$1.1T Spending Bill Weakens Dodd-Frank, Cuts Pensions

Industrials Associated Press

A huge, $1.1 trillion spending bill funding every corner of government faces its first test in the House, where conservatives are unhappy because it fails to challenge President Barack Obama's immigration policy and many Democrats are displeased because it weakens the 2010 Dodd-Frank regulation of risky financial instruments.

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Another provision drawing fire would allow pensions to be cut for current retirees covered by some economically-distressed multiemployer plans, part of a package agreed to unexpectedly Tuesday after secretive talks.

The 1,603-page measure was unveiled late Tuesday and will be scrutinized in advance of a House vote Thursday. But support from the top leaders in both the House and the Senate appears to cement its passage and prevent a government shutdown Thursday midnight, despite the presence of items in the legislation for lawmakers of all persuasions to dislike.

Rep. Hal Rogers, R-Ky., the chairman of the House Appropriations Committee, said the measure "will allow us to fulfill our constitutional duty to responsibly fund the federal government and avoid a shutdown."

The measure adheres to tight budget caps negotiated previously between the White House and Republicans, freezing agency budgets, on average. It also includes several provisions to fulfill Republican policy objectives, including significantly weakening new regulations that require banks to set up separate affiliates to deal in the more exotic and riskier forms of complex financial instruments called swaps. But some top Democrats, including Appropriations Committee member Nita Lowey of New York, supported the provision, and party leaders didn't appear to try too hard to knock it out.

The measure is laced with trade-offs. Democrats won budget increases for the Securities and Exchange Commission and the Commodity Futures Trading Commission; Republicans won a big cut to the Internal Revenue Service budget and a smaller cut to the Environmental Protection Agency.

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Democrats blocked the most ambitious attempts by Republicans to thwart Obama administration regulations on greenhouse gas emissions blamed for global warming, and on clean water; Republicans again won concessions exempting livestock producers from regulations on greenhouse gases and boosting exports of coal mine equipment.

The compromise spending bill will permit virtually the entire government to operate normally through the Sept. 30, 2015, end of the fiscal year, with the exception of the Homeland Security Department.

Funds for that one agency will run out again on Feb. 27, when Republicans are expected to try to use the expiration as leverage to force Obama to roll back a decision suspending the threat of deportation for an estimated 4 million immigrants living in the country illegally.

The overall spending measure reaches into every corner of government, from a provision to ease standards on school meals that were supposed to go into effect in 2017 to funds to restore the iconic Capitol Dome.

Proponents of campaign finance reforms decried a provision slipped in at the last minute that would sharply increase limits on the amount that an individual may contribute to various national political party accounts and committees each year. Those limits would rise from $32,400 to $324,000 for donations to finance parties' national conventions, election recounts and headquarters buildings. That means individuals could give $648,000 in a two-year campaign cycle, with a married couple capped at almost $1.3 million for an election cycle.

"It is only millionaires and billionaires who can give these huge, corrupting contributions," said campaign finance activist Fred Wertheimer, president of Democracy 21.

Earlier Tuesday, House Republicans removed one obstacle to passage of the spending measure by announcing they would pass legislation separately to renew a requirement for the government to assume some of the insurance risk in losses arising from terrorism.

In talks with Sen. Chuck Schumer, D-N.Y., Republicans led by Rep. Jeb Hensarling, R-Texas., agreed to the renewal, but split sharply over rolling back portions of the 2010 Dodd-Frank law that tightened federal regulation on the financial sector by easing rules on "end users" of complex financial instruments known as derivatives.

The stand-alone bill seemed likely to clear the House, but its fate in the Senate, where Schumer vowed to fight it, was uncertain.

The pension-related talks between Rep. John Kline, R-Minn., and George Miller, D-Calif., were designed to preserve benefits of current and future retirees at lower levels than currently exist, but higher than they would be if their pension funds ran out of money.

"We have a plan here that first and foremost works for the members of the unions, the workers in these companies, and it works for the companies," said Miller, retiring at year's end after four decades in Congress.

The AARP, which claims to represent millions of retirement-age Americans, attacked the agreement as a "secret, last-minute, closed-door deal between a group of companies, unions and Washington politicians to cut the retirement benefits that have been promised to them."