Sen. Elizabeth Warren and other liberal Democrats bitterly complain about a Republican rider to the $1.1 trillion omnibus spending bill that would undo a major provision of the Dodd-Frank financial regulatory reforms. But they have their eye on the wrong ball.
A New York Times survey shows that 54 percent of Americans say “over-regulation” that may interfere with economic growth was a bigger problem than too little government regulation. The findings, based on telephone interviews with 1,006 adults Dec. 4-7, show slightly more than half of Americans (52 percent) think the U.S. economic system is “basically fair” compared to just 45 percent who believe it’s unfair.
The new survey published Wednesday shows that despite a significant improvement in the economy and the employment picture, there still is widespread pessimism about the future. There’s also a troubling decline in the number of people who still cling to the “American Dream” - the idea that people can get ahead and climb the economic ladder by dint of hard work.
Despite their growing pessimism about the state of the economy, the majority of those surveyed said they were more concerned about damage caused by excessive government regulation and red tape than they were about inequality spawned by the economic system.
Indeed, 54 percent said that “over-regulation that may interfere with economic growth” was a bigger problem than “too little regulation that may create an unequal distribution of wealth,” according to The Times survey. Just 38 percent said that too little regulation posed a bigger problem.
The Republican-dominated House was struggling to approve the massive $1.1 trillion spending measure containing the controversial amendments later today, after narrowly approving a crucial procedural motion, 214 to 212, with all Democrats and a handful of conservative Republicans voting against it.
The omnibus bill would keep most of the government fully funded through the remainder of the fiscal year ending next Sept. 30. Funding for the Department of Homeland Security, which will be responsible for implementing President Obama’s controversial immigration executive order, would be extended only through February.
That will give Republicans more time to consider ways to block the executive order designed to shield more than four million illegal immigrants from the threat of deportation. However, Warren (D-MA) and a clutch of other liberal Democrats who are outraged by the campaign finance and Dodd-Frank provisions that were slipped into the spending bill by Republicans, may try to block the overall spending package if it reaches the Senate tonight.
The controversial financial provision would weaken an element of the 2010 Wall Street reform bill aimed at making banks less susceptible to shocks from the financial markets. It did so by forcing banks to move most of their risky trading of swaps and derivatives to separately capitalized subsidiaries. The investments in question are relatively complex and enable huge bets on the changing value of commodities, other borrowers’ creditworthiness, and more. They were partly blamed for the near-collapse of the financial services industry during the crisis.
Top Reads from The Fiscal Times: