By Brady Dennis
Washington Post Staff Writer
Friday, February 12, 2010; A21
The marbled hallways of the Russell Senate Office Building were silent and empty Wednesday afternoon when a veteran Democrat and a freshman Republican met to plan their unlikely partnership.
A blizzard churned outside. The Democrat had come from his nearby Capitol Hill home. The Republican had come from lunch at Ben's Chili Bowl.
Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate banking committee, was seeking a new collaborator on a landmark bill to overhaul the nation's financial regulatory system. He had grown frustrated after months of unsuccessful talks with the committee's ranking Republican, Sen. Richard C. Shelby (R-Ala.).
"We were stuck," Dodd said in an interview. "I just feel like we weren't getting anywhere."
After he and Shelby reached yet another impasse last week, Dodd threatened to go it alone. But he knew that a strictly partisan bill probably would not survive a divided Senate. Also, he said, on every major bill he has worked on, he's "always had a Republican partner."
So Dodd asked Sen. Bob Corker (R-Tenn.), a first-term senator and a fellow committee member, to be that partner. Their impromptu alliance introduces unexpected drama into the debate over financial regulatory reform and is a political gamble for both men.
Dodd is eager to complete one last significant piece of legislation before he retires next year, and this latest move leaves him open to second-guessing if the bill fails or he makes compromises that liberals find unacceptable. But Corker took perhaps the larger leap of faith, breaking ranks with fellow Republicans and bucking the far more tenured Shelby to work directly with Dodd.
On Thursday, both men seemed at ease with their choice.
"What's been missing is finding someone who is willing to sit down seriously and negotiate a bill," said Dodd, who called Corker a "serious thinker and a valuable asset" to the banking committee. "There's no guarantee this thing is going to work. But I'm feeling a lot better about it today."
Corker said he called Shelby and Senate Minority Leader Mitch McConnell (R-Ky.) to inform them of his decision. He described the conversations as "collegial." Still, he said he understands that it "could be problematic" to bypass his more senior colleagues to seek a deal with Dodd. "I feel like it's an issue we need to deal with," Corker said. "A bipartisan solution is going to be far better for the American people."
A spokesman for Shelby said the senator had negotiated with Dodd based on the "unified position of committee Republicans" on several key issues, including ending assistance for "too-big-to-fail" institutions, crafting a resolution authority that prevents taxpayer-funded bailouts, modernizing derivatives regulation, and enhancing consumer protection without subordinating the soundness of our financial institutions.
"Sen. Shelby remains committed to these principles and passing legislation that achieves them," spokesman Jonathan Graffeo said.
Dodd's attempt to reach across the aisle comes nearly eight months after the Obama administration unveiled its blueprint for regulatory reform. In December, the House passed its own version, largely modeled on the administration's plan, without a single Republican vote.
His effort also comes as public support for changes to the current system appear to be shrinking. According to a new Washington Post-ABC News poll, a majority of Americans still support stricter federal regulations of the financial industry, but the proportion has slipped over the past year. Overall, 62 percent of those polled back new, tougher federal regulations on how banks and other financial companies conduct their business, but that's down from 76 percent a year ago.
The majority of Americans, regardless of their political affiliation, lack confidence that financial institutions are making changes to lower the risk of crisis, and most Republicans and independents also express little or no confidence that Washington is doing so. By contrast, two-thirds of Democrats are at least somewhat confident that the federal government is putting in place sufficient measures to avert another round of financial upheaval.
In November, Dodd introduced an initial bill that exceeded the reforms proposed by the Obama administration and those passed by the House. It would strip regulatory power from the Federal Reserve and the Federal Deposit Insurance Corp., and create new regulators with sweeping, unprecedented powers.
During a hearing that month, Shelby assailed the draft bill as seriously flawed and unnecessarily rushed. Even Corker expressed reservations, saying the legislation as drafted would cause "pandemonium" in the financial world. "There hasn't been the give and take in creating this bill that there should be," he said.
Corker and Dodd have worked closely before, most notably in late 2008 as they tried unsuccessfully to hammer out a bipartisan rescue of the auto industry. But now the two men confront a far more broad and complex set of issues.
The most divisive issue has remained consumer protection. Dodd and the administration want to create an autonomous new regulator with the power to write and enforce rules aimed at protecting consumers of mortgages, credit cards and other financial products. Shelby and other Republicans have maintained that the same federal agency assigned to supervise the financial health of lenders should also oversee consumer protection.
Corker said Thursday that he would not support a stand-alone new agency, though he thinks the two sides can reach a compromise.
Sen. Mark Warner (D-Va.), a banking committee member who has worked closely with Corker, welcomed the new partnership. "I think this is a good sign. This is too important to fail," Warner said. "We've got to finish this. Time to check your partisan hat at the door on this one."
Dodd said Thursday that whatever anyone thinks of his improbable alliance with Corker, doing nothing would mean that lawmakers "failed to respond to the most significant economic crisis since the 1930s."
His new Republican collaborator agreed.
"The citizens of Tennessee gave me a six-year lease to at least try to deal with issues like this that are complex. I'm going to give it a try," Corker said. "I think there's a strong desire to end up with a bipartisan bill that will stand the test of time."
Polling director Jon Cohen contributed to this report.