You may have noticed that Sen. Ben Nelson, D-Neb., voted against the Democrats’ financial reform bill yesterday. It isn’t because he’s some kind of “conservative” Democrat, but it probably has more to do with a broken deal he had arranged for a major company in his home state.
Nelson, recall, had arranged the so-called “Cornhusker Kickback” during the health care debate. On the financial bill, at the request of Warren Buffett’s Berkshire Hathaway, Nelson had added a provision to the financial reform bill that would exempt existing derivatives contracts from new collateral requirements. The provision would have saved Berkshire Hathaway the trouble of setting aside $8 billion in collateral.
But Senate Democrats killed that provision before yesterday’s failed vote.
From The Wall Street Journal:
Senate Democrats agreed Monday to kill a provision from their derivatives bill pushed by Warren Buffett’s Berkshire Hathaway Inc., a change one analyst predicted could force the Nebraska company to set aside up to $8 billion.
The Senate Agriculture Committee inserted language into its derivatives bill last week at the request of Sen. Ben Nelson (D., Neb.) that would have exempted any existing derivatives contracts from new collateral requirements—the money set aside to cover potential losses.
Berkshire has $63 billion in derivatives contracts, and Mr. Buffett has boasted he holds very little collateral against these products…
The inclusion of the provision could have been a problem for Democrats, who saw their health-care overhaul stagger under the weight of similar home-state favors, including one for Mr. Nelson.
