Parties working together on financial regulatory bill in Senate

By Shailagh Murray
Washington Post Staff Writer
Saturday, May 8, 2010; A01

Something unusual is taking place on the Senate floor: Republicans and Democrats are working together on a major piece of legislation.

Almost as the founders planned it, senators are considering amendments to a massive financial regulatory bill without any of the usual procedural obstructions that eat up time and force 60-vote thresholds before anything can happen. Democrats are co-sponsoring Republican amendments and vice versa, and some measures are winning unanimous or near-unanimous majorities.

Lawmakers in both parties have embraced the freewheeling environment as a break from the bitter partisanship that marred the health-care debate. That acrimony still lingers over the Senate. Bipartisan talks on immigration and climate change collapsed last week, and Republicans are refusing to release "holds" on scores of executive branch nominees.

But the seamless Republican opposition that had been the hallmark of Minority Leader Mitch McConnell's tenure has frayed in recent weeks. GOP senators are forging alliances with Democrats and voting against measures offered by fellow Republicans. They are trying to reshape a bill they don't like the old-fashioned way -- in an open process on the Senate floor.

"It is my hope that this bill will not only produce a good product at the end but also have the healing quality that this institution needs," Senate banking committee Chairman Christopher J. Dodd (D-Conn.) said this week. "We've been through a lot this Congress, and we need to get back to acting like colleagues."

There are no signs that Republicans have lost confidence in McConnell, acknowledged as a savvy inside operator even by his Democratic opponents. But the shift does signal that the just-say-no approach he employed until recently has its limits, particularly in an election year when voters are angry at both parties and appear to be gravitating to outsiders.

How long this reasonable phase will last is an open question. Republicans are predicting smooth passage for President Obama's Supreme Court pick. A food-safety bill headed to the Senate floor later this month has picked up GOP co-sponsors. Senate Republican leadership aides said upcoming debates over unemployment and war funding could prove anticlimactic, provided Democrats refrain from attaching unrelated provisions.

Or the goodwill could vanish quickly. Senate Majority Leader Harry M. Reid (D-Nev.) has already bickered with McConnell (Ky.) over scheduling particulars, with Reid eager to finish the financial regulatory bill next week and McConnell seeking more time.

By Thursday night, 53 senators had offered more than 140 amendments, and only nine amendments had come to a vote. Sen. John McCain (R-Ariz.) announced that 20 GOP senators had lined up to speak about his proposal to end federal support for the mortgage giants Fannie Mae and Freddie Mac. Reid suspected a plot to stall debate. "We do not need a filibuster by some other name," he said.

But McConnell said his goal was to see the amendments come to votes. "We are going to work hard to get them in the queue and to get them voted on," he said.

In a show of good faith, Reid disappeared into the GOP cloakroom at the back of the Senate chamber and negotiated a time agreement on the next round of votes.

The Wall Street bill represents the first time since Obama took office that the minority party has fully engaged in negotiations over an issue at the top of the Democratic agenda. For supporters, the effort to overhaul practices at banks and financial firms took on new urgency Thursday, when the Dow Jones industrial average dropped suddenly by nearly 1,000 points, in part triggered by a technical glitch that resulted in a massive computerized sell-off.

"We saw a living, breathing, real-time example today of the potential catastrophe that takes place if we don't have an ability to make sure we adequately use this technology," Sen. Mark Warner (D-Va.) said on the Senate floor after the market dive.

Democrats, for their part, have refrained from their usual habit of cutting short Senate debate at the first whiff of parliamentary maneuvers by the GOP. Reid and Dodd have permitted several far-reaching Republican amendments to reach the floor, including McCain's Fannie and Freddie proposal and a major GOP rewrite of the bill's consumer protection provisions, shifting oversight responsibility from the Federal Reserve to the Federal Deposit Insurance Corp. while easing restrictions on lenders. The latter effort failed 38 to 61, with two Republicans supporting the stronger Democratic approach.

When the financial overhaul debate began in mid-April, it appeared on track to become a repeat of the health-care showdown. The first crack appeared after Republicans decided not to offer a single amendment to the bill in the Senate banking committee. Sen. Bob Corker (Tenn.), one of several GOP senators who had spent a year negotiating with Dodd, warned publicly that his party had made "a very large strategic mistake," and others privately questioned whether McConnell was underestimating public anger about Wall Street abuses.

A week after sharply criticizing the Democratic bill, McConnell announced that Republicans would resume talks with Dodd. When Reid grew impatient with the pace of negotiations and tried to move the legislation to the floor, McConnell unified his 41-member caucus to block the effort.

By the third day of the filibuster, GOP senators warned McConnell that Republicans had gotten "ourselves in a hole," as one lawmaker put it. Sen. George V. Voinovich (R-Ohio) acknowledged rising GOP frustration, as Republicans were portrayed as trying to sabotage important reforms.

One big difference from health care, said Sen. Susan Collins (R-Maine), is that the two parties share a concern that banks and investment firms need more effective oversight. "I don't think there's a single senator who does not believe that our financial regulatory system isn't in need of substantial reform," she said.

Corker said he was encouraged to see Republicans "waking up every day and thinking of ways to make this bill better." Whether he votes for the final product or not, "I think the process that we're going through right now is very, very healthy. It's the way the Senate ought to operate."

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