Congress Deal to Avoid Shutdown Includes Victory for Banks

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Senate Majority Leader Harry Reid
Senate Majority Leader Harry Reid, a Democrat from Nevada, said earlier today that if the House included the District of Columbia marijuana provision in the bill, “it’s going to be hard to take it out over here. But I oppose it.” Photographer: Andrew Harrer/Bloomberg

Congress will vote this week on a $1.1 trillion spending plan that would avert a U.S. government shutdown as Democrats agreed to roll back rules affecting banks, clean water and rest for truckers.

The House will vote on the plan tomorrow, Speaker John Boehner told reporters today. The Ohio Republican said he looks “forward to it passing with bipartisan majorities in the House and the Senate in the coming days.”

The deal was announced late yesterday after Democrats accepted Republican demands to ease regulations including the banking provision, a significant victory for big banks. It lets JPMorgan Chase & Co., Citigroup Inc. and other lenders keep swaps trading in units with federal backstops.

The measure is a compromise “that can and should have wide bipartisan support,” House Appropriations Chairman Hal Rogers, a Kentucky Republican, said in a statement yesterday. “Passage of this bill will show our people that we can and will govern responsibly.”

While Democrats aren’t pleased about the policy changes, they said they beat back dozens of other provisions that Republicans had sought in the measure.

“This agreement means no government shutdown and no government on autopilot,” said Senate Appropriations Chair Barbara Mikulski of Maryland, a Democrat who negotiated the plan with Rogers.

Stopgap Plan

Congress would have to enact a stopgap plan if the Senate doesn’t also pass the bill on Dec. 11, when current government funding ends. Senate Majority Leader Harry Reid has said the Senate may need to work through the weekend.

The agreement on the spending bill allows Republican leaders to clear their agenda to advance other items next year when they control the Senate and have an expanded House majority. It also puts off a confrontation over immigration policy until early 2015.

While most of the government would be funded through September 2015, the Department of Homeland Security would be financed only through Feb. 27. Republicans want to use that agency’s spending bill to defund President Barack Obama’s decision to ease deportation rules for millions of undocumented immigrants.

“This sets up a direct challenge to the president’s unilateral actions on immigration,” Boehner said today.

Last year, Republican efforts to defund Obama’s health-care law led to a 16-day partial government shutdown. Since taking House control in 2010, Republicans have used a series of short-term spending bills to force deep spending cuts.

Clean Air

In addition to the Dodd-Frank measure on swaps trading, the new spending bill would allow exceptions to clean-water laws for agricultural refuse, and block the District of Columbia from spending any money to legalize marijuana following a voter-approved measure allowing possession of as much as 2 ounces for personal use.

Reid said earlier yesterday that if the House included the District of Columbia marijuana provision in the bill, “it’s going to be hard to take it out over here. But I oppose it.”

The plan would roll back safety rules aimed at ensuring truck drivers get enough rest, ignoring the pleas of consumer activists and Transportation Secretary Anthony Foxx.

The provision would temporarily suspend rules that took effect last year while a study is conducted about the number of trucks driven on congested roads. Under the change, truckers would be able to work as many as 82 hours a week.

Warren Opposes

Some Senate Democrats oppose the Dodd-Frank proposal, including Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts. Warren in a statement today called the change “reckless.”

Lawmakers included the measure in the 2010 Dodd-Frank law to protect taxpayers against bank losses after souring derivatives trades spurred a U.S. rescue of the financial industry in 2008.

The Federal Reserve and Office of the Comptroller of the Currency provided a two-year delay in 2013 as long as banks take reasonable steps to move swaps to affiliates that don’t benefit from federal deposit insurance and discount borrowing.

Representative Maxine Waters, the top Democrat on the House Financial Services Committee, said in statement the measure would be “risking our homes, jobs and retirement savings once again.”

Campaign Donations

The measure would allow a tenfold increase in donations that individuals can give national political parties each year, to $324,000 from $32,400, according to a statement by Fred Wertheimer, president of Democracy 21. The non-partisan group advocates for changes to campaign finance laws.

Donors would be able to give $97,200 a year to each of three separate party committees for conventions, to pay for building funds and to finance the expenses for recounts and legal challenges to election results, Wertheimer said in a statement.

House Minority Leader Nancy Pelosi, a California Democrat, said in an e-mailed statement, “Until we review the final language we cannot make a determination about whether House Democrats can support this legislation, but I am hopeful.”

The policy disputes preview the partisan battles that will dominate Congress in 2015 when Republicans will control the Senate and have an expanded majority in the House.

Democrats agreed to the changes after fighting off a number of others. Those omitted include revisions to District of Columbia gun laws and six other Dodd-Frank-related policy proposals, according to a Democratic aide who sought anonymity to discuss the talks.

Environmental Rules

The aide said Democrats also headed off 25 changes to environmental regulations, including those governing greenhouse gases, fish and wildlife and ceiling fans as well as one blocking climate research.

“I strongly oppose several policy riders included in this final agreement, but I am pleased Democrats were able to eliminate many of the most damaging provisions,” said Nita Lowey of New York, the top Democrat on the House Appropriations Committee, in a statement.

The plan includes a proposal pushed by the National Rifle Association that lets gun manufacturers use lead to produce ammunition, and a labor provision exempting claim adjusters from overtime requirements during major disasters.

Pension Benefits

The measure would seek to shore up the Pension Benefit Guaranty Corp. by allowing some underfunded multiemployer pension plans to cut benefits. The provision reflects an agreement by House Education and the Workforce Committee Chairman John Kline, a Minnesota Republican, and senior Democrat George Miller, a California Democrat.

It also includes an extension until Oct. 1, 2015, of a ban on taxing Internet access. It would provide $5.4 billion in emergency funds to respond to the Ebola outbreak.

The bill would require the Postal Service to continue delivering on Saturdays and to keep all post offices open.

The Export-Import Bank would be allowed to continue financing overseas coal-fired power projects. As part of Obama’s effort to combat climate change, Ex-Im had revised its guidelines to bar such funding for plants that lack carbon capture technology.

The Internal Revenue Service would receive $10.9 billion, a 3 percent cut from last year and 12 percent below the administration’s request. IRS Commissioner John Koskinen has said enforcement will suffer and that taxpayers will face longer telephone waiting times if the agency’s budget is cut.

$1 Bill

The bill would prevent a pay increase for members of Congress and for Vice President Joe Biden. Also, it would prohibit the Bureau of Engraving and Printing from spending any money to redesign the $1 bill.

Lawmakers overcame the biggest risk to the spending bill last week as House Speaker John Boehner rejected Tea Party Republicans’ insistence on using it to defund Obama’s immigration orders. Instead, on Dec. 4 Boehner let members vent with a symbolic vote of disapproval.

Democratic votes probably will be needed for House passage as the spending measure is opposed by some Republicans who wanted to force a confrontation on immigration this month.

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