‘Let’s Talk about What We’re Actually Talking About’

Too bad Congress actually doing something is nearly as bad as Congress doing nothing. I’m referring to the ‘omnibill’, the poor excuse for a budget that was passed to stave off yet another government shutdown.  It’s not just the earmarks and other ‘pork’ that gets line-item added into such legislation, It’s the fact that seismic policy shifts that have no bearing on what is actually being passed are hidden into these massive funding bills. Two of the most blatant policy adjustments that have no place in a document detailing government spending are new donation limits on campaign finance and the roll-back of Dodd-Frank enforcement in regards to credit-swaps and derivatives.

Government funds shouldn’t be used in campaign finance to begin with, so why on page 1,599 of a 1,603 page government spending document are limits (or the lack thereof) for campaign finance even addressed! A New York Times article summarized the impact of the changes perfectly: “A donor who gave the maximum $32,400 this year to the Democratic National Committee or Republican National Committee would be able to donate another $291,600 on top of that to the party’s additional arms -- a total of $324,000, ten times the current limit. In a two-year election cycle, a couple could give $1,296,000 to a party's various accounts.”[i] This little add-on at the end of a massive document that had little time for review basically guts campaign finance rules that were established back in 2002 in a separate bill authored by Senators McCain and Feingold.

After reading up on the legalese behind credit-swaps and derivatives in an attempt to arrive at a sensible layman’s explanation of these complex murky investments…, I gave up and decided on a different tact. The FDIC was established in 1933 as a response to the numerous bank failures of the time. It was established to “promote confidence and stability in the nation’s banking system.” [ii] The FDIC covers deposits in the following accounts: Checking, NOW (Negotiable Order Withdrawal), Savings, Money Market Deposit Accounts (MMDA), CD’s and other time deposits. It does not cover Stocks, Bonds, Mutual Funds, Life insurance, Annuities, Municipal securities, or Safe deposit boxes. Basically the FDIC covers money someone sets aside for safekeeping; it does not cover money someone is trying to use to make more money with. It almost goes without saying, but nobody uses credit swaps and derivatives for the safekeeping of money. The only reason anyone dabbles in such obscure, complex, and risky financial instruments is because there are large amounts of money to be made. In no way, shape or form should the FDIC be using taxpayer money to backstop such murky ill-defined investments, but that is exactly what Rep. Kevin Yoder of Kansas slipped into this all-encompassing budget bill. To top it off, he didn’t even write it, he just copied. “Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-lines. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word.”[iii] Basically, a subsection of 85 lines in a 1,603 page document essentially destroyed a significant part of the separate Dodd-Frank legislation that was passed in 2010 as a response to protect American citizens from having to bail out ‘too big to fail’ banks that epically fail to manage their finances effectively in the future.


Congress and our government have many significant problems but one thing that should be fixed, that will be a step in the right direction towards solving several other issues, would be to require different policies be addressed in their own respective bills.  This would allow more visibility and clarity on important issues and would also limit hidden lobbyist agendas from sneaking in legislation that has unforeseen consequences. Governing a large powerful country such as ours is already a complex enough endeavor without combining disparate issues. We need a ‘Let’s just talk about what we’re actually talking about’ law to help achieve a sense of clarity and focus.  

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