The Bank Lobbyists Behind the Senators Voting "No" on Reconciliation

May 24, 2010

Kevin Connor

Co-founder, Public Accountability Initiative
Posted: March 24, 2010 04:06 PM

The Bank Lobbyists Behind the Senators Voting "No" on Reconciliation

As the Senate takes up health care under the reconciliation process, the fight to block reform continues -- for the banks and their minions in the Senate, at least.

The health care fix-it bill approved by the House on Sunday night includes student loan reform legislation that would end wasteful subsidies to lenders like Sallie Mae, Citigroup, and JP Morgan. The banks are extraneous middlemen in the student loan business, skimming profits by originating government-backed loans and charging high interest rates. The reconciliation bill would eliminate the program that subsidizes these activities and switch to a more efficient and equitable system of direct lending.

Despite the common-sense nature of the reform, Senators Blanche Lincoln and Ben Nelson have decided that they will vote no on the reconciliation bill due to the inclusion of student loan reform legislation. Two weeks ago, they were part of a coalition of six Democratic Senators -- including Mark Warner, Tom Carper, Bill Nelson, and Jim Webb -- that wrote a letter to Senate majority leader Harry Reid raising concerns about the student reform legislation.

Why would these Senators step forward to defend a wasteful, inefficient system that pads bank profits at the expense of college students?

That's the question I attempted to answer in a report released on Tuesday by the Campaign for America's Future, titled "Money-Changers in the Senate: How the Student Loan Industry Enlisted Senators to Fight Reform and Protect Profits."

The report estimates that the industry has spent $15 million fighting the Student Aid and Fiscal Responsibility Act (SAFRA). It details how the banks have mounted a massive political campaign to fight legislative reform and preserve the status quo: billions in profits, company jets, private golf courses -- and predatory interest rates for America's college students.

As part of the campaign, the industry developed a sophisticated political strategy that targeted potential sympathizers in the Senate, including the six Senators who signed the letter to Reid. The industry showered them with campaign contributions and made a number of key lobbying hires in order to open lines of communication with their offices.

Among their hires: Kelly Bingel. Bingel is Senator Blanche Lincoln's former chief of staff and a longtime aide to the Senator. She is lobbying on behalf of an obscure group called the "Student Loan Coalition" and John Dean, a lobbyist for the Consumer Bankers Association. The CBA's membership includes Citigroup, Chase, Wells Fargo, and a number of other large student lenders.

A recent Roll Call article described Bingel as Lincoln's "alter ego."

Student loan lobbyist Kelly Bingel and Sen Blanche Lincoln.

Their ties also extend beyond the professional sphere: Lincoln is the godmother of Bingel's son, according to this interview Bingel gave to her old sorority. Ironically, considering the matter at hand, Senator and lobbyist were brought together by their college ties. Lincoln and Bingel were both members of the same sorority, Chi Omega (at different schools, however).

Lobbyists like Bingel have used their relationships with their old bosses to ensure that the Senate looks out for the student loan industry's agenda, even if it comes at the expense of millions of students.

The industry's other key Democratic defender, Senator Ben Nelson, also has strong ties to the industry through his former legislative director, Amy Tejral. Tejral lobbies for Nelnet, a major lender based in Nelson's home state of Nebraska.

Amy Tejral - Ben Nelson(2)

Student loan lobbyist Amy Tejral and Sen Ben Nelson.

At least six student loan lobbyists once worked for the six Senators who rose to the defense of the student loan industry in the letter to Reid.

The report also notes that the industry has used a number of industry associations and shadow groups to fight reform. The Consumer Bankers Association, the Business Roundtable, the American Bankers Association, and the Chamber of Commerce have all lobbied against student loan reform. The groups enlisted lobbyists on behalf of their members, which include Sallie Mae, JP Morgan, Citigroup, and other major lenders.

Even Chamber CEO Tom Donohue got in the act, personally lobbying against SAFRA, according to the business lobby's disclosure reports.

The industry has also funneled tens of thousands of dollars to these Senators. Nelson, for one, is a top recipient of Nelnet cash. The company's PAC has given him $19,000 over the years, and executives Jay and Mike Dunlap gave him $3,000 late last year. Sallie Mae's PAC maxed out to Senator Blanche Lincoln's primary account in 2009. Two of Tom Carper's top three career contributors are JP Morgan and Citigroup, both major lenders, and Sallie Mae's PAC has given him $13,500 over the past ten years.

To get an idea of the firepower behind the industry's campaign, check out the full report.

In a hopeful sign for American college students, the original coalition of Senators that rallied around the student loan industry now appears to be splintering. Ben Nelson and Blanche Lincoln have announced that they will vote no on reconciliation, but Tom Carper, Bill Nelson, and Jim Webb appear to be signaling that they will support the legislation. Mark Warner's stance is still unknown.

When the Democrats first re-gained the Senate majority in 2006, the late Senator Ted Kennedy made student loan reform a major legislative goal, saying that "it's time to throw the money-changers out of the temple of higher education." Despite the student lenders' multi-million dollar campaign to preserve the status quo -- billions in bank profits while college students get stuck with the bill -- the Senate may finally stand up and give the money-changers the boot.

Kevin Connor is a fellow at the Institute for America's Future. A version of this post first appeared at OurFuture.org.

http://www.huffingtonpost.com/kevin-connor/the-bank-lobbyists-behind_b_512049.html

Senate Votes For Wall Street; Megabanks To Remain Behemoths

Ryan Grim and Shahien Nasiripour
The Huffington Post

A move to break up major Wall Street banks failed Thursday night by a vote of 61 to 33.

Three Republicans, Richard Shelby of Alabama, Tom Coburn of Oklahoma and John Ensign of Nevada, voted with 30 Democrats, including Senate Majority Leader Harry Reid of Nevada, in support of the provision. The author of the pending overall financial reform bill in the Senate, Banking Committee Chairman Christopher Dodd, voted against it. (See the full roll call.)

The amendment, sponsored by Sens. Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del.), would have required megabanks to be broken down in size and capped so that their individual failure would not bring down the entire system.

Under Brown-Kaufman, no bank could hold more than 10 percent of the total amount of insured deposits, and a limit would have been placed on liabilities of a single bank to two percent of GDP.

In practice, the amendment required the six biggest banks -- Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley -- to significantly scale down their size. It was touted as a way to end Too Big To Fail.

Though top Obama administration officials have not publicly opposed the amendment, its leading economists have opposed ending Too Big To Fail simply by breaking up the nation's financial behemoths. Austan Goolsbee and Larry Summers have both fought back against this idea, as has Treasury Secretary Timothy Geithner.

"This is certainly a defeat for those who are concerned about the dangers of financial concentration in this country," Kaufman said in a statement after the vote. "Some causes are worth fighting for, and for me, the concern about the risks 'too big to fail' banks pose to the American economy and people is deep and profound given the economic tragedy millions of American have endured. I believe the debate itself -- though failing to gain a majority of votes -- has helped to change attitudes about the degree of financial concentration and power these megabanks now represent."
Story continues below

The banks owned by the four largest financial firms in the U.S. collectively account for about 45 percent of all assets in the U.S. banking system, according to a HuffPost analysis of Federal Deposit Insurance Corporation data.

Those four megabanks collectively hold about $7.4 trillion in assets, according to the most recent regulatory filings with the Federal Reserve. That's equal to about 52 percent of the nation's estimated total output last year.

The top 12 banks in the U.S. control half the country's deposits. By comparison, it took 25 banks to accomplish this feat in 2003 and 42 banks in 1998, according to a Jan. 4 research note by Jason M. Goldberg of Barclays Capital.

There are 23 bank-holding companies in the U.S. with more than $100 billion in assets, according to Federal Reserve data.

Richard W. Fisher, president and chief executive of the Federal Reserve Bank of Dallas, is among a group of at least three current regional Fed presidents that have called for the nation's megabanks to be broken up, joining Kansas City Fed president Thomas M. Hoenig and St. Louis Fed president James Bullard.

Fisher has suggested a ceiling on bank assets placed at $100 billion.

"In the past two decades, the biggest banks have grown significantly bigger," Fisher said last month. "The average size of U.S. banks relative to gross domestic product has risen threefold. The share of industry assets for the 10 largest banks climbed from almost 25 percent in 1990 to almost 60 percent in 2009."

Of course, size is not the only danger -- Lehman Brothers, whose crash rocked the financial system, would have been under the size caps proposed by the amendment. To that end, the Brown-Kaufman amendment limited the amount of leverage an institution can take at about 16-to-1. Hoenig has suggested a 15-to-1 ratio. Leverage is the use of debt to increase assets without a corresponding increase in capital.

The amendment began as a wild longshot, backed by the junior senator from Ohio, Brown, and a longtime aide to Joe Biden, Kaufman, appointed to keep his seat warm for two years until the 2010 election. That the amendment gained as much support as it did is an indication of the depth of the populist anger.

Sen. Mark Warner (D-Va.) and Dodd of Connecticut spoke against the amendment.

Sen. Judd Gregg (R-N.H.) was indignant. "I don't understand this Brown-Kaufman amendment. Basically, what it says is if you're successful...you're going to break them up? I mean, where does this stop? Do we take McDonald's on?"

"It really doesn't make any sense to me," he said.

After the vote, Kaufman defended the provision.

"I believe this idea was sound policy -- and I further believe that a mainstream consensus will continue to grow that these megabanks are too large, too complex and too internally conflicted to regulate successfully," he said, echoing a position voiced by regional Fed presidents, former top Fed officials, and former top bankers on Wall Street.

The Senate will resume voting on amendments to the legislation next week.


The 27 Democrats who voted against the amendment:

* Akaka (D-HI)
* Baucus (D-MT)
* Bayh (D-IN)
* Bennet (D-CO)
* Carper (D-DE)
* Conrad (D-ND)
* Dodd (D-CT)
* Feinstein (D-CA)
* Gillibrand (D-NY)
* Hagan (D-NC)
* Inouye (D-HI)
* Johnson (D-SD)
* Kerry (D-MA)
* Klobuchar (D-MN)
* Kohl (D-WI)
* Landrieu (D-LA)
* Lautenberg (D-NJ)
* McCaskill (D-MO)
* Menendez (D-NJ)
* Nelson (D-FL)
* Nelson (D-NE)
* Reed (D-RI)
* Schumer (D-NY)
* Shaheen (D-NH)
* Tester (D-MT)
* Udall (D-CO)
* Warner (D-VA)

http://www.huffingtonpost.com/2010/05/06/senate-votes-for-wall-str_n_567063.html

Levin releases email showing Goldman Sachs fraud.

http://levin.senate.gov/newsroom/release.cfm?id=324169

FOR IMMEDIATE RELEASE April 24, 2010	Contact: Senator Levin's Office Phone: 202.224.6221
Senate Subcommittee Investigating Financial Crisis Releases Documents on Role of Investment Banks
WASHINGTON – The Senate Permanent Subcommittee on Investigations released several exhibits that will be among those discussed on Tuesday at the fourth of its hearings on the causes and consequences of the financial crisis. The exhibits are available at this link. Using Goldman Sachs as a case study, the April 27 hearing will focus on the role of investment banks in contributing to the worst U.S. economic crisis since the 1930s, resulting in the foreclosure of millions of homes, the shuttering of businesses, and the loss of millions of American jobs. The Subcommittee, whose Chairman is Sen. Carl Levin, D-Mich., and whose Ranking Republican is Sen. Tom Coburn, R-Okla., has conducted a nearly year and a half investigation into the 2008 financial crisis. “Investment banks such as Goldman Sachs were not simply market-makers, they were self-interested promoters of risky and complicated financial schemes that helped trigger the crisis,” said Sen. Levin. “They bundled toxic mortgages into complex financial instruments, got the credit rating agencies to label them as AAA securities, and sold them to investors, magnifying and spreading risk throughout the financial system, and all too often betting against the instruments they sold and profiting at the expense of their clients.” The 2009 Goldman Sachs annual report stated that the firm “did not generate enormous net revenues by betting against residential related products.” Levin said, “These e-mails show that, in fact, Goldman made a lot of money by betting against the mortgage market.” The four exhibits released today are Goldman Sachs internal e-mails that address practices involving residential mortgage-backed securities and collateralized debt obligations (CDOs), financial instruments that were key in the financial crisis. Goldman Sachs Chairman and Chief Executive Officer Lloyd Blankfein and other current and former company personnel are scheduled to testify at Tuesday's hearing. In one of the e-mails released today, Mr. Blankfein stated that the firm came out ahead in the mortgage crisis by taking short positions. In an e-mail exchange with other top Goldman Sachs executives, Mr. Blankfein wrote: “Of course we didn't dodge the mortgage mess. We lost money, then made more than we lost because of shorts.” In a second e-mail, Goldman Sachs Chief Financial Officer David Viniar, who also will testify on Tuesday, responded to a report on the firm's trading activities, showing that – in one day - the firm netted over $50 million by taking short positions that increased in valued as the mortgage market cratered. Mr. Viniar wrote: “Tells you what might be happening to people who don't have the big short.” Levin said: “There it is, in their own words: Goldman Sachs taking ‘the big short’ against the mortgage market.” In a third e-mail, Goldman employees discussed the ups and downs of securities that were underwritten and sold by Goldman and tied to mortgages issued by Washington Mutual Bank's subprime lender, Long Beach Mortgage Company. Reporting the “wipeout” of one Long Beach security and the “imminent” collapse of another as “bad news” that would cost the firm $2.5 million, a Goldman Sachs employee then reported the “good news” – that the failure would bring the firm $5 million from a bet it had placed against the very securities it had assembled and sold. In a fourth e-mail, a Goldman Sachs manager reacted to news that the credit rating agencies had downgraded $32 billion in mortgage related securities – causing losses for many investors – by noting that Goldman had bet against them: “Sounds like we will make some serious money.” His colleague responded: “Yes we are well positioned.” Prior hearings of the Subcommittee have looked at how high risk lending strategies, bank regulatory failures, and inflated credit ratings contributed to the financial crisis. Next Tuesday’s hearing examining the role of investment banks will be the final hearing in the quartet of hearings on “Wall Street and the Financial Crisis.” The hearing will begin at 10:00 a.m. in room 106 of the Dirksen Senate Office Building.

Inside Job - a well-told story of the big financial sharks.

This American Life tells another part of the story of the sharks betting against the American Dream.

http://www.thisamericanlife.org/radio-archives/episode/405/inside-job

New Senate report on says Treasury programs are not resolving the mortgage forclosure crisis.

http://cop.senate.gov/press/releases/release-041410-aprilforeclosure.cfm

Panel Applauds Recent HAMP Revisions, But Treasury's Programs Are Not Keeping Pace with the Foreclosure Crisis

WASHINGTON, D.C. - The Congressional Oversight Panel today released its April oversight report, "Evaluating Progress of TARP Foreclosure Mitigation Programs." The Panel commended recent changes to the mortgage modification program designed to reach more homeowners, but found that Treasury is still struggling to get its foreclosure programs off the ground even as the crisis continues unabated.

Since the Panel's last examination of foreclosure mitigation efforts in October 2009, Treasury has taken steps to address concerns that the Home Affordable Modification Program (HAMP) did not adequately address foreclosures caused by unemployment or negative equity, including by establishing a voluntary principal reduction program. Despite these and other efforts, foreclosures continue at a rapid pace. In 2009, 2.8 million homeowners received a foreclosure notice, and nearly one in four homeowners with a mortgage currently has negative equity. While housing prices have begun to stabilize in many regions, home values in several metropolitan areas continue to fall sharply.

The Panel found that "Treasury's response continues to lag well behind the pace of the crisis" and that, even when HAMP is fully operational, they "will not reach the overwhelming majority of homeowners in trouble." The report raises three specific concerns with Treasury's foreclosure programs:

Timeliness. Since early 2009, Treasury has initiated half a dozen foreclosure mitigation programs, gradually ramping up the incentives for participation by borrowers, lenders, and servicers. Although Treasury should be commended for trying new approaches, its pattern of providing ever more generous incentives might backfire, as lenders and servicers might opt to delay modifications in hopes of eventually receiving a better deal.

Sustainability. Although HAMP modifications reduce a homeowner's mortgage payments, many borrowers continue to experience severe financial strain. HAMP typically does not reduce the total principal balance of a mortgage, meaning that a borrower who was underwater before receiving a HAMP modification will likely remain underwater afterward. Many borrowers will eventually redefault and face foreclosure. Redefaults signal the worst form of failure of the HAMP program: billions of taxpayer dollars will have been spent to delay rather than prevent foreclosures.

Accountability. The Panel is concerned that the sum total of announced funding for Treasury's individual foreclosure programs exceeds the total amount set aside for foreclosure prevention. Treasury must be clearer about how much taxpayer money it intends to spend. Additionally, it must thoroughly monitor the activities of participating lenders and servicers, audit them, and enforce program rules with strong penalties for failure to follow the requirements.

The full report is available at cop.senate.gov.

The Congressional Oversight Panel was created to oversee the expenditure of the Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA) and to provide recommendations on regulatory reform. The Panel members are: former Securities and Exchange Commissioner Paul S. Atkins; J. Mark McWatters; Richard H. Neiman, Superintendent of Banks for the State of New York; Damon Silvers, Policy Director and Special Counsel for the AFL-CIO; and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.

The Up-or-Down Vote on Obama’s Presidency

March 7, 2010

By FRANK RICH

WEDNESDAY’S health care rally was one of President Obama’s finest hours. It was so fine it couldn’t be blighted even by his preposterous backdrop, a cohort of white-jacketed medical workers large enough to staff a hospital in one of the daytime soaps that refused to be pre-empted by the White House show.

Obama’s urgent script didn’t need such cheesy theatrics. At last he took ownership of what he called “my proposal,” stating concisely three concrete ways the bill would improve America’s broken health care system. At last he pushed for a majority-rule, up-or-down vote in Congress. At last he conceded that bipartisan agreement between two parties with “honest and substantial differences” on fundamental principles wasn’t happening. At last he mobilized his rhetoric against a villain everyone could hiss — insurance companies. In a brief address, he mentioned these malefactors of great greed 13 times.

There was only one problem. This finest hour arrived hastily and tardily. At 1:45 p.m. Eastern time, who was watching? Of those who did watch or caught up later, how many bought the president’s vow to finish the job “in the next few weeks”? We’ve heard this too many times before. Last May Obama said he would have a bill by late July. In July he said he wanted it “done by the fall.” The White House’s new date for final House action — specified as March 18 by Robert Gibbs, the press secretary — is already in jeopardy.

“They are waiting for us to act,” Obama said on Wednesday of the American people. “They are waiting for us to lead.” Actually, they have given up waiting. Some 80 percent of the country believes that “nothing can be accomplished” in Washington, according to an Ipsos/McClatchy poll conducted a week ago. The percentage is just as high among Democrats, many of whom admire the president but have a sinking sense of disillusionment about his ability to exercise power.

Now that we have finally arrived at the do-or-die moment for Obama’s signature issue, we face the alarming prospect that his presidency could be toast if he doesn’t make good on a year’s worth of false starts. And it won’t even be the opposition’s fault. If too many Democrats in the House defect, health care will be dead. The G.O.P. would be able to argue this fall, not without reason, that the party holding the White House and both houses of Congress cannot govern.

For the sake of argument, let’s say that Obama does eke out his victory. Republicans claim that if he does so by “ramming through” the bill with the Congressional reconciliation process, they will have another winning issue for November. On this, they are wrong. Their problem is not just their own hypocritical record on reconciliation, which they embraced gladly to ram through the budget-busting Bush tax cuts. They’d also have to contend with this country’s congenitally short attention span. Once the health care fight is over and out of sight, it will be out of mind to most Americans. We’ve already forgotten about Afghanistan — until the next bloodbath.

The 2010 election will instead be fought about the economy, as most elections are, especially in a recession whose fallout remains severe. But that battle may be even tougher for this president and his party — and not just because of the unemployment numbers. The leadership shortfall we’ve witnessed during Obama’s yearlong health care march — typified by the missed deadlines, the foggy identification of his priorities, the sometimes abrupt shifts in political tone and strategy — won’t go away once the bill does. This weakness will remain unless and until the president himself corrects it.

Those who are unsympathetic or outright hostile to Obama frame his failures as an attempt to impose “socialism” on a conservative nation. The truth is that the Fox News right would believe this about any Democratic president no matter who he was and what his policies were. Obama, who has expanded the war in Afghanistan and proved reluctant to reverse extra-constitutional Bush-Cheney jurisprudence, is a radical mainly to those who believe a conservative Republican senator like Kay Bailey Hutchison of Texas is a closet commie.

The more serious debate about Obama is being conducted by neutral or sympathetic observers. There are many hypotheses. In Newsweek, Jon Meacham has written about an “inspiration gap.” He sees the professorial president as “sometimes seeming to be running the Brookings Institution, not the country.” In The New Yorker, Ken Auletta has raised the perils of Obama’s overexposure in our fractionalized media. (As if to prove the point, the president was scheduled to appear on Fox’s “America’s Most Wanted” to celebrate its 1,000th episode this weekend.) In the Beltway, the hottest conversations center on the competence of Obama’s team. Washington Post columnists are now dueling over whether Rahm Emanuel is an underutilized genius whose political savvy the president has foolishly ignored — or a bull in the capital china shop who should be replaced before he brings Obama down.

But the buck stops with the president, not his chief of staff. And if there’s one note that runs through many of the theories as to why Obama has disappointed in Year One, it cuts to the heart of what had been his major strength: his ability to communicate a compelling narrative. In the campaign, that narrative, of change and hope, was powerful — both about his own youth, biography and talent, and about a country that had gone wildly off track during the failed presidency of his predecessor. In governing, Obama has yet to find a theme that is remotely as arresting to the majority of Americans who still like him and are desperate for him to succeed.

The problem is not necessarily that Obama is trying to do too much, but that there is no consistent, clear message to unite all that he is trying to do. He has variously argued that health care reform is a moral imperative to protect the uninsured, a long-term fiscal fix for the American economy and an attempt to curb insurers’ abuses. It may be all of these, but between the multitude of motives and the blurriness (until now) of Obama’s own specific must-have provisions, the bill became a mash-up that baffled or defeated those Americans on his side and was easily caricatured as a big-government catastrophe by his adversaries.

Obama prides himself on not being ideological or partisan — of following, as he put it in his first prime-time presidential press conference, a “pragmatic agenda.” But pragmatism is about process, not principle. Pragmatism is hardly a rallying cry for a nation in this much distress, and it’s not a credible or attainable goal in a Washington as dysfunctional as the one Americans watch in real time on cable. Yes, the Bush administration was incompetent, but we need more than a brilliant mediator, manager or technocrat to move us beyond the wreckage it left behind. To galvanize the nation, Obama needs to articulate a substantive belief system that’s built from his bedrock convictions. His presidency cannot be about the cool equanimity and intellectual command of his management style.

That he hasn’t done so can be attributed to his ingrained distrust of appearing partisan or, worse, a knee-jerk “liberal.” That is admirable in intellectual theory, but without a powerful vision to knit together his vision of America’s future, he comes off as a doctrinaire Democrat anyway. His domestic policies, whether on climate change or health care or regulatory reform, are reduced to items on a standard liberal wish list. If F.D.R. or Reagan could distill, coin and convey a credo “nonideological” enough to serve as an umbrella for all their goals and to attract lasting majority coalitions of disparate American constituencies, so can this gifted president.

He cannot wait much longer. The rise in credit-card rates, as well as the drop in consumer confidence, home sales and bank lending, all foretell more suffering ahead for those who don’t work on Wall Street. But on these issues the president, too timid to confront the financial industry backers of his own campaign (or their tribunes in his own administration) and too fearful of sounding like a vulgar partisan populist, has taken to repeating his health care performance.

And so leadership on financial reform, as with health care, has been delegated to bipartisan Congressional negotiators poised to neuter it. The protracted debate that now seems imminent — over whether a consumer protection agency will be in the Fed or outside it — is again about the arcana of process and bureaucratic machinery, not substance. Since Obama offers no overarching narrative of what financial reform might really mean to Americans in their daily lives, Americans understandably assume the reforms will be too compromised or marginal to alter a system that leaves their incomes stagnant (at best) while bailed-out bankers return to partying like it’s 2007. Even an unimpeachable capitalist titan like Warren Buffett, venting in his annual letter to investors last month, sounds more fired up about unregulated derivatives and more outraged about unpunished finance-industry executives than the president does.

This time Obama doesn’t have a year to arrive at his finest hour. Not to put too fine a point on it, but the clock runs out on Nov. 2.

Copyright 2010 The New York Times Company

Poll: Mass. Voters Protested Against Weak Wall Street, Health Care Policies

First Posted: 01-20-10 11:07 AM | Updated: 01-20-10 05:16 PM

Sam Stein and Ryan Grim

Massachusetts voters who backed Barack Obama in the presidential election a year ago and either switched support to Republican Senate candidate Scott Brown or simply stayed home, said in a poll conducted after the election Tuesday night that if Democrats enact tougher policies on Wall Street, they'll be more likely to come back to the party in the next election.

A majority of Obama voters who switched to Brown said that "Democratic policies were doing more to help Wall Street than Main Street." A full 95 percent said the economy was important or very important when it came to deciding their vote.

In a somewhat paradoxical finding, a plurality of voters who switched to the Republican -- 37 percent -- said that Democrats were not being "hard enough" in challenging Republican policies.

It would be hard to find a clearer indication, it seems, that Tuesday's vote was cast in protest.

The poll also upends the conventional understanding of health care's role in the election. A plurality of people who switched -- 48 -- or didn't vote -- 43 -- said that they opposed the Senate health care bill. But the poll dug deeper and asked people why they opposed it. Among those Brown voters, 23 percent thought it went "too far" -- but 36 percent thought it didn't go far enough and 41 percent said they weren't sure why they opposed it.

Among voters who stayed home and opposed health care, a full 53 percent said they opposed the Senate bill because it didn't go far enough; 39 percent weren't sure and only eight percent thought it went too far.

The firm Research 2000 conducted the post-election survey Tuesday night on behalf of three progressive organizations -- the Progressive Change Campaign Committee, Democracy for America and MoveOn.org.

Taken from interviews of 500 Obama backers who voted in the Senate election and 500 Obama backers who sat out the election, the firm discovered that 18 percent of Obama backers who voted in the Senate race ended up casting ballots for Brown.

Of that group, 82 percent said they favored a public option for insurance coverage, with 14 percent opposed. Of those who sat out the election, 86 percent favored the public option, while only seven percent opposed it. The findings suggests that progressive arguments that disappointed Obama supporters deserted have serious merit.

UPDATE: With little, if any, historical precedent for the current situation in Congress, anything is possible on Capitol Hill over the next few weeks. Progressives have seized on the chaos and the polling numbers above to argue that the message voters sent was that Democrats haven't been bold enough. So far, more than 100,000 people have signed a petition calling for the Senate to put the public option back into the health care bill and pass it using the parliamentary maneuver known as reconciliation, which only requires 50 votes plus the vice president. Meanwhile, top Democrats are taking the idea seriously.

"Congressional Democrats have now been given fair warning by voters about what they expect in 2010: faster change, bolder change, and a willingness to fight big corporations on behalf of the little guy," said Adam Green, whose organization is leading the petition effort. "The Lieberman-Nelson strategy lost Ted Kennedy's Senate seat. Now it's time to push the public option through reconciliation -- and then, on to strong Wall Street accountability."

More details on the poll here and here.