Since at least 2007, roughly half of Iowa’s land in agricultural production has been rented or leased rather than farmed by its owner. Farmland values at historically high levels are making it even more difficult for Iowans to pursue a secure career in farming. Almost no one can afford a large parcel of farmland at more than $8,000 per acre (or $10,000 per acre of high-grade land). Banks are rarely willing to lend aspiring farmers the kind of money needed to buy a farm, or to buy out siblings or cousins who inherited parts of the family farm.

Some experts believe Iowa farmland values have peaked, but via Tom Philpott I came across evidence that pressure from large buyers may continue to drive up prices. The Oakland Institute analyzed the trend of Wall Street investors buying farmland in the U.S. As institutional investors pile into this market, Iowa farmland may become increasingly unaffordable.

After the jump I’ve posted a few excerpts from the Oakland Institute‘s report, but I recommend downloading the whole piece to see supporting charts and references.

The trend toward absentee landlords owning Iowa farms is one among many reasons we can’t rely on purely voluntary efforts to protect soil and water quality. Tenant farmers have no incentive to spend money on conservation practices to improve land for the long-term. Landowners (whether they be Wall Street firms or individual investors) are often looking for the highest rent this year, not farming practices that preserve soil fertility and keep excess nutrients out of waterways.  

Today the U.S. Senate confirmed Janet Yellen to be the first woman to chair the Federal Reserve. All of the Democrats present, including Iowa’s Tom Harkin, voted for the cloture motion on Yellen’s nomination in December. All of the Democrats present on January 6 voted to confirm her, joined by eleven Republicans. Incidentally, only 59 senators voted for cloture, which would have sunk Yellen under old Senate rules. Senate Democrats removed the 60-vote requirement for motions on presidential nominations in November.

Although a sizable group of Republicans voted to confirm Yellen, most of the Senate GOP caucus opposed her nomination, including Iowa’s Chuck Grassley. In a floor statement I’ve posted after the jump, Grassley said he could not support her nomination because he is concerned the Federal Reserve’s “easy money” policies are “misguided” and will lead to high inflation. Yellen is widely considered an “inflation dove” who is willing to balance the Fed’s longstanding concern for keeping inflation down with a focus on reducing unemployment.

UPDATE: Corrected to clarify that the cloture vote on Yellen happened before the holiday recess. Grassley was among the 26 Republicans who voted no on Yellen’s confirmation. Harkin was absent for the final vote on Yellen on January 6, as were many other senators because of the extreme winter weather.

For the third time since October, Iowa’s representatives have split along party lines as the U.S. House approved a bill that would undermine the 2010 Dodd-Frank financial reform law. Pete Kasperowicz reported for The Hill that the “Small Business Capital Access and Job Preservation Act” would remove a requirement for private equity firms to register with the Securities and Exchange Commission. It passed the House yesterday by 254 votes to 159, as 36 Democrats joined almost the entire Republican caucus. Iowa Republicans Tom Latham (IA-03) and Steve King (IA-04) voted for the bill, while Bruce Braley (IA-01) and Dave Loebsack (IA-02) voted no, along with most of the House Democrats. Braley and Loebsack also opposed the two other recent Republican efforts to undermine Dodd-Frank.

I have not seen any public comment on this vote from the Iowans in Congress. The Obama administration opposes the bill.

The legislation effectively provides a blanket registration and reporting exemption for private equity funds, undermining advances in investor protection and regulatory oversight implemented by the Securities and Exchange Commission (SEC) under Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Wall Street Reform).

The Administration is committed to building a safer, more stable financial system. H.R. 1105 represents a step backwards from the progress made to date, given that private equity fund advisers have been filing reports with the SEC for over a year. The bill’s passage would deny investors access to important information intended to increase transparency and accountability and to minimize conflicts of interest. Moreover, H.R. 1105 would exempt private equity funds from the disclosure requirements that the Congress laid out in Wall Street Reform to allow regulators to assess potential systemic risks.

According to Kasperowicz, the Senate is unlikely to take up this bill because of the White House veto threat.

Catching up on news from last week, the U.S. House voted 292 to 122 to undermine part of the Dodd-Frank financial reform law. Cheyenne Hopkins reported for Bloomberg that H.R. 922

would upend the 2010 law’s pushout provision by allowing trades of almost all types of derivatives by lenders with access to deposit insurance and discount borrowing. […]

Lawmakers included the original measure as a way to limit risk-taking by banks that got federal bailouts during the 2008 credit crisis. The pushout provision was faulted by banks and also by regulators including Federal Reserve Chairman Ben S. Bernanke, who expressed concern that it could drive swaps trading to less-regulated entities.

All but three Republicans present voted for this bill, joined by 70 Democrats. Iowa’s Tom Latham (IA-03) was a yes, while Steve King (IA-04) did not vote. Meanwhile, Bruce Braley (IA-01) and Dave Loebsack (IA-02) voted against the bill, as did most of the Democratic caucus. I did not see any public comment on this bill from any of Iowa’s four representatives. During the floor debate on October 30, Democrat Collin Peterson of Minnesota warned,

“This bill would effectively gut important financial reforms and put taxpayers potentially on the hook for big banks’ risky behavior,” Peterson said. “The provision is a modest measure designed to prevent the federal government for bailing out or subsidizing bank activity that is not related to the business of banking.”

Peterson also noted that under current law, banks can still perform about 90 percent of the swaps hedges they were able to perform before Dodd-Frank.

Sounds like Braley and Loebsack made the right call. A White House statement argued against the bill as “premature” and possibly “disruptive,” but did not threaten a presidential veto.

LATE UPDATE: Iowa’s representatives also split on party lines when the House approved the so-called Retail Investor Protection Act on October 29.

The bill prevents the Department of Labor from issuing rules under the Dodd-Frank financial reform act that describes when financial advisors are considered a fiduciary, which means they must must work in their clients’ best interest. Under the bill, Labor would have to wait until the Securities and Exchange Committee (SEC) acts first in this area.

Alicia Munnell explained here why that Republican-backed bill was “fundamentally misconceived.”

President Barack Obama finally settled on Janet Yellen to succeed Ben Bernanke as the next chair of the Federal Reserve. No woman has previously held that position, nor has any previous nominee for the job been as qualified as Yellen. Binyamin Appelbaum’s profile of Yellen for the New York Times is excellent. Some other good links about her views are here. She is commonly described as an “inflation dove,” meaning that in her opinion, reducing unemployment should be a higher priority than keeping inflation low (the traditional obsession of Fed chairs). A few years ago, Bleeding Heartland user PrairieBreezeCheeze discussed why it’s time for a Fed chair willing to prioritize employment. Even now, long-term unemployment is still near historically high levels.

Nobody’s perfect, and Zach Carter offers a more negative take on Yellen, focusing on her support for NAFTA, a chained Consumer Price Index, and repealing the Glass-Steagall Act during the 1990s. Nevertheless, Yellen is a much better person to run the Fed than Obama’s first choice for the job, Larry Summers. Credit goes to the coalition that came out early against Summers, convincing five Democrats on the Senate Banking Committee to oppose him.

Despite today’s news, President Obama’s record on appointing women to cabinet-level positions remains worse than Bill Clinton’s–and not for lack of qualified women to choose from.

UPDATE: After the jump I’ve added some remarks from President Obama and Yellen at today’s press conference. SECOND UPDATE: Added Senator Tom Harkin’s official comment.

Federal Reserve Chair Ben Bernanke’s term ends early next year, and President Barack Obama’s rumored top choice to replace him has been economic adviser Larry Summers. Why Obama would want to elevate someone who’s failed at several important jobs is beyond me, particularly when a much more qualified candidate is available in Janet Yellen. She has more experience in the Fed, as well as more support in the U.S. Senate and from economists. Yellen also lacks the huge conflict of interest problems that would have dogged Summers because of his involvement with Citigroup.

Yesterday Summers saved Obama from making a big mistake by formally withdrawing from consideration for the top job at the Fed. I disagree with Jonathan Chait’s claim that Summers “paid” for Obama’s poor record on appointing women to high positions in his administrations. There were plenty of reasons to favor Yellen over Summers for this job. The fact that she would be the first woman to chair the Fed is just a bonus. Kudos to the three Democrats on the U.S. Senate Banking Committee who came out early against Summers, helping to avert what would have been a very bad choice by the president. UPDATE: Apparently five Senate Democrats were ready to vote against Summers in committee: Jeff Merkley of Oregon, Elizabeth Warren of Massachusetts, Sherrod Brown of Ohio, Jon Tester of Montana, and Heidi Heitkamp of North Dakota.

Democrats in the U.S. Senate came closer than ever this week to stopping Republicans from forcing a supermajority vote on executive branch nominees. An informal deal deterred Democrats from changing Senate rules by simple majority vote and cleared the path for a handful of President Barack Obama’s nominees to go forward. However, more struggles over confirmations seem likely in the future.

Iowa’s Senators Tom Harkin and Chuck Grassley could hardly be further apart on the process by which the Senate gives its “advice and consent.”  

Senator Chuck Grassley’s former chief of staff David Young and former U.S. Attorney Matt Whitaker have both officially entered the U.S. Senate race. Highlights from the candidates’ announcements and recent interviews are after the jump.

Any comments about the IA-Sen campaign are welcome in this thread.

Yesterday President Barack Obama nominated Penny Pritzker as Secretary of Commerce and Mike Froman as U.S. trade representative. You can read the president’s spin on Pritzker’s “distinguished” business leadership here.

Although this nomination has been expected for months, it still sends an unfortunate message. Pritzker was one of the largest bundlers for Obama’s re-election campaign and one of the largest donors to his inaugural festivities, so the president has overlooked union-busting by her family’s Hyatt Hotel chain, as well as her union-busting as a member of the Chicago Board of Education, her aggressive use of legal means to avoid taxes on her massive wealth, and her role in managing a subprime lender (hat tip to Susie Madrak). Organized labor groups will be furious.

Pritzker will probably sail through the Senate confirmation process. Too bad the president didn’t hold back this nomination until Senate votes on his other cabinet appointees. I would hate to see corporate interest groups tank Gina McCarthy, Obama’s excellent choice to head the Environmental Protection Agency.

Any comments about the administration are welcome in this thread.

The U.S. Senate confirmed Jack Lew as secretary of the Treasury today by 71 votes to 26 (roll call). Senator Chuck Grassley was one of the 25 Republicans who opposed Lew’s nomination, joined by independent Senator Bernie Sanders of Vermont, who caucuses with Democrats. Twenty Republicans joined the rest of the Democrats present, including Iowa’s Tom Harkin, in voting to confirm Lew. Grassley announced his opposition to the Treasury nominee earlier this week. After the jump I’ve posted the floor statement he read today. While Grassley raised some troubling points, I think Sanders made a stronger case for opposing Lew, so I’ve enclosed his statement below as well. I will update this post if I see any further comment from Harkin.

Four years ago, both Grassley and Harkin voted against confirming Timothy Geithner as Treasury secretary.  

I planned to write several posts this fall about the third Congressional district race between Representatives Tom Latham and Leonard Boswell. Instead, every time I sat down to write about the campaign, I found myself turning to other topics. Central Iowa radio and television stations have been so over-saturated with cookie-cutter attack ads against both candidates. If a political junkie like me finds it off-putting, I can’t imagine how disengaged other people feel when they hear the beginning of yet another negative commercial.

Neither Latham nor Boswell has offered a compelling case for re-election, but after the jump I review the main messages from both campaigns and from various outside groups that have been advertising in Des Moines and Omaha.

Democratic candidates for the state Senate haven’t fared well in western Iowa lately, so the new Senate district 6 hasn’t been on my radar, even though it’s an open seat. However, campaign finance reports indicate that Democrats are not conceding this district, so I decided to post a profile of the race. Background on both candidates is below, along with a district map and some of the campaign rhetoric voters have been hearing.

I’ve never been a fan of former Minnesota Governor Tim Pawlenty, but until this morning I didn’t take him for someone who would kick a friend when he’s down. Today’s breaking news is Pawlenty resigning as national co-chair of Mitt Romney’s presidential campaign in order to become CEO of the Financial Services Roundtable.

Iowa’s five U.S. House members helped approve one of Representative Ron Paul’s top legislative priorities yesterday.  

The word “devastating” is overused in political commentary, but I can’t think of a better way to describe the television commercial President Barack Obama’s re-election campaign rolled out today. The fifth commercial the president’s team has run in Iowa since the beginning of April is in my opinion the most effective by far. (The previous ads claimed Republican Mitt Romney “stood with Big Oil,” accused Romney of shipping jobs overseas and maintaining a Swiss bank account, put a positive spin on Obama’s record, and highlighted the unpopular decision to bail out the auto industry.)

The new spot is two minutes long and features workers who lost their jobs after Bain Capital took over GST Steel in Kansas City. The video and transcript are after the jump. UPDATE: Added a new web video from the Romney campaign and two new anti-Obama commercials the American Future Fund is running on cable television in several swing states.

The U.S. House voted yesterday to exempt small lenders from regulations adopted in the 2010 financial reform bill commonly known as Dodd-Frank. All Republicans present and 73 Democrats supported the Small Business Credit Availability Act. The roll call shows that Democrat Leonard Boswell (IA-03) was one of the yes votes, along with Republicans Tom Latham (IA-04) and Steve King (IA-05). Democrat Bruce Braley (IA-01) voted against the bill, while Dave Loebsack (IA-02) was absent, attending President Barack Obama’s event in Iowa City.

Proponents assert that this bill would help farmers, manufacturers, and small and rural businesses secure loans. I’ve posted the official bill summary after the jump. It sounds like a leap of faith to assume that loosening regulations on small banks, savings associations, and credit unions will free up credit for small businesses.

Yesterday the U.S. Senate approved an amended version of the Jumpstart Our Business Startups (JOBS) Act, which is supposed to make it easier for entrepreneurs to start small companies. All five Iowans in the U.S. House voted for this bill two weeks ago, but Iowa’s senators split on party lines.  

Iowa Attorney General Tom Miller announced yesterday “a landmark $25 billion national joint federal-state accord over mortgage foreclosure abuses and fraud, and unacceptable nationwide mortgage servicing practices.” My gut says this deal lets lenders off too easily and will do virtually nothing for most foreclosure fraud victims. A $2,000 check isn’t much for people who wrongfully lost their homes, and the amount earmarked for principal reductions would rescue only a tiny fraction of “underwater” borrowers.

I’ve posted five versions of the case for the agreement after the jump, along with five statements from critics of the deal. Miller’s press release includes details on what borrowers in Iowa could receive. Please share your perspective in the comments.

A new report underscores how badly Iowa lawmakers screwed up when they missed the chance in 2010 to enact reasonable regulations on “legalized usury,” more commonly known as payday lending.

The Bureau of Labor Statistics released new employment figures yesterday, showing nonfarm payroll employment up by 200,000 in December 2011, and the unemployment rate down slightly to 8.5 percent. Several members of Congress from Iowa cited the news a Their statements are after the jump.

I’ve also enclosed reaction from U.S. Senators Chuck Grassley and Tom Harkin to President Barack Obama’s recess appointments of Richard Cordray to head the Consumer Financial Protection Bureau and three members of the National Labor Relations Board. While Harkin welcomed Cordray’s appointment, Grassley slammed the president for “upending years of Senate practice and legal precedent.” Grassley was among Senate Republicans who filibustered Cordray’s confirmation last month.

Hope dies last for Iowa Attorney General Tom Miller when it comes to reaching a settlement with major lenders accused of foreclosure fraud. He predicted that a deal would be finalized by Christmas, but so far, no deal has materialized. Attorneys general for several major states remain unlikely to abide by any agreement Miller’s working group negotiates.

U.S. Senate Republicans successfully filibustered President Barack Obama’s appointee to run the new Consumer Financial Protection Bureau today. It was the second time this week that Senator Chuck Grassley and his GOP colleagues blocked a presidential nominee.

Senator Tom Harkin and Representative Bruce Braley introduced legislation today that would levy a small tax on “most non-consumer financial trading including stocks, bonds and other debts,” as well as “all derivative contracts, options, puts, forward contracts, swaps and other complex instruments.”  

The public policy organization representing the Catholic Church in Iowa released its list of 2012 legislative priorities this week, along with a statement on “Labor and the Common Good.”

This Halloween weekend seemed like a good time to highlight some tricks and treats from the news headlines.

A full year has passed since Iowa Attorney General Tom Miller became leader of a 50-state working group to investigate mortgage fraud. In recent months, seven Democratic attorneys general have broken away from efforts to reach a broad settlement with major lenders, as the flaws in Miller’s approach to negotiations have become more clear. This week news broke that the AG working group are offering new concessions in order to reach a deal with financial institutions.

Miller should give up this charade.  

Nearly a year after a nationwide working group of state attorneys general began investigating foreclosure fraud, settlement talks between Iowa Attorney General Tom Miller’s team and major lenders appear to be virtually irrelevant. California Attorney General Kamala Harris is the latest and most important state official to abandon the working group.

Not long ago, Yves Smith predicted that the proposed settlement between large mortgage lenders and state attorneys general was “likely to fall apart.” This week’s developments may prove her right.  

I’ve seen a lot of hippie-punching by professional Democrats, but the Iowa Democratic Party’s attack on Iowa Citizens for Community Improvement yesterday was a particularly cynical example.  

Iowa Attorney General Tom Miller kicked his New York counterpart Eric Schneiderman off the executive committee for the 50-state working group on foreclosure fraud yesterday. As leader of the working group created last October, Miller has drawn criticism for negotiating lenient terms for major lenders and not investigating some shady foreclosure practices. His latest move is another sign that Miller leans toward terms favored by banks and their Obama administration allies.  

For months, the Des Moines rumor mill has said former Governor Chet Culver was under consideration for some federal government position. The speculation was confirmed this week when President Barack Obama named Culver to the Federal Agricultural Mortgage Corporation board of directors. An excerpt from the White House press release is after the jump.

Better known as “Farmer Mac,” the corporation purchases agricultural loans, in theory freeing up credit to “improve the ability of agricultural lenders to provide credit to America’s farmers, ranchers and rural homeowners, businesses and communities.” Farmer Mac also “finances rural electric and telephone cooperatives.”

Many Iowa politics-watchers will recognize the name of the Farmer Mac board chairman: Lowell Junkins. He served 12 years in the Iowa Senate, rising to the position of majority leader, before he ran for governor against Terry Branstad in 1986. President Bill Clinton appointed Junkins to the Farmer Mac board in 1996.

In April of this year, Culver formed a consulting firm “to work with individuals and public and private sector entities to provide strategic consulting, cut through red tape and promote cutting-edge ideas that will move the country forward.” He also became “co-champion” of the national popular vote movement, an effort to ensure that the winner of the presidential election is the candidate who wins the most popular votes.

There was bad news for travelers in north central Iowa this week. Delta Airlines announced plans to drop service to 24 unprofitable small markets across the country, including Fort Dodge and Mason City. According to KSCG radio, “Delta flights in Mason City have a 46-percent load factor, with Fort Dodge flights having a 39-percent load factor.” Senator Tom Harkin warned in a statement that Delta’s decision “could disrupt air service across the state, forcing Iowans to drive farther and travel for longer periods of time to meet their destination.  It will also negatively impact business operations in these areas.” Harkin noted that Delta is also seeking aid to continue serving Sioux City and Waterloo. The whole statement from Harkin’s office is after the jump. The Republican-controlled House of Representatives passed a bill this year eliminating the Essential Air Service program, which subsidizes air travel to smaller communities. The Senate is trying to preserve the program, but House and Senate negotiators haven’t reached a compromise on that provision, which is part of a larger Federal Aviation Administration authorization bill.

By the way, that FAA bill passed the House on a mostly party-line vote (roll call). Republicans Tom Latham (IA-04) and Steve King (IA-05) voted for the bill, while Democrats Leonard Boswell (IA-03), Dave Loebsack (IA-02) and Bruce Braley (IA-01) voted against it. Currently Burlington, Mason City and Fort Dodge are the only Iowa communities receiving support through the Essential Air Service program. Loebsack represents the Burlington area, while Latham represents Mason City and Fort Dodge. Both of those cities are part of the new fourth Congressional district, where King will be running against former First Lady Christie Vilsack in 2012.

This is an open thread. What’s on your mind, Bleeding Heartland readers?

UPDATE: Someone tried to break into Representative Leonard Boswell’s farm outside Lamoni on Saturday night. Boswell was there with members of his family at the time. No one was seriously injured; a statement from Boswell’s office Sunday morning suggests that the intruder hasn’t been apprehended. That statement is after the jump.

Resisting a full-court press from bank industry lobbyists, Senators Chuck Grassley and Tom Harkin voted yesterday against delaying new regulations of fees banks can charge for debit card retail transactions. Under the Dodd-Frank financial reform law enacted last year, the Federal Reserve Board has until July 21 “to ensure fees banks charge merchants for debit card purchases are ‘reasonable and proportional.’” Those fees currently average 44 cents per transaction, totaling approximately $1.3 billion per month nationwide. A proposed Fed rule would cap the fees at 12 cents per transaction.

Democratic Senator Jon Tester of Montana and Republican Senator Bob Corker of Tennessee have been trying to water down the regulation:

Tester and Corker had originally proposed a 24-month delay, then shortened it to 15 months and on Tuesday filed an amendment to reduce it to 12 months in a bid to pick up support.

The Tester-Corker measure would require bank regulators to study the impact of the Durbin regulation on consumers and community banks and credit unions for six months. It requires regulators to issue a rule implementing new swipe fee rates six months later but gives them power to include a wider range of costs which could let banks charge more than the Fed is currently proposing.

The number two Senate Democrat, Dick Durbin of Illinois, sponsored the Dodd-Frank amendment on debit card swipe fees. Speaking on the Senate floor yesterday, Durbin said “leading up to this vote has been one of the most heated debates and exchanges that many of us in the Senate have seen in our time.” The Hill’s Alexander Bolton called it ” the biggest K Street battle of 2011.”

Tester and Corker fell six votes short of the 60 needed to approve their amendment to the financial reform law. In an unusual split, 19 Democrats and 35 Republicans voted to delay the debit card fee rules. Grassley and Harkin were among the 12 Republicans, 32 Democrats and one independent who voted against the amendment (roll call).

Both of Iowa’s U.S. senators both voted for Durbin’s amendment on debit card fees last May (roll call). Kudos to them for resisting the pressure to delay this reasonable regulation. Bolton noted that nine Senate Democrats who supported the original debit card rule also voted for the Tester-Corker amendment.

For what it’s worth, credit cards still offer consumers more protection than debit cards for certain retail transactions.

Since last October, Iowa Attorney General Tom Miller has been leading a national foreclosure working group involving attorneys general from all 50 states. The group was supposed to investigate “robosigning” and other abuses that led to many wrongful foreclosures. Last week the five largest mortgage servicers in the U.S. received a proposed settlement from Miller’s group, and the American Banker posted the settlement terms here (27-page pdf file). Financial penalties will be determined later; $20 billion seems to be the most likely figure, and it’s not clear how that money will be used.

Miller described the settlement offer as an attempt to “change a dysfunctional system” and “reach an agreement good for banks and good for homeowners.” Many observers charge the deal would do little to correct abuses by mortgage lenders and contains nothing to compensate victims of past misconduct. More details and analysis are after the jump.

Iowa Attorney General Tom Miller spoke out this week about changes attorneys general and bank regulators will seek in order to resolve major problems in the banking and mortgage servicing industry. Miller has led the national mortgage foreclosure working group since October. He discussed the investigation and possible terms of a settlement in a recent Des Moines Register interview and in a December 14 meeting with advocates for reform to reduce foreclosures and compensate homeowners.

Miller’s remarks suggest the settlement will focus on ending all “robo-signing” practices, increasing the number of loan modifications and reducing principal to help keep people in their homes. The investigation may lead to criminal prosecutions as well. More details are after the jump.

The House of Representatives approved what’s likely to be the final version of financial reform yesterday, on a mostly party-line vote of 237 to 192 (roll call). Iowa Democrats Bruce Braley (IA-01), Dave Loebsack (IA-02) and Leonard Boswell (IA-03) voted for the compromise that emerged from a House-Senate conference committee. They had also voted for the original House version last December. Republicans Tom Latham (IA-04) and Steve King (IA-05) voted against the new regulations on the financial sector. The Senate will take up this bill after senators return from the July 4 recess on July 12.

I haven’t blogged much about financial reform because so many important provisions didn’t make it into the original House bill and/or were ditched during the Senate amendment process. Yesterday Democratic Senator Russ Feingold of Wisconsin blasted the “unholy alliance between Washington and Wall Street”:

I cosponsored a number of critical amendments during Senate consideration of the bill including a Cantwell-McCain amendment to restore Glass-Steagall safeguards, Senator Dorgan’s amendment that addressed the problem of “too big to fail” financial institutions, and another “too big to fail” reform offered by Senators Brown and Kaufman that proposed strict limits on the size of those institutions. Each of those amendments would have improved the bill significantly, and each of them either failed or was blocked from even getting a vote.

After that, it wasn’t a close call for me. It would be a huge mistake to pass a bill that purports to re-regulate the financial industry but is simply too weak to protect people from the recklessness of Wall Street. […]

Since the Senate bill passed, I have had a number of conversations with key members of the administration, Senate leadership and the conference committee that drafted the final bill. Unfortunately, not once has anyone suggested in those conversations the possibility of strengthening the bill to address my concerns and win my support. People want my vote, but they want it for a bill that, while including some positive provisions, has Wall Street’s fingerprints all over it.

In fact, reports indicate that the administration and conference leaders have gone to significant lengths to avoid making the bill stronger. Rather than discussing with me ways to strengthen the bill, for example, they chose to eliminate a levy that was to be imposed on the largest banks and hedge funds in order to obtain the vote of members who prefer a weaker bill. Nothing could be more revealing of the true position of those who are crafting this legislation. They had a choice between pursuing a weaker bill or a stronger one.

While we’re on the subject of those conference talks, which catered to a handful of New England Republicans, here’s a textbook case of Republicans negotiating in bad faith:

This week, Democrats sought to confirm the support of Sen. Scott Brown (R) of Massachusetts, who threatened to vote against the bill if it contained $19 billion in new fees on large banks and hedge funds. House and Senate conferees reconvened to remove that provision, but on Wednesday Senator Brown didn’t commit his vote. He said he plans to evaluate the bill over Congress’s week-long July 4 recess.

During the past few weeks David Waldman wrote an excellent series of posts on the conference process and mechanics. Political junkies should take a look, because this won’t be the last important bill hammered out by a conference committee.

As with health insurance reform, the Wall Street reform bill contains a bunch of good provisions. Chris Bowers lists many of them here. Representatives Braley, Loebsack and Boswell also highlighted steps forward in statements I have posted after the jump. On balance, it’s better for this bill to pass than for nothing to pass. But like health insurance reform, the Wall Street reform bill isn’t going to solve the big systemic problems it was supposed to solve. It’s disappointing that large Democratic majorities in Congress couldn’t produce a better bill than this one, and it’s yet another sign we need filibuster reform in the Senate.

Another parallel between health insurance reform and financial reform is that Republican talking points against it are dishonest.

Share any relevant thoughts in this thread.

Senator Tom Harkin is among 13 senators (eight from the Banking Committee, five from the Agriculture Committee) named to the conference committee that will reconcile differences between the financial reform bills approved by the House last December and the Senate last week. The House will also have 13 representatives on the conference committee. For lists of the key differences between the bills, see Pat Garofalo’s Wonk Room chart and this post by David Dayen. Harkin’s office released this statement on Tuesday:

“Over the last year, Wall Street has repeatedly tried to kill this reform with hundreds of lobbyists and millions of dollars in ads. From my seat at the table, I look forward to ensuring that effort will have been in vain,” Senator Harkin said. “I plan to do everything in my power to preserve the bill’s integrity, strengthen its consumer protections, and stop the reckless financial wheeling and dealing that destabilized our economy and threw millions of Americans out of work. And, given the dangers they pose if not properly regulated, I plan to focus on preserving the key reforms in the Senate-passed derivatives portion of the bill. The Restoring American Financial Stability Act is a step in the right direction, and I look forward to improving it in conference.”

He’ll have his work cut out for him if he wants to preserve the Senate language on derivatives. Dayen wrote last week,

Everyone expects the 716 provision, which forces the mega-banks to spin off their swaps trading desks, to be excised in conference. But Michael Greenberger believes something like it will be retained. The House’s derivatives piece is a mess and nearly useless, but [conference committee chairman] Barney Frank has admitted a mistake on that front, and wants to preserve strong rules against derivatives, like in the Senate bill.

The smart money is on the conference committee dropping the strong derivatives language after the Arkansas Democratic primary runoff election on June 8. Until then, corporate hack Senator Blanche Lincoln needs to be able to brag about standing up to Wall Street lobbyists.

Here’s another battle Harkin should fight during the conference negotiations. On Monday the Senate passed a non-binding instruction to the conference committee supporting “a special exemption to shield automobile dealers from the oversight of a new Bureau of Consumer Financial Protection.” The House bill already contains that exemption. Harkin was among the 30 senators who voted against that instruction, while Republican Chuck Grassley was among the 60 who voted to limit the oversight of the new consumer protection unit. Of the 13 senators named to the conference committee, six voted against the instruction on automobile dealers, four voted for it, and three did not vote (roll call).

According to the White House blog,

The President has been clear on this issue, repeatedly urging members of the Senate to fight efforts of the special interests and their lobbyists to weaken consumer protections.  The fact is, auto dealer-lending is an $850 billion industry, which is larger than the entire credit card industry and they make nearly 80 percent of the automobile loans in our country.

Is there any question that these lenders should be subject to the same standards as any local or community bank that provides loans?

Auto dealer-lenders sell auto loans to working families every single day, and while most dealers are no doubt above board, some cannot resist the bigger profits that come from inflating rates, hiding fees, and tacking on over-priced add-ons.

In this kind of situation, President George W. Bush would make his demands clear and tell members of Congress to send him “a bill I can sign.” We’ll see how far President Obama is willing to go to keep consumer protection provisions in the Wall Street reform bill.  

The U.S. Senate passed the Wall Street reform bill today by a 59 to 39 vote (roll call here). The vote was mostly along party lines, but Democrats Russ Feingold of Wisconsin and Maria Cantwell or Washington voted no, while Republicans Olympia Snowe and Susan Collins of Maine, Scott Brown of Massachusetts and Iowa’s own Chuck Grassley voted yes. Earlier today, a cloture motion to end debate on the bill passed 60 to 40. Only three Republicans voted for the cloture motion (Snowe, Collins and Brown). In other words, Grassley voted against letting the bill advance before he voted for it.

Grassley typically wouldn’t be the only conservative Republican voting with a handful of New England moderates. Like Howie Klein, I wonder whether Grassley was concerned about this bill becoming an election issue. Roxanne Conlin’s campaign blasted Grassley yesterday for joining the Republican filibuster of the bill.

The financial reform now goes to a formal conference committee to reconcile differences between the House and Senate versions. Annie Lowrey discussed that process and some of the contentious issues here. I’m not hopeful about the final product.

Lots of amendments to more strongly regulate the financial industry bill didn’t get a vote in the Senate, including Tom Harkin’s proposed limit on ATM fees. Jeff Merkley of Oregon and Carl Levin of Michigan were unable to get a vote on their amendment to reinstate the “Volcker rule” (banning proprietary trading by banks). There was a small silver lining in that opposition to Merkley-Levin scuttled a horrible idea. Earlier this week Merkley and Levin attached their amendment to a terrible Republican amendment, which would “[exempt] auto dealers from new consumer protection laws, even though auto loans are the biggest instances of financial malfeasance against consumers, especially military personnel.” Today Senator Sam Brownback of Kansas withdrew his auto dealer amendment in order to prevent Merkley-Levin from getting a vote.

UPDATE: Statements from Harkin, Grassley and Conlin are after the jump. Harkin and Grassley both called the bill “a step in the right direction” even as they lamented its flaws. Harkin lamented that several specific proposals were not adopted or considered, while Grassley called attention to his amendments that became part of the bill. Conlin praised Grassley’s vote for the reform bill and claimed that grassroots efforts “turned up the heat” on Grassley, prompting him to reverse “his five previous votes to block debate on Wall Street reform.”

The massive oil spill in the Gulf of Mexico and the many primary elections this month have drawn much of the media’s attention away from the Senate debate on financial reform. That’s too bad, because this bill will affect the future stability of our financial system and the ability of financial institutions to fleece consumers. I’ve been catching up with David Dayen’s superb coverage of the financial reform debate, and most of the news isn’t encouraging.

Senate Republicans voted several times in early May to block the bill from coming up for debate, but they soon decided that was not a viable strategy. In the early days of Senate debate, some decent amendments were adopted to strengthen the bill. For example, one amendment sponsored by Jeff Merkley of Oregon and Amy Klobuchar of Minnesota, which passed last week, would ban some deceptive practices by mortgage lenders.

This week Republicans have been trying to “run out the clock” on more strengthening amendments. By denying unanimous consent to bring these amendments to a vote, they have been able to keep the Senate from voting on an amendment by Byron Dorgan of North Dakota, which would ban naked credit default swaps. Republicans have also blocked a vote on Tom Harkin’s amendment to cap ATM fees at 50 cents. In addition, a measure backed by Merkley and Carl Levin of Michigan, which would impose the so-called “Volcker rule,” has been denied a vote. Merkley-Levin “would ban proprietary trading at banks and require the Federal Reserve to impose tougher capital requirements on large non-banks that engage in the same type of trading”. I have a sense of deja vu reading about the Merkley-Levin amendment; like the public health insurance option, Merkley-Levin has the stated support of the White House and Senate Majority Leader Harry Reid. And as with the public option, these Democrats won’t do what’s necessary to get Merkley-Levin into the bill.

Meanwhile, many Senate Democrats are doing Wall Street’s bidding by watering down key provisions of the financial reform. Most of the Democratic Senate caucus backed an amendment from Tom Carper of Delaware, which “would block class-action lawsuits by state Attorneys General against national banks” and “would allow the Office of the Comptroller of the Currency to pre-empt regulation at the state level of consumer financial protection laws.” Chris Dodd of Connecticut got an amendment through last night that eliminates real derivatives reform from this bill. Now, instead of forcing some large banks to spin off their businesses in trading derivatives, Dodd’s amendment delays that move for two years so the issue can be further studied.

Dayen concludes, “Overall, we have a bill that got less bad through the Senate process, but is generally as mediocre as the House’s version, better in some ways, worse in others. And there’s a whole conference committee to go.” Looks like we’ll be stuck with a bill that only gives the appearance of solving key problems, as opposed to a bill that would solve the key problems.

One point worth noting: Senator Chuck Grassley joined Republican efforts to block the financial reform bill earlier this month, but during the debate he has voted for some regulations that most Republicans opposed. For instance, he voted for the stronger language on regulating derivatives trading when it came up in the Senate Agriculture Committee. He was also one of a handful of Republicans to vote for the Merkley-Klobuchar amendment on lending standards. Grassley said recently that there’s a lot of anti-incumbent sentiment this year, and I think he is trying to compensate for his long and consistent record of standing up for Wall Street interests. Analysts outside Iowa agree that Grassley’s re-election contest is looking more competitive than it did last year (though Grassley is still favored).

Share any relevant thoughts in this thread.

WEDNESDAY AFTERNOON UPDATE: Dodd withdrew his derivatives amendment today, Merkley and Levin are trying a new tactic to get their amendment considered, and Reid’s cloture vote failed today, 57-42, despite two Republicans yes votes (Olympia Snowe and Susan Collins of Maine). Reid voted no at the last minute so that he could bring up the matter again tomorrow. Two other Democrats voted no: Russ Feingold of Wisconsin and Maria Cantwell of Washington. Like several other Senate progressives, Feingold wants votes on more strengthening amendments, and Cantwell isn’t happy with “a loophole in the derivatives piece”.  

The Senate voted to confirm Ben Bernanke as chairman of the Federal Reserve today, but it was hardly a ringing endorsement:

The 70 to 30 vote was the thinnest approval ever extended to a chairman in the central bank’s 96-year history.

The confirmation was a victory for President Obama, who had called Mr. Bernanke an architect of the recovery, but also signaled the extent to which the Fed, once little known to the public, has become the object of populist outrage over high unemployment and Wall Street bailouts.

In several hours of debate, senators said the Fed had abetted, then ignored, the housing and credit bubbles and allowed banks to keep dangerously low capital reserves and to make reckless lending decisions that ruined consumers. Some even blamed Mr. Bernanke for the falling dollar and questioned his commitment to free enterprise.

In contrast, Mr. Bernanke’s supporters were muted. Like a mantra, they said that the Fed had made mistakes but that Mr. Bernanke had helped save the economy from a far worse recession.

Eleven Democrats, 18 Republicans and independent Bernie Sanders voted against confirming Bernanke (roll call here).

Senators of both parties who opposed Bernanke said his monetary policy and poor oversight contributed to the financial meltdown of 2008. Various Democrats who voted against Bernanke said he had been too beholden to Wall Street interests.

I still think it was a mistake for Obama to nominate Bernanke for another term, but let’s hope the Fed chairman our mild-mannered economic overlord improves on the job.

UPDATE: MIT economist Simon Johnson argues that Bernanke’s reappointment was “a colossal failure of governance.” Worth a read.

SECOND UPDATE: Bleeding Heartland user ragbrai08 notes that seven senators voted for cloture (allowing the Senate to proceed to consider Bernanke’s nomination) before voting against confirming him. Here is the roll call on the cloture vote. The senators who voted for cloture but against Bernanke are Democrats Tom Harkin, Barbara Boxer (CA), Byron Dorgan (ND), Al Franken (MN), Ted Kaufman (DE), and Sheldon Whitehouse (RI), along with Republican George LeMieux (FL).

Following up on the diary I posted this morning, this post compiles links to Bleeding Heartland’s coverage of national politics from July through December 2009. Health care reform was again the number one topic. I wish there had been a happy ending.