UPDATE 1-NY Democrats antagonizing their backers on Wall St

* Bankers pay the bills but Democrats siding with Obama

* Schumer goes from industry advocate to antagonist

* Senator says seeking “proper ground,” won’t punish banks
(Adds Schumer response in NY Post column, financial
contribution details)

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 after the crisis that nearly brought the financial
system to collapse, Schumer is seen by some as a foe of the
securities and investment sector that has donated so generously
to his campaigns.

Schumer, a member of the Senate Democratic leadership
pushing for tougher regulations on Capitol Hill, exemplifies
the political bind facing New York Democrats in the U.S.
Congress this election year.

They are traditional advocates for an industry that employs
voters and pays the bills back home. Yet they have become the
targets of an intense lobbying campaign that wants to avoid the
kind of regulation and taxation being proposed.

The House of Representatives passed its version of a
financial regulation bill in December and the Senate may begin
debate on legislation as early as next week. [ID:nN09158043]

Responding to fierce criticism in an editorial in the New
York Post — controlled by the conservative Rupert Murdoch —
Schumer published a guest column on Friday saying Wall Street
actually supported his approach to regulation that would “make
the financial system stronger and more resilient.”

“But I will work just as hard to prevent vindictive and
merely punitive responses that will hurt New York,” he said.

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

At the same time, Schumer may be courting favor with Senate
Democrats who will need to choose a new leader if their current
one, Harry Reid of Nevada, is defeated in November.

“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 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.”

Schumer, elected to Congress in 1980 and the Senate in
1998, has received $7.7 million in campaign contributions from
the securities and investment sector since 1989, the most of
any politician who did not run for president in that time,
according to the website OpenSecrets.org.

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.

The Post editorial skewered him for remaining silent in the
face of a recent 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 New Yorkers — including some on Wall Street
— 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, known as 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.”
(Additional reporting by Thomas Ferraro in Washington and Joan
Gralla in New York; Editing by Eric Walsh)

UPDATE 1-NY Democrats antagonizing their backers on Wall St