Months of intense negotiations led to passage of financial overhaul bill
Sunday, May 23, 2010
When Christopher J. Dodd arrived at the White House that Wednesday morning in March, he was wrestling with a fateful choice.
Two days earlier, his landmark financial overhaul bill had sailed through the Senate banking committee, which he chairs, without a single Republican vote. Now Dodd (D-Conn.) was trying to decide whether to hold on to the hope of winning bipartisan support for legislation through compromise or pursue a more ambitious bill that he and the Obama administration preferred.
As Dodd sat in the Oval Office alongside Rep. Barney Frank (D-Mass.), sponsor of the House version, President Obama eagerly shared some intelligence. A Republican senator had privately informed him that GOP ranks were fraying and that Senate Republicans would have trouble filibustering the effort to rewrite the nation's financial regulations. Obama concluded that Democrats did not need to concede much, given their 59 to 41 majority in the Senate, one vote shy of the number required to prevent a Republican filibuster.
"I hope that's the case," Dodd responded. "I hope you're right."
The president and his advisers were fresh off their victory on health care -- Obama had signed the health-care bill a day earlier -- and were oozing with confidence.
Dodd wasn't so sure. After three decades in the Senate, the 65-year-old, snow-haired senator knew what a fickle and unpredictable place it could be, how quickly tides could change. He suspected that some administration officials, who came from academia or the corporate world, didn't have the vaguest idea about the intricacies of the legislative process.
"In my world, everybody potentially has veto power. One or two people can literally end everything," he said later. "So when I'm sitting in rooms and people are telling me how this is to work, I'm fascinated by what you've got to say, but it doesn't really register terribly significantly with me."
What Dodd wanted most from the White House was breathing room and trust.
Over the next two months, Dodd would ultimately choose the course Obama had urged. It would put the government more squarely in the middle of financial markets, punish banks that had contributed to the financial crisis -- and win support from only a handful of Republicans.
The story of how emboldened Democrats got nearly everything they wanted is based on interviews with more than 20 people. Some asked to remain anonymous because the legislation has not been finalized and Obama has not signed it.
As Democrats suspected, Republicans would not stay united in the face of an electorate angry over Wall Street abuses. In the end, four Republicans defected, enough to bring the bill to a final Senate vote.
The process did little to convince embittered Republican senators of Obama's sincerity in appealing for a kinder, more harmonious Washington. But if the House and Senate versions are reconciled in coming weeks as expected, Obama could sign into law a bill very much like what he envisioned at the start: the most dramatic restructuring of regulations in generations.