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An about-face on ‘backroom deals’?
Brown winning concessions for state in financial overhaul
Question of the Day
Republican Scott Brown owes his election in part to the public furor over the so-called "Cornhusker Kickback," the backroom deal that Sen. Ben Nelson, Nebraska Democrat, struck for his vote to pass the health care bill. Now he is following Mr. Nelson's example, winning concessions in the financial-overhaul bill on behalf of Massachusetts banks.
The "Massachusetts Miracle" who delivered Edward M. Kennedy's Senate seat to Republicans is now wheeling and dealing with both parties and hinting that he just might vote with Democrats if they agree to goodies for financial institutions in his state.
It's an instructive look this midterm election year at how quickly a candidate who campaigned against "closed-door meetings" and "backroom deals" can learn to craft them once in office.
Mr. Brown scored an exemption for home-state interests like Fidelity Investments and the Massachusetts Mutual Life Insurance Co. from some new restrictions on trading. He also persuaded congressional negotiators to let banks invest up to 3 percent of their capital in private equity funds and hedge funds, a change that would help such banks as Boston-based State Street Corp.
Then, Democrats bowed to a more philosophical demand that knowledgeable officials say was choreographed by Republican leader Mitch McConnell of Kentucky. On June 29, Democratic negotiators agreed to remove a $19 billion tax on large banks and hedge funds after Mr. Brown threatened to vote "no" because of it.
Mr. Brown wouldn't say whether the concession was enough to win his vote.
"Over the July recess, I will continue to review this important bill," Mr. Brown said.
Advocates of the bill to rein in Wall Street were casting Mr. Brown's dealmaking as a shift from underdog candidate in a pickup truck to something more amorphous. The Massachusetts branch of Americans for Financial Reform planned a news conference to try to present him Thursday with a new BMW.
"Since Sen. Brown is willing to gamble with American consumers, he's sending the signal that he wants to trade in his iconic truck for something a little more luxurious, something more in line with the kinds of cars that his Wall Street cronies are driving," the group said in a press release.
Gail Gitcho, Mr. Brown's spokeswoman, defended the senator's actions, describing them as fighting for improvements in the bill for the entire country, not just Massachusetts, and for firms everywhere that didn't contribute to the financial crisis.
"Throughout it all, he has been very open and transparent about what he is trying to accomplish," Miss Gitcho said. "Scott Brown remains committed to putting in place safeguards to prevent another financial meltdown, ensure that consumers are protected, jobs are protected, banks can't act like casinos anymore, and that this bill is paid for without new taxes."
Senators advocate for the people and businesses in their states all the time and even set aside federal funds for specific purposes called "earmarks." Such deals earn lawmakers goodwill and campaign donations back home, but fairly or not they've acquired an unpopular image in the era of massive financial bailouts and health care reform.
There's no sign yet that Mr. Brown's maneuvering has hurt him back home. A poll for the Boston Globe conducted in mid-June showed he is the most popular officeholder in Massachusetts, with 55 percent of respondents holding a favorable view of him.
Safe in the Bay State, he faces little downside for playing hardball with the big boys in Washington on financial reform, for now.
The Senate's arithmetic, its polarization and happenstance - the death of Sen. Robert C. Byrd, West Virginia Democrat - gives this most junior of senators outsized power in the seniority-driven chamber. As soon as West Virginia Gov. Joe Manchin III appoints a successor to Mr. Byrd, Mr. Brown's power becomes a little less.
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