The Ultimate Culprits On Behalf Of Wall Street Deregulation: Chuck Schumer (D) And Kevin McCarthy (R)-- And Who Are The New Dems?

Two rats: Kevin McCarthy and Chuck Schumer

Elizabeth Warren's clarion calls-- three on the Senate floor this week-- may have been derided by South Carolina closet queen Lindsay Graham (R) as "immature" and "emotional," but they were having their intended effect on their intended audience (which was not South Carolina closet queens on the other side of the aisle). Centrist Jeanne Shaheen joined the progressive stalwarts opposing the Antonio Weiss confirmation and both Harry Reid and Barbara Milkulski started moving away from the deal Chuck Schumer (D-NY) and Kevin McCarthy (R-CA) had struck to allow the worst and most predatory banksters to deregulate a crucial part of Dodd Frank that protects taxpayers from bailouts of gambling-addicted, greed-obessed Wall Street banks. But Schumer-- who had successfully gotten the Wall Street Journal to withdraw it's correct assertion that Schumer was behind the bailout provision-- went on the warpath, covering up for himself in public while acting behind the scenes as the enforcer in the Senate for the banksters. Who even needs Republicans when you have Chuck Schumer?

Correction: An earlier version of this editorial misstated the role played by Sen. Chuck Schumer (D., N.Y.) in promoting the change in derivatives regulation as part of the budget legislation.

Elves didn't put the gratuitous CitiBank-written provision in the spending bill. Schumer did. Friday Phil Mattingly, writing for Bloomberg, speculates that a path back to power for Democrats is to abandon the Schumer approach of kissing up to the banksters and go a more populist route, the route espoused by working family oriented Democrats like Sherrod Brown (OH), Brian Schatz (HI), Jeff Merkely (OR), Bernie Sanders (VT) and, of course, Elizabeth Warren (MA).

Led by Massachusetts Senator Elizabeth Warren, Democrats have come out in increasing numbers against President Barack Obama's nominee for undersecretary of domestic finance, Antonio Weiss, because of his ties to Wall Street. Warren has also been the leading voice urging Democrats to reject the compromise in the $1.1 trillion government spending bill because it includes language that would cut down a narrow rule guiding how banks can hold derivatives imposed by the 2010 Dodd-Frank financial reform law. Democratic opposition to that provision nearly killed the spending bill in the House, where lawmakers narrowly eked out passage 219-206.

"Certainly the Weiss fight is a proxy fight over Wall Street regulation and probably one over the direction of the Democratic Party," said Brian Gardner, director of Washington research for the investment banking firm Keefe Bruyette & Woods Inc. The fight over the derivatives provision probably has to be viewed "as a proxy fight as well, since it’s mostly symbolic" given the small sliver of derivatives held by the world's largest banks the provision actually affects, he said.

In other words, according to Gardner, the fights are less about the actual issues than what those issues represent. As Democrats strain to find their voice in the wake of a sweeping defeat in the midterm elections, these fights provide a test of how much leverage the party really has to force changes, and, perhaps more importantly, how much patience the White House will have when those changes fly in the face of the president's preferred path forward.

...Warren has helped lead another insurgency that flared over the must-pass spending bill, where bipartisan negotiations led to rolling back part of the Dodd-Frank financial reform law. The bill would ease one specific rule on how, and where, banks hold derivatives, the financial instruments that helped fuel the 2008 financial crisis.

It's a provision that has a long and tortured history, starting from its initial inclusion into the drafts of what would become the financial reform law (where it was opposed by then-Fed Chairman Ben Bernanke, then-FDIC Chairman Sheila Bair, the Obama administration's Treasury Department, then-Senate Banking Committee Chairman Chris Dodd and then-House Financial Services Committee Chairman Barney Frank, both Democrats).

Banks including Citigroup and JPMorgan Chase & Co. hate the provision, which they deem equally onerous and unnecessary, and have made no secret of their lobbying push to get rid of it over the last four years. The spending bill, it turns out, has finally given them an opening. Jamie Dimon, JPMorgan's CEO, made calls to lawmakers in support of the bill, according to people familiar with the lobbying. But it's not as if Wall Street lobbyists are operating on their own. Republicans and Democrats have supported previous bills to strip the provision. A version went to the House floor in 2013 and 70 Democrats joined 222 Republicans to support its passage. Senate Democratic leadership, wary of re-opening the financial reform law, never took the measure up even as many of their own members likely would have supported its passage.

Yet removing it from the spending bill has now become a rallying cry for the party. Warren took to the Senate floor to rip the compromise on Wednesday and returned on Thursday to call on Republicans to join her in opposition. House Minority Leader Nancy Pelosi called Frank, now retired, and asked him to raise objections, which he did forcefully. Outside progressive groups and even the party campaign committee have used the issue to rile up grassroots supporters. Representative Maxine Waters, the top Democrat on the financial services committee, publicly and privately urged the members of her caucus to oppose the spending bill because of the inclusion of the derivatives provision.

Democrats were central players in the spending bill negotiations and signed off on the inclusion of the derivatives language. In exchange, the Securities and Exchange Commission and Commodity Futures Trading Commission, the two derivatives regulators, were given modest funding increases. People involved in the process said other Republican-backed policy changes to the law were blocked. The White House was aware of the trade off and while Obama opposes the Dodd-Frank changes, he supports the bill's passage, according to White House Press Secretary Josh Earnest.

As the spending bill works its way through Congress, one thing is clear: the past few weeks have given Democrats the opportunity to make Wall Street their issue and they have increasingly grabbed onto it with both hands.

Obama is going to be less and less of a factor for Democrats charting the party's future. And the Clintons-- the epitome of Democratic connivance with the banksters-- will become more and more of a factor. And in Congress... well just start with a Washington Post headline from Friday: Democrats who voted for the CRomnibus have received twice as much money from the finance industry as the ‘no’ voters. This kind of pro-Wall Street, anti-family activism is the entire raison d'être of the New Dem coalition. Unlike the other big component in the Republican wing of the Democratic Party, the Blue Dogs, the New Dems are not about racism, misogyny, homophobia or any other GOP social values. The New Dems are about Wall Street and Big Business, which funds their careers. There are no active New Dems who aren't active pawns of Wall Street.

The New Dems haven't announced their new members yet. They endorsed 15 wretched conservative candidates in the last cycle, most of whom lost, several spectacularly: Aaron Wolf (NY), Kevin Strouse (CIA), Joe Bock (IN), Aimee Belgard (NJ), Manan Trivedi (PA), Amanda Renteria (CA), John Lewis (MT), John Foust (VA), Emily Cain (ME) and Erin Bilbray (NV). These were the 5 corrupt conservatives they backed who managed to win-- and will presumably be new members of the dreadful group:

• corrupt former bank lobbyist Pete Aguilar (CA)
• Don Beyer (VA)
• Gwen Graham (FL)
• Kathleen Rice (NY)
• former Republican Brad Ashford (NE)

You can always expect these 5, along with the younger brother of corrupt NJ boss George Norcross (Donald), who I also expect to see join the New Dems, to trample the interests of ordinary working families in favor of the interests of their Wall Street and Big Business financiers. Although he ran against a Republican, Aguilar was heavily backed ($346,841) by one of Mitch McConnell's big financial boosters, the Credit Union National Association. Foolish environmental and women's groups backed Gwen Graham, who isn't just a New Dem, but a Blue Dog as well. Clueless players like the naive and badly run League of Conservative will rue the day they ever wasted their contributors' money on Graham. We haven't run a membership list of the New Dems before, although we often write about how they tend to vote as a group against progressive initiatives. On Thursday, for example, of the 57 Democrats who crossed the aisle to vote with the GOP to deregulate the banksters, 30 were New Dems: Ron Barber (AZ), John Barrow (GA), Ami Bera (CA), John Carney (DE), Gerry Connolly (VA), Susan Davis (CA), John Delaney (MD), Bill Foster (IL), Pete Gallego (TX), Jim Himes (CT), Ron Kind (WI), Ann Kuster (NH), Dan Maffei (NY), Sean Patrick Maloney (NY), Carolyn McCarthy (NY), Gregory Meeks (NY), Jim Moran (VA), Patrick Murphy (FL), Bill Owens (NY), Ed Perlmutter (CO), Gary Peters (MI), Scott Peters (CA), Mike Quigley (IL), Cedric Richmond (LA), Brad Schneider (IL), Allyson Schwartz (PA), David Scott (GA), Terri Sewell (AL), Kyrsten Sinema (AZ), and, of course, Debbie Wasserman Schultz (FL), as well as former New Dem chairman Joe Crowley and Democratic Whip Hoyer, the two biggest New Dem enablers in Congress. This is the entire official list of New Dem members, although the new members haven't been inducted and the 13 members leaving Congress next week are still showing up:

• Ron Kind, chairman (WI)
• Jim Himes, vice-chair (CT)
• Rick Larsen, vice-chair (WA)
• Gerry Connolly, vice-chair (VA)
• Ron Barber (AZ)
• John Barrow (GA)
• Ami Bera (CA)
• Lois Capps (CA)
• Tony Cárdenas (CA)
• John Carney (DE)
• Andre Carson (IL)
• Joaquin Castro (TX)
• Jim Cooper (TN)
• Joe Courtney (CT)
• Susan Davis (CA)
• John Delaney (MD)
• Suzan DelBene (WA)
• Eliot Engel (NY)
• Elizabeth Esty (CT)
• Bill Foster (IL)
• Pete Gallego (TX)
• Joe Garcia (FL)
• Colleen Hanabusa (HI)
• Denny Heck (WA)
• Rush Holt (NJ)
• Derek Kilmer (WA)
• Ann Kirkpatrick (AZ)
• Ann Kuster (NH)
• Dan Maffei (NY)
• Sean Patrick Maloney (NY)
• Carolyn McCarthy (NY)
• Mike McIntyre (NC)
• Gregory Meeks (NY)
• Jim Moran (VA)
• Patrick Murphy (FL)
• Bill Owens (NY)
• Ed Perlmutter (CO)
• Gary Peters (MI)
• Scott Peters (CA)
• Jared Polis (CO)
• Mike Quigley (IL)
• Cedric Richmond (LA)
• Loretta Sanchez (CA)
• Adam Schiff (CA)
• Brad Schneider (IL)
• Kurt Schrader (OR)
• Allyson Schwartz (PA)
• David Scott (GA)
• Terri Sewell (AL)
• Kyrsten Sinema (AZ)
• Adam Smith (WA)
• Juan Vargas (CA)
• Filemon Vela (TX)
• Debbie Wasserman Schultz (FL)