After Blanche Lincoln narrowly won the Arkansas Senate primary, 52%–48%, a Senior White House Official told Ben Smith of Politico the following:
“Organized labor just flushed $10 million of their members’ money down the toilet on a pointless exercise,” the official said.
Well, its looking a lot less pointless now. The derivatives language (also known as section 716) Blanche Lincoln put in the Wall Street reform bill in order to make herself look like a populist fighter is now, stunningly, likely to survive. David Dayen breaks it down:
Earlier, I noted the House offer on derivatives, which will be a focus of tomorrow’s final FinReg conference committee meeting. It’s not bad, it actually strengthens in places (like closing the enforcement loophole, something sought by Maria Cantwell), and the weakening pieces aren’t all that crucial. The exchange and clearinghouse requirements remain, as does Section 716, which would force the mega-banks to spin off their lucrative swaps trading desks into separately capitalized subsidiaries.
That’s the House offer. It was determined by House members only, and so if the New Democrats or other coalitions wanted it changed or weakened, that was their opportunity to do so, though there will be others.(…)
There’s now an investment in making Blanche Lincoln a derivatives hero. The leadership has other options but so far hasn’t used them – the House offer is largely inoffensive. They really do look afraid to change Section 716. And that’s good news for those who want to see a saner banking system.
The Democratic leadership even threw in a staged meeting where Lincoln supposedly confronted them, and made them keep 716 in the bill. Then, they leaked that meeting to the press, effectively turning it into a Lincoln re-election ad.
While it would be wrong to celebrate early, it now looks like section 716 will remain in the bill, and will pass into law. This will cost big banks literally billions of dollars every year–as much as $10 billion per year and $100 billion per decade. It will take just as much of a bite out of their concentrated power and wealth as the swipe fee regulations would (assuming that passes, too).
This would never, ever have happened without Bill Halter’s primary challenge.
So, how much should it cost to take $100 billion out of the biggest banks? Frankly $10 million seems like a bargain.
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