Wall Street Was Right About Elizabeth Warren-- She's Holding Their Feet To The Fire

Wall Street financed the Republican campaign against Elizabeth Warren's run for the Senate. After she won (54-46%), Wall Street went bonkers when there was talk she might be put on the Senate Banking Committee. Wall Street has spent billions (literally-- with a "b") making "friends: on Capitol Hill, lobbying and giving legalistic bribes to Members of Congress (and not just to Republicans, not by a long shot). Just since 1990 the finance/insurance/real estate sector has given powerful Democratic senator Chuck Schumer $18,946,291. Do you think they have some pull with him? In her much shorter tenure, Kirsten Gillibrand, who desperately wants to run for president, got $7,155,437. Bob Menendez got $6,738,847, Harry Reid got $5,815,835, Max Baucus took in $5,715,734 and Banking Committee chairman Tim Johnson got $4,106,218. Nearly $50 million for just those half dozen senators! Do you think the banksters begged them to put Elizabeth Warren on any committee other than Banking?

This week she showed why they were worried when she questioned (above) banking regulators, Daniel Stipano, Deputy Chief Counsel for the U.S. Comptroller, and Richard Ashton, Deputy General Counsel of the Federal Reserve. Apart from the substance of her line of questioning-- that our government has made a decision to protect the predatory big banks but not to even alert the families who have been the victims of illegal foreclosures-- we see a picture forming of why Elizabeth Warren is special, and not just another grubby senator climbing the ladder-- like Gillibrand, for instance.

Joshua Green warned in Businessweek last month that the banksters were right to fear Warren and that she would disrupt their business as usual criminal world.

Senator Elizabeth Warren (D-Mass.) made a big splash at her first hearing of the Senate Banking Committee recently when she went after regulators for failing to be more aggressive with such big banks as HSBC, which had just paid a $1.9 billion fine for money laundering. I used the occasion for a column speculating that, despite her freshman status and a Senate culture that frowns on new members speaking out, Warren could be more effective (and be so much sooner) than many people realize.

“Being effective” is not the same thing as “passing legislation.” The latter is difficult for any freshman-- heck, in today’s broken Senate, passing legislation is difficult, period. My point was that Warren appeared to grasp that there were other ways besides legislation to influence the government and the banking system. She was using the spectacle of a Senate hearing to do this.

Now we can see the first evidence that this strategy is having an effect. From this week’s American Banker:

“Bankers are bracing for the start of more severe anti-money laundering exams as regulators rework their standards and prepare to issue another round of guidance tackling the issue.

“The agencies, notably the Office of the Comptroller of the Currency, are feeling the heat as lawmakers blame them for not doing enough to ensure institutions are following anti-laundering standards.

“Regulators are likely to make exams tougher for banks of all sizes, though officials have noted the most serious problems have arisen at the largest banks. Some of the biggest institutions including HSBC, Citigroup, and JPMorgan Chase-- have recently drawn the toughest enforcement actions related to Bank Secrecy Act violations.”

Not many politicians take seriously the idea that they are tribunes of working families and not servants of the rich and powerful. Elizabeth Warren is one of them (along with Bernie Sanders, Jeff Merkley and a pitiful few others in the Senate). The debate over the Obama-Boehner Chained CPI scheme to reduce benefits for the elderly and veterans is separating the wheat from the chaff. As soon as Obama released the budget that included the Chained CPI deal Boehner had demanded, Warren spoke up loudly against it:

My brother David has always had the special spark in our family.

Like our two older brothers, David served in the military. When he got out, he started a small business -z- and when that one didn't work out, he started another one. He couldn't imagine an America where he wasn't living by his wits every single day.

Year after year, my brother paid into Social Security. He never questioned it. He figured he was paying so that he-- and a lot of other people-- could have a secure retirement.

Today my brother lives on his Social Security. That's about $1,100 a month. $13,200 a year.

I'm telling you my brother's story not because it's unusual, but because it's like the story of so many other people. I can almost guarantee that you know someone-- a family member, friend, or neighbor-- who counts on Social Security checks to get by. That's why I was shocked to hear that the President's newest budget proposal would cut $100 billion in Social Security benefits. Our Social Security system is critical to protecting middle class families, and we cannot allow it to be dismantled inch by inch.

The President's policy proposal, known as "chained CPI," would re-calculate the cost of living for Social Security beneficiaries. That new number won't keep up with inflation on things like food and health care -- the basics that we need to live.

In short, "chained CPI" is just a fancy way to say "cut benefits for seniors, the permanently disabled, and orphans."

Two-thirds of seniors rely on Social Security for most of their income; one-third rely on it for at least 90% of their income. These people aren't stashing their Social Security checks in the Cayman Islands and buying vacation homes in Aruba-- they are hanging on by their fingernails to their place in the middle class.

My brothers and I grew up in an America that invested in its kids and built a strong middle class. An America that allowed millions of children to rise from poverty and establish secure lives. An America that created Social Security and Medicare so that seniors could live with dignity.

We can't chip away at America's middle class and break the promise we made to our seniors.

I've read similar statements from Bernie Sanders (daily) and from Tom Harkin and from Jeff Merkley. In the House, progressive leaders like Alan Grayson, Barbara Lee, Raul Grijalva, and Keith Ellison have been leading the battle against the whole notion of Austerity and balancing the budget on the backs of the most vulnerable. What about Hillary Clinton? Where does she stand? She wants to be the next president? Cat's got her tongue? Too politically dangerous to speak out until the chips fall? Carol Shea-Porter (D-NH) is in a tough district and is being heavily targeted by the GOP for 2014. But that didn't make her hedge and haw over Chained CPI. She is absolutely clear where she stands: "I will not vote for a budget that supports chained CPI and cuts benefits that seniors have earned through a lifetime of hard work."

“Together with Medicare and Medicaid, Social Security embodies the moral fabric of our country. These programs are the foundation of economic security for America’s seniors and the most vulnerable. And while I am open to proposals that make Social Security stronger and extend its solvency, I will not accept a plan that takes from Social Security beneficiaries without first asking America’s millionaires and multi-billion-dollar corporations to pay their fair share.

“I am proud to support legislation to ensure the long-term viability of Social Security. The Protecting and Preserving Social Security Act, which I cosponsored, would create long-range solvency and improve benefits, and it would ensure greater economic security for America’s seniors.

“I urge the President to consider the approach taken in the Van Hollen budget, legislation that would reduce our deficit in a balanced way, invest in programs that help our economy grow, and maintain our commitment to seniors."

Blue America has been asking candidates for Congress to tell us how they see Chained CPI. Their statements are on this Saving Social Security page. The latest addition is Martha Robertson, the Democrat running against Social Security foe Tom Reed in western New York state. "Seniors," Robertson told us this week, "have paid into Social Security all their working lives and they depend on the benefits they've earned. Chained CPI and other cuts to benefits are the wrong choice. Seniors shouldn't bear the burden of these cuts when corporations and the billionaires aren't paying their fair share." That's the minimum we should expect from people asking for our votes for public office.