Obama Goes To Bat For Banks
Ten days ago, we reported on Open Left that bankruptcy “cram-down” mortgage relief would not appear in the stimulus, but would appear in a different piece of legislation later this year. Despite our reports, the fight over bankruptcy “cram-down” legislation in the stimulus did not actually end ten days ago. As recently as Thursday, House Democrats will still fighting in to include the measure in the stimulus, and Senator Dick Durbin, the leading proponent of the measure in the Senate, was denying that President Obama was opposed to including the measure in the stimulus.
However, any lingering doubt about the fate of bankruptcy “cram-down” reform in the stimulus can now be put to rest. Senator Durbin has confirmed that President Obama opposes including the measure in the stimulus, and favors including it in later legislation instead (more in the extended entry):
The key to passage of the bankruptcy bill is the Senate, where Democrats need 60 votes to stop a possible filibuster. Ten Democrats — all still in the Senate — would not back the plan in a vote a year ago.
Sen. Dick Durbin, D-Ill., the chief Senate sponsor of the bill, said Obama persuaded him in a White House meeting Friday to remove the bankruptcy proposal from an economic recovery package — to ensure it doesn’t jeopardize the stimulus bill. But Obama pledged his support for the bankruptcy solution, Durbin said.
Obama said he would work with Durbin to attach the proposal to other ”must pass” legislation — with the hope that supporters of the overall bill would not vote against it because of the bankruptcy provisions.
There will definitely be no cram-down in the stimulus now. Further, with ten Senate Democrats opposed to the measure last year, we can also expect a big fight over the measure when the home foreclosure mitigation bill comes up later this year. In fact, The ten Democrats in question are actually eleven, now that Lieberman is back in the caucus. Baucus (MT), Byrd (WV), Carper (DE), Johnson (SD), Landrieu (LA), Lieberman (CT), Lincoln (AR), McCaskill (MO), Nelson (NE), Pryor (AR) and Tester (MT). Without a single Republican defector, this will be a difficult bill to pass at any point.
However, there are rays of hope. First, the economic crisis might actually be changing votes. For example, Mike Thompson, one of the sixteen House Blue Dogs who in 2007 sent out a letter opposing cram-down legislation, offered a promising response to Open Left commenter kaleidescope when s/he called Thompson’s office about cram-down legislation in the stimulus:
I called my Representative, Mike Thompson (CA-1), a blue dog, about HR 225. My experience is that you get better results if you call the local (as opposed to the D.C.) office. You get to talk to a career staffer instead of an intern. Thompson’s Eureka staffer told me Thompson is starting to edge away from his blue dog affiliations. She noted that he is fiscally conservative, but that “everything has changed in the economy” since 2007.
Second, there is always the hope of working a deal where the Democrats who are opposed agree to not filibuster, but then vote “no” on an up-or-down, simple majority vote for the legislation.
It is pretty sad that, even with the Democratic trifecta and even with the collapse of the credibility of the banking industry, that the banking lobby can still delay, and possibly even stop, good legislation like this. They can twist Congressional arms into forking over trillions of dollars on their behalf, all the while twisting those arms to make sure homeowners facing foreclosure get nothing. At least it makes it clear who is actually running the country.