British Petroleum and Walmart Want You to Pay their Bills – Big Government
Posted June 7, 2010on:
It sure isn’t Sam’s Walmart anymore. When our dearest Uncle Sam opened up the pockets of tax payers with the TARP bail out of the failing financial industry the others began to line up for their “fair share” of tax payers money. Big business’s own Congressmen; always have and always will. They own these Congressmen and hire lobbyist to remind these owned Congressmen from time to time to pay up. The pay back is legislation favorable to the companies in some way that will allow the companies to do something they perceive will give them an extra profit.
The Durbin Amendment discussed in this article is not the bail out and transfer of funds directly from the government (tax payer) to the company but it is nonetheless a transfer of tax payer money from their pocket to the company’s pocket. This is done by capping the fee the companies have to pay banks for allowing their customers to use DEBIT CARDS (this bill does not apply to the use of credit cards). The only good thing about this bill is perhaps the fact that even the 40% of the working population who do not pay taxes will pay this “bail out” at the cash register.
Then again it may be the companies way of trying to balance their books by getting money from one source (customer use of debit cards) to pay the taxes the government plans to impose on them for all this drunken sailor spending Obama and the Democrats have been doing. This way they can stay afloat with little change in their balance sheet. Any way you look at We the People are being gouged! BB
When Washington opened the doors to taxpayer bailouts of Wall Street firms they set off a modern day gold rush for lobbyists, corporations and unions looking to get their piece of the pie. The car companies lined up for their handout. Big labor and their failed underfunded pensions are angling for bailouts. And now major retailers like Walmart and oil companies like British Petroleum are lobbying for their government created wealth transfer payment. Welcome to the world of the Durbin Amendment to the Financial Reform bill — a new bailout attached to a giant bailout bill.
A coalition of lobbyists for oil and gas companies, convenience stores, giant retailers and petroleum marketers have conned Senators into supporting a provision that is tantamount to a bailout for perfectly profitable multi-billion corporations.
There was a time when a business was looking to cut costs, they would tighten their belt and make changes within their company to ensure profitability. No longer. Now companies hire Washington lobbyists who push schemes to shift costs from the company to other companies, or worse yet, the consumer. That is exactly what the Durbin amendment to the Financial Reform bill is all about.
When giant corporations like BP and Walmart accept payment via credit cards (or debit cards), they pay a fee (to the issuer of the card) for processing services. The Durbin amendment empowers the Fed to cap the cost of those services to these industry giants. Proponents of the so-called “swipe fee” amendment have cynically argued that this amendment would somehow benefit consumers. But in reality, the Durbin amendment is a lobbyist-written, government imposed price control program that will shift the cost of accepting (debit) cards from mega corporations to consumers.
Writing in the Washington Times, Todd Zywicki explains:
This means, inevitably, costs will be shifted from merchants to consumers. Consumers will see new fees or greater restrictions on their use of debit cards – reminiscent of times past when banks imposed a limit on the number of free debit transactions a consumer was permitted in a given month, after which consumers had to pay a fee. Consumers can also expect to see deterioration in customer service and investments in security, and efforts by banks to cross-subsidize debit card transactions through other bank services. Issuers may also try to steer consumers toward greater use of credit cards, whose interchange fees – although generally higher than those on debit cards – are not regulated by the Durbin amendment. Moreover, while the Durbin amendment excludes banks with assets of less than $10 billion from its price control regulations, payment card networks will be forced by competitive pressures to equalize its interchange fees across its various issuers, thereby nullifying this purported safe harbor for small issuers and their customers.
Having successfully duped the Senate in to passing the Amendment, the major beneficiaries are pushing the conference committee to accept the Durbin amendment. BP, Conoco, Exxon, WalMart and Best Buy are all working the Hill to ensure the costs of processing credit cards are moved from their books to the books of others. But rather than using the marketplace to set the price, they are asking government to do it. Passing the Durbin amendment into law would be the shameful equivalent of handing these mega corporations a check.