Chuck Schumer - Friend Of Wall Street and War - Ready to Be Anointed Head of the Senate Democrats

News & Politics

Last week, Senate Minority Leader Harry Reid announced that he would be retiring after a career that spanned three decades. Less than 24 hours later, Senator Chuck Schumer (D-NY) had secured the support of numerous senators, including Reid himself, to succeed him as the next leader of Senate Democrats when he retires at the end of 2016.

It's not surprising that Schumer would be able to collect so much support in such a short period of time. Recall that he was head of the Democratic Senate Campaign Committee, and helped recruit as many as one-third of the current Senate Democratic caucus – and that he was the one who set about raising the funds necessary to bring them to power in the first place. There's also the power of personal loyalty. “Schumer goes out of his way to address the concerns of his members, especially the classes he helped elect in 2006 and 2008,” says one former senior aide to a Senate Democrat. “He will take everyone's call and ostensibly try to help them with their concerns. With Chuck, they know what they're getting, and for a lot of them, they know their voice will be at least heard in leadership if he becomes majority leader.”

Which would explain why other senior Democrats such as Sen. Patty Murray (WA) and Sen. Dick Durbin (IL) have failed to gather similar support (Durbin himself has thrown support to Schumer). 

While the behind-the-scenes machinations are interesting,  the policy implications of Schumer's ascendance are what are most troubling to Democratic voters. While the role of Senate Democratic Leader involves building consensus – bringing together opposing wings of the caucus, maneuvering the procedural process – the particular politics of the senator remain important. For example, Reid used his influential position as leader of the Senate Democrats to prevent nuclear waste from going to the Yucca Mountain site in his state.

So what are Schumer's particularities? In what ways does he significantly differ from his colleagues – what sort of policy would be aggrandized under a Senate Democratic Leader Chuck Schumer?

A Loyal Friend Of Wall Street

“Wall Street Welcomes Expected Chuck Schumer Promotion,” read a CNN headline on Friday. “It'll be a big plus to have somebody like that if he ends up being Democratic leader,” said former Republican Senator Judd Gregg, who until recently was head of the Securities Industry and Financial Markets Association. “From Main Street issues to the financial issues and everything in between, he's always kept New York at the top his agenda and that will continue as majority leader,” said Izzy Klein, a former staffer of his who now works for the lobbying firm the Podesta Group.

The “financial issues” were indeed at the forefront of much of Schumer's Senate career. During the height of the financial crisis, when lawmakers were debating a rescue package for Wall Street, the senator turned not to constituents in upstate New York whose lives were destroyed by subprime mortgages, but to the industry iself.

The day after he finished meeting with fellow senators about the details of the bailout bill, he attended a fundraiser in Midtown Manhattan with almost two dozen finance industry executives. “We're not going to be some crazy, anti-business liberals,” one executive told The New York Times he told them. “We are going to be effective, moderate advocates for sound economic policies, good responsible stewards you can trust.” The executives ended up giving $135,000 at the fundraiser.

These executives had more than his words at the fundraiser to go by. Schumer had in the past “succeeded in limiting efforts to regulate credit-rating agencies, for example, sponsored legislation that cut fees paid by Wall Street firms to finance government oversight, pushed to allow banks to have lower capital reserves and called for the revision of regulations to make corporations’ balance sheets more transparent.”

His behavior has changed very little since the crisis. When Senators Sherrod Brown (D-OH) and Ted Kaufman (D-DE) introduced an amendment to break up the largest banks, they were able to recruit the support of a handful of GOP senators, but Schumer worked alongside the Obama administration to kill it. He insists that capital gains tax rates stay lower than those of other income, a direct gift to fund managers. And he has kept alive the idea of granting corporations that store cash overseas to bring funds back to the United States if they are granted a large tax cut.

All of these moves point to interest groups, not ideology. He maintains consistently high ratings from various liberal ideological groups, and is reliable with respect to issues like womens rights and gay rights. But his positions related to the banks are in sync with the fact that he comes from a state that is dominated by the industry – in 2014, roughly 19 percent of the state's total revenue came from Lower Manhattan, the geographic epicenter of Wall Street. Like Reid and Yucca Mountain, Big Finance will continue to be a closely-attached special interest that Schumer will continue to look after if he's the next Democratic leader, this time with even more power in his new position.

A Friend Of War 

“Every time the Arab world, the Palestinians, have risen against us, we have risen to defeat them. The one existential threat to Israel’s existence is a nuclear Iran,” thundered a speaker before a right-wing Jewish audience in the fall of 2013.

It'd be easy to believe those words came from Israeli Prime Minister Benjamin Netanyahu, whose campaign of incitement earned even a rare rebuke from the United States.

But those words were not spoken by any Israeli, rather they were remarks Schumer gave to the OHEL Children's Home and Family Services gala, as he was trying to rally Democrats to oppose a nuclear deal that President Obama was in the process of working out with Iran.

The senator's rhetoric was surprisingly sectarian, even for a hawkish member of Congress. They implied that the Arab world and Palestinians were in some sort of racial or religious conflict with Jews the world around, even here in the United States – and they seemed to gloss over the fact that New York has a sizeable Arab American population itself who Schumer is supposed to be representing as well.

His rhetoric on matters particularly relating to Israel has often been among Congress's most extreme. In 2011, after the Israeli attack on an aid flotilla to Gaza, Schumer used religious rhetoric to incite against the Palestinians in a speech to a group of right-wing Jewish constituents:

The Palestinian people still don’t believe in the Jewish state, in a two-state solution. More do than before, but a majority still do not. Their fundamental view is, the Europeans treated the Jews badly and gave them our land — this is Palestinian thinking […] They don’t believe in the Torah, in David […] You have to force them to say Israel is here to stay. The boycott of Gaza to me has another purpose — obviously the first purpose is to prevent Hamas from getting weapons by which they will use to hurt Israel — but the second is actually to show the Palestinians that when there’s some moderation and cooperation, they can have an economic    advancement. When there’s total war against Israel, which Hamas wages, they’re going to get nowhere. And to me, since the Palestinians in Gaza elected Hamas, while certainly there   should be humanitarian aid and people not starving to death, to strangle them economically until they see that’s not the way to go, makes sense.

Watch Schumer's remarks:


It isn't just Schumer's words that are warlike. He was a backer of the war in Iraq, and he has been “leading the push” for deal-busting sanctions in the year and a half that Obama has been negotiating with Iran. His latest move is to co-sponsor legislation drafted by Sen. Bob Corker (R-TN) that would require congressional approval of any Iran deal, which would be a hard-sell in the current far-right Congress. 

Like with Wall Street, Schumer's foreign policy orientation is fueled by cash – he is among the largest recipients of pro-Israel donations of any member of Congress, Democrat or Republican.

Incoming Pushback

Although Beltway politicos have all but anointed Schumer as the next leader of Senate Democrats, he is unlikely to grab the spot without at least some friction from progressive activists.

Soon after Reid's announcement, progressive organizations Democracy For America (DFA) and Progressive Change Campaign Committee (PCCC) floated Senator Elizabeth Warren (MA) as a replacement. “If Elizabeth Warren doesn’t run for president, she should definitely run for leader of the Senate,” said DFA's Neil Sroka. “The election for Senate leader is not going to be a slam dunk for any early front-runner, especially someone like Senator Schumer. He’s closer to Wall Street while the Wall Street wing of the party is dying and the Elizabeth Warren wing is rising. It only makes sense that the next leader of the U.S. Senate is either from that wing or deeply understands how to work with that wing.”

“There will likely not be a coronation to replace Harry Reid, and Elizabeth Warren is right up there with others as someone who would be taken very seriously,” said a PCCC statement. “Warren’s lifetime of fighting for the little guy against Wall Street power — including her upset victory on the Consumer Financial Protection Bureau — shows she can think big, wage tough fights against powerful interests, and win key votes in the Senate. She’s the definition of a leader, and that’s why her colleagues and millions of Americans respect her and are inspired by her rise.”

Warren herself has said she isn't interested in the spot, but organizations continue to pile on with skepticism towards Schumer. Political Action's Ilya Sheyman used the moment to warn Schumer to back off legislation that could scuttle Iran talks and lead to war, saying, “Supporting reckless legislation that undermines President Obama’s diplomacy with Iran and risks a dangerous, unnecessary war in the Middle East should disqualify anyone from leading the Senate Democratic caucus. Sen. Schumer needs to withdraw his support from the Corker and Menendez legislation.”

While Schumer may end up moving into the role of the leader of the Senate Democrats in 2017, it's abundantly clear that progressives are putting him on notice that his love of Wall Street and war can't dictate the party's direction.

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