blaming the current crisis in the financial industry

[darrels joy]

How a Bill Becomes a Law

A Constitution Day lesson for the DailyKos Kidz.

By JAMES TARANTO

yesterday's column we noted that some supporters of Barack Obama, including Senate Majority Leader Harry Reid, were blaming the current crisis in the financial industry on the 1999 Gramm-Leach-Bliley Act (http://banking.senate.gov/conf/), a law whose chief Senate sponsor was then-Sen. Phil Gramm, who until July was an adviser to John McCain's presidential campaign. (The chief House sponsor was then-Rep. Jim Leach, now co-founder of Republicans for Obama.)

This was curious, we noted, since Graham-Leach-Bliley passed the Senate on a 90-8 vote, with both Reid and Obama running mate Joe Biden casting "aye" votes. One Andre Neil, a contributor to the Angry Left Web site DailyKos.com, thought he had caught us in an error--or, as he put it, "James Taranto is a liar. The Wall Street Journal just allowed one of its staff to perpetuate a blatant lie on its behalf." There followed a flood of angry spam from dozens of DailyKos readers; to get a sense of the tone, click on Neil's name and peruse the comments.

Trouble is, it is Neil who has misled his readers. He claims that the page to which we linked "is not a transcript to the roll call for the bill":

This is. It took place on May 6, 1999. The page that Taranto linked to was a vote on the conference report, which took place 6 months after the bill had already passed in the senate, and just over a week before it was signed into law. The bill was not passed 90-8; it was passed 54-44, almost strictly down party lines.

Neil and most of his readers do not seem to know what a conference report is. As a public service on this Constitution Day, we therefore present a lesson for DailyKos readers (and anyone else who could use a refresher) in How a Bill Becomes a Law:

America has what is known as a bicameral (two-chamber) legislature. In order for a bill to become a law, it must command a majority of voting members in both the House of Representatives and the Senate. A bill that has the support of only one chamber is a legal nullity. This much you could have learned by watching "

Schoolhouse Rock" target="_blank">Schoolhouse Rock

," which seems to be where the Kos Kidz' education ended. In real life, though, things are a bit more complicated.

The way the process works is that before voting on a bill, each chamber debates it separately, considering and voting on amendments (changes) introduced by members. The result in many cases is that by the time the House and Senate each vote on a bill, it become two different bills: one that passed the House and one that passed the Senate. Since each bill has passed only one chamber of Congress, neither one can become a law.

Enter the conference committee. This is a group of representatives and senators who meet to hash out the differences between the House and Senate bills. They produce a compromise: a bill on which both houses vote, so that it can become a law. The bill that actually becomes a law is known as a "conference report."

This is what happened with Gramm-Leach-Bliley. The Senate-only version of the bill did pass on May 6, 1999 by a near-party-line vote of 54-44.

The House-only version passed, 343-86, on July 1. Neither of these bills, however, became a law. The bill that did become a law--the law about which Sen. Reid and others are complaining now--was the conference report, the bill the Senate approved by 90-8 on Nov. 4. The House passed it the same day, 362-57.

Neil seems to have mistakenly thought that the "conference report" was a mere procedural action, when in fact it was a vote on actual legislation.

One of his readers tried to clear up his confusion but failed, as evidenced by Neil's response:

Update 3: I'm seeing a lot of comments about the significance of Democrats having voted for the Conference Report. I'll just go ahead and repost my reply to robertacker13:

"The Conference Report is nothing but an editing session. During the session, a a team picked from both the House and Senate meet in order to reconcile differences between the versions of the bills already passed in both chambers. This is the reason it took from May until November to get the bill passed. This is the reason GLBA passed that 4 November vote with such an overwhelming majority--it had already been approved in both houses, and the only formality left was for language to be amended by the conferees.

The 4 November vote was not a vote on the merits of the bill. It was a vote on the language of the bill.

Blocking the conference report does not kill a vote. Even if the report was voted against by every last Democrat, it was going to get pushed through anyway."

In fact, had the Senate voted down the conference report, the legislation would have been dead, since the bill that previously passed the Senate was different from the one that passed the House. Neil's distinction between the "merits" and "language" of the bill lacks any basis in reality. A bill and its language are one and the same thing.

Moreover, Neil errs in implying that the Republicans could have passed Gramm-Leach-Bliley without Democratic help. It is true that the Republicans held majorities in both congressional chambers in 1999. Yet as hard as it may be to believe now, the president, Bill Clinton, was a Democrat. It was Clinton's signature that made the bill a law. Clinton could have refused to sign ("That's called a veto," as "Schoolhouse Rock" teaches).

In that case, it would have taken a two-thirds vote in both houses to make the bill a law--which means the votes of 34 Democratic senators would have been sufficient to block the legislation. Between May and November, 37 Democrats, including Reid and Biden, switched from opposing Gramm-Leach-Bliley to supporting it. Had 27 or more of them stood their ground, their numbers would have been sufficient to sustain a veto.

In fairness to Neil and the other Kos Kidz, it's probably true that hardly anyone knows what a conference report is. Yet while their ignorance may be excusable, the self-righteousness and bluster with which they express it ought to embarrass even Markos Moulitsas.

Several readers called to our attention two other points relevant to our item yesterday. First, it seems Peter Fitzgerald, the Republican who preceded Obama in the Senate, voted "present" because his father was in the banking business and thus the senator believed it was a conflict of interest for him to vote on legislation affecting the industry.

Second, without Gramm-Leach-Bliley, which abolished the barrier between commercial and investment banking, the recent deals that saved Bear Stearns and Merrill Lynch would have been impossible, since both of them involved a commercial bank acquiring a troubled investment bank.
http://online.wsj.com/article/SB122167514301648581.html

[Advisor]

No one's skirts are clean on this mess. Both parties have bought into trickle-down Reganomics. De-regulation of the financial sector is to blame..congress rewrote the laws regulating this biz, believing, wrongly as it turns out, that the market would regulate things. Turned out they were wrong..didn't take into account the Gordon Gecko syndrome..greed is good. All it did is make a few rich people richer & left us, we the sheeple,stuck with the mess. They got the steak, we got the gristle.

[Gimpy]

Update: Did I just get called out by WSJ?

by AndreNeil

Wed Sep 17, 2008 at 0626 PM PDT


Looks like James Taranto didn't like his intellectually dishonest column getting called into question last night.

Excerpt from today's Best of the Web column:

"Neil and most of his readers do not seem to know what a conference report is. As a public service on this Constitution Day, we therefore present a lesson for DailyKos readers (and anyone else who could use a refresher) in How a Bill Becomes a Law:

America has what is known as a bicameral (two-chamber) legislature. In order for a bill to become a law, it must command a majority of voting members in both the House of Representatives and the Senate. A bill that has the support of only one chamber is a legal nullity. This much you could have learned by watching "Schoolhouse Rock," which seems to be where the Kos Kidz' education ended. In real life, though, things are a bit more" complicated.

Fighting words?


AndreNeil's diary :: ::

No, not really. In my previous diary, I discussed the passage of the Gramm-Leach-Bliley Act in the Senate, because his column yesterday concerned senators. Specifically, Biden, Reid, and McCain. Yet Taranto lapses into a maudlin discussion of the bill's passage in the house:

The House-only version passed, 343-86, on July 1. Neither of these bills, however, became a law. The bill that did become a law--the law about which Sen. Reid and others are complaining now--was the conference report...

And its signing into law by Bill Clinton:

Yet as hard as it may be to believe now, the president, Bill Clinton, was a Democrat. It was Clinton's signature that made the bill a law. Clinton could have refused to sign ("That's called a veto," as "Schoolhouse Rock" teaches).

Which is all well and good, and I did not hide from that yesterday. Matter of fact, I did assign some blame to Bill Clinton for signing the bill:

There is a reason the Obama campaign is not bringing this up. The bill was passed by Bill Clinton in 1999. If Obama plans on using Clinton as a stumper, it wouldn't be wise to bring up a bill that Clinton himself passed, which managed to auger the financial industry into the ground.

Clinton was in support of this bill, as was his economic advisor Robert Rubin, and Alan Greenspan. Quoth Rubin:

"The banking industry is fundamentally different from what it was two decades ago, let alone in 1933." He said the industry has been transformed into a global business of facilitating capital formation through diverse new products, services and markets. "U.S. banks generally engage in a broader range of securities activities abroad than is permitted domestically," said the Treasury secretary. "Even domestically, the separation of investment banking and commercial banking envisioned by Glass-Steagall has eroded significantly."

So we can put away the idea that I was trying to let Democrats off the hook. My point was that Sens. Reid and Biden, mentioned by Taranto in his column, did in fact vote against the bill on principle in May of 1999. Senator McCain did vote for it, and has consistently spoken in favour of the trend of financial industry deregulation that allowed GLBA to happen. In his first article, Taranto attempts to use Sen. McCain's absence from voting as an implication that he might have been against this bill, but was too busy campaigning for the 2000 Republican primaries to offer any insight.

To wit:

In financial institutions, there is no substitute for adequate capital to serve as a buffer against losses. Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital.

Removing regulatory impediments. He said that in March of this year. Let's not confuse ourselves here. McCain has supported deregulation in the financial industry all the way through Monday afternoon.

So here's what we know. Bill Clinton was in approval of this bill. The majority of the Senate was in approval of this bill. The House passed the bill with overwhelming support. Knowing that it was not going to be vetoed, and knowing that any attempts at blocking the bill would be futile, what, for heaven's sake would Biden and Reid have accomplished by voting against it?

Voting against the reconciled post-Conference Committee draft of the bill would not have terminated it. Voting against it would have sent the bill back to the Conference Committee, as well as ensured that Republicans refuse to play ball at any point in the future when they may make up a veto-capable minority. It would have eliminated any future expectations of reciprocity, should the Democrats regain control of either house. This is why CC drafts are rarely stonewalled, if they have passed both chambers with a decisive majority, and are supported by the President.

This is why I have such a hard time discussing politics with loyalist conservatives. And by "loyalist", I am leaving the sensible ones with any sense of nuance and lateral thinking off the table. I'm referring to the blank-slate, forget-about-all-history automatons whose minds have crystalized so as to repel all information that does not conform to their world view.

This bill's passage was a foregone conclusion in November of 1999. James Taranto damn well knows that.

It was supported by the majority of the House and Senate, and by the Executive. The only debate concerning the Conference Committee draft was consumer privacy protection, during and after the process of institution mergers. So, as I said before, the floor vote concerned the language of the bill, and not its merits.

Look, I realize that this is a thorny and complex discussion. But I've always been taught that not telling the whole truth is the same as a lie. Taranto knows, as well as any of you do, that passing a bill in Congress involves far more than just rote procedure. What he's relying on is the idea that his readers are either not sophisticated enough to understand the chicanery involved in passing laws, or simply don't care. So rather than talk about the circumstances of how the bill ended up being passed, and why McCain did not vote for the CC draft while Biden and Reid - two previous opponents - did, we're treated to an insipid lecture on the mechanisms of Congress.

Now do some of you understand why being an intellectually honest person in the financial industry, with people like James Taranto manning our presses, is so damned difficult?
P.S.

I cannot believe that the McCain campaign has left that web page intact, what with his call for further deregulation. Someone really should get the word out.

###END###

So then, another lying, fact challenged and totally dishonest conservative, James Taranto has once again been caught RED HANDED in another scheme that has been thoroughly DEBUNKED!

Gimp

[SuperScout]

You might find it interesting, and downright informative, if you read my thread about Freddie, Fannie and Obama. It will probably temper your enthusiasm for Barack Hussein Obama who is directly tied to Freddie and Fannie, and has the advisors and the campaign contributions to prove it.

[Gimpy]

Originally Posted by SuperScout

You might find it interesting, and downright informative, if you read my thread about Freddie, Fannie and Obama. It will probably temper your enthusiasm for Barack Hussein Obama who is directly tied to Freddie and Fannie, and has the advisors and the campaign contributions to prove it.

I "checked" your thread, and then did some further "research" into your comments and found them to be at best, incomplete, or at worst....completely misleading and lacking in total accuracy.

You may want to "vett" your "sources" a liittle more thoroughly before posting info of which appears to be somewhat misleading and/or distorted.

I will agree however.....BOTH campaigns have been "in bed" with Freddie Mac and Fannie Mae officials, for sure.

See, I'm still be "civil".

Yo Old "fact checking" buddy,

Gimp