Show an ad over header. AMP

Democrats seek progressive overhaul of the U.S. financial system

Now in control of Congress, Democrats are looking to give the U.S. financial system a progressive overhaul, incoming Senate Banking Chairman Sherrod Brown said Friday. It will be a tall task.

What we're hearing: "This committee in the past has been about Wall Street," Brown told reporters. "As chair I’m going to make it about workers and their families and what matters to their lives."


  • "Under Senate Republicans we’ve had government intervention to put its thumb on the scale for corporations at every turn and their wealthy friends, and the free market for everyone else.
  • "We’re going to change that."

Why you'll hear about this again: Atop Brown's ambitious priority list — which also features sweeping action on climate change, housing assistance and racial justice — is a push for public banking that would create a system of government-administered bank accounts that are not profit-driven.

  • The accounts would be similar to those provided by the Federal Reserve for large banking institutions.

Watch this space: Democrats also will be looking to rewire the Fed's role in helping to underpin the economy in times of economic stress to perform monetary policy from the bottom up rather than the top down to reduce the inequality that has been a hallmark of the coronavirus recession.

  • Brown has been in consistent contact with expected incoming Treasury Secretary Janet Yellen, he told Axios, noting that she has "become a mentor and adviser."

Yes, but: Much of this agenda has already been proposed and rejected by congressional Republicans and may be a tough sell to moderate Democrats who will be needed with a slim majority in the House and a 50-50 Senate.

  • Further, representatives from the banking sector, who all declined to comment on the record, were generally dubious of Brown's ideas.
  • Many warned that putting more responsibilities for banking in government hands — or overburdening the Fed with them — could lead to a less efficient system that did more harm than good.

Be smart: "There are historical instances of one-tier systems where the central bank did everything," BIS general manager Agustín Carstens said in June 2019 speech.

  • "In the socialist economies before the fall of the Berlin Wall, the central bank was also the commercial bank. But we cannot hold up that system as an example of better customer service."
  • "Less dramatically, publicly owned banks in many economies are hardly paragons of efficient allocation of funds or of good service."

State of play: Still, the plan is already in motion.

  • Reps. Alexandria Ocasio-Cortez and Rashida Tlaib put forth similar legislation for public banking last year and Brown says he and House Financial Services Chair Maxine Waters will be "coordinating directly, consulting frequently, and I would be shocked if we aren’t going in the same direction on damn near everything."

The bottom line: "The unifying theme for progressive Democrats is that they want to flatten pricing. They want wealthier customers to really be subsidizing less wealthy people who are accessing financial services," Jaret Seiberg, financial services and housing policy analyst for Cowen Washington Research Group, said on the "Voices of Wall Street" podcast in October.

  • Additionally, "they want the government to be financing more financial services."

Schumer: Trump impeachment trial to start week of Feb. 8

The Senate will begin former President Trump's impeachment trial the week of Feb. 8, Majority Leader Chuck Schumer announced Friday on the Senate floor.

Why it matters: Trump is the only president in U.S. history to be impeached twice for “incitement of insurrection" after a violent pro-Trump mob breached the U.S. Capitol, resulting in five deaths.

Keep reading... Show less

CDC shifts COVID vaccine guidance, expanding minimum interval between doses for exceptional cases

Patients can space out the two doses of the coronavirus vaccine by up to six weeks if it’s "not feasible" to follow the shorter recommended window, according to updated guidance from the Centers for Disease and Control and Prevention.

Driving the news: With the prospect of vaccine shortages and a low likelihood that supply will expand before April, the latest changes could provide a path to vaccinate more Americans — a top priority for President Biden.

Keep reading... Show less

Texas attorney general sues Biden administration over deportation freeze

Texas Attorney General Ken Paxton is suing the Biden administration in federal district court over its 100-day freeze on deporting unauthorized immigrants, and asking for a temporary restraining order.

Between the lines: The freeze went into effect Friday, temporarily halting most immigration enforcement in the U.S. In the lawsuit, Paxton claims the move "violates the U.S. Constitution, federal immigration and administrative law, and a contractual agreement between Texas" and the Department of Homeland Security.

Keep reading... Show less

Biden administration unveils 3-pronged plan to combat domestic extremism

White House press secretary Jen Psaki announced at a briefing on Friday that the Biden administration will roll out a three-pronged, interagency plan to assess and combat the thread by domestic violence extremism.

Why it matters: The federal government's approach to domestic extremism has come under scrutiny in the wake of the Jan. 6 attacks on the Capitol by a pro-Trump mob. In his inaugural address, Biden repudiated political extremism, white supremacy and domestic terrorism, vowing to defeat them.

Keep reading... Show less

Senate confirms retired Gen. Lloyd Austin as defense secretary

The Senate voted 93-2 on Friday to confirm retired Gen. Lloyd Austin as secretary of defense. Sens. Mike Lee (R-Utah) and Josh Hawley (R-Mo.) were the sole "no" votes.

Why it matters: Austin is the first Black American to lead the Pentagon and President Biden's second Cabinet nominee to be confirmed.

Keep reading... Show less

House will transmit article of impeachment to Senate on Monday, Schumer says

Senate Majority Leader Chuck Schumer (D-N.Y.) announced that the House will deliver the article of impeachment against former President Trump for "incitement of insurrection" on Monday.

Why it matters: The Senate is constitutionally required to begin the impeachment trial at 1 p.m. the day after the article is transmitted. Minority Leader Mitch McConnell (R-Ky.) had been pushing for the trial to begin in mid-February, arguing that it will force the Senate to delay other important business.

This story is breaking news. Please check back for updates.

Private equity bets on delayed tax reform in Biden administration

In normal times, private equity would be nervous about Democratic Party control of both the White House and Congress. But in pandemic-consumed 2021, the industry seems sanguine.

Driving the news: Industry executives and lobbyists paid very close attention to Treasury Secretary nominee Janet Yellen's confirmation hearings this week, and came away convinced that tax reform isn't on the near-term agenda.

Keep reading... Show less

New Energy Department roles look to animate Biden's campaign themes

The burst of Biden administration staffing picks announced yesterday revealed that the Energy Department (DOE) has newly created roles that reflect what President Biden called campaign priorities.

Driving the news: One new position is "director of energy jobs," which is being filled by Jennifer Jean Kropke. She was previously the first director of workforce and environmental engagement with Local 11 of the International Brotherhood of Electrical Workers.

Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories