Democrats balk at U.S. spending bill, raising shutdown risk

[December 11, 2014]  By David Lawder and Susan Cornwell
 
 WASHINGTON (Reuters) - Congressional Democrats objected on Wednesday to controversial financial and political campaign provisions tucked into a $1.1 trillion U.S. spending bill, keeping the risk of a government shutdown alive.

The complaints from House of Representatives Minority Leader Nancy Pelosi and other top Democrats clouded the chances for passage of the funding bill as a midnight Thursday deadline drew near.

Republicans were preparing a one-or-two day extension to keep federal agencies open past the deadline, but were unwilling to make any concessions on dozens of provisions added to the bill.

Pelosi said Democrats were "deeply troubled" by Republican measures that would kill planned restrictions on derivatives trading by large, federally insured banks and expand tenfold the amounts that individuals can donate to national political parties.

"These provisions are destructive to middle-class families and to the practice of our democracy. We must get them out of the omnibus package," Pelosi said in a statement.

Democratic support is seen as critical to passage of the spending bill in the House, as Republican aides and lawmakers say it is unlikely their party would be able to muster enough votes for passage on its own.

Many conservative House Republicans oppose the bill, claiming it fails to deny funding for President Barack Obama's controversial executive action on immigration. And Democrats still control the U.S. Senate.

Democratic Senator Elizabeth Warren, a staunch advocate for tougher regulation of Wall Street, called for Democrats to withhold support from the bill due to the derivatives provision, which would effectively strike down a portion of the Dodd-Frank financial reform law enacted in the wake of a financial crisis fueled partly by complex mortgage derivatives.

But House Republicans were not blinking. A party leadership aide said no changes would be made to the spending measure, which was negotiated by appropriators from both parties. A vote was planned for Thursday.

In 2013, a House vote to repeal the same rule, which requires that banks move derivatives trading to units that do not benefit from federal deposit insurance, attracted 70 Democratic votes.

White House spokesman Josh Earnest said the administration was still studying the bill and was not recommending how Democrats should vote.

"As always, we believe that Democrats should vote their conscience. They should make those kinds of decisions for themselves," Earnest told a news briefing.

Unveiled late on Tuesday night, the 1,603-page spending bill got a warm welcome from many House Republicans in a closed-door session with Boehner on Wednesday morning.

While the legislation would fund most federal agencies through September, the end of the current fiscal year, it would only pay for Department of Homeland Security (DHS) activities through February in a move to gain leverage over Obama's immigration order.

DHS is the main agency that will implement Obama's order, which was announced in November. Supported strongly by immigration activists and staunchly opposed by many Republicans, the president's action eased deportation threats for around 4.7 million undocumented immigrants.

(Additional reporting by Richard Cowan, Emily Stephenson and Sarah N. Lynch; Editing by John Whitesides and Tom Brown)

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