Warren, Vitter team up against Dodd-Frank change in spending bill

The Massachusetts Democrat has been the most vocal opponent of the tweak to the 2010 Dodd-Frank financial reform law included in the spending bill, urging House Democrats to oppose the bill because of it earlier in the week.

With the spending bill now moving to the Senate for passage, Warren and Vitter have created an unusual alliance of liberal and conservative lawmakers to try to get the provision removed.

“Congress should not put taxpayers on the hook for another bailout, and this giveaway that was drafted by Citigroup lobbyists has no place in a critical government funding bill,” Warren said in a statement that she was filing an amendment with Vitter to remove the language.

The spending bill includes a roll-back of a Dodd-Frank provision, known as the swaps push-out, meant to prevent bank units that receive taxpayer insurance from speculating with certain kinds of derivatives. Reports from the New York Times indicate that the repeal measure was originally drafted by lobbyists for the megabank Citigroup, a claim that Warren has drawn attention during the week.

“We need to remove these risky derivatives that aren’t even necessary for normal banking purposes and would only make future taxpayer-funded bailouts more likely,” Vitter said in calling for a vote on the amendment.

The House passed the government funding bill in a close vote late Thursday night, despite vocal opposition to the swaps push-out repeal from liberal Democrats.

The White House has pushed hard for the passage of the bill, despite the inclusion of the Dodd-Frank tweak.

Senate Majority Leader Harry Reid called on his Democratic colleagues to pass the bill in a floor speech Friday morning, saying that it “achieves many of our important priorities.”

If the Warren-Vitter amendment were to get a vote and be adopted, the bill would have to be sent back to the House.