Wednesday on MSNBC’s “The Rachel Maddow Show,” Sen. Elizabeth Warren (D-MA) explained why she was aligned with some conservatives in opposing the spending bill set to be voted on by the U.S. House of Representatives later on Thursday that would fund the government, at least in part, until Republicans are in control of the U.S. Senate.
Warren told host Rachel Maddow her opposition is primarily due to a provision that would roll back parts of the Dodd-Frank law and make it possible for the FDIC to insure certain types of investments.
Transcript as follows:
MADDOW: Joining us now for the interview is Senator Elizabeth Warren of Massachusetts.
Senator Warren, thanks very much for your time tonight.
WARREN: Thank you. It`s good to be here.
MADDOW: So, specifically, what`s your objection to this specific provision in the budget bill, and did you know it was coming?
WARREN: So, let`s start with the second part. No, I did not know it was coming. I don`t think anybody knew this was coming.
But what the Republicans did is they pushed a bunch of terrible financial bills into the negotiations — a lot of attacks on Dodd/Frank, on the Consumer Financial Protection Bureau — and the Democrats beat them back, but this is the provision that stayed, and it is a real stinker.
What this one is about is that after the financial crash, we said to these big financial institutions, you`ve got to take the riskiest part of your trading, separate it out so that if it explodes, when it explodes, it`s not going to take down the insured part of the business, the deposits that are insured by FDIC insurance. And that provision has been in Dodd/Frank all along. Everybody has adjusted to it.
But what happens now in the spending bill is they just repealed that provision, which means that the taxpayers ultimately will be on the hook if they get out there and engage in derivatives trading and it blows up the entire financial institution or the entire economy.
You know, this is just one of those — this is a basic safety and soundness provision. And it only applies to just a handful of the biggest financial institutions in this country. So, what`s really going on here?
Well, they can make more money if they can do all of this business under the umbrella of their insured operations. They want the American taxpayers to subsidize their risk taking. They`ll take all the profits when it works and push the losses off on everyone else if it blows up.
MADDOW: The Republican lesson from the bailout, from the financial crisis, at least on the very far right side of the Republican Party, was supposedly that the bailouts were a bad idea, that the taxpayers getting involved in trying to save any part of the economy is a bad thing, it`s ideologically odious and that we should never do this again.
It`s hard — I`m surprised that there is not an outcry on the right about this, that the Tea Party caucus and others aren`t looking at this and saying this a taxpayer giveaway that isn`t good for anybody other than these lobbyists.
WARREN: No kidding. In fact, the title of the provision is no bailouts. I mean, that`s what this is about.
So, every Republican and every Democrat who votes for the omnibus with the repeal in it is voting to say, you know, we`re going to take out the part that says no bailouts for derivatives trading. You think everybody would say, we`re not doing this. We`re not doing this.
But do keep in mind, this was a provision that was written by Citigroup lobbyists. I mean, they literally wrote it. They took it back, they reedited it and made sure it said exactly what they wanted it to say.
The biggest financial institutions in this country can make more money if this little provision gets stripped out of Dodd/Frank, and that`s why we`re here to fight.
MADDOW: In terms of the practical and timely politics of this right now, John Boehner knows that he`s going to have 10, 20, 30, 40, 50, 60 defections from his own side in trying to pass the government funding bill. He knows he needs troops from the Democratic side, from Nancy Pelosi`s troops on the Democratic side, in order to get this thing passed. Nancy Pelosi has not said that she`s whipping against this and she wants Democrats to get in line with her objections to this, but her objections to this were loud and voiced very clearly today and repeatedly.
Do you think that this is — or do you have indications that this call that you`ve made and that Nancy Pelosi is now making will actually deprive John Boehner of enough votes that this might stop the passage of the whole bill?
WARREN: You know, I think this is about the leadership in the House. But I think this is really about democracy. I think this is about getting out and exposing what`s going on to the American people and that the American people speaking up themselves saying we`re not going to put up with this.
You know, I want to say to anybody who is watching this, I hope they`ll go to elizabethwarren.com. We`ve put something up on our Web site to say, sign on to tell the people in the House of Representatives we`re not putting up with business like this where these terrible provisions get crammed at the last minute into a bill that`s absolutely essential to keep the government up and running. That is not how we should be doing business in Washington.
And I think the folks in the House right now who have got the chance to strip this provision out need to hear from the American people over it. That`s — that`s why I`m here tonight. And that`s what I`m going to keep getting out there and fighting for.
Tomorrow morning, we`ll see what happens.
MADDOW: Senator Elizabeth Warren, thank you very much for your time tonight. This is — I have no idea how this is going to end. Thanks for helping us understand your take on it. I appreciate it.
WARREN: Thank you.
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