By Robert Pore

Sen. Ben Nelson and Sen. Mike Johanns differed Thursday as members of the Senate Agriculture Committee voted for the “The Wall Street Transparency and Accountability Act of 2010.”

According to Nelson, the legislation regulatesderivatives, which the committee sent to the full Senate on a bipartisan 13 to 8 vote. The only Republican to vote for the legislation was Sen. Chuck Grassley of Iowa.

 “These common sense rules for derivatives will bring a massive market now operating largely in the dark into the light,” Nelson said.  “They represent one step needed to address financial reforms that end bailouts, stop Wall Street’s risky behavior and protect taxpayers with new transparency.

 He said that  in recent years, the derivative market has “mushroomed to nearly $600 trillion as Wall Street made enormous bets with no oversight and no rules.”

“Because the derivative market was considered too big to fail when our economy plunged into crisis, taxpayers had to pay for Wall Street’s bad bets,” he said.  “We know, of course, that Nebraska taxpayers and our Main Street businesses did not make these bets. And they didn’t act irresponsibly.”

Critical of the Senate Ag Committee vote was Ranking Republican Member of the House Agriculture Committee, Frank Lucas. He said voted down a substitute amendment by Sen.Saxby Chambliss (R-Ga), which would have replaced the bill’s language with the text of a bipartisan draft the committee had been developing.

“I am disappointed that the Senate Agriculture Committee in a matter of hours reversed months of bipartisan efforts in the House to bring greater transparency to the derivatives markets while at the same time allowing end-users to manage legitimate business risk,” Lucas said. “Last year, Chairman Peterson and I worked tirelessly together with our colleagues from the Financial Services Committee and with the greater regulated community to strike the appropriate balance for increased regulation of the swaps and other derivatives markets. We widely agreed that the end-users did not cause the financial crisis and should not be regulated like they did.”

Lucus said that if the bill adopted by the Senate Agriculture Committee becomes law, “…it will make it too costly for end-users to manage risk and will require companies to unnecessarily tie up capital that could otherwise be used for job creation and economic growth.”

Nelson said the misuse of derivatives “clearly hurt our economy and contributed to the collapse of several large financial institutions, including Barings Bank, Enron and AIG.”

“This proper regulation of the over-the-counter derivatives market will protect and empower consumers by creating transparency in what was a shadow banking market,” he said. 

Tim Keigher, Executive Director of the Nebraska Petroleum Marketers & Convenience Store Association, Inc., thanked Nelson for supporting what he called a “comprehensive commodity reform” bill.

 “This legislation is critical to petroleum marketers and will benefit all consumers,” Keigher said. “In voting for this legislation, Senator Nelson is putting Main Street before Wall Street. The bill would close the egregious statutory loopholes that have allowed investment banks, sovereign wealth funds, and institutional investors to pour billions of dollars into commodity markets and drive up the price of energy for American families and businesses.”

 John Hansen, president of the Nebraska Farmers Union, said that Nebraska farmers and ranchers appreciate Nelson’s support for the bill.

 ”Sen. Grassley was the only Republican on the Senate Ag Committee brave enough to vote in favor of this package,” Hansen said. “After all that has happened on Wall Street and in the financial markets, how can you be opposed to financial reforms? ” 

Hansen said increased transparency, accountability, and integrity in derivatives trading will help Nebraska farmers and ranchers, and lessen the ability of “bad actors to unfairly manipulate the commodity markets, which is the livelihood of our producers.”

“This legislation is an important first step to bring common sense oversight to the derivatives market to ensure that farmers, ranchers, and rural America are no longer hampered by the unregulated activities of Wall Street,” Hansen said.