By David Cho, Brady Dennis and Michael D. Shear
Washington Post Staff Writer
Sunday, May 23, 2010; A01
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.
"Bipartisanship is desirable as a means to an end," said David Axelrod, Obama's top political strategist. "But if in the name of bipartisanship, you end up with a law that's inadequate to do the things that need to be done, then it's really not a victory."
Dodd knew the financial overhaul represented his last shot at a major piece of legislation. In January, he announced he would not seek a sixth term. His sister had died the year earlier, as had Sen. Edward M. Kennedy (D-Mass.), an old friend and drinking buddy. Dodd himself had battled prostate cancer, making him reflect on his life. In addition, he was facing an uphill battle to win reelection in the fall.Seeking GOP help
If this was to be the old bull's last ride in the Senate, he wanted to do it the way he thought best. That meant trying to find a Republican partner, as he so often had in the past.
He and Sen. Richard C. Shelby (Ala.), the ranking Republican on the banking committee, had negotiated in fits and starts over the previous months. They were old friends -- although their staffs had a chilly relationship -- but their talks ended without resolution, in particular over the details of a new federal regulator to protect consumers from abusive lending.
Dodd had gone shopping for another Republican collaborator. The most natural choice was another longtime colleague, Sen. Robert F. Bennett of Utah, the No. 2 Republican on the committee, but he was preoccupied with his own reelection battle. So Dodd settled on Sen. Bob Corker, an earnest, genial freshman from Tennessee.
Starting on the day of the great February snowstorm, Dodd and Corker spent a month seeking to hammer out the details of a compromise on every element of the bill.
During that time, Obama's senior political and economic advisers were worried that Dodd would give away too much. To keep tabs, Treasury Secretary Timothy F. Geithner and Obama's chief of staff, Rahm Emanuel, each spoke with Dodd at least once a day.
The administration's concerns spiked when Dodd traveled with Corker to Central America. Officially, the trip was a mission to discuss U.S. political and economic relations with senior officials in five countries. But for the senators, it was a chance to huddle away from the pressures of Washington. Spotty cellphone coverage made it tougher for Geithner and Dodd to talk.
Fearing that a deal was close, Geithner decided to make an unscheduled trip to Central America to see the pair of senators before it was too late. But when one of Geithner's aides called Dodd to share the plan, the senator waved them off. Trust me, Dodd told them.
Dodd and Corker eventually found middle ground on nearly every issue. But Dodd realized that some of his fellow Democrats would balk if he went forward. He pressed Corker to see what other GOP senators were willing to sign on. The answer: none.
"I admire Bob for wanting to try, but then you've got to be able to produce," Dodd recalled.
He decided to pull the plug. He would push forward alone -- just as the White House had hoped.The amendments
Corker was discouraged, but he intended to keep pursuing the compromise he had been fashioning with Dodd.
As a vote in the banking committee neared, Corker prepared amendments that would, among other things, soften the powers of the new consumer agency. Other Republicans had their own proposals. On the eve of the committee vote, 401 amendments had been readied, nearly all from Republicans. (Dodd, amazingly, had predicted the precise number in an office pool.)
Dodd had initially assured Corker that the huge stack of proposals would be debated. But two days before the committee vote, Corker got a call from Dodd in Connecticut. Dodd and Shelby had agreed that no amendments would be heard. Corker was livid.
Dodd would later say the Republicans made a strategic decision not to offer amendments. But according to Corker, Dodd had threatened to block the amendments, so the Republicans withdrew them. Among the Republican committee members themselves, there were disagreements over which amendments -- some contradicting one another -- were important.
On Monday, March 22, the fifth-floor committee room in the Dirksen Senate Office Building was packed. In the audience were Treasury officials who had worked through a sleepless weekend to analyze all the proposals that had been filed. Just 21 minutes later, the committee finished its vote. The bill had passed along party lines, taking a giant step forward to passage.
The Treasury officials spilled out into the hallway, cheering and high-fiving one another. They then moved to the rooftop bar of the W Hotel near the Treasury to celebrate.
Administration officials thought it would be much harder for Republicans to block the bill once it reached the full Senate. Time for debate on the Senate floor is limited, so fewer amendments could be heard. Administration officials also had been hearing from moderate Republicans who said they did not want to filibuster.
Weeks after the committee vote, Corker remained crestfallen. One day on the Senate floor, he approached Dodd, who was talking to two staff members.
"Just tell me," Corker said, "is there any reason for me to attempt to get consumer protection back in the middle of the road?"
There was a long pause.
"Bob," Dodd said softly, "these bills have a life, and that time has passed."'A fixable bill'
With the bill headed to the Senate floor, Dodd and Senate Majority Leader Harry M. Reid (D-Nev.) were still worried. Republicans could slow the deliberations to a halt if they wanted, and Senate Minority Leader Mitch McConnell (R-Ky.) was in a bad mood.
McConnell was furious over the partisan vote in the banking committee. He also accused the Democrats of breaking off talks with Republicans on the Senate agriculture committee, which had been drafting rules to govern the trading of financial instruments called derivatives.
In mid-April, Obama invited congressional leaders to the White House to discuss the financial legislation. But before the talks got far, McConnell interjected. He pointed at Emanuel, Obama's hard-nosed chief of staff, and demanded, "Mr. President, if you want bipartisanship, you tell that guy to stop pulling people out of the room."
The discussion abruptly ended. The meeting broke up early.
In the Senate, McConnell focused his displeasure on a proposed $50 billion fund that would help shut down large financial companies that were failing. Although the money would come from Wall Street, he warned it could open the door to bailouts.
White House officials countered, saying they had publicly opposed the $50 billion fund. They said the measure had been suggested by Republicans on the banking committee.
As the weeks progressed, McConnell tempered his attacks on the bill. During the debate over health care, he had worked harder to keep his ranks in line, pressing them to oppose the bill at any cost. This time he struck a different tone.
"This wasn't an effort to kill the bill. This was a fixable bill," said Don Stewart, McConnell's spokesman. "It was fixable had they accepted our amendments."Getting Republican votes
Even if McConnell had tried to hold the line, it might have been impossible. Public outrage over Wall Street abuses reignited in mid-April when the Securities and Exchange Commission filed fraud charges against the storied investment bank Goldman Sachs. A few Republicans told McConnell they would vote to let the financial bill move forward to formal debate.
From there, Democrats needed only to pick off a couple of Republicans whom Geithner and others had courted for months. Democratic leaders backed a few amendments these Republicans offered, including measures that would exempt some small businesses from tougher oversight and would force big banks to set aside more money to cover possible losses.
Democrats secured the vote of Sen. Scott Brown ((R-Mass.) with help from Frank, who assured him that some large firms -- including two in Massachusetts -- would be shielded from certain kinds of regulation.
Though two Democrats voted no, the 1,500-page bill passed Thursday evening 59 to 39, with the support of four Republicans.
After the news conferences had ended and other lawmakers had cleared out, Dodd headed to the empty Senate. Ignoring protocol, he invited nearly two dozen staff members to sit at the senators' desks and thanked them for the long hours and lost weekends.
Afterward, they filed out in to the warm night and headed to a nearby restaurant. Dodd ate seafood, drank a couple beers, told a few stories -- and laughed louder than anyone else in the room.