Lost in the latest news of the gulf oil spill and Rand Paul's latest kooky comments is the quiet killing by Republicans of one of the financial reform bill's best possible amendments - the Merkley-Levin amendment, which implemented the so called 'Volcker Rule'. Merkley-Levin and the Volcker rule were designed to crack down on banks' risky proprietary trading.
You may be forgiven if you thought Merkley-Levin would be included in the bill, after all, the media was reporting that it looked to be near the 60 votes required to overcome even a Republican filibuster. But Republican parliamentary maneuvers, combined with a lack of leadership on the part of Senators Dodd and Reid to make sure the amendment got a vote, ended up killing the essential Volcker Rule without a vote even be taken. How did it happen? Read on.
[Note: this diary seeks to give a bit more detail around what McJoan briefly mentioned in her main page post on financial reform last night.]
When the Volcker Rule was brought up for a vote, Senator Richard Shelby objected, denying unanimous consent for the bill to proceed. Senator Reid, who was merely in a rush to get the whole thing over with and proceed to other legislation, didn't fight for a vote here, so Merkley and Levin made a strategic error - they attached their amendment to Brownback's amendment which would have removed car dealerships from the financial reform legislation, which had already been guaranteed a vote by both parties.
Besides now going to the altar with a shitty amendment (there's no reason car dealerships should be exempted from the legislation), they failed to see what was coming next: Brownback withdrew his own amendment at the last minute, thus killing Merkley-Levin in the process.
And here's where Senators Merkley and Levin wimped out - they voted for closure anyway. Rather than taking a stand that the senate wouldn't move forward until they got a fair vote, Merkley and Levin didn't join Feingold and Cantwell in opposing closure, and the reform bill passed without the Volcker Rule included in it.
The most sickening part is that after preventing the vote on the amendment, Richard Shelby told everyone that he actually supported Merkley-Levin and would vote for it when it came to the floor later. Of course, he probably knew that Brownback was planning to dump his own amendment and kill Merkley-Levin. Thus he got to say he'd vote for a key anti-Wall Street amendment that he himself was responsible for killing. Cynicism knows no bounds.
Meanwhile, the Obama administration displayed cynicism that was almost as repulsive. After the President stood next to Paul Volcker at a press conference in support of The Volcker Rule, he and his administration did nothing to actually support its inclusion in the battles on the senate floor we just witnessed. In fact, administration top honcho/Wall Street shill Larry Summers showed up at the last minute in the Senate yesterday saying that if they voted for the bill as is, then we've solved Wall Street's problems. Wimpy Democrats (besides Feingold and Cantwell) went along with this bullshit and demonstrated their usual spinelessness.
I think this sums up why we have a bill, that while it does some good things, doesn't go far enough in preventing another financial crisis. If I missed anything here, or got any key details wrong, please let me know!