Sen. John Boozman crossed hometown retail-industry behemoth Wal-Mart in voting to maintain bank swipe fees last week, but even Democrats predicted that the Arkansas Republican probably won’t suffer any political blowback.
Boozman and Sen. Mark Pryor split their votes, with the Arkansas Democrat deciding at the last minute to support the retailers’ ultimately successful opposition to a measure that would have delayed a reduction in the fees banks charge stores for processing debit card transactions.
Yet, it was Boozman’s vote that came as a surprise, given Wal-Mart’s clout in Arkansas and the Senator’s particularly close relationship with the company that is headquartered in the House district that he represented for a decade.
Boozman sidestepped questions about whether his vote would lead to political repercussions at home or permanently strain his intensely personal relationship with Wal-Mart and the Walton family — suggesting in a brief interview that the situation was more sensitive than he acknowledged.
Still, a K Street lobbyist, an Arkansas political insider and Pryor all seemed to agree that Boozman was likely to emerge unscathed, in part because the retailers won without Boozman’s vote.
“I live where Wal-Mart No. 1 is,” Boozman said, in reference to the first store opened by Sam Walton in 1962. “I know the company very, very well. I think that generally, because they’re very careful about the battles that they fight, I’ve been very supportive of their issues. But I’m elected to represent everyone and to do what I think is right. And, in this case, I think that the [Federal Reserve] has gone too far — [Federal Reserve Chairman Ben] Bernanke has alluded to this. We’ll lose some community banks over this.”
The battle over swipe fees essentially pitted the banking industry against the retailers, with proponents of the banks focusing on how the issue might affect small, community banks and retail industry supporters highlighting the fees’ effect on family-owned, mom-and-pop gas stations and convenience stores. The fight created alliances and opponents unusual for a major Senate squabble and did not break along party lines.
The Senate voted 54-45 to delay the regulations on reduced swipe fees. But the measure, sponsored by Sen. Jon Tester (D-Mont.), failed to reach the 60 votes it needed to prevail.
A K Street lobbyist familiar with the swipe-fee issue said Wal-Mart was absolutely disappointed in Boozman’s vote. The Senator confirmed that the retailing giant had communicated its dissatisfaction to him.
In fact, Wal-Mart sent a notice to employees regarding the outcome of the vote and how Boozman and Pryor voted.
This lobbyist said Boozman could find that campaign contributions from the retail industry dry up — at least for a while. But this individual, noting that Boozman doesn’t have to begin seriously raising money for his 2016 re-election for two years, said the relationship could be repaired before the rift creates negative consequences. Boozman had made it known that he was leaning toward supporting the banks.
“His vote wasn’t a total shock,” the lobbyist said. “I think it will affect what the industry does for him. But at the end of the day, he’s not up for five years, and he’s not going to have to raise a lot of money in the near term.”
A political insider based in Arkansas predicted even fewer problems than that for Boozman, who ousted Sen. Blanche Lincoln (D) last year. This individual said the swipe-fee issue garnered no public attention in Arkansas and is not on the radar of rank-and-file voters.
“I don’t think most people understand this,” the insider said. “I don’t see any adverse repercussions.”
Like Boozman, Pryor said the vote was difficult because of Arkansas’ large number of community banks. But Pryor said he was ultimately swayed by appeals from small retailers who have long complained that the swipe fees they pay are onerous and unfair.
Pryor said he might have voted with Boozman had the legislation been considered during last year’s debate over the financial regulatory reform package — or if Tester had waited a few weeks to see the new federal rule governing swipe fees that is due out this month.
Pryor, explaining that he heard very little from Wal-Mart directly during the runup to last week’s vote, said he doubted Boozman would suffer politically for opposing the nation’s largest private employer.
“I have a good relationship with them, and I guess I’ve never seen Wal-Mart really try to go after someone to punish them, or anything like that,” Pryor said during a brief interview. “This was a very close call, and [Boozman] and I split on this one. I feel like that’s why our Founding Fathers gave us two Senators per state, because a lot of these are judgment calls, and they are difficult sometimes.”
He added, “If I feel like the Fed doesn’t get it right or if I feel like it really is going to do harm in a serious way to our smaller banks and credit unions, then I reserve the right to revisit this at some point.”
Wal-Mart boasts 200 million customers per week at more than 9,000 stores in 15 countries.