الإثنين , يونيو 8 2020

US Senate delays $1.1tn budget vote

Traders work on the floor of the New York Stock Exchange (NYSE) at the start of the trading day in New York, New York, USA, 04 December 2014.The $1.1tn bill includes a provision to loosen regulations on financial instruments, angering Democrats

The US Senate has pushed back to Monday a vote on a $1.1tn (£700bn) budget after it failed to pass on Friday.

The bill had already cleared the House of Representatives in a close and contentious vote.

The measure passed by 219-206 after President Barack Obama urged Democrats to support it despite objections the bill would weaken key bank regulations.

It will fund most of the government until September 2015, with the exception of one agency.

Republicans won control of both House and Senate in elections last month.

Congress also passed a separate measure to prevent a government shutdown on Thursday until the budget work is complete.

The Senate began looking at the bill on Friday and is expected to attempt a vote on Monday.

In order to avoid a government shutdown, the Senate is also expected to pass a new stop-gap bill on Saturday to extend government funding through to next week.

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Analysis – Kim Gittleson, BBC News, New York

Wall Street sign

At the behest of Wall Street’s biggest banks, Republican lawmakers had inserted a line that repealed one of the signature provisions of the 2010 Dodd-Frank financial reform bill.

This provision, Section 716, required banks to put portions of their riskier derivatives businesses into holding companies. The idea was to separate some of the bank’s riskier trading in things like credit default swaps and commodities into a separate entity not insured by US taxpayers. But banks have balked at the rule since it was passed in 2010.

Citigroup, one of the country’s largest banks, wrote a measure repealing the provision, and with help from JP Morgan’s Jamie Dimon, managed to get Republicans to include it in the final $1.1bn budget bill.

Unsurprisingly, this angered many liberal Democrats – and even conservative Tea Party members – who saw it as a dirty play by Wall Street to force a Congress desperately in need of passing a spending bill into doing the banks’ bidding.

But with a US public tired of fiscal brinksmanship – and a newly empowered Republican majority – it seems that the bill will pass. Once more, US taxpayers will be tied inextricably to obscure, and risky, Wall Street activities.

US spending bill boon for Wall Street?

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Fifty-seven Democrats voted for the House bill, but others were angry about the president’s call for support of the Republican bill.

Democratic House leader Nancy Pelosi said she was “enormously disappointed” at Mr Obama’s position, describing a provision added to the budget to loosen regulations on risky financial instruments as legislative blackmail by Republicans.

Senator Elizabeth Warren a member of the Senate Banking Committee, right, and Rep. Maxine Waters, D-Calif., ranking member of the House Financial Services Committee, express their outrage to reporters 10 December 2014Senator Elizabeth Warren (centre) has been sharply critical of the provision weakening financial regulation

House Speaker John Boehner, RepublicanJohn Boehner: “Thank you and Merry Christmas”

“We don’t like lobbying that is being done by the president or anybody else that allows us to… give a big gift to Wall Street,” Democrat congresswoman Maxine Waters said.

But others said it was hard to vote against the bill considering its scope and the fact the Democrats will be in a worse position to negotiate next year.

“Hold your nose and make this a better world,” Representative Sam Farr said.

The bill funds the government at the same levels that were set last December.

It also adds emergency funding requested by Mr Obama, including funds to fight Ebola in West Africa and money for US air strikes against militant group Islamic State in Iraq and Syria.

As presented earlier in the week, the 1,600-page bill also includes a number of provisions intended to gain votes from both parties, including:

  • increasing the amount an individual person can contribute to a national political party from $32,400 to $324,000
  • blocking the District of Columbia from using its own funds to set up regulatory systems for marijuana legalisation
  • blocking certain Environmental Protection Agency (EPA) regulations
  • cuts in the budgets of the EPA and the US tax agency
  • increases in the budget for Wall Street regulation agencies, including the Securities and Exchange Commission

US House Minority Leader Nancy Pelosi (right) and Representative George Miller depart after a House Democratic Caucus meeting at the US Capitol in Washington, 11 December 2014Democratic House leader Nancy Pelosi criticised Mr Obama for supporting the bill

Republicans voted for the measure 162-67 with some angry the bill left Mr Obama’s immigration policy unchallenged for now.

The Republicans strongly oppose President Obama’s immigration reforms and so the bill only funds the Department of Homeland Security until February.

Republicans hope that when the new Congress meets at the start of next year, they can force changes to the president’s immigration plans.

The debate is expected to be dominated by ideological opposites, Massachusetts Senator Elizabeth Warren and Texas Senator Ted Cruz, but Mr Reid has signalled his support for the overall legislation, making it unlikely to fail.

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