Wednesday, June 30, 2010

Feingold vs. the Bank Tax

Here's Kevin Drum, Monday, on Russ Feingold's decision to oppose the banking bill as it came out of conference:
But seriously: WTF? This is the final report of a conference committee. There's no more negotiation. It's an up-or-down vote and there isn't going to be a second chance at this. You either vote for this bill, which has plenty of good provisions even if doesn't break up all the big banks, or else you vote for the status quo. That's it. That's the choice. It's not a game. It's not a time for Feingold to worry about his reputation for independence. It's a time to make a decision between actively supporting something good and actively supporting something bad. And Feingold has decided to actively support something bad.
That's  Monday.  And what was, apparently, the real-life effect of Feingold's stubborn stand?  Well..back to Drum, on Tuesday:
After three Republican senators threatened to vote against the financial reform bill unless its $18 billion bank fee was removed, Democrats briefly reopened conference committee proceedings today and voted to remove it.
Granted, I don't have any idea whether Feingold's support would have save the bank fee, which I assume Feingold actually would support..  But it might have!  The truth is that the practical effect of Feingold bailing on the bill isn't to sink the bill; it's to empower the three New England Republicans a bit more than they would have been had he supported the bill.  Which, in this case, meant something that the banks, presumably, will be happier with. 

My larger point here is just to echo what Drum said: when politicians worry more about posturing than they do about making the best of what they have, there are real consequences.  That doesn't always mean that liberals in the Senate, for example, should just give up and do whatever the 60th most liberal Senator wants; there's plenty of room for fighting and negotiating and bargaining.  And sometimes, walking away may still be the best choice. However, what I'd say is that walking away better have some real-life, substantive benefits, or else the Senator is simply being self-indulgent and/or irresponsible. 


  1. It's never posturing if you have an election in four months and there's no argument that it's an epochal, once-in-lifetime legislative opportunity whose failure will poison the environment such that you'll lose anyway. Politicians get to act in their electoral interests: you of all people I thought held that view. Remember: Russ played ball on HCR. Everything can't be a strong-arm routine of that nature.

    Beyond which, he offers a strong argument about substantive benefits (or avoidance of harm) here (

    "At the start of this process I made clear that I had a simple test for financial reform — will it stop another financial meltdown? This bill fails that test, and I won’t support legislation that fails to protect the people of Wisconsin from the pain of another economic disaster. And I don’t need to be lectured about this issue by people who supported the repeal of Glass-Steagall, which paved the way for this terrible recession [...]

    It would be a huge mistake to pass a bill that purports to re-regulate the financial industry but is simply too weak to protect people from the recklessness of Wall Street. That would be like building an impressive-looking dam without telling everyone that it has a few leaks in it. False security is no security at all."

    And as to negotiations, here is is response to that:

    "Since the Senate bill passed, I have had a number of conversations with key members of the administration, Senate leadership and the conference committee that drafted the final bill. Unfortunately, not once has anyone suggested in those conversations the possibility of strengthening the bill to address my concerns and win my support. People want my vote, but they want it for a bill that, while including some positive provisions, has Wall Street’s fingerprints all over it.

    In fact, reports indicate that the administration and conference leaders have gone to significant lengths to avoid making the bill stronger. Rather than discussing with me ways to strengthen the bill, for example, they chose to eliminate a levy that was to be imposed on the largest banks and hedge funds in order to obtain the vote of members who prefer a weaker bill. Nothing could be more revealing of the true position of those who are crafting this legislation. They had a choice between pursuing a weaker bill or a stronger one. Their decision is clear."

    When you are receiving an ultimatum, believe your position is right on the merits, and believe going along will harm you electorally, the thing you do is walk away.

    I am not an angry FDL-er myself and generally think legislators should play ball. But the point is, I've been represented by Feingold for a long time as well, and I haven't found him to be, either. When he digs his heels in, it's usually for honest principle whether I agree or disagree, and it's also quite rare when he does. If there's a political dimension to it this time, I think that's entirely legitimate in a climate where every Democrat is going to be in a fight for their life. I would point out that the gubernatorial election coincides with Feingold's election, and there is an outgoing Democratic governor and a shallow Democratic bench, while there are strong contenders in the races for the Republican nominations for both Senate and governor. He's got his hands full. If they want his vote, they should be coming to his position in some measurable way.

  2. I'm also not sure that Feingold isn't trying to make progress as he sees it. That's not to say it will work, just that I think strategery could still be at play here.

    I think this might be particularly true in the 60-vote Senate. Failure to reach cloture does not kill the underlying bill. If cloture fails, Reid and Dodd have to try to find a way to promise something to get it. While comity is down in the Senate, generally speaking, I think Senators are still willing to vote for cloture if they have a promise from Reid that he will offer an amendment to implement an agreed-upon change. Thus, cloture can fail, Reid could then negotiate with Feingold or Brown or whoever he needs to, and then move forward with a new cloture motion with an understanding reached.

    Moreover, I think Feingold's reading is that this is seen as a must pass. Thus, if his holding out kills this particular bill, it doesn't kill the issue, and they'll hastily cobble a new version together to pass it before the August recess. Now, I happen to think that Feingold's interpretation is a little off, in that he isn't needed once they have the New England 3 on board, and the New England 3 have every incentive in the world to hold out for changes that they can sell as being moderate, then vote for it. (Sadly, how one wins as a "moderate" is to simply nay-say whatever the folks in the majority are pushing for in the final stages for some "compromise", regardless of whether its actually moderate or not). Feingold's math, to me, seems off by 1. However, if he thinks one of the 3 Reps isn't going to vote for it in the end, then his tactic has promise. Personally, I think he's misread the winds on this one, but I don't think his tactic is ipso facto foolish; I just disagree with him on certain likelihoods.

  3. That's a good point as well, Matt - the opportunity really can't pass: everyone agrees financial reform is needed. You might well be right about what the outcome will turn out to be, but you're equally right that Feingold has every right to place a bet that a certain tactic may improve the bill from his perspective. Moreover, if that tactic benefits him politically, in this environment in his year, that's legitimate too.


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