Shutdown deadline looms as opposition to ‘Cromnibus’ spending bill mounts
With the threat looming of a midnight government shutdown, the fate of a $1.1 trillion U.S. spending bill was thrust into doubt on Thursday by Democratic objections over a provision to roll back part of the Dodd-Frank financial reform law.
A vote on final passage of the bill was set for Thursday afternoon, and House Speaker John Boehner predicted passage.
But the measure barely cleared a procedural hurdle as both liberal Democrats and conservative Republicans urged their colleagues to oppose it.
Current spending authority for federal agencies expires at midnight on Thursday, so the House is also planning to pass a two-day extension to avoid a shutdown and allow more time for Senate passage, the Republican aides said.
The 1,603-page funding package, negotiated by Republican and Democratic appropriators and leaders in both chambers, looked to be cruising toward passage until full details were disclosed on Tuesday night.
Liberals, led by Senator Elizabeth Warren of Massachusetts, were livid that it included a provision that kills planned restrictions on derivatives trading by large banks, allowing them to continue trading swaps and futures in units that benefit from federal deposit insurance and Federal Reserve loans.
The Obama administration views the restriction, due to go into effect next year, as a pillar of the financial reforms enacted after the financial crisis, which was triggered by a collapse in complex mortgage derivatives.
“We think that’s wrong” Treasury Secretary Jack Lew told CNBC of the roll-back provision in the spending bill. However, both Lew and the White House stopped well short of issuing a veto threat against the measure.
Warren and others urged Democrats to withhold support until the provision was dropped. Some also demanded the removal of a provision that allows a massive increase in individual contributions to national political parties for federal elections, potentially up to $777,600 a year.
“I am increasingly optimistic that House Democrats will come together to defeat this effort to protect Wall Street’s biggest banks,” said Representative Maxine Waters, the top Democrat on the House Financial Services Committee.
She said many Democrats spoke out against the provision at a meeting Thursday morning. Aides to House Democratic leaders said, however, that they were not actively campaigning to defeat the bill.
House Majority Leader Kevin McCarthy said Republicans would not make any last-minute changes, adding: “I think we will be fine.”
Democratic support is seen as critical to passage of the spending bill in the House, as Republican aides and lawmakers say it is unlikely their party would be able to muster enough votes for passage on its own.
The spending bill would keep most federal agencies funded through September 2015, except for the Department of Homeland Security (DHS), which would get an extension only through Feb. 27.
The plan is intended to give Republicans leverage over DHS next year, when they control the Senate and have a stronger House majority. They intend to deny funding to the agency for implementation of Obama’s order allowing millions of undocumented immigrants stay and work in the United States.
(Additional reporting by Richard Cowan and Susan Cornwell; Editing by John Whitesides and Tom Brown)