NY Democrats antagonizing their backers on Wall St

* Bankers pay the bills but Democrats siding with Obama

* Schumer goes from industry advocate to antagonist

By Daniel Trotta

NEW YORK, April 16 (BestGrowthStock) – U.S. Senator Charles Schumer
of New York has always been known as a savvy politician: a
reliably liberal Democrat, never camera shy, and a defender of
his home-town industry: Wall Street.

But now, after the crisis that nearly brought the financial
system to collapse and during the current Capitol Hill debate
on how to reform banking regulation, Schumer is seen as a foe
of the securities and investment sector, which according to the
website OpenSecrets.org has contributed $1.5 million to his
campaign committee since 2005.

Schumer, born and raised in Brooklyn, has become a symbol
for the political bind facing New York Democrats.

Traditional advocates for an industry that employs voters
and pays the bills back home, they have become the targets of
an intense lobbying campaign that wants to avoid the kind of
regulation and taxation now being proposed. [ID:nN14149197]

The House of Representatives passed its version of the bill
in December [ID:nN09158043] and now the more conservative
Senate is debating the issue and could vote on it next week.

The spectacle is playing out in an election year when
Democrats hope to maintain their majorities in the U.S. House
of Representatives and the Senate in part by demonstrating they
can be tough on Wall Street, whose image with voters is awful.

And it takes place while Schumer may be courting favor with
Senate Democrats who could be in need of a new leader in case
their current one, Harry Reid of Nevada, is defeated in
November’s election.

“Schumer is a bit of an anathema because sometimes he’s
with us and sometimes he’s against us,” said one financial
industry lobbyist who declined to be identified in order to
preserve friendly relations with New York politicians.

“The reality is the banking industry (Read more about the banking industry recovery.) is easy to demagogue
but there are local interests that they need to consider.”

Always attuned to his constituency, Schumer in 2006
co-authored a Wall Street Journal column with Mayor Michael
Bloomberg that argued for streamlining regulation, limiting
Wall Street’s legal liabilities and revising the financial
industry’s unpopular Sarbanes-Oxley Act of 2002.

But on Wednesday he became the target of a fierce editorial
in the New York Post — controlled by the conservative Rupert
Murdoch — that skewered him for remaining silent in the face
of a Democratic Party television ad that said “Wall Street’s
risk and greed cost us trillions.”

“What’s the point of having a high muckety-muck like Chuck
Schumer sitting in the U.S. Senate if he refuses to fight for
New York’s best interests?” said the editorial, which also
criticized fellow New York Senator Kirsten Gillibrand and
Representatives Jerrold Nadler and Carolyn Maloney, both of New
York City.

Schumer said he had no intention of being “vindictive or
punitive” but that New Yorkers overwhelmingly support reform.

“Here’s the bottom line. Wall Street did a lot of wrong
things that led to terrible, terrible problems for average
people,” Schumer told Reuters. “That didn’t happen because of
some proposed legislation. That happened because there weren’t
safeguards on Wall Street.”


American taxpayers remain resentful of the financial
industry after rescuing it with the $700 billion Troubled Asset
Relief Program (TARP) and then watching executives collect
multimillion-dollar pay packages.

Moreover, U.S. President Barack Obama, has antagonized Wall
Street by championing the so-called Volcker Rule that would
restrict proprietary trading by banks, remove them from the
hedge fund business, and limit their future growth.

“It’s created a more punitive and hostile attitude toward
the banks and there’s no doubt the White House has made it much
more difficult for Democrats to be supportive of the financial
industry,” said Kathryn Wylde, president of the pro-business
Partnership for New York City, a nonprofit coalition of CEOs.

“It’s all about the Democrats keeping control of the House
and Senate in November and that’s all it’s about,” she said.

In a standoff between Wall Street and the White House,
Nadler, whose district includes lower Manhattan’s Financial
District, said it was easy to support Obama.

“The big banks are spending a huge amount of money on
lobbyists to lobby against this regulation,” Nadler said. “The
president is taking a good position. He more than anyone else
in politics can frame an issue, and to the extent that he’s
framing it as the big guys versus the little guys, it makes it
easier to vote with him.”
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(Additional reporting by Thomas Ferraro in Washington and Joan
Gralla in New York; Editing by Eric Walsh)

NY Democrats antagonizing their backers on Wall St