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Progressives fight bid to ease rules for Wall Street

A leading progressive group blasted out an email Thursday urging members to oppose a Wall Street-backed bid to loosen financial regulations. But is it too late?
Traders stand outside the New York Stock Exchange prior to the opening bell.
Traders stand outside the New York Stock Exchange prior to the opening bell.

A leading progressive group blasted out an email to its members flagging a Wall-Street-backed measure in Congress' spending bill that would badly weaken the financial reform law passed after the 2008 crisis.

But with a vote scheduled for Thursday afternoon on the spending bill and Republicans mostly on board, the message could be too little, too late.

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The email, sent Thursday morning by the Progressive Change Campaign Committee (PCCC), raises the alarm about a late addition to the spending bill, reportedly written by a Citigroup lobbyist, that repeals a key provision of the 2009 Dodd-Frank financial reform law. That provision put restrictions on Wall Street banks' trading of derivatives — the complex financial instruments that helped cause the near meltdown of the world financial system six years ago. Financial industry lobbyists have been working quietly but doggedly in recent years to get the law scrapped.

“Will you call [your representative] and tell him to vote NO on the spending bill?” the email asks PCCC’s nearly 1 million members.

PCCC spokeswoman Laura Friedenbach also told msnbc that President Obama should veto the spending bill if it comes to his desk with the Dodd-Frank repeal in it.

In an impassioned speech on the Senate floor Wednesday, Sen. Elizabeth Warren also denounced the effort to weaken Dodd-Frank.

"We put these rules in place after the collapse of the financial system because we wanted to reduce the risk that reckless gambling on Wall Street could ever again threaten jobs on Main Street,” Warren said. "I urge my colleagues in the House, particularly my Democratic colleagues whose votes are essential to moving this package forward, to withhold support for it.”

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But Republicans are expressing confidence that they have the votes to pass the $1.1 trillion government funding bill as is, with support from some moderate Democrats.

Warren and PCCC have close ties and both have lately been leading the fight on issues of economic populism in Washington. In recent weeks, they’ve spearheaded a campaign to oppose Obama’s pick for a top Treasury Department post, Antonio Weiss, a senior banker at Lazard who has helped corporations use loopholes to avoid U.S. taxes.

That campaign is shaping up as a test of the strength for the progressive wing of the Democratic party. Sen. Jeanne Shaheen of New Hampshire, a relative moderate, came out Wednesday in opposition to Weiss, and Sen. Dick Durbin of Illinois, the number 2 Senate Democrat, also is opposed. Other liberal groups including and Democracy for America, founded by Howard Dean, are also rallying their members on the issue.

Last month, progressives succeeded in a bid to stop Rep. Jim Himes of Connecticut, a former Goldman Sachs banker, from being made head of the party’s House campaign arm.