Congress Reaches Spending Accord

Measure would finance most of U.S. government through September 2015.

Congressional leaders agreed on a $1.1 trillion spending bill to keep the U.S. government operating past Dec. 11 as Democrats accepted Republican demands to ease rules for banks, clean water and rest for truckers.

The banking provision would be a big victory for Wall Street, letting JPMorgan Chase & Co., Citigroup Inc. and other lenders keep swaps trading in units with federal backstops.

Senate Majority Leader Harry Reid earlier today said that though Democrats opposed the Republican-sponsored policy proposals, his party wouldn’t be responsible for shutting down the government.

“There’s no reason the government should shut down,” Reid told reporters. He said Republicans were “going at some of the basics that we believe in and have become part of our makeup, that has been clean air, clean water.”

The House plans to vote on the measure Dec. 11, according to a leadership aide who spoke on condition of anonymity.

Timing of a Senate vote hasn’t been announced, though current government funding ends that day. Congress would have to enact a stopgap plan if the spending measure isn’t passed by then. Reid has said the Senate may need to work through the weekend.

The measure is a compromise “that can and should have wide bipartisan support,” House Appropriations Chairman Hal Rogers, a Kentucky Republican, said in a statement. “Passage of this bill will show our people that we can and will govern responsibly.”

House Minority Leader Nancy Pelosi, a California Democrat, said in an e-mailed statement, “Until we review the final language we cannot make a determination about whether House Democrats can support this legislation, but I am hopeful.”

In addition to the Dodd-Frank measure on swaps trading, the spending bill would allow exceptions to clean-water laws for agricultural refuse, and block funding for rules to tax and regulate marijuana in the District of Columbia.

The bill would roll back safety rules aimed at ensuring truck drivers get enough rest, ignoring the pleas of consumer activists and Transportation Secretary Anthony Foxx.

The provision would temporarily suspend rules that took effect last year while a study is conducted about the number of trucks driven on congested roads. Under the change, truckers would be able to work as many as 82 hours a week.

 

‘Reckless’ Provision

Some Senate Democrats oppose the Dodd-Frank proposal, including Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts. Warren in a statement today called the change “reckless.”

Lawmakers included the measure in the 2010 Dodd-Frank law to protect taxpayers against bank losses after souring derivatives trades spurred a U.S. rescue of the financial industry in 2008.

The Federal Reserve and Office of the Comptroller of the Currency provided a two-year delay in 2013 on the condition that banks take reasonable steps to move swaps to affiliates that don’t benefit from federal deposit insurance and discount borrowing.

Representative Maxine Waters, the top Democrat on the House Financial Services Committee, said in statement the measure would be “risking our homes, jobs and retirement savings once again.”

The spending plan would put off until early 2015 a fight over Republican efforts to defund President Barack Obama’s plan to ease deportation policies for undocumented immigrants.

The policy disputes preview the partisan battles that will dominate Congress in 2015 when Republicans will control the Senate and have an expanded majority in the House.

Democrats agreed to the changes after fighting off several others. Those omitted include revisions to District of Columbia gun laws and six other Dodd-Frank-related policy proposals, according to a Democratic aide who sought anonymity to discuss the talks.

The aide said Democrats also headed off 25 changes to environmental regulations, including those governing greenhouse gases, fish and wildlife and ceiling fans as well as one blocking climate research.

The plan includes a proposal pushed by the National Rifle Association that lets gun manufacturers use lead to produce ammunition, and a labor provision exempting claim adjusters from overtime requirements during major disasters.

 

Pension Benefits

The bill would seek to shore up the Pension Benefit Guaranty Corp. by allowing some underfunded multiemployer pensions to cut benefits. The provision reflects an agreement by House Education and the Workforce Committee Chairman John Kline, a Minnesota Republican, and senior Democrat George Miller, a California Democrat.

It also includes an extension until Oct. 1, 2015, of a ban on taxing Internet access. It would provide $5.4 billion in emergency funds to respond to the Ebola outbreak.

The Internal Revenue Service would get $10.9 billion, a 3 percent cut from last year and 12 percent below the administration’s request. IRS Commissioner John Koskinen has said enforcement will suffer and that taxpayers will face longer telephone waiting times if the agency’s budget is cut.

Reid said earlier today that if the House included the District of Columbia marijuana provision in the bill, “it’s going to be hard to take it out over here. But I oppose it.”

An agreement on the spending bill is a victory for Republican leaders seeking to clear the agenda to advance other items next year.

While the spending bill would fund most of the U.S. government through September 2015, the Department of Homeland Security would be financed only through Feb. 27.

Lawmakers overcame the biggest risk to the spending bill last week as House Speaker John Boehner rejected Tea Party Republicans’ insistence on using it to defund Obama’s immigration orders. Instead, on Dec. 4 Boehner let members vent with a symbolic vote of disapproval.

Democratic votes probably will be needed for House passage as the spending measure is opposed by some Republicans who wanted to force a confrontation on immigration this month.

 

Bloomberg News

 

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