GOP Rep. Kevin Yoder of Kansas says he's responsible for a controversial banking language included in the spending measure
Progressives, led by Sen. Elizabeth Warren, claim the provision could lead to another Wall Street meltdown
The White House opposes the language but supports the broader package
The mystery congressman responsible for the inclusion of language in the $1.1 trillion dollar spending bill that caused a progressive outcry is coming forward to defend the provision. The measure weakens banking regulations designed to prevent another financial crisis.
Critics of the language, such as Democratic Sen. Elizabeth Warren, claim the provision could invite another fiscal meltdown and was essentially written by the U.S. banking giant, Citigroup.
In a statement to CNN, Rep. Kevin Yoder, R-Kansas, insisted the provision included in the spending bill would not lead to a collapse on Wall Street, followed by a bailout from taxpayers.
“The amendment does not address the riskier derivatives associated with the mortgage crisis,” Yoder said in the statement. “Other backstops exist in Dodd-Frank to prevent a bailout based on those instruments.”
As the spending bill, dubbed the CRomnibus by Capitol Hill insiders, was debated in Congress last week, Warren blasted the banking provision as a “loophole” that would allow Wall Street to gamble with taxpayer money.
“This giveaway that was drafted by Citigroup lobbyists has no place in a critical government funding bill,” Warren said in a speech on the Senate floor that once again stirred speculation the Massachusetts Democrat may run for the presidency.
A spokesman for Yoder acknowledged the wording of the amendment essentially came from a stand-alone bill that passed the House last year.
“We got the language from HR 992,” a Yoder aide told CNN.
That legislation, HR 992, was partially written by lobbyists for Citigroup, according to emails obtained by The New York Times. The bill, which was never voted on in the Senate, sought to loosen Dodd-Frank Act regulations aimed at limiting banking and investment industry practices that led to the 2008 financial crisis.
Asked about the provision, White House Press Secretary Josh Earnest said President Barack Obama plans to sign the spending legislation to prevent a government shutdown. But Earnest said the President remains opposed to Yoder’s language.
“The White House, regardless of who wrote the provision, strongly opposes it and doesn’t think it’s a good idea, because it does water down one element of Wall Street reform,” Earnest told reporters Tuesday.
Earnest said the White House was “in the loop” in the drafting of the spending bill but could not account for every provision in the legislation.
“This is a bill that was written by Congress, and whether one element of that bill was plagiarized by a member of Congress from a Citibank lobbyist is something that you’d have to ask a member of Congress,” Earnest said.
In his statement, Yoder touted his provision as needed protection for smaller financial institutions, rather than a boon to Wall Street.
“Without this fix, smaller regional banks would be in danger of not being able to meet the lending needs of their customers. Ultimately, farmers, manufacturers and other Main Street businesses would be harmed the most,” Yoder added.
Yoder is perhaps best-known for skinny dipping in the Sea of Galilee during a trip with other congressional leaders to Israel in 2011. The Kansas Republican later apologized for the incident.