Via mistermix, someone’s not telling the truth and it’s Ben Nelson:

Nelson said he had opposed starting debate on the bill because he objected to consumer-protection provisions that could harm “Main Street businesses” back home, including dentists, whose patients often borrow to finance major procedures that their insurance policies don’t cover, and auto dealers.

But after talking with Nelson, Dodd said, “Dentists and auto dealers did not come up.”

Instead, Dodd said, Nelson had spoken with him about making a change to the derivatives portion of the bill. Nelson favored including a provision that would exempt owners of existing derivatives contracts from having to post additional collateral, as required in the legislation.

I mean, this is naked horse-trading, and it comes just months after another naked horse-trade, the so-called “Cornhusker Kickback,” seriously threatened Nelson’s political career, to the extent that he gets booed at pizza parlors in Omaha. The provision in question would very specifically aid Warren Buffett, the richest man in Nebraska and a big Nelson contributor.

I happened to think at the time that Nelson’s bid for federal participation in Medicaid expansion was actually the right call, and the fact that it eventually got expanded to all states, smoothing over the inequities in that insurance program for the poor, actually reflects well on him in hindsight. Nabbing a derivative exemption for Warren Buffett, not so much, although Buffett makes his case that not grandfathering the old contracts would amount to changing them:

“They are dangerous to the system,” Buffett said. “That’s why I have no objections to the idea that regulation is coming on them.”

However, Buffett said, he wants the legislation to make clear that existing contracts will not be affected by the new collateral requirements. Those would make companies set aside money to offset potential losses to derivatives.

Regardless, Buffett said, the outcome would not hurt Berkshire’s finances because he is confident that any retroactive regulation of existing derivative contracts would be defeated in court. But he’d like to avoid litigation.

Buffett said it would be unconstitutional for Congress to essentially rewrite existing contracts and require companies such as Berkshire to post collateral on deals already in place.

Of course, Nelson either is not equipped with the knowledge to explain this or not willing to carry water for Buffett in public. So he lies – outright lies – to the media, saying he’s deeply concerned about poor dentists and auto dealers, when that’s not the case. And this is why Ben Nelson has a bipartisan reputation – as a snake.

David Dayen

David Dayen

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