WASHINGTON — The Senate passed a largely symbolic package of budget amendments over the weekend that contains a plan to limit the size of the biggest banks, among other financial services-related provisions.
As part of a series of back-to-back votes on provisions in the chamber's budget blueprint, the Senate approved an amendment by a vote of 99-0 Friday night that would reduce federal subsidies and certain funding advantages for banks with over $500 billion in assets. The package also included a measure to restrict the government's ability to offset spending with certain fee hikes imposed by the government-sponsored enterprises Fannie Mae and Freddie Mac.
The amendments were among hundreds considered as part of the chamber's so-called "vote-a-rama," a rapid-fire passing of consecutive amendments that do not carry the force of law but can help set the stage for future debates about legislation.
Still, Sen. David Vitter, R-La., one of two main Senate proponents for breaking up the big banks, said the vote was a positive development. (The other primary sponsor is Sen. Sherrod Brown, D-Ohio.)
"This is a really impressive sign that we mean business on ending too-big-to-fail," Vitter said in a press release. "Mega-banks are still receiving special handouts that create an uneven playing field — making it harder for our community banks and credit unions to compete with the mega-banks. Beyond the TARP bailouts, the government has created a belief in the marketplace that the government will provide support to the mega-banks, but our amendment corrects that."
Sen. Tim Johnson, D-S.D., chairman of the Senate Banking Committee, and Sen. Mike Crapo of Idaho, the panel's top Republican, introduced the amendment that would make it harder for Congress to use increases in mortgage guarantee fees at the GSEs to offset government spending increases. Any bill using the "g-fees" as an offset would be subject to a budget point of order and then need to get at least 60 votes. The amendment, which was co-sponsored by the entire banking panel, passed by unanimous consent early Saturday morning.
"As the Banking Committee continues to work to build consensus on housing finance reform, I am glad my Senate colleagues recognize the risks of using Fannie Mae and Freddie Mac as piggybanks to finance short-term spending," Johnson said in a press release. "I am heartened that we could find consensus on a complex issue, and I look forward to finding more common ground in the future."
The chamber narrowly approved the entire budget plan by a vote of 50-49 before dawn on Saturday morning.