Dems: Senate budget would ‘diminish and degrade’ consumer bureau

Senate Democrats are accusing Republicans of trying to undermine financial regulators with their latest budget proposal.

Sen. Elizabeth Warren (D-Mass.) said the GOP had put financial protections “in the center of the bull’s-eye” with their new budget proposal.

{mosads}“A budget resolution is a statement of values, and the Republicans have put their values on display,” she said Wednesday. “Republicans … want to end the protections for American families and make it easier for Wall Street to rip them off.”

Warren, joined by Sens. Jeff Merkley (D-Ore.) and Al Franken (D-Minn.), criticized the GOP budget Wednesday, targeting particular ire at a provision that calls for lawmakers to set the funding levels for the Consumer Financial Protection Bureau (CFPB).

The Senate Budget Committee added an amendment to the GOP budget that would subject the agency’s budget to the congressional appropriations process. Currently, the CFPB receives its funding directly from the Federal Reserve, and bureau advocates argue that giving appropriators control would allow Republicans to starve the agency of funds.

But Republicans have long contended that the CFPB should see its budget set by lawmakers, and the failure to do so has made it unaccountable.

“The CFPB is completely unaccountable,” said Sen. Pat Toomey (R-Pa.). “It’s frankly outrageous that they are able to operate with a budget and the latitude they have without having to come to Congress for this oversight.”

Sen. David Perdue (R-Ga.) offered the amendment at the Budget Committee aimed at the CFPB. He pointed to budget overruns in the renovations of the CFPB’s headquarters as a reason for the move, saying congressional oversight was critical. The GOP budget passed that committee on a party-line vote.

The Senate is set to vote on its budget Thursday, after which they will attempt to reconcile that version with a House blueprint set to receive a vote Wednesday.

The Democratic press conference was the latest volley in a long-running partisan feud over the CFPB, which was created as part of the Dodd-Frank financial reform law. Republicans have long argued the agency lacks accountability and oversight from Congress, and has pushed proposals to bring it under closer scrutiny. Besides subjecting it to appropriations, Republicans have also pushed to replace its director with a bipartisan board and make it easier for other financial regulators to veto its initiatives.

But Democrats have staunchly opposed all efforts to alter the agency, and that debate has not gotten any less heated with the 2013 arrival of Warren, who previously worked with President Obama to establish the agency.

Warren issued a broadside of Republican efforts to step back regulations on the financial front.

“The Republicans are doing everything they can to weaken financial regulation,” she said. “To find ways to give Wall Street the permission to take everything they can from the American people.”

The budget proposal does not carry any legal weight, but rather is seen as more of a negotiating position for the two parties when it comes to spending and other policy debates that will come down the road. Furthermore, Republicans only need 51 votes in the Senate to advance the budget, whereas they would need 60 to actually advance tangible policy changes.

So, while Republicans have a clear path to include the CFPB language in their budget proposal, Democrats said they would be keeping a close eye on more realistic efforts to actually alter the CFPB.

Merkley noted that Republicans had been able to win some Dodd-Frank concessions by pairing measures with “must-pass” legislation like a government funding measure at the end of 2014. But he said that strategy would face much stricter pushback if tried again.

“We are now on guard against this type of action,” he said. “We’re going to do everything we can to rally the American people.”

— This post updated at 1:49pm.