Vote on banking bill splits party into two camps
WASHINGTON — Senate Minority Leader Chuck Schumer made clear almost two weeks ago that he would vote against a bill that eases some of the Dodd-Frank regulations put in place after the 2008 financial crisis. He also made clear he wouldn’t try to stop it.
As more than a dozen Democratic senators helped Republicans chip away at the Obamaera banking law Wednesday, Schumer largely stepped aside, rather than twist arms. It was a do-what-you-must strategy aimed at allowing some moderate Democratic senators to avoid the wrath of powerful banking interests back home. But it also split the party and, some argued, muddied the party’s populist message against President Trump ahead of the midterm election.
For Schumer, it was a crucial test of how he intends to shepherd a deeply divided group of Democrats through a difficult campaign year, and beyond. While some of his predecessors might have blocked the vote or tried to hold troops in line, Schumer, a New Yorker unafraid of noisy disagreements, was comfortable with some fights within the family.
“When half of our caucus sides with Republicans and the banks, it’s impossible to rise above the din and show that we’re on the side of the working class,” said Brian Fallon, a former top Schumer aide who later advised Hillary Clinton’s presidential campaign.
“You can’t blame leader Schumer for not wanting to twist the arms of red-state Democrats against home-state banking interests,” Fallon said, “but from the standpoint of the larger party messaging, it’s a missed opportunity to not strike a bright-line contrast on behalf of consumers.”
The Senate approved the bill Wednesday 67-31.
Schumer put the party on this path last fall when he agreed to allow four Democratic senators — almost all of them up for re-election in states Trump won — to work with Senate Banking Committee Republicans on legislation to ease regulations imposed after the 2008 financial crisis.
Initial talks between Sen. Mike Crapo, R-Idaho, the panel’s chairman, and its top Democrat, Sen. Sherrod Brown of Ohio, broke down as Democrats said the changes went too far. But within a month of gaining Schumer’s nod, the Democratic senators — Jon Tester of Montana, Heidi Heitkamp of North Dakota, Joe Donnelly of Indiana and Mark Warner of Virginia — struck a deal with Republicans. Their compromise sailed through the committee.
Moderates say the changes they have been seeking for years are needed to help small and mid-size banks, particularly in rural regions, that can’t afford to keep up with the regulations. But liberals argue it goes too far in lifting requirements on bigger banks that received federal bailout funds.