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Buffett's Puppet (3) Nelson Flips on Regulatory Reform after Buffett Provision Removed

Alex Constantine - April 28, 2010

By Sam Stein | Huffington Post | April 26, 2010

1Obama Wall Street - Buffett's Puppet (3)Democrats were surprised on Monday evening when Sen. Ben Nelson (D-Neb.) did an abrupt about-face and became the only Democrat to help filibuster legislation to revamp Wall Street regulations.

The removal of a provision that would have dramatically benefited financial tycoon and Nebraska native Warren Buffett, it was said, played a role in the Senator's flip.

"He was on board until today and the only thing that changed was the removal of that provision," said one Democratic aide, who definitively said Nelson changed his vote because the Buffett carveout was removed.

Nelson did not address the language change when talking to reporters immediately after the vote, in which the legislation was stalled, 57 to 41, with 57 senators voting to proceed. Instead, Nelson said he was worried the "legislation will adversely impact Main Street when the focus needs to be on Wall Street. ... I don't think everyone is aware of the unintended consequences." ...

That said, the optics aren't kind to the Nebraska Democrat. Earlier in the day, Senate negotiators agreed to remove a provision that Nelson had inserted last week, which would have exempted any existing derivatives contracts from being subjected to new capital requirements. That provision had been pushed by Buffett's Berkshire Hathaway Inc., which has $63 billion in existing derivatives contracts and would have to set aside $8 billion to cover potential losses on those contracts if the legislation were to pass.

Nelson was hammered mercilessly during the health care debate for withholding his vote until he secured additional Medicaid funding for his home state. If that led to ridicule from Republicans, it stands to reason that holding out for financial help for one of the richest financial tycoons in the world won't go over smoothly either. Nelson should be put on the spot again relatively soon as a Democratic leadership aide told the Huffington Post that the party plans to reintroduce regulatory reform within a matter of days. ...


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