We have 9.1% unemployment, but we can’t pass jobs bills because they’re too expensive. We have an unreformed financial sector still desirous of engaging in risky lending, but we can’t implement risk retention rules that would force financial institutions to keep a tiny sliver of the deals they make instead of packaging them up and making them someone else’s problem. What we can do in the United States Congress is engage in a months-long lobby bonanza between the largest retailers in the country and the largest banks in the country over how they will split up the fee for when you purchase products via debit card. And finally, that battle over swipe fees gets a vote today.
After months of intensive lobbying by banks, the Senate is slated to vote Wednesday on a controversial bill that would delay changes to debit-card swipe fees that would cost the industry billions of dollars.
Sen. Jon Tester (D-Mont.) unveiled revised legislation Tuesday that requires four banking regulators to study the issue for six months. The Federal Reserve would then have an additional six months to rewrite the rules governing swipe fees. Tester’s original bill called for a two-year delay and would have required Congress to vote again to approve additional action.
“Working together across party lines, we’ve found common ground and agreed on a plan that actually fixes the problem with a balanced approach,” Tester said.
Just for backstory, the swipe fee reform would cap payments between retailers and banks at 12 cents per debit card purchase, down from the average of 44 cents today. This is a $16 billion industry for the banks, and the lobbying to get the rule delayed has become something of a cottage industry itself.
Of the three of the co-sponsors of the bill – Tester, Bob Corker and Kay Hagan – Hagan voted for the swipe fee amendment as part of the Dodd-Frank law. Mike Crapo and Michael Bennet, at least, are on Tester’s side after also voting for the amendment, which Dick Durbin carried and got 64 votes. This issue was settled then. But the banks turned their attentions to rolling it back, and Tester saw an opportunity to grease palms for his tough re-election fight. So he forced the issue. (continued)….
However, Tester doesn’t look to be in the greatest position. First of all, he cut his demands in half, from a two-year delay to a one-year delay. Second of all, the amendment will probably need 60 votes for passage, so Tester will need a lot more flippers than Hagan and Bennet and Crapo. And most important, the vote will come on the Economic Development Administration reauthorization bill, the very one that the White House deemed too expensive, and one which probably has no chance of passing in the house, swipe fee delay or not. The bill increases funding for the EDA to $500 million a year through 2015, up from $325 million in the President’s budget. And we can’t have increases!
As Ryan Grim and Zach Carter point out, Durbin seems to know his advantages here:
On Tuesday, HuffPost asked Durbin about Tester’s decision to attach his amendment to a legislative vehicle that is running on empty. Durbin responded with a wide, wry smile, relishing the timeworn congressional jiu-jitsu that pinned Tester without the Montana senator even realizing it. “Well,” Durbin said, “we haven’t had a lot of luck passing bills in both chambers.” […]
K Street, which has lobbyists representing banks and merchants, wins either way and is grateful to Durbin for the payday, he says. “A friend of mine who is a lobbyist downtown in Washington said, ‘Durbin, praise the Lord. Come up with some more ideas. This is a full employment amendment. Everybody who is a lobbyist in Washington is working on this amendment. We just love you to pieces,'” Durbin recounted on the Senate floor Tuesday afternoon. “Well, the sad reality is, it’s coming maybe to a close with a vote on this amendment.”
As the vote nears, an accurate whip count is hard to come by. Lobbyists on both sides are uncertain. Senators whom The Huffington Post queried generally said they remained undecided — often a sign that members of the herd were waiting to see which way the voting stampede might be headed. In Congress, the only thing worse than flip-flopping and angering a powerful industry is going to all that trouble for a losing cause.
So the inability of the Senate to get anything done might work in favor of the retailers here. Even though this is mainly a militating between corporate interests, it would be an important victory. If the banks can beat back an extremely powerful opponent, and save $1.35 billion a month in fees for each month of delay, they will see themselves as unstoppable in the future. Dodd-Frank, such that it is, won’t have a chance. Virtually every regulatory reform in it, and a bunch more, will get rolled back. This is an opportunity to show the banks that they don’t totally own the place, at least not when they have a foe willing to spend as much as them.