Cornhusker Kickback, Part II?

The Associated Press reports today that Senator Ben Nelson of Nebraska is making Majority Leader Harry Reid pay a steep price every time the Senate holds a big vote.  This time, it's the financial reform bill.

Nelson voted with Republicans on Monday to deny Democrats the 60 votes they needed to advance the legislation to a floor debate.  Democrats were expected to try again Tuesday, and yet again the day after if necessary.

In a statement, Nelson, a conservative Nebraska Democrat, said his vote reflected concerns about the bill raised by Nebraska businessmen.  Before the vote, Nelson huddled with Senate Banking Committee Chairman Christopher Dodd to discuss a regulatory item of interest to one Nebraska businessman in particular--billionaire investor Warren Buffett.

We all remember the so-called "Cornhusker Kickback" from the health care reform bill.  In return for his vote, Nelson extracted a promise that Nebraska would not have to pay for any increases in Medicare payments, but the promise was worthless as soon as the deal was made public.  That provision was eliminated in the bill of "fixes" which was passed by the Senate in response to popular outrage.

This time, Nelson is seeking an exemption from new financial derivatives rules that, among other things, would sharply limit the amount of "leverage" that firms can apply to derivatives trades by requiring that all derivatives be guaranteed with real assets.  This would be especially disastrous for Buffett's Berkshire Hathaway corporation, which owns a $5 billion stake in troubled investment bank Goldman Sachs.  The exemption would soften the blow by "grandfathering" existing derviatives.

Senator Nelson isn't up for re-election until 2012, but one has to wonder whether Nebraskans will support him.  On one hand, he can argue that he fought to get a good deal for Nebraska.  Other Senators are surely jealous of Nelson's ability to extract such huge benefits for his home state.  On the other hand, he has shown himself to be not only a dupe, but a craven and corrupt one.

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