex-Im bank exposed taxpayers to risk - even though it has never cost taxpayers a dime - how can you support repealing a provision to prevent another calamity like the one that cost taxpayers billions just six years ago?
House Republican leaders are moving quickly to try to jam this bill through today before their own members have had a chance to digest this Wall Street bailout provision. The "Fact Sheet" that Republican appropriators sent around to their members explaining the provision doesn't even describe it accurately. According to the Fact Sheet, the provision in question would "protect farmers and other commodity producers from having to put down excessive collateral to get a loan, expand their businesses, and hedge their production." Whatever you think about the bill, that description is wrong. In fact, it applies to yet another Wall Street reform rollback that Republicans are pushing right now, which is attached to a completely different bill.
I don't know if Republican leaders in the House are deliberately trying to confuse their members into voting for a government bailout program, or whether they just can't keep straight all of their efforts to gut financial reform. Republican leaders are about to bring this bill up for a vote. So here's the bottom line: a vote for this bill is a vote for future taxpayer bailouts of Wall Street. When the next bailout comes, a lot of people will look back at this vote to see who is responsible for putting the government back on the hook to bail out Wall Street.
To Republican leaders in the House, I would ask this. You say you're against bailouts to Wall Street. I've heard you say that again and again for five years. So why in the world are you spending your time and energy fighting for a provision, written by Citigroup lobbyists, that would increase the chance of future bailouts? Why, in the last minute as you head out the door and a spending bill must be passed, are you making it a priority to do Wall Street's bidding? Who do you work for-Wall Street or the American people?
This fight isn't about conservatives or liberals. It's not about Democrats or Republicans. It's about money, and it's about power right here in Washington. This legal change could trigger more taxpayer bailouts and could ultimately threaten our entire economy, but it will also make a lot of money for Wall Street banks. According to Americans for Financial Reform, this change will be a huge boon to just a handful of our biggest banks - Citigroup, JP Morgan, and Bank of America.
People are frustrated with Congress. Part of the reason, of course, is gridlock. But mostly it's because they see a Congress that works just fine for the big guys but won't lift a finger to help them. If big companies can deploy their armies of lawyers and lobbyists to get the Congress to vote for special deals that will benefit themselves, then we will simply confirm the view of the American people that the system is rigged.
This is a democracy. The American people sent us here - Republicans, Democrats, and Independents - to stand up for them. To stand up for taxpayers, and to protect the economy. Nobody sent us here to stand up for Citigroup.
I urge my conservative Republican colleagues in the House to withhold their support from this package until this risky giveaway is removed from the legislation. It's time for all of us to stand and fight.