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Democrats Are Helping Trump Deregulate Wall Street

If Democrats capture the House or Senate or both chambers this November, the grassroots, anti-Trump voters who put them in power will periodically become disaffected by some of our system of government’s unique constraints. Democrats will and should be expected to conduct vigorous oversight of a historically corrupt administration, but they will also have a governing stake in routine matters like passing appropriations and responding to national crises, and it will not always be obvious whether a they are compromising out of necessity, weakness, or venality.

In 2007, after Democrats took control of Congress, they rooted out a ton of corruption, but they also worked with the Bush administration to fund the government—including two misbegotten wars—and authorized national security tools they had accused the president of abusing on the campaign trail. Democratic activists often lumped these concessions together into a single narrative of betrayal, but the truth was a bit more complicated.

The Democrats’ current complicity in streamlining legislation to weaken the Dodd-Frank financial reform law is, by contrast, not complicated at all. It is a naked bid for favors from some of the most Trump-enabling forces in the American political economy, against the wishes of most members of the party. Republicans have been trying for years to return to the pre-reform status quo, and now that President Obama and Senate Minority Leader Harry Reid are out of the way, over a dozen Democrats are lining up to help them.

The dispute over the merits of the bill centers largely around the potential consequences of letting large banks carry riskier balance sheets. Nobody who supports the bill can point to any urgency in passing it now or passing it in its current form. Its critics note that the bill will increase the odds of bank failures should we encounter another financial crisis.

Even if we assume good faith on the part of supporters of this bill, the big tell that this is a venal giveaway to Wall Street, Trump, and the GOP can be found in what these Democrats are seeking in return for their votes: nothing.

Recently, nearly the entire Senate Democratic caucus was of one mind that Republicans should have to make concessions to Democrats if and when they need Democratic votes to pass their bills. At the time, advancing legislation to protect Dreamers was at the top of the party’s priority list, but the stakes of playing legislative hardball were much higher than they are now: Withholding their votes would ensure the failure of government funding legislation, causing a government shutdown. As a result, Democrats were only able to secure a commitment from Majority Leader Mitch McConnell to hold an open debate and vote on separate legislation to protect Dreamers. But they secured it by using their leverage over legislation that had bipartisan support.

That was less than one month ago.

Today, Dreamers are in just as much limbo as they were in February.

The Consumer Financial Protection Bureau remains in the hands of Trump’s reactionary, and possibly corrupt budget director, Mick Mulvaney, who earlier in his career had committed himself to the agency’s destruction.

As Vox’s Matthew Yglesias noted, there are myriad other regulatory vacancies that Trump could in theory fill with people who are committed to protecting the public from another financial crisis.

If this bill can’t pass without Democratic support, the Democrats who support it could condition their votes on concessions in any one of these areas. But they aren’t even bothering. Among the Democrats not bothering are a few vulnerable incumbents from states Trump won, who may fear voting against him (though it’s strange to imagine a huge clamor in, say, North Dakota for allowing megabanks to lever up). But their ranks also include two former chairmen of the Democratic Senatorial Campaign Committee and a former chairman of the DNC.

The good news is the bill isn’t so far along in the legislative process that these Democrats couldn’t reverse course, at least to demand something in return for their votes. If they do so in sufficient numbers, Republicans would either have to cough up the concessions or see their bill die. Senate Democratic leaders could essentially hold their members to that standard. But it looks like the fix is in. This wasn’t a borderline case in which Democrats were torn between their ideals and the messy obligations of governing. It was completely voluntary. They were just hoping you wouldn’t notice.

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