What’s Keeping the 2014 Spending Bill?

something smells fishy

I’ll say it once and I’ll say it again, banks ruin everything…

 

 

As Congress finishes up their lame-duck session, one major piece of legislation is still hanging over their heads unfinished. A $1.1 trillion government-wide spending bill.

 

With the hard deadline on the bill being Thursday at midnight, Congress is still hashing out policy differences between the parties. The biggest roadblock in this legislation? Relaxing existing regulations on certain financial sectors.

 

House Financial Services Chairman Republican Jeb Hensarling of Texas is holding out in hope that a new spending bill will come with agreement on weakening provisions to the 2010 Dobb-Frank law which created many new regulations for the financial sector. Specifically Rep. Hensarling is championing loosening regulations to the practice of hedging derivatives as risk.

 

This negotiating point comes from a separate piece of legislation that would make banks have to tone-down risky financial practices that wouldn’t be eligible for federal assistance, specifically deposit insurance. This would allow banks to make customers pay more for products that help them hedge against market changes like higher fuel costs or inconsistent housing prices.

 

Democrats in the Senate are not budging saying the measure would put taxpayers at risk. And you know what, THEY’RE RIGHT!!!

 

gasp

 

In times of financial prosperity, these new measures to Dobb-Frank would mean a win-fall for banks (DOLLA-DOLLA-BILLS!) and to their customers (easier access to credit and cheaper banking fees). However if a bank were to hedge on a bet that would fall through (ie the 2008 housing crisis), then tax payers would be left holding the bill. Granted we are in a much better financial position than we were a few months ago, but it’s hard not to look at the GOP’s measure as anything but financially reckless.

 

Do we think it will pass? This time, probably not.

 

With the spending bill funding day-to-day operations, it’s too big of a populous measure to just let it lapse. And the one time Republicans did let a shut-down happen, they took a significant political hit. As many analysts are alluding to, this looks to be a power play by Speaker of the House John Boehner. But with both the House and Senate being under Republican control, don’t be surprised if you see the legislation creep up again.

 

 

(Photo Credits: Google Images)

 

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  1. Pingback: The Winners and Losers from the 2014 Spending Bill | The Post Turtle

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