Trade legislation being pushed by the Obama administration could be used in the future to “punch holes” in U.S. financial regulations, Elizabeth Warren said in an interview published Monday.
The Massachusetts Democrat was responding to criticism over the weekend from President Obama, whose push for trade legislation she has opposed in the Senate over concerns about worker protections and how it could affect domestic regulations.
If Congress passes a law giving Obama the authority to negotiate trade deals that would get expedited consideration in the legislature, Warren argued, that authority could be used by his successor to undermine the 2010 Dodd-Frank financial reform law that placed numerous new rules on banks.
“It’s possible to punch holes in Dodd-Frank without directly repealing it,” Warren told the Washington Post’s Plum Line blog, citing the possibility that a trade deal hammered out under the Trade Promotion Authority could loosen international agreements on bank rules.
Warren, a liberal instigator in the Senate, has been drawn into increasingly direct confrontation with the Obama White House over the trade legislation.
In an interview with Yahoo News published Saturday, Obama said that Warren was “absolutely wrong” that the eventual trade deal could be used to undermine financial regulation.
“The truth of the matter is that Elizabeth is, you know, a politician like everybody else,” the president said of Warren.
Warren has raised concerns about a feature of the trade deal being negotiated known as Investor-State Dispute Settlement, or ISDS. ISDS would provide a mechanism for settling legal conflicts that might arise around companies operating across borders. Liberals have expressed worries that it could be used to undercut worker protections or regulations.
Warren reiterated that fear in the interview published Monday, despite Obama’s efforts to reassure liberals that the mechanism wouldn’t lead to abuse. “If the president has changed ISDS to solve the problem, then the text should be released so that legal experts can look at it,” Warren said.
