Even as Democrats celebrate their narrow victory in southwest Pennsylvania, party solidarity is in doubt — and progressive groups, Capitol Hill darlings for so much of the past year, are getting a preview of the challenges to come.
In defiance of fierce protests from liberal activists, Republicans and a raft of moderate Democrats in the Senate passed legislation on Wednesday evening that will ease banking regulations enacted eight years ago, as part of the Dodd-Frank regulatory law, in response to the 2008 financial meltdown.
The backlash was most pronounced from figures on the Democratic left, both inside the chamber and out, who say the bill, if it gets to President Donald Trump (no sure thing, as House Republicans want more comprehensive rollbacks that could scare off Democrats), will heighten the risk of another crisis. In a report issued last week, the nonpartisan Congressional Budget Office agreed.
Still, 17 members of the Democratic caucus, some up for re-election this fall in red or purple states, joined their GOP colleagues and ultimately ignored those appeals. A handful, like North Dakota Sen. Heidi Heitkamp, cited the narrower interests in their own states. Of criticism from her liberal colleague, Massachusetts Sen. Elizabeth Warren, Heitkamp told The Atlantic, “She doesn’t live where I live.” Nationally, these divisions will deepen skepticism that Democrats are that much closer to coalescing behind a single, coherent economic message.
Senate Minority Leader Chuck Schumer, who voted against the bill, has also come under fire not doing more to twist arms and rally opposition within his camp.
“This is not what Americans expect or deserve from the top Democrat in the Senate,” Kurt Walters, campaign director at Demand Progress’s Rootstrikers project, said in a statement. “If progressives sit at home on Election Day this November, Chuck Schumer will be the one to blame.”
Activists from a coalition of progressive groups say they collected more than 125,000 signatures on a petition demanding Schumer “move to block” what they’ve come to call the “Bank Lobbyist Act.” Democratic senators who voted to advance and then pass the legislation have been dubbed “the #BailoutCaucus” on social media.
Schumer’s office didn’t comment on the accusations. But one of his former aides, Brian Fallon, talking to the Associated Press, summed up the minority leader’s pickle.
“You can’t blame leader Schumer for not wanting to twist the arms of red-state Democrats against home-state banking interests, but from the standpoint of the larger party messaging, it’s a missed opportunity to not strike a bright-line contrast on behalf of consumers,” he said.
In Alabama, a host of local groups that worked last year to elect Sen. Doug Jones, were among the signatories on an open letter pleading with him to withdraw his support for the bill.
“Please, Senator Jones, remove your name from the list of cosponsors of this bill,” it read. “Remember, the bankers and the financial sector are not the people who voted you into office.”
But Jones didn’t budge. He responded to the criticism with his own public note, stressing that the bill is “bipartisan” — he used the word five times — and argued that it improves on the current law.
“I have tried to take that common sense, bipartisan approach in everything I do,” Jones wrote. “And while that may not always be popular with some people even in my own party, I believe it’s the right approach for Alabama.”
Indivisible, the increasingly influential liberal group created in response to President Trump’s victory in 2016, also pushed back publicly, on Twitter, and via grassroots outreach. In Colorado, activists signed a joint letter to Sen. Michael Bennet, made calls to his office and even had an audience with his team in Washington.
“Several group leaders spoke via conference call to his staff, specifically asking him to change the bill to avoid loosening controls for bigger banks, and opening the door to discrimination in lending at smaller community banks,” said James Scott, representative with Indivisible NOCO. “We don’t understand why Senator Bennet needed to sponsor this bill, when it gives large banks legal footing to compel weaker oversight.”
Bennet addressed his reasoning in a statement last week, insisting that opponents either didn’t understand or were misleading the public about the bill’s potential risks.
“There’s been a lot of misinformation about what this legislation does and doesn’t do,” he said. “In reality, it maintains these core protections but also provides narrow relief for Colorado’s small financial institutions so they can extend credit to consumers, small businesses and our rural communities.”
The debate has also exposed rifts within the Senate Democratic caucus. Warren, a potential presidential aspirant, has attacked both the legislation and, by naming them on social media, Democratic colleagues who backed it.
“The American people aren’t going to stand by while big banks and giant corporations run this economy and this Congress for their own benefit,” she tweeted soon after the vote. “Soon — maybe not today, or next week, or even in the next election — but soon, they will demand a government that works for the people.”
Vermont Sen. Bernie Sanders, another leading critic of the bill, has focused more on the GOP’s role. On Wednesday, he tweeted, “If you want to know why the American people have so much contempt for what goes on in Congress, it is because time after time after time, the Republican leadership in Congress is doing the exact opposite of what the American people want.”
Asked last week whether he thought Democrats would suffer more broadly for their part in moving the bill forward, Sanders in an interview downplayed concerns the defections would deal the party a lasting setback.
“I can tell you very happily, and I think any objective observer would confirm what I’m saying, is that in the last year and half or so, the Democratic Party has moved in a far more progressive direction than they were before I ran for president,” he said.
Nevada Democratic Sen. Catherine Cortez Masto, whose state was among those hardest hit by the housing crisis, touted her vote against the bill on Wednesday, saying in a statement the Senate had “made the false choice today by putting Big Banks and their lobbyists first.”
Meanwhile, the state Democratic party whacked her Republican counterpart, Sen. Dean Heller, who faces a tough reelection bout in November, tying his vote in favor to past support for the GOP tax cuts and to confirm Treasury secretary Steve Mnuchin.
“Nevada knows all too well the damage that the Big Banks can do to our economy without strong Wall Street reform rules in place,” state party spokesperson Sarah Abel said. “But instead of working to ensure another financial crash never happens, Sen. Heller has decided to help out the bank lobbyists who fill his campaign coffers.”
Back on the East Coast, a spokeswoman for Virginia Sen. Mark Warner, who supported the legislation, said of the progressive objections, his “answer is the same, regardless of who asks the question.”
“This bill helps Main Street by rolling back unnecessary and burdensome regulations on credit unions and small community banks,” she said, “while ensuring that larger banks remain subject to the same Dodd-Frank rules Senator Warner helped put in place after the financial crisis.”
