Republican senators again block vote on financial regulation

Speaking at a town hall meeting in Ottumwa, Iowa, President Barack Obama criticized Senate Republicans for continuing to block debate on a bill to impose greater financial controls on the financial industry. (April 27)
By Brady Dennis and Paul Kane
Washington Post Staff Writer
Wednesday, April 28, 2010

Senate Republicans on Tuesday blocked for the second straight day efforts to begin debate on a sweeping overhaul of financial regulations, saying the bill represents an overreach of government power that could harm small businesses.

A procedural vote to consider the measure on the Senate floor fell short of the 60 votes required to overcome the threat of a filibuster. Fifty-seven senators voted in favor of advancing the bill, while 41 voted against it. Two senators -- Robert F. Bennett (R-Utah) and Evan Bayh (D-Ind.) -- did not vote.

Democrats again accused Republicans of trying to block essential and popular financial reforms. They planned another vote for Wednesday -- the third in three days -- to pressure GOP lawmakers to let the bill proceed.

Despite the continued blockade, several Republicans acknowledged that they will probably allow formal debate to begin soon. But they plan to keep blocking the bill for now to give the lead negotiators, Sens. Richard C. Shelby (R-Ala.) and Christopher J. Dodd (D-Conn.), more time to nail down agreements, locking in portions of the legislation before undertaking a protracted amendment process on the Senate floor.

"We'll go to the floor, sooner or later, either way," Shelby told reporters after Tuesday's vote.

Assurances sought

As the closed-door negotiations continued, Democrats continued to court a handful of Republicans who they think might be persuaded to vote for the legislation, which among other things would create a bureau to protect consumers against abuses involving mortgages and other loans, establish oversight of the vast derivatives market, and give the government power to wind down large, troubled financial firms.

One of the possible swing votes, Sen. Charles E. Grassley (R-Iowa), recently voted to approve a piece of the legislative package that emerged from the agriculture committee. He said he is willing to support the final bill only if more Republicans sign on. "Chuck Grassley and 59 Democrats do not make a bipartisan bill," he said.

Republicans, meanwhile, want assurances that if they allow debate on the bill, Democratic leaders will permit them to offer amendments. GOP leaders, who a week ago insisted that Dodd's bill would perpetuate Wall Street bailouts, opened a new line of attack Tuesday, arguing that the legislation would harm small businesses.

"This bill would touch such entities as auto dealers. It would touch a candy company that tries to hedge sugar prices. In short, the bill reaches into every nook and cranny of American business," said Senate Minority Leader Mitch McConnell (R-Ky.). "I think most Americans thought this was all about Wall Street. But as you look at the bill closer and closer, you see that it is mostly about Main Street."

Shelby, too, said the "biggest obstacle" remaining between him and Dodd is a proposed consumer regulator to oversee mortgages, credit cards and other consumer loans. He argued that the new agency "would be one of the most intrusive and sweeping pieces of legislation this country has ever seen."

'A lot of anger'

While Shelby and McConnell spoke about the plight of candymakers and car dealers, scores of car dealers flooded the Capitol -- their flights and hotels paid for by the National Auto Dealers Association (NADA) -- in a bid to persuade lawmakers to exclude them from the legislation.

"We never should have been included in this Senate bill in the first place," said Ed Tonkin, an Oregon car dealer and the NADA chairman. "This should be a Wall Street reform, and it should focus on just that -- fixing Wall Street -- and not small businesses like auto dealers on Main Street."

The dealers, who won an exemption under the House's financial overhaul bill, have an ally in Sen. Sam Brownback (R-Kan.), who said he plans to introduce an amendment to carve them out of the Senate bill. "The bill is so broad in its scope and sweep that it grabs a whole bunch of entities that are beyond the target," Brownback said. "You've got a lot of anger in America today about an overreaching federal government."

Obama administration officials have said they would oppose efforts to exempt auto dealers and would seek to strip out the House exemption. The issue underscores how legislation dubbed the "Wall Street reform bill" has piqued concern in industries nationwide.

After voting with Republicans for a second straight day, Sen. Ben Nelson (D-Neb.) told reporters that his main concern is ensuring that the legislation affects "Wall Street, not Main Street." He denied that the main source of his discontent was the exclusion from the bill of a derivatives provision he had sought that could have aided Berkshire Hathaway, owned by Nebraska investor Warren Buffett. Nelson said that his votes had "nothing to do with that" and that he's confident the measure will be worked out so as not to harm Berkshire in a retroactive way. (Buffett is a director of The Washington Post Co.)

As lawmakers continued to wrestle over the legislation Tuesday, administration officials talked up the need for new financial rules in the nation's heartland. Treasury Secretary Timothy F. Geithner and Vice President Biden made the pitch for a financial overhaul in Wisconsin, while President Obama spoke in Iowa about the need for "common-sense reforms."

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