But Warren’s apparent disavowal of the tactics of OWS and like-minded community organizers may not be shared by Richard Cordray, President Obama’s nominee to head the Consumer Financial Protection Bureau that Warren designed. Cordray has long supported ESOP, formerly known as the East Side Organizing Project, an Ohio housing advocacy group that has distinguished itself by storming into banks and launching plastic “shark attacks” on the lawns of private homes. ESOP’s leaders brag about what they call their “organized hits” on banks and other targets, which have included the home of the late Congressman and Housing and Urban Development Secretary Jack Kemp.

As Ohio treasurer and attorney general, Cordray lobbied for state and federal funding for ESOP and publicly praised funders of the group as “the real heroes.” And in a highly unusual move for a nominee awaiting confirmation, Cordray returned to Ohio in October to be the keynote speaker at the group’s gala dinner.

Since his nomination in July to head the bureau created by the Dodd-Frank financial “reform” law, Republicans have held fast against confirmation. But largely, they haven’t made Cordray’s state record an issue. They have focused instead on structural defects in the agency’s design, such as the massive new powers the bureau will have to ban financial products it deems “abusive” and its lack of accountability to Congress.

These criticisms are valid, but they may not be enough to hold Senate Republicans together without criticism of the nominee’s merits. Just before Thanksgiving, Scott Brown (R-Mass.), facing a tough reelection challenge from Warren, became the first GOPer to commit to voting for Cordray. The Democrat-controlled Senate plans to hold a vote on his confirmation this week, possibly as early as Tuesday. Human Events‘ Neil McCabe reports that in addition to Maine Sens. Susan Collins and Olympia Snowe, other GOP targets for Cordray supporters include Alaska’s Lisa Murkowski, Tennessee’s Bob Corker, and Cordray’s home state Senator Rob Portman of Ohio (though Portman seemed to reaffirm his opposition in a statement to Human Events last week).

But Cordray’s support of ESOP needs further scrutiny, particularly since as head of the bureau, he will have the power to help funnel federal support to ESOP and like-minded community organizers with virtually no oversight by Congress. And a report by Bloomberg News suggests that Cordray specifically blessed ESOP’s “organized hits” on banks and homes.

As reported by Bloomberg upon Cordray’s nomination in July, “Mark Seifert recalls being impressed when Richard Cordray, then the Ohio state treasurer, walked into the offices of his Cleveland activist group one day in August 2007.” Seifert recalled warning Cordray: “We are not necessarily safe for the powers-that-be to hang around with. We do direct action. We throw plastic sharks at bankers.”

According to Bloomberg, “‘Far from being aghast, Cordrayapproved of the tactics [emphasis added] and said the small, Cleveland-focused group should expand,’ Seifert recalled.” Since that time, the community organizing group, which has changed the full name underlying its acronym to Empowering and Strengthening Ohio’s People, has expanded to more than 10 offices across the state and grown its staff from five to about 40.

ESOP’s growth is due in no small part to Cordray’s support. According to the Cleveland Plain Dealer, as state treasurer and AG, Cordray “helped them find grants to expand.” With state and federal funding that Cordray helped secure, ESOP grew from a “little ACORN” — to borrow the phrasing of Subversion Inc. author and TAS contributor Matthew Vadum — into a powerful tree. But its core is still rotted by its tactics of threats and intimidation.

In fact, national Leftie pundits praise ESOP for taking militant “direct action” to whole new levels. As the Huffington Post recentlyput it, “ESOP takes a civil approach, but stops at nothing to get lenders to negotiate options for homeowners who face foreclosure.” In other words, the group is civil until it isn’t.

As the New York Times recently described ESOP’s actions in a glowing opinion profile, after demonstrating in front of a lender’s office, ESOP “would fill a bus with community members, drive out to the suburban house of a regional vice president and demonstrate there. ESOP’s signature tactic was to throw hundreds of two-inch plastic sharks on the lawn and circulate flyers saying, ‘Your neighbor is a loan shark.’”

Although ESOP may not do as many organized “hits” as it did in the past — their last major “hit” seemed to be a storming of JPMorganChase bank branches in 2009 with busloads yelling “Chase Bank Sucks” — group leaders make it clear that it’s a tactic in their arsenal. When negotiation “doesn’t work, that’s when we really start to have fun,” an ESOP employee told the Press, a Toledo, Ohio newspaper, in late 2010. “It’s an organized hit.” ESOP founder Inez Killingsworth stressed to the New York Times: “The word has gotten around. Now, most of the time we ask for a meeting, we get a meeting.”

Killingsworth, still active with ESOP as board president, first gained fame for a threatened “hit” in the ’90s on the home of Jack Kemp, then secretary of Housing and Urban Development in the first Bush Administration. Killingsworth and other housing advocates visiting the Washington, D.C., area threatened to disrupt Kemp’s daughter’s wedding being held at the family home. “Then all of a sudden, he calls us to say he’ll meet us if we promise not to hit his daughter’s wedding,” Killingsworth recounted to the Cleveland Plain Dealer in 1992. Kemp met with the “advocates” a few months later.

Cordray continued to embrace ESOP during his Ohio political career and even during his current nomination fight. At an Ohio housing summit in 2009, Cordray showered praise on the government agencies that funded ESOP. “A number of community groups working with homeowners, especially ESOP, got more funding and local agencies have been the real heroes,” Cordray said in a statement reported by the Gannett-owned Mansfield (Ohio)News Journal (story available here with a fee).

If confirmed as director of the consumer bureau, Cordray will have plenty of chance to be such a “hero” and to throw federal support ESOP’s way. In addition to its broad powers from Dodd-Frank to ban any financial product it deems “abusive,” the bureau has authority to hire “contractors” to help with consumer issues. And as most Republicans have pointed out in their objections to approving a director, the bureau gets a guaranteed independent stream of funding from the Federal Reserve, denying Congress the oversight through the appropriations process that it has with other agencies.

Cordray seemed very eager to address ESOP, returning to Ohio in October to address what the Cleveland Plain Dealer described as the group’s “annual gala and silent auction” at the Cleveland Marriott Downtown. Strangely, neither the Plain Dealer nor other media reported on the contents of Cordray’s speech, nor can one find it on ESOP or the consumer bureau’s website. So much for transparency!

ESOP, not surprisingly, is fighting hard for Cordray’s Senate confirmation. In a remarkable interview with Human Events‘ McCabe, ESOP executive director Mark Seifert pooh-poohed concerns about lack of congressional oversight. Conceding that “the CFPB will have a lot of power,” Seifert then exclaimed, “Congress sat silent for 10 years, now all of a sudden they want oversight? Go to hell, no!”

But it is not only Congress whose oversight would be curtailed if Cordray is confirmed, but the next presidential administration as well. Once confirmed, Cordray (with likely influence from ESOP) will be in power until late 2016. That would cover nearly the entire term of the next president, whoever he or she may be.

Under Dodd-Frank, McCabe explains: “The director would serve a five-year term that overlaps presidential terms. This means, an incoming president could not appoint his own director, nor does the director serve at the pleasure of the president.”

First published at The American Spectator.

[Ed Note: Hill sources confirm that Sen. Olympia Snowe is leaning towards supporting the radical Richard Cordray. Her office number is 202-224-5344]

For all the talk about fairness and equity with the so-called Buffett Rule, there is one sneaky loophole in the Obama revenue proposal that has largely escaped notice. In doublespeak that would make even George Orwell do a doubletake, President Obama’s “financial crisis responsibility fee” would tax banks, insurance companies and brokerage houses that have paid back their bailout money — and even some firms that never took a bailout — to pay the tab of irresponsible firms, namely the auto companies that still owe the government billions.

“We also ask the largest financial firms — companies saved by tax dollars during the financial crisis — to repay the American people for every dime that we spent,” President Obama proclaimed in the Rose Garden two weeks ago. But the details of this “responsibility fee” in the 80-page plan the president submitted to the Joint Committee on Taxation makes it clear that this fee will only be on firms that have already repaid the TARP funds and likely on some firms who never took a dime of taxpayer money.

“Although many of the largest financial firms have repaid the Treasury for their TARP assistance, they continue to implicitly benefit from the TARP funds that bolstered their balance sheets during a period of great economic upheaval,” the administration states. A fee of an unspecified amount “will be restricted to financial firms with assets over $50 billion and will be imposed until all TARP costs have been recouped.”

But let’s look at the “fine print,” which Obama always talks about when making the case for his big new consumer agency, an agency created by the same “pro-consumer” Dodd-Frank law that is responsible for new monthly debit card fees due to price controls on debit card transactions that serve as corporate welfare for big retailers. (I had alerted BigGovernment readers about the dangers of the Senate Democratic Whip Dick Durbin’s destructive Dodd-Frank provisions last December.)

Careful readers of the tax plan can see that or all Obama’s talk of “repayment,” his proposed “responsibility fee” would not be levied on recipients of TARP per se, but “financial firms” with assets of more than $50 billion.

Let’s first examine the term “financial firm.” The Obama plan never exactly defines it, but appears narrow enough to exclude auto companies. Fannie and Freddie would also almost certainly be excluded, since they are now officially part of the government, and hence not private “financial firms.”

Yet the term “financial firm” is also broad enough to go beyond banks and rope in broker-dealers and insurance companies, most of which have never taken a dime from TARP. Fidelity Investments, for instance, has weathered the storm relatively well and has not taken any TARP money. But since it has assets of more than $1 trillion under management, Fidelity would still likely be hit by the Obama tax.

Other probable targets of this tax are well-managed insurance companies such as State Farm and USAA, which also never received taxpayer bailouts. It should also be remembered some of the TARP recipients, like BB&T Corp., hadn’t engaged in the foolish mortgage and credit practices, yet were pressured by the government to take the bailout money so that the truly insolvent banks wouldn’t be stigmatized by taking TARP money.

The Obama plan argues disingenuously that “shared responsibility requires that the largest financial firms pay back the taxpayer for the extraordinary support they received.” Yet there is no responsibility, “shared” or otherwise, for the auto companies General Motors and Chrysler that still owe the taxpayer billions. In fact it gives GM and Chrysler a free ride to cave to the United Auto Workers’ demands for thousands more unionized workers, as GM recently did in sham “negotiations” with the union bosses.

The White House “wants to make the nation’s largest banks pay for the losses incurred in the $85 billion auto bailout,” reports the Detroit News. And “last month, the Treasury Department raised the government’s estimate of taxpayer losses due to the auto bailout by more than $400 million to $14.33 billion,” the paper adds.

What this really means is that ordinary Americans — “working-class folks” as politicians like to call them — will pay for the auto bailouts twice. Once through their tax dollars, and again when their banks and insurance companies pass on the cost of the “responsibility fee” through higher borrowing costs, higher policy premiums, and lower returns on savings and investment. For we know from the experience of the Dodd-Frank debit card price controls that when government imposes costs on business, those costs are inevitably passed on to consumers.

So tell us, Mr. President and allies like MoveOn, how does Warren Buffett’s secretary benefit from that?!

But actually it wouldn’t be so bad if politicians merely treated the American economy like an ATM, even if they made fairly large withdraws. What’s really killing jobs is the red tape that causes a massive slowdown by jamming the gears of the advanced, multi-functional machine that is the free market.

The “Ten Thousand Commandments” of federal regulations, as my Competitive Enterprise Institute colleague Wayne Crews calls them in his annual study, costs the U.S. economy billions of dollars a year.  And some regulations even put outright bans of the very activities politicians say they want businesses to engage in.

Since the financial implosion and banks bailouts, the Obama administration and other politicos have been hectoring lenders to make loans to small business. Yet some financial institutions that haven’t even asked for a bailout and are desperately seeking to make more small business loans are statutorily barred from doing so.

These are the credit unions.

Credit unions are cooperative financial institutions owned by member depositors who receive excess funds in the form of dividends. Members can also take out loans from the credit union for items such as cars and homes, often on better terms than at banks.

But if a credit union member wants to borrow money to start or expand a small business, he or she will likely run headlong into a decade-old rule that clipped credit unions’ wings and is holding back economic growth. In 1998, bank lobbyists looking to halt competition succeeded in getting Congress to put in place a rule limiting the amount of business lending a credit union may engage in to just 12.25 percent of its assets.

There is no credible research to show that the 12.25 percent cap does anything to contribute to credit unions’ safety and soundness, and in fact, this arbitrary cap actually creates lending risk for these institutions. The cap, which is separate and aside from reserve requirements, puts limits on business lending that don’t exist for other types of credit union lending, such as mortgages and car loans. There is nothing inherently safer about these types of loans over business lending. This rule not only discourages beneficial lending to small business; it may encourage a dangerous concentration in other types of loans such as mortgages, which we all know could often be anything but safe.

The good news is there is bipartisan legislation ease this barrier to small business growth. The Small Business Lending Enhancement Act – sponsored as S. 509 by Mark Udall (D-CO) and H.R. 1418 by Ed Royce (R-Calif.) — raises the government’s current cap on the amount of business loans credit unions can make from 12.25 percent to 27.5 percent of a credit union’s assets.

The Credit Union National Association has estimated that this measure would create billions in new loans and more than 100,000 jobs in its first year of enactment, and it has been endorsed by trade groups from the National Association of Manufacturers to the National Association of Realtors — as well as policy groups from free market stalwarts such as the Competitive Enterprise Institute, Heartland Institute, and Americans for Tax Reform to the left-leaning League of United Latin American Citizens (LULAC) – as a way to make credit more available for entrepreneurs.

But though both Senate Majority Leader Harry Reid (D-Nev.) and the Obama administration initially expressed support for a similar measure in the last Congress, they ended up preventing the measure from coming to a vote as an amendment to a larger bill, with the lame old excuse that there just wasn’t enough time to debate its merits. Yet the administration and last Congress always  found plenty of time to rush through stimuluses and bailouts to “save the economy,” even though this cost-free step of simply lifting the barriers to business lending by credit unions will probably “save and create” more jobs and businesses than all those spending bills put together.

Bank lobbyists have been ferociously opposing any increase in the credit union business lending cap that would give more borrowing options to small businesses. They complain of “unfair subsidies” to the credit unions. An “action alert” of the American Bankers Association warns about “the expansion on unfair credit union competition in business lending.” The alert intones, “Credit unions were given a tax exemption to serve people of modest means, not to aggressively go after business loans.”

But it’s a bit rich for the banking industry, which has received more than $1 trillion from TARP and other measures, to complain about unfair subsidization. Yes, credit unions have an exemption from taxation at the corporate level because they are member-owned cooperatives that don’t have the many means that banks have to raise money such as the issuance of shares of stock.

Credit union members, however, are fully taxed on the dividends on their accounts, and are taxed at the “ordinary income” rate for interest and not the lower rate for dividends. Conservatives and libertarians have long argued that business income should only be taxed once, and credit unions provide a successful example of single taxation. They should also argue for expanding this structure, rather than for unduly restricting credit union activity simply because the tax system for all businesses hasn’t yet been reformed.

One free market-leaning politician who was a fan of credit unions was Ronald Reagan. In Presidential Proclamation 5211 in 1984, Reagan said: “Credit unions are uniquely democratic economic organizations, founded on the principle that persons of good character and modest means, joining together in cooperative spirit and action, can promote thrift, create a source of credit for productive purposes, and build a better standard of living for themselves. Because credit unions exemplify the traditional American values of thrift, self-help and voluntarism, they have carved a special place for themselves among the Nation’s financial institutions.”

Through his chairman of the National Credit Union Administration, Edgar Callahan, Reagan lifted barriers to credit union modernization, such as allowing credit unions with different fields of memberships to merge. Upon Reagan’s death in 2004, an article from the website CreditUnions.com stated that “the Reagan legacy means that individuals can choose a cooperative form of financial services in most communities today.”

Incidentally, it was in the Reagan era that ATMs had their biggest spurt of growth – the number in operation more than tripled during the 1980s. But this decade was also a booming time for jobs, and this included jobs in the financial sector too. As my colleague Iain Murray has written, “From 1985 to 2002, U.S. banks added some 300,000 ATMs around the country, but also added 42,000 bank teller jobs.”

The difference today is that credit unions, banks, and the economy as a whole face shackling red tape. In addition to the lending cap, credit unions, like community banks, are faced with devastating losses in revenue that will result from the Durbin Amendment’s price controls on debit card transaction fees to retailers from the Dodd-Frank monstrosity.

Ironically, the effect of these price controls will be to raise ATM fees for consumers to possibly as high as $5 per transaction, as well as (as I have noted previously in BigGovernment) eliminate free checking and card rewards, as the costs of processing debit cards are shifted from retailers to consumers.  So because of the new fees, there may be less ATM usage and hence, fewer ATMs installed or maintained. Yet, for some reason, financial analysts aren’t predicting an influx of jobs from these costly mandates.

As the great libertarian writer Isabel Paterson put it in her classic book from 1943, freedom is the god of America’s economic machine. Remove from the red tape from the economy’s gears, and just watch the coinciding growth in jobs, ATMs, and other new marvelous machines!

For more information on the Small Business Lending Assistance Act, and on the history of Ronald Reagan’s deregulation of credit unions, go to FreetheCreditUnions.com, a project of the Competitive Enterprise Institute’s sister organization, Freedom Action.

The gift the Fed voted to give on Dec. 16 wasn’t free money through more quantitative easing – or whatever new name they have come up with to make inflation sound nice – although that’s probably coming up soon. Rather, under the direction of an amendment to the Dodd-Frank financial “reform” law by Senate Majority Whip Dick Durbin (D-Ill.), the Fed bestowed near-free access to the services of the vast electronic debit card payment system for some of the nation’s wealthiest retailers – with the tab to be paid for by community banks, credit unions and, of course – you the American consumer.

If the Fed’s proposed rule goes through, come next Christmas Wal-Mart, Walgreens, Home Depot and the other retailers who lobbied for this piece of corporate welfare will have even more overstuffed stockings. These and other retailers benefit greatly from consumers using cards, both in increased sales and in protection from the costs of fraud from bad checks and theft of cash, yet they have gone charging to Washington to for a regulatory “free lunch” to allow them to shift the costs of these valuable services to consumers.

In one of those rare moments of politicians acknowledging the true masters whom they serve, Sen. Durbin admitted on the Senate floor that the CEO of Walgreens, headquartered outside of Chicago in his home state, called him to complain that the transaction fees Walgreens pays to process debit and credit cards were “the fourth largest item of cost for their business.” Durbin actually argued that relieving costs of doing business for a company that makes $2 billion in annual profits was a reason for support price controls on what they pay for financial services.

But the Fed even exceeded Durbin’s order, filling the wish lists of Walgreens and other merchants while giving their customers several lumps of coal. Next holiday season, even if they are not paying vastly inflated prices for the goods they buy due to quantitative easing, American consumers will be losing their free checking, seeing the return of annual fees, and getting significantly reduced reward points for the purchases they make with plastic.

Under the proposed rule the Fed put forward for regulation of interchange fees – the fees card issuers charge retailers to process debit card transactions – merchants will never pay more than 12 cents for any customer’s transactions, whether it’s for $1.00 or $10,000.  This goes far beyond the even the language of pro-retailer Durbin Amendment, which required the Fed to “establish standards” to assess whether interchange fees were “reasonable and proportional to the cost,” but did not specify what these fees should be.

According to the Associated Press, the Fed said that average interchange fees in 2009 ranged from 44 to 56 cents. This means that the 12-cent cap will cause a 70 to 90 percent drop in revenues for the banks and credit unions that issue debit cards.  And By the Fed’s own admission, this will not come close covering the cost of processing debit card transactions, let alone allow the banks and credit unions to make a profit from what they charge retailers for the valuable services of electronic payments.

The rule states that card issuers will only be able to recover what the Fed deems to be “allowable costs.” Among the costs that are not “allowable,” according to the Fed, are fixed costs of computers and software, the cost of distributing debit cards, and employee costs for “responding to certain customer service inquiries.” Banks and credit unions can charge merchants a small fee hike for the cost to combat debit card fraud, but only under the strictest of conditions.

According to Professor Richard Epstein, a constitutional law and property rights expert on the faculty of the University of Chicago Law School, this rule is the first price control scheme in U.S. history in which businesses, by design, were required to price below product’s cost. He says in an interview that even under the gasoline price caps of the ‘70s, “no one was asked to sell below cost.”

And this is not only horrible policy; it also likely crosses a constitutional line. As argued by a lawsuit challenging the Durbin Amendment from Minneapolis’ TCF National Bank,  on which Epstein is serving as an attorney, the fee controls likely violate both the Due Process and Takings Clauses of the 5th Amendment because they deprive banks and credit unions that issue cards of their property rights to a return on capital invested. The Supreme Court in its 1989 case Duquense Light Co v. Barasch, affirmed that  a government-set “rate is too low if it is so unjust as to destroy the value of the property for all the purposes for which it was acquired.”

But according to the Fed, the 12-cent cap creates “an incentive to control costs.” And besides, the Fed points out, “the interchange fee standard would not limit the ability of an issuer to earn revenue from other sources, such as by charging fees to its cardholders.”

And indeed, consumers have already been paying for the anticipated costs of the Durbin Amendment. “Free checking as we know it is ending,” reported the lead paragraph of an Associated Press story in October, and the article listed one of the main reasons as “the new regulations limit fees the bank can collect when retailers accept debit cards.”

If Australia’s experience in capping interchange fees for credit cards in 2003 is any guide, the vanishing of free checking could be just the beginning. As George Mason University law professor Todd Zywicki noted in the Wall Street Journal, “Annual fees increased an average of 22% on standard credit cards and annual fees for rewards cards increased by 47%-77%. Card issuers also reduced the generosity of their reward programs by 23%.” And last year, a study by the Government Accountability Office of the U.S. Congress found no “conclusive evidence” that any of the Aussie retailers’ $1.1 billion in savings had been passed on to consumers.

The good news is there are efforts underway in Congress to delay or repeal the Durbin Amendment, and even some Democrat Dodd-Frank supporters have pulled back, correctly perceiving that this measure and the Fed rule implementing it make a mockery of their claim that Dodd-Frank was a victory for consumers over special interests. Even soon-to-be former House Financial Services Committee Chairman Barney Frank (D-Mass.), criticized the Fed on CNBC for setting the fees “too low.”

But the Tea Party movement also has to watch the GOP on this issue, including some in Congress they may normally count as their own. 17 Republicans voted for the Durbin Amendment in the Senate last May, including some ostensible conservatives who would oppose price controls in most other contexts. Georgia Sens. Johnny Isakson and Saxby Chambliss voted aye, for instance, after heavy lobbying from Atlanta-based Home Depot, a firm that American Banker described as “on the warpath” against interchange fees . (The full list of which senators were naughty or nice on their votes on the Durbin Amendment is here.)

Conservatives are often sympathetic to retailers and with good reason. They are hit with the taxes and regulations of Big Government and threatened with threatened with coercive measures from Congress such as union “card check.” Yet when the leaders of their industry lobby for price controls, we must say in unison, “No sale!” This is what several groups in the Center-Right Coalition – from CEI and American for Tax Reform to Phyllis Schlafly’s Eagle Forum – have already done in a letter last summer.

The Fed is taking comments on the rule through Feb. 22, and you can send them your thoughts at regs.comments@federalreserve.gov. Or go  here and follow the instructions for submitting comments. If you wish to share your views on whether Congress should repeal the Durbin Amendment’s price controls, or delay the date the Fed implement them, you can e-mail your members of Congress or call them through the general number of (202) 224-3121.

Meanwhile, it wouldn’t hurt to have some Tea Parties in front of your neighborhood Walgreens and Home Depot communicating that if they want you to shop in their stores, they’ll have to stop lobbying to take away your free checking and card rewards!

But what the establishment media didn’t tell you – unless you waded through the details in a select few news articles or saw this fairly balanced short article in the Washington Post – is that Wednesday evening,  hours after the first cloture vote failed and hours after  I informed BigGovernment.com readers about an effort by Sen. David Vitter (R-La.), to narrow the scope of what I have been calling the Obama-Dodd-Frank-Everything’s A Bank Bill, Democrats blinked and Vitter’s amendment passed without objection by voice vote.

Vitter’s amendment to the so-called “Restoring American Financial Stability Act” gives a precise meaning to the term “financial company” – changing the definition from Dodd’s original language of “substantially engaged in activities in the United States that are financial in nature” to that of the much stricter “predominantly engaged.” And his amendment precisely defines “predominantly engaged” as a business that makes no less than 85 percent of its revenue from financial activities.

As a result of Vitter’s measure that passed during the brief 24-hour period of most of the GOP standing together in opposition (along with Democrats Maria Cantwell and Russ Feingold for their own reasons), a very important change was made.

There are still many horrors in this bill, but at least now a business will only fall under the new regime of the Federal Reserve for taxation, regulation, and nationalization if it is “predominantly engaged” in financial activities. Most retailers and manufacturers — although still hit by other parts of the bill such as the broad reach of the Bureau of Consumer Financial Protection – will not come under Fed supervision for “financial stability.”

Ironically, I concluded my article in BigGovernment.com, “There are many reasons for the GOP and truly moderate Democrats in the Senate not to grant cloture. Even if the bill was primarily concerned with Wall Street, it still does nothing about Fannie and Freddie, But making sure the Wall Street bill is actually about Wall Street – or at the very least about banks – should be a line in the sand. There should this firm message. ‘No Vitter amendment. No cloture.  No dice!’” The amazing thing is, though not necessarily as part of a conscious effort of all who voted “no,” this is pretty close to what happened.

The lesson from the fight for Vitter’s amendment – which was assisted by support from the measure by the U.S. Chamber of Commerce, the National Association of Manufacturers and many businesses large and small, as well as a Center-Right coalition letter signed by CEI and other groups that specifically called out the bill’s broad definition of financial company– is clear. From health care to financial regulation, the progressives will paint the enemy as unpopular big business – from big insurers to big oil to big Wall Street firms.

But once the Center-Right forces them to debate, as the Vitter amendment did, how a particular bill would affect entrepreneurial Main Street businesses, they will duck and cover and sometimes retreat.. Despite opposition from the Huffington Post crowd and other progressives, the Obama administration and Senate Democrats made a significant concession likely because they did not want to be seen as going after the entrepreneurial firms that are rightly seen as the backbone of this country.

Main Street businesses do not have to be necessarily small, either. Just examples of the American dream that the public can relate too. Vitter made the excellent point that under the bill as written, Google could have been considered a bank. Google may be big, but it grew that way because it pleased its customers, and no one can rationally accuse Google of contributing to the financial crisis.

And despite what many in the establishment media say, this fight is not over, as even President Obama seemed to acknowledge in his speech yesterday when he talked about “lobbyists” trying to thwart a House-Senate conference. Reconciling the House and Senate bills is not going to be a cakewalk. There are many differing provisions.

The Senate bill lacks, for instance, the provisions in the House bill to comprehensively audit the activities of the Federal Reserve. The House bill, at the behest of “Blue Dog” Democrats, also limits on the jurisdiction Consumer Financial Protection Agency, so that it cannot have jurisdiction over orthodontists who spread out payments for braces or small stores with layaway plans.

Time magazine liberal columnist Michael Grunwald wrote this about the uncertain prospects for a final bill about a week ago: “Even if the Senate bill did attract 60 votes, it would have to be reconciled with the House bill, and then the House and Senate both would have to pass the reconciled bill — and all probably before the pre-election August recess, while dealing with a Supreme Court confirmation battle and jobs bills and whatever else comes down the pike. I’m not a Beltway insider anymore, but that sounds hard! “

And even White House spokesman Robert Gibbs has said it will likely be the Fourth of July before the House and Senate forge an agreement and the President Obama has a final bill on his desk.

There is a window to make known the impact of the many terrible things that remains in this bill – from a massive new consumer agency with the power to track virtually every financial transaction to share with other big agencies like the IRS, proxy access provisions that would federalize state incorporation laws and empower unions and other progressive shareholders to wage director campaigns at the company and other shareholders’ expense, and no attempted reform of the government-sponsored enterprises Fannie Mae and Freddie Mac at the center of the financial mess.

To slightly alter a popular saying, it’s never over until the same bill passes both the House and Senate and is sent to the President’s desk. The Center-Right coalition should learn an important lesson from Vitter’s smart and principled fight and should not waste this window.

Trouble is, though its audience is growing by leaps and bounds every day, this site is still at the point in which not every American relies on it for essential political info. And because Republicans have done a mediocre job of explaining how far this bill would reach, and the establishment media largely has no interest in explaining these facts, supporters of Senate Banking Committee Chairman Chris Dodd’s “Restoring American Financial Stability Act” have been able to get away with saying, “If you’re against this bill, you’re against reform of Wall Street.”

Or at least, that was the case until a couple days ago. That’s when Sen. David Vitter (R-La.) introduced an amendment with a straightforward message: A bill that claims to be about fostering transparency on Wall Street should itself be transparent in its objective and not sneak regulation on Main Street manufacturers and retailers.  Call it (and I just did) the Not-Everything’s-A-Bank Amendment.

Vitter has distinguished himself with his dedicated efforts in fighting for real financial reform.  He co-sponsored with self-proclaimed (but not necessarily sole) Senate socialist Bernie Sanders (I-Vt.)a bipartisan amendment similar to the measure in the House bill to have the Government Accountability Office audit the Federal Reserve. When Sanders and others went for the Obama administration”compromise” of a one-time audit of a limited part of the Fed’s operation, Vitter carried the flag of Fed transparency.

Vitter’s new amendment provides similar sunshine the bill’s supposed reform efforts. It changes the vague language in Dodd’s current bill that would enable Federal Reserve supervision of any firm “substantially engaged in activities in the United States that are financial in nature” to the stricter “predominantly engaged.” And this amendment precisely defines “predominantly engaged” as a business that makes no less than 85 percent of its revenue from financial activities.

“I have a huge concern about the bill overall allowing the government to grab control of the economy,” Vitter told the Wall Street Journal. “I’m looking for ways to appropriately limit that.”

The amendment serves two noble purposes. If it passes, of course, it will ensure new financial rules, however onerous they are, will only be directed at truly financial companies – not be used as an excuse for back-door control of firms the government wants to target for whatever reason. And the second purpose it serves is just to end the progressives’ rhetorical shell game.

And quite frankly, it is driving the Left nuts. After weeks of castigating critics of the bill as favoring Wall Street over Main Street, suddenly in opposing Vitter’s amendment, progressives are forced to explain why they favor such intrusive regulation over Main Street businesses that had nothing to do with the crisis. And they are tying themselves in knots trying to do so.

Take a look at this tortured defense of the Dodd bill’s broad “financial company” definition from the Huffington Post. “The Vitter amendment must be defeated,” writes Jane D’Arista, who is with some entity called SAFER — (Economists’ Committee for Stable, Accountable, Fair and Efficient Financial Reform) She tries to explain that “replacing ‘substantially’ with ‘predominantly’ to define the level of financial activity permitted for non-financial firms may seem like no more than a relatively small change in wording. In reality, it is a change that threatens to erase those structural elements that have ensured a fair, open and competitive US financial system.”

Got that?!  I think what she’s trying to say is that to ensure “a competitive U.S. financial system,” we have to treat a variety of businesses just like banks. Oh, okay. Interestingly, the article has been up for two days on HuffPo with zero comments. D’Arista’s logic – or lack of it – seems to have left the site’s readers speechless – for once.

So the new smear tactic is to accuse Vitter of carrying water for none other than General Electric, parent company of HuffPo’s favorite cable news network, which has subsidiaries that engage in a lot of genuine financial actvities  “GE Wants To Be Saved From Reform Bill,” blares the front page of HuffPo as of this writing. “GE and other manufacturers back exemption in financial regulation bill” screams a headline in the Washington Post.

Yes, you see, apparently staunch conservative Vitter has introduced an amendment solely to benefit a company whose cable network blast Republicans and Tea Partiers, whose lobbyists press for cap-and-trade, and whose CEO showers praise on President Obama. Makes perfect sense!

And then there’s just one minor thing.  GE Capital already owns two federally insured banks. That’s how, as ProPublica explains, it qualified for the FDIC’s Temporary Liquidity Guarantee Program in 2008. Any bank falls under banking regulators, and to the extent its transactions with the parent company poses risks to the deposit insurance fund, the parent company does as well.

Plus, GE Capital as a finance subsidiary would more than meet Vitter’s 85 percent. This is something that the Washington Post story, despite its headline, more or less admits if the reader is patient enough to wade halfway through the article. “The subsidiary company could still come under scrutiny,” the article points out.

If anything, to draw from Washington Examiner columnist Timothy P. Carney’s illustrations of big business and regulation, GE would benefit from having its smaller manufacturing rivals being forced to comply with banking regulations it already has to comply with. GE serves the same purpose for progressives in trying to defeat the Vitter amendment as Goldman Sachs served in ramming the bill through: a useful decoy that in reality stands to benefit from the bill at large.

As early as today, a vote may be called on cloture to end debate and have a vote on the final bill. Cloture to end debate takes 60 votes, and it represents the Senate Republicans last shot at stopping this destructive bill or making it better, although each House will likely have to vote on some version of the bill again, and the House –Senate conference may take longer than expected, giving critics of the bill some additional time to make their case.

There are many reasons for the GOP and truly moderate Democrats in the Senate not to grant cloture. Even if the bill was primarily concerned with Wall Street, it still does nothing about Fannie and Freddie, But making sure the Wall Street bill is actually about Wall Street – or at the very least about banks – should be a line in the sand.

There should this firm message. “No Vitter  amendment. No cloture.  No dice!”

Among its horrors are a massive new consumer agency with the power to track virtually every financial transaction to share with other big agencies like the IRS, onerous new restrictions on angel investors and venture capital that greatly delay funding promising startup firms, proxy access provisions that would federalize state incorporation laws and empower unions and other progressive shareholders to wage director campaigns at the company and other shareholders’ expense, and no attempted reform of the government-sponsored enterprises Fannie Mae and Freddie Mac at the center of the financial mess.

But the most destructive portions of the bill — the one that would in my judgment go beyond even Obamacare in making the American free enterprise system unrecognizable — has been little discussed even by critics of this bill. To put it bluntly but absolutely accurately, this bill sets up a mechanism for the Treasury Secretary, the Federal Reserve, and the Federal Deposit Insurance Corporation to nationalize virtually any business they deem to be a threat to American “financial stability.”

I include myself among these critics not focusing on this issue and I apologize for not informing readers sooner, but I wanted to be sure the bill would do what I suspected it would do. Many of the bill provisions are interconnected, and what can seem like a mild measure by itself becomes lethal when combined with another sections. As Financial Times columnist Gillian Tett recently wrote: “Buried in [the bill’s] pages are numerous clauses and sub-clauses, many of which have been largely ignored until now (partly because they strike most non-financiers as pretty dull). Yet, the fine print could turn out to be crucial in the coming years.”

And after reading and rereading the “fine print” of this 1336-page piece of legislation (which will grow by hundreds more pages when amendments are added), it is clear that the bill’s “orderly liquidation authority” would facilitate outright government seizure of a wide variety of firms with very limited judicial review.

The first clue of what the bill would do in this regard comes from one of the bill’s architects. House Financial Services Committee Chairman Barney Frank, author of the similar financial bill that passed the House in December, has freely used the term “death panels” to describe the new powers the bills give the government over firms. In response to charges of “death panels“ in the health care bill, Frank responded that the panels were in the wrong bill. “Yes, we have death panels, but they got the death panels in the wrong bill,” Frank said on the House floor. “The death panels are in this bill.”

Defending against charges that the bills’ new mechanism to wind down firm will lead to taxpayer bailouts, Frankwrote in the Huffington Post that under this authority, “Shareholders are wiped out, unsecured creditors are out of luck, management and every employee that is not required to shut down the company is fired.” What Frank and other of the bills’ architects don’t say — not even in liberal venues like the Huffington Post — is that the bills also give the government these same powers to take over firms not seeking any kind of government aid.

Section 203 of Title II of the bill empowers the Secretary of Treasury, with a two-thirds vote from the Federal Reserve and the Federal Deposit Insurance Corporation, to take into government “receivership” any “financial company” whose failure he determines “would have serious adverse effects on financial stability in the United States. “

Once the Treasury Secretary puts the company into “receivership” of the FDIC, the government may — under Section 210 — “take over the assets of and operate the covered financial company with all of the powers of the members or shareholders, the directors, and the officers of the covered financial company, and conduct all business of the covered financial company,” “perform all functions of the covered financial company, in the name of the covered financial company,” and “ provide for the exercise of any function by any member or stockholder, director, or officer of any covered financial com1pany for which the Corporation has been appointed as receiver under this title.”

The ostensible “purpose” of this “orderly liquidation authority,” as stated in Section 204, is to “provide the necessary authority to liquidate failing financial companies that pose a significant risk to the financial stability of the United States.” Yet the funny (or not-so-funny) thing is that firms don’t really have to be “failing” to be taken over.

The Treasury Secretary can seize, under Section 203, any firm “in default” or “in danger of default.” And it’s clear that this “danger of default” does not need to be an immediate danger. The word “likely” appears many times in this section’s listing the criteria of a firm that can be taken over. A company can be in danger of default if “the assets of the financial company are, or are likely to be, less than its obligations to creditors and others; or the financial company is, or is likely to be, unable to pay its obligations [emphasis added].” The word “likely” itself is never defined, so up to the Treasury Secretary and Federal Reserve to make that determination.

Pretty dramatic new powers, huh? But, of course, most businesses won’t have to worry because this just affects “financial companies” like investment banks, right? Not exactly. “Financial company” is defined very broadly in Title II, as in other sections of the bill.

Recall that for purposes of Federal Reserve regulation and paying assessments for bailout of failed firms (though now after the failure, rather than through the $50 billion bailout fund that Dodd agreed to get rid of after to GOP mini-filibuster, a slight improvement), a “nonblank financial company” is defined as a firm “substantially engaged in activities in the United States that are financial in nature.” (See my previous piece, “The Obama-Dodd-Frank-Everything’s-A-Bank-Bill.”)

Also, last week orthodontists visited Capitol Hill because they were concerned that they would be subject to the new Bureau of Consumer Financial Protection if they offer installment plans for their patients to pay for braces. Dodd denied this, but a Bloomberg story pointed that the bill’s language grants jurisdiction to the bureau over any business that is “engaged significantly in offering or providing consumer financial products or services,” and the term “significantly” isn’t defined.

Similarly, under the definitions Title II, a “nonbank financial company” supervised by the Federal Reserve would be subject to the “orderly liquidation authority.” So if the Treasury Secretary and the Federal Reserve decide that a manufacturer, retailer, or even an orthodontics practice “would have serious adverse effects on financial stability in the United States,” they have the authority to send it to what Frank calls the “death panel.”

The authors of this bill still, however, are still left with one pesky problem: the courts. There’s always the possibility that some “backward” judges might actually take the Constitution seriously and see such a government seizure as a violation of the Takings Clause of the Fifth Amendment, the Due Process Clause of the 14^th Amendment, the limitation of the federal government’s power in the 10^th Amendment, or numerous other constitutional provisions that protect contracts and property rights and separate America from Argentina and Venezuela.

To try to prevent constitutional and other challenges , Section 202 of the bill creates a three-judge “orderly liquidation authority panel” in the federal bankruptcy courts to rubber-stamp the government‘s actions. This court would have just 24 hours to review a government seizure and could only stop it if it found “substantial evidence” the seizure was justified. As Heritage Foundation regulatory scholar James Gattuso recently put it, this means “that the seizure must be upheld if the government produces any evidence in favor of its action.”

The bill even sharply curtails Supreme Court review to attempt to block constitutional challenges. “Review by the Supreme Court under this subparagraph, shall be limited to whether the determination of the Secretary that the covered financial company is in default or in danger of default is supported by substantial evidence,” says the bill on page 117.

Sen. Mark Warner, who was substantially involved in drafting the bill, said during a speech that “resolution should only be used as a last resort.” For those interested in freedom and true financial stability, stopping this bill’s creation of a resolution/nationalization authority — a power that should not to be given to the Obama administration or any administration regardless of party — should be the first resort.