Carve-Outs, Carve-Outs Everywhere

Two days from now, the conference committee reconciling the House and Senate versions of financial regulatory reform should be done and the bill will be set. That means there are only two days for conferees to push their exemptions and carve-outs, as well as bolstered measures, into the bill. The proverbial sausage is being made, and the process is not pretty.

For instance, today The Wall Street Journal’s Damian Paletta reports on a change Sen. Blanche Lincoln (D-Ark.) is pushing for the benefit of a single Arkansas bank, one primarily owned by the Waltons of Wal-Mart fame no less.

Under Ms. Lincoln’s proposed change, Arvest would be excused from a provision that could require banks to raise more capital, in Arvest’s case about $115 million. Other Senate Democrats had intended only to exempt banks with less than $10 billion in capital from the provision. Ms. Lincoln wants to raise that to $15 billion, a threshold that would exempt Arvest. It is the only bank in Arkansas with between $10 billion and $15 billion of assets, though there are some in other states.

White House officials have said they don’t want changes that benefit specific companies, leery of the horse-trading that nearly sank their health-care overhaul. But the administration also can’t afford to alienate Ms. Lincoln, head of the Senate Agriculture Committee, whose support on the broader overhaul is vital to its success.

Lawmakers routinely do things to benefit organizations in their home states, often seen as “constituent service.” But Ms. Lincoln’s move could cause headaches for other Democrats because Arvest is owned by such a wealthy and politically influential company.

This is hardly the first time Lincoln has been accused of doing Wal-Mart’s work. And in other Wal-Mart-possibly-influencing-major-Senate-Democrats news, the Daily Caller has a provocative, thin story on the $20 million in donations the world’s biggest retailer has made in Illinois, purportedly to curry favor with Sen. Dick Durbin (D-Ill.) over the debit card fee provision in the financial regulatory reform bill. They apparently lost that battle, if they were fighting it.