In March 2012, with tough re-elections looming, centrist Democrats in the Senate voted over the objection of outside consumer and liberal groups to send President Barack Obama a bill that eased financial regulations, gaining a bipartisan accomplishment in an otherwise ultra-partisan political environment.
That was the JOBS Act, a measure that eased many securities regulations, most notably by allowing for crowdfunding by companies.
Now, the bill is different, but the political dynamics are similar as the Senate moves next week toward passage of a legislative package that would remove or limit many financial regulations, especially ones that apply to community banks and regional banks.
There’s one major difference, though: The opposition of Sen. Elizabeth Warren, who wasn’t in Congress for the fight over the JOBS Act.
The Massachusetts Democrat acknowledges that she can’t stop the bill, authored by Senate Banking Committee Chairman Mike Crapo of Idaho. It won the support of all Republicans and 17 Democrats in a vote on starting debate last week.
But she appears determined to exact a major political price from her fellow Democrats for supporting it, costing them political capital before they return to their home states to campaign in earnest, some of them in Trump country.
Speaking at a Congressional Progressive Caucus retreat on Friday, Warren called it a “stab in the heart” seeing Democrats vote for the measure, according to the Intercept.
At several times during her attempts last week to gin up opposition to the bill in floor speeches and on social media, Warren criticized other Democrats. On social media, she even highlighted a list of the Democrats who voted to advance the bill in the Senate, including vulnerable members in red states such as Sens. Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Claire McCaskill of Missouri, and Bill Nelson of Florida.
Her attack on Democrats drew criticism from within the party, but Warren is unapologetic.
“Since I called out some of my Democratic colleagues for their support, I’ve been taking heat from fellow Democrats,” Warren wrote in a Medium post Thursday. “…That doesn’t make me the most popular kid on the team. But that’s not why I ran for the Senate.”
Some of the Democrats in favor of the legislation have sided with Warren in past clashes over banking policy. In 2013, for instance, Sen. Jon Tester of Montana joined Warren in helping to block Obama from appointing former adviser and Harvard professor Larry Summers as Federal Reserve chairman, thrilling populist liberals.
But Tester, as an example, now faces re-election in a state that President Trump won by 20 points, and he could use a bipartisan victory. It’s a rural state in which the kinds of community banks that would get regulatory relief from the bill play an outsize role in the economy.
Having already voted for the legislative package in committee and on the Senate floor, Tester, Heitkamp, Donnelly, and Sen. Mark Warner of Virginia have said they are committed to defending it from the attacks of Warren and those who have sided with her.
Despite Warren’s criticisms of the bill, other Democrats have concluded that it is not a significant undoing of the post-crisis banking rules. Others see it as a marginal rollback of the 2010 Dodd-Frank law, not significant enough to start an intra-party war.
“I can understand why she’s frustrated by senators willing to do things that unquestionably increase risk, however moderately,” said one Democratic consultant who works on financial issues before Congress. “But I can also understand why some in her own party are saying, ‘Let’s be reasonable here. Nothing here is anywhere near the deregulatory stuff you’re accusing us of. We’re not walking away from Dodd-Frank here.’”
Yet, the liberal activists rallying behind Warren share her view that the bill is a favor to Wall Street and reject the idea that Democrats facing tough re-elections should be allowed to vote for it and gain bipartisan credibility.
Neil Sroka, a spokesman for the group Democracy for America, suggested that constituents, even in red states, are not interested in bank deregulation. Instead, potential bank campaign donors are.
“Anyone who thinks that the path for victory for Democrats is by touting your ability to work with a crew of Republicans that’s enabling the white supremacists in the White House is similarly delusional,” he said.
His group plans to keep rallying activists to pressure senators through calls. Warren is set to continue fighting the bill over the weekend with an appearances on Sunday shows and in voting next week.
Yet, Democrats who have already voted for the bill are not going to back away from it now, and the bill is going to pass the Senate, said Brandon Barford, a partner at Beacon Policy Advisors and a former GOP staffer. All that is left is a “nasty circular firing squad for the Democrats.”
