Reid aims to move forward with financial regulation bill
Friday, April 23, 2010
Senate Majority Leader Harry M. Reid (D-Nev.) plans to move forward Monday with an expansive bill to overhaul the nation's financial regulatory system, setting up a possible showdown between Republicans and Democrats if efforts at a compromise fall short.
As President Obama spoke Thursday in New York about the "essential" need for the landmark legislation, Reid set in motion the Senate procedures necessary to hold a crucial test vote late Monday afternoon.
"The games of stalling are over," Reid said.
Democrats will need support from at least one Republican to reach the 60 votes required to overcome a filibuster and proceed with formal debate on the bill put forth by Sen. Christopher J. Dodd (D-Conn.). It would create an agency to protect consumers against abuses in mortgages and other loans, set up a council of regulators to monitor for risks to the financial system and give the government power to wind down large, troubled financial firms.
Senate Republicans continued to oppose the pending test vote, known as cloture. They used the threat of a filibuster as a bargaining chip, saying Dodd's bill contains flaws that could harm the economy.
"I hope that Senator Reid abandons his plan to force a premature cloture vote on Monday," said Sen. Susan Collins (R-Maine), whom Democrats have been courting in recent days. "A divisive vote on cloture at this point would be unfortunate.
The lead Republican negotiator on the far-ranging legislation, Sen. Richard C. Shelby of Alabama, also cautioned Democrats against trying to force the bill.
"I wouldn't want to rush it and make a lot of mistakes," he said. "We're making progress, but we're dealing in something very complex."
Republicans have focused most of their recent criticism, at least publicly, on a proposed $50 billion "resolution fund" to cover the cost of a major financial firm's failure. GOP lawmakers say the fund, although financed by the financial industry, allows regulators to treat creditors of failing firms differently, essentially permitting the government to pick winners and losers.
Democrats and Obama administration officials have signaled they would be willing to drop the resolution fund provision from the bill. Such a move is unlikely to cause waves among Democrats, and it could allow GOP lawmakers voting for the bill to claim a legislative victory.
Still, although the $50 billion fund and concerns over how the legislation would affect community banks and small businesses have drawn the bulk of public focus, other critical issues remain.
The two sides still must find common ground over the "Volcker Rule," which would ban Wall Street banks from engaging in certain investment activities, such as owning hedge funds.