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Congressional Democrats took a stand Thursday that ultimately failed but that will nevertheless reverberate next year both inside the Capitol and on the presidential campaign trail.

The populist anti-Wall Street faction, increasingly embodied by freshman Sen. Elizabeth Warren (D-Mass.), nearly took down a bill to fund the federal government in a revolt over a provision that would ease restrictions on risky trades by big banks.

For the Warren wing, what they see as siding with banks over average Americans is among the most unforgivable of sins, and the showdown exposed just how disruptive and demanding this populist bloc plans to be.

A vote for this bill is a vote for future taxpayer bailouts of Wall Street, Warren said in a 10-minute speech Thursday blasting the bill. When the next bailout comes, a lot of people will look back to this vote to see who was responsible.

On the other side of the new Democratic divide are a number of longtime power brokers on the Hill, including Sen. Majority Leader Harry M. Reid (Nev.) and House Minority Whip Steny H. Hoyer (Md.), who have held key positions in Washington since at least the Clinton administration. Operating in what they viewed as a pragmatic manner, they hoped to leverage the best deal possible in their final days with a Senate majority.

A $1 trillion spending bill unveiled Tuesday keeps most of the federal government funded through September. Here, The Post's Ed O'Keefe points out a few of the most notable components of the legislation. (Davin Coburn/The Washington Post)

They saw the more than $1trillion deal as a bipartisan compromise a term that has gone out of fashion in Washington necessary to fund the government and preserve money for key liberal programs. They prodded President Obama and his top advisers into waging a last-ditch lobbying effort to save the deal. And they argued that the alternative, letting an all-Republican Congress write new spending bills next year, would be far worse than this bipartisan package.

I think the progressives within the Senate Democratic caucus are feeling they have to speak up, said Sen. Richard J. Durbin (D-Ill.), a 32-year veteran of Congress. Most of those who are vocal and active have never been in the minority. I listen to them and I think, Theyre not aware that this place is going to change a lot in just a few weeks.

Yet, in a sign of the growing clout of the Warren faction, Durbin declined to say in advance how he would vote on the 1,600-page legislation if the House was able to approve it, a surprising neutral position for a longtime member of the Appropriations Committee that co-wrote the plan.

With the Houses narrow approval of the bill, the fight now heads to Warrens home turf in the Senate, where she will have a day or two to rally support against it. Her challenge will be steep, with a large bloc of Democrats and Republicans poised to support the legislation. Its unclear whether Warren would support a filibuster.

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Congressional Democrats take a stand with spending bill

Thune: No Surprise Democrats Are Rethinking Their Support for ObamaCare
U.S. Senator John Thune (R-South Dakota), Chairman of the Senate Republican Conference, discusses a prominent Democrat #39;s second thoughts on ObamaCare and highlights the damage the law is...

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Thune: No Surprise Democrats Are Rethinking Their Support for ObamaCare - Video

The mood among Democrats on Capitol Hill soured as details of a $1.1-trillion spending bill confronted them Wednesday with the reality of their eroding political leverage.

Elections have consequences, Democratic negotiators said as they spent much of the day defending the deals they cut with Republicans, saying it was the best they could do.

"I say to my colleagues: Stay steady; stay strong," said Sen. Barbara Mikulski (D-Md.), the chief Democratic negotiator on the huge bill that will fund most government departments through the end of September.

"You know, sometimes you give a little, you take a little," she said.

As is typically the case with must-pass money bills, the current appropriations measure, which is necessary to prevent a government shutdown, not only sets spending levels but also includes a host of substantive provisions tacked on by influential lawmakers.

Democratic leaders said they had stopped dozens of Republican proposals -- to restrict abortions, loosen rules on mountain-top coal mining, enable ivory imports and expand gun rights -- in return for the ones they did agree to.

They said that compromise was tough, but that leaving decisions to next year, when Republicans will have a majority in both houses, would have been worse for Democratic priorities.

Those arguments did not soothe critics of the 1,603-page bill that is making its way toward a House vote on Thursday, with the Senate expected to follow by week's end.

A coalition of liberal lawmakers, led by Sen. Elizabeth Warren (D-Mass.), made a last-minute pitch to change a provision of the bill that would weaken financial regulations.

The measure would loosen rules on certain types of financial swaps by banks -- deals that were at the heart of the 2008 financial meltdown. The rules were adopted under the Dodd-Frank financial reform law and have been a major target for Republicans.

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Democrats sour over government funding bill with Republican priorities

Congressional Democrats objected on Wednesday to controversial financial and political campaign provisions tucked into a $1.1 trillion U.S. spending bill, keeping the risk of a government shutdown alive.

The complaints from House of Representatives Minority Leader Nancy Pelosi and other top Democrats clouded the chances for passage of the funding bill as a midnight Thursday deadline drew near.

Republicans were preparing a one-or-two day extension to keep federal agencies open past the deadline, but were unwilling to make any concessions on dozens of provisions added to the bill.

Pelosi said Democrats were "deeply troubled" by Republican measures that would kill planned restrictions on derivatives trading by large, federally insured banks and expand tenfold the amounts that individuals can donate to national political parties.

"These provisions are destructive to middle-class families and to the practice of our democracy. We must get them out of the omnibus package," Pelosi said in a statement.

Democratic support is seen as critical to passage of the spending bill in the House, as Republican aides and lawmakers say it is unlikely their party would be able to muster enough votes for passage on its own.

Many conservative House Republicans oppose the bill, claiming it fails to deny funding for President Barack Obama's controversial executive action on immigration. And Democrats still control the U.S. Senate.

Democratic Senator Elizabeth Warren, a staunch advocate for tougher regulation of Wall Street, called for Democrats to withhold support from the bill due to the derivatives provision, which would effectively strike down a portion of the Dodd-Frank financial reform law enacted in the wake of a financial crisis fueled partly by complex mortgage derivatives.

But House Republicans were not blinking. A party leadership aide said no changes would be made to the spending measure, which was negotiated by appropriators from both parties. A vote was planned for Thursday.

In 2013, a House vote to repeal the same rule, which requires that banks move derivatives trading to units that do not benefit from federal deposit insurance, attracted 70 Democratic votes.

Originally posted here:
Democrats balk at spending bill as government shutdown looms

The U.S. House is set to pass a $1.1 trillion spending bill that includes a banking provision opposed by many Democrats as a giveaway to large institutions.

Current funding for the government ends today, and the measure would finance most of the government through September 2015. The House also plans to pass a two-day stopgap spending bill to give the Senate until Dec. 13 to vote on the measure and avoid a government shutdown.

The banking language, insisted upon by Republicans, would ease rules enacted to protect taxpayers against bank losses after souring derivatives trades helped cause the 2008 financial crisis. The dispute over the banking rule is a preview of Republican plans to roll back other business regulations when they take control of both chambers in 2015.

The provision would put taxpayers back on the hook for Wall Streets riskiest behavior, House Minority Leader Nancy Pelosi, a California Democrat, said yesterday.

Though Pelosi opposes the banking provision, she stopped short of urging fellow House Democrats to vote against the bill, said a leadership aide who sought anonymity.

A deal on the measure was announced Dec. 9 after Senate Democratic negotiators accepted the banking rule changes and Republican demands on other policy provisions. Republicans oppose changes to the measure and said theyre not reopening negotiations.

House Republicans say they will have the votes to pass the bill without support from Pelosi because other Democrats, including retiring Representative Jim Moran of Virginia, are willing to back it.

House Speaker John Boehner told reporters yesterday he looks forward to it passing with bipartisan majorities in the House and the Senate in the coming days.

Senate opponents led by Elizabeth Warren of Massachusetts arent threatening to hold the bill up. Chief negotiator Barbara Mikulski of Maryland, the Senate Appropriations chair, is standing by the deal.

The banking provision would let JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and other lenders keep swaps trading in units with federal backstops.

Excerpt from:
Democrats Criticize Bank Plan in Spending Bill as Deadline Nears