The decision to tack a Wall Street-backed plan requiring the federal government to backstop risky financial trades on to legislation that would keep the government funded through next September has allowed liberal Democrats to take a stand against big banks and to pull back the veil on the GOP establishment’s coziness with Wall Street. It has also jeopardized passage of that spending bill, with an appropriations deadline looming this week.
With the mantle of populism at stake, you might think conservatives would seize upon the spectacle of Republican leaders teaming up with establishment Democrats to insure more of Wall Street’s activities, and align with liberal Democrats to strip the rider from the spending. Instead, they are happy to let Wall Street get its way, so long as it means they can blame Democrats for shutting down the government.
We might get the first Elizabeth Warren Government Shutdown - http://t.co/QhESBQAxU0— Timothy P Carney (@TPCarney) December 11, 2014
Carney now acknowledges that Warren, Nancy Pelosi, and the left may be making an important substantive point, but his initial sentiment is widely shared on the right. And in addition to exposing the shallowness of the right’s putative opposition to corporatism, it reveals a two-pronged misunderstanding of the politics of government shutdowns, which generally don’t favor the team supporting extraneous policy riders, and really don’t favor the party out of power in the White House.
A complicating factor for Warren and her supporters is that plenty of Democrats, including very powerful ones, support the omnibus spending bill as is, rider and all. Against a formidable bipartisan majority, any attempt to obstruct the bill’s passage can be construed as an effort to shutdown the government, just as when Ted Cruz and his small but determined group of supporters shut down the government over Obamacare in 2013.
The crucial difference is that last year, Cruz and his supporters in the House of Representatives, were demanding the inclusion of a contentious, extraneous policy rider in a spending bill as the price for keeping the government open. Warren, Pelosi, and other Democrats are trying to remove such a rider, not to insert it.
And for that reason, the politics of a potential shutdown in the coming days comes down to whether President Obama decides he wants to stand with a growing number of Democrats in rejecting the rider, or whether he can live with it. As you might imagine, Obama was rather opposed to the idea of using a bill to keep the government funded as a vehicle for defunding his signature legislation last year. And so Republicans suffered mightily when the government shutdown.
Perhaps Obama feels differently about using spending bills as vehicles to weaken financial reform, rather than health-care reform. But if he decides he’s similarly opposed to weakening his Wall Street reform law, by socializing more risky Wall Street behavior, in the shadow of a government shutdown, then Republicans will have a big political problem on their hands.
Update: After this article was published, the White House expressed opposition to the Wall Street-backed provision and other extraneous riders in the spending bill. However, officials say President Obama would sign it even if they are not removed.