U.S. Rep. Kevin Yoder’s role in a measure allowing federally insured banks to use a controversial risk-management tool continues to rattle around his Kansas district.
To review: This summer, Yoder sponsored an obscure House amendment allowing insured banks to continue to use “swaps,” complicated instruments that contributed to the 2008 bank meltdown. He said allowing insured banks to use swaps would make it easier for farmers and business owners to get loans.
Yoder’s amendment never made it through the Senate, but the banks still wanted it to become law. So it was tucked into the recently passed catch-all spending bill.
Financial reformers are furious. Allowing insured swaps, they say, encourages the biggest banks to gamble. If the swaps sour, reformers worry, the government will be on the hook for the damage, not bank shareholders.
That criticism may or may not be accurate, but it may miss the point. Taxpayers are on the hook for risky bets by big banks no matter where they’re listed on a balance sheet. Let’s be clear: if a big bank wobbles next year, or the year after that, Uncle Sam will ride to the rescue with or without the Yoder amendment.
Some financial institutions are still too big to fail.
At the same time, though, the Yoder amendment’s tortured path to passage deserves scrutiny. How did such an important policy decision end up in a massive, last-minute, can’t-amend, can’t-veto spending bill?
Yoder says he didn’t put it there. Staff members apparently grabbed the amendment and stuffed in into the December spending bill, where liberal critics found it.
The practice of attaching unrelated policy choices to must-pass spending bills is as old as Congress, but it remains reprehensible. Something as potentially important as the Yoder amendment should have had an up-or-down vote as a stand-alone bill, not as a freeloader on a law designed to keep the government open.
Republicans now assuming control of both branches of Congress have promised a return to something called “regular order,” where bills are offered, amendments are considered and votes are taken in the way you were taught in social studies class. Yet when I asked Sen. Roy Blunt of Missouri if the GOP will stop adding unrelated policy amendments to must-pass spending bills, he said no.
Congress remains the most unpopular institution in America for a reason. One step it might take to restore trust is to stop trying to sneak bills past its members, and the rest of us.