WASHINGTON The House narrowly passed a massive $1.1 trillion spending plan Thursday night, moving the bill to the Senate, where the fight over a Dodd-Frank Act derivatives measure is likely to continue.
The vote was a win for the big banks, House Republicans and the White House - a rare combination of supporters. Obama administration officials reportedly worked late into the evening lobbying Democrats to support the so-called "cromnibus" bill that would fund most of the government until Sept. 30, arguing it's a better deal than they will get next year when the GOP controls both chambers of Congress. The measure ultimately passed 219-206, with 57 Democrats on board.
It was also a sign that some Democrats, including the White House, appear willing to make changes to Dodd-Frank, as the spending bill included a repeal of a key provision of the 2010 financial reform law that forces big banks to push out their derivatives businesses into affiliates.
"This probably does represent a situation of where we are going from 'Dodd-Frank is sacrosanct' to 'Dodd-Frank is an amendable piece of legislation,'" said Edward Mills, an analyst at FBR Capital Markets.
House Republicans squeaked out a narrow procedural vote earlier in the day, but GOP leaders abruptly called an hours-long recess after the vote - working behind the scenes to secure enough votes for final passage.
Congressional leaders have been working for weeks to reach a spending deal, and the final fight largely came down to a provision that would repeal section 716 of Dodd-Frank, the so-called "swaps push out" measure. No Democrats supported the earlier procedural vote, which came down to a 214-212 count at the last minute.
The fight made for some strange bedfellows. More conservative lawmakers don't like the bill because it doesn't fully block President Obama's executive action on immigration, meaning Republican leaders needed to look to Democrats to secure a successful vote. But many Democrats opposed the repeal of the swaps provision, arguing it was a handout to the largest banks.
The White House said in a Statement of Administration Policy Thursday that it also opposed the so-called swaps pushout provision and another on campaign finance reform, but it did not issue a veto threat. The move was a symbolic one for the Obama administration, which has faced increasing attacks from the left for being too close to Wall Street.
Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, led the fight in the House to oppose the bill, even in the face of calls by President Obama to vote for it.
"Rallying Democrats in strong opposition to CRomnibus to stop the Wall Street giveaways and bank bailouts," Waters tweeted on Thursday afternoon.
The House ultimately passed the bill, but the fight is expected to continue in the Senate in coming days. Both chambers quickly passed a two-day continuing resolution bill late Thursday to keep the government open, and Majority Leader Harry Reid said the Senate would vote on the full spending bill "as soon as possible."
Senate leaders want to avoid a government shutdown, however, and supporters of the larger package are likely to be able to cobble together enough votes for passage.
Still, Sen. Elizabeth Warren, among others, is likely to put up a final battle. She took to the chamber floor Thursday afternoon to again speak out against the swaps repeal as a gift to Wall Street banks. She also later noted that the swaps measure was written by Citigroup lobbyists, accusing the bank of taking the government hostage.
"That provision means big money for a few big banks," she said. "It would let derivatives traders on Wall Street gamble with taxpayer money and, when it all blows up, require the government to bail them out."
Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., who have teamed up before on legislation to break up the big banks, also issued a joint letter to Senate and House leaders pressing them to remove the language.
"If Wall Street banks want to gamble, Congress should force them to pay for their losses, and not put the taxpayers on the hook for another bailout," they wrote. "Congress should not gamble on a possible government shutdown by attempting to tuck this controversial provision into a spending bill without having been considered by the committees of jurisdiction, where it can be subjected to a transparent and vigorous debate."