Whether Sen. Jon Tester was genuinely concerned about community banks in his failed proposal to delay the implementation of caps on swipe fees those institutions can charge, expect his opposition to frame it as another Wall Street bailout. Introducing an amendment delaying the caps was a risky move for the freshman Democrat, who faces a tough reelection campaign against Congressman Denny Rehberg. And he may later ask himself if the fight was worth it.
The basis for Tester’s amendment was complex. He argued that the swipe fee caps would unfairly hurt small banks in Montana and they would then have to raise fees for other customers, including small businesses, to make up for the losses. “Main Street banks and the credit unions – the small guys who had nothing to do with the financial crisis – can’t survive on a 75 percent cut in that revenue.” His appeals don’t fit neatly into a short sound bite. And his amendment failed 54-45, short of the 60 votes needed to pass.
The vote didn’t fall along traditional party lines. Instead, it was framed as a showdown between banks and retailers, a vote no senator really wanted to make. “They don’t wanna choose between their two favorite children,” Sen. Tom Carper, D-Del., who backed the banks, said before the vote.
But they did anyway. And the retailers won. And now the government will limit how much banks can charge for swipe fees – not exactly a free-market position. That’s why it’s a bit awkward for Rehberg to hammer Tester on the issue. When asked about his position on the amendment, Rehberg’s spokesman Jed Link told Lee Newspapers that the congressman “has strong reservations about Sen. Tester’s bill” and added that it was “written by Wall Street and needs to be written by Main Street.”
Others were less muted. The Montana GOP said Tester was “ignoring Montanans” and Republican operative Karl Rove weighed in on the issue, calling into the radio show “Voices of Montana” and arguing that Tester was “literally doing the bidding for the 1 percent, the biggest banks in the world.”
But that position was inconsistent on the right. Florida Republican Sen. Marco Rubio, a tea party favorite, voted for Tester’s amendment. So did Arkansas Republican Sen. John Boozman, despite heavy lobbying by his home state Walmart (he said he was concerned about price fixing). A pundit at OpenMarkets.org labeled those in the GOP who opposed the bill the “pro-price control caucus.”
Many liberals who strongly support banking reform criticized Tester as loudly as conservatives. So even if the senator was truly concerned about community banks, it still splintered his base, making the debate surrounding the issue somewhat reminiscent of another major piece of legislation Tester proposed, the Forest Jobs and Recreation Act.
That bill, which the senator characterizes as a compromise aimed at both increasing logging and preserving more wilderness, has drawn its share of critics from the left and right. Rehberg has helped coordinate opposition to it. And like Tester’s proposal to delay swipe fees, explaining the wilderness legislation takes longer than a sound bite allows.
Supporters of Tester can point to what is certainly an ambitious agenda over the last year, in contrast to Rehberg’s. Tester can also point to his opposition to the original Wall Street bailout, a rare position for a Democrat, to counter accusations that he is in the pocket of big banks.
But his high-profile proposals have given Republicans plenty of material with which to criticize him in one of the most-watched Senate races in the country. Tester now has 17 months to explain those positions and a record that, as is the burden of the incumbent, will place him on the defensive.