With 51 votes in the Senate, Democrats fall far short of the numbers they need to break a filibuster (60) or override a veto (67), so their legislative record this session is likely to be meager. But they are already making their mark in another way – oversight.
As the majority party in both houses, Democrats control committee agendas, hearing schedules and witness lists. Perhaps their most important power can be summed up in one word: Subpoena.
An excellent example of this power occurred last week when the Senate Subcommittee on Investigations, headed by Carl Levin of Michigan, summoned three executives of credit card companies to explain some of their more outrageous and abusive practices. Even before the hearing, two of the companies announced changes in those practices and issued apologies to their customers.
Citigroup ended “universal default,” which allows companies to raise credit card interest rates when a customer is late in paying any bill, say from an electric utility or cable provider. Citi also dropped their practice of arbitrarily raising rates at any time for any reason. Now, charges can rise only when a card expires or a customer defaults.
Chase Card Service shelved a particularly pernicious trick, called “double cycle billing,” which allows card companies to level late charges even on customers who pay promptly. Richard Srednicki, the company’s CEO, also apologized to another witness, Wesley Wannamacher, who was socked with huge penalties for slightly exceeding his credit limit to pay for his wedding. “In this case we simply blew it,” Srednicki admitted.
The companies claim they are acting voluntarily, but that’s absurd. As Travis Plunkett, legislative director of the Consumer Federation of America, told the Web site MarketWatch: “Credit-card issuers are announcing unilateral changes in their practices ... because they are now fearful that Congress will legislate in this area and they don’t want that to happen.”
In fact, when Congress passed a bill in 2005 making it harder to declare bankruptcy (a change strongly supported by the credit card companies), Democrats tried and failed to attach amendments correcting some of the very abuses that have now been changed. Republicans, who then ran the Senate and receive large contributions from banking interests, rejected any new regulations.
“The lobbying dollars are all on the side of industry,” says Harvard law professor Elizabeth Warren, an expert on bankruptcy law. “That’s why they get to make the rules.”
No longer. Democrats have their own campaign contributors to pay off – from trial lawyers to trade unions – but when it comes to correcting business malpractice, they are tougher and more independent than the GOP.
