AFL-CIO President Richard Trumka said of Lincoln's derivatives proposal, in a statement released by the AFL-CIO as Congress's financial-reform conference committee finalizes its Wall Street reform package today:
The committee must maintain this language. Let me be clear: Any provisions or alternate language being offered are a gift to Wall Street. Financial regulatory reform without this strong derivatives language maintains the status quo where Wall Street gets rich on the backs of working families. We have to get it right or we set our nation up for another financial crisis. I do not say this lightly. Our future economy could very well rest on today's vote.
Just a few weeks ago, the AFL-CIO was slamming Lincoln at every opportunity, but her derivatives language very well could be a big silver lining for labor: pundits have asked what, exactly, labor got in return for the millions of dollars spent on Lt. Gov. Bill Halter's Democratic primary challenge, but Lincoln put forth her derivatives reform language--which would require banks to spin off or separate their derivatives-trading operations--as she felt the heat of Halter's primary challenge.
And the AFL-CIO knows it. "We support, and are fighting for, the tougher derivatives language in Wall Street reform. And this is a a good example of how our work to hold politicians accountable results in concrete policy changes," spokesman Eddie Vale said today.
The chronology went like this: with Halter's campaign gaining momentum but expected to fail, Lincoln unveiled her derivatives language, which surprised observers with its toughness, in mid-April. She campaigned on it. On the eve of her May 18 primary, as she was predicted by nearly everyone to win, Banking Chairman Chris Dodd weakened the derivatives language in the financial reform bill, essentially removing Lincoln's proposal. The following day, Halter got enough votes to force a runoff. The day after that, the derivatives language was back in. Lincoln eventually won the June 8 runoff.
Labor probably can't claim to have forced a gigantic change in the derivatives market, as it's not quite enough to pressure Lincoln to introduce her language, if that's what indeed happened. What emerges from the conference committee, and what the House and Senate eventually pass, has more to do with what's palatable to each chamber than what Lincoln introduced.
But it's interesting to see the AFL-CIO, just weeks removed from their campaign against her, pushing for Lincoln's derivatives language, despite not particularly liking the senator herself. Perhaps the millions in independent-expenditure money will earn them a tangible victory in the Senate, after all.
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