Byrd's absence could be problematic for financial regulation bill
Monday, June 28, 2010; 2:36 PM
The death early Monday of veteran Sen. Robert Byrd (D-W.Va.) could complicate passage of the landmark financial legislation that Democrats are hoping to send to the president this week.
A House-Senate conference committee finished its work Friday after two weeks of deliberations -- and one all-nighter -- to finalize the details of the 2,000-page bill, which would create an independent consumer watchdog aimed to protect borrowers from lending abuses, establish oversight of the vast derivatives market and enable the government to wind down large, failing firms.
Democratic leaders had planned to hold final votes this week in the House and the Senate, and President Obama urged lawmakers over the weekend "to take us over the finish line, and send me a reform bill I can sign into law." But while the House likely has the votes to approve the far-reaching new financial rules, Byrd's absence creates a potential math problem in the Senate.
"If the House acts, we're prepared to do so right after that," Jim Manley, spokesman for Senate Majority Leader Harry Reid, said Monday. As for whether Democrats could secure enough votes, Manley said: "Where are the Republicans? Are they all going vote against it? . . . "We're just going to have to wait and see."
Democrats need GOP support to reach the 60 votes needed to clear procedural hurdles standing in the way of a final vote, which takes only a majority. When the Senate passed its initial bill last month, Sens. Olympia Snowe (R-Maine), Susan Collins (R-Maine) and Scott Brown (R-Mass.) joined Democrats in a 60 to 40 tally to end debate on the legislation and allow a final vote.
Without Byrd, that effort would have failed. And there's no guarantee that Republicans who helped break a potential filibuster will stay on board this time.
Brown already has wavered. The freshman senator has bristled at a proposed tax included by the House-Senate committee that would pay for the cost of the legislation, which the Congressional Budget Office estimated at nearly $20 billion over the next decade. The assessment would apply to financial firms with more than $50 billion in assets and hedge funds with more than $10 billion in assets.
Brown said in a statement that he was "surprised and extremely disappointed" by the proposed assessment. "While I'm still reviewing the bill's details, these provisions were not in the Senate version of the bill which I previously supported," he said. "My fear is that these costs would be passed onto consumers in the form of higher bank, ATM and credit card fees and put a strain on lending at the worst possible time for our economy. I've said repeatedly that I cannot support any bill that raises taxes."
Democratic leaders made notable changes to the legislation in recent weeks in an effort to secure Brown's support. They approved an exemption he wanted that would allow insurance and mutual fund companies, which are major employers in Massachusetts, to continue to trade on their own accounts. Brown also won a concession to allow banks to invest up to 3 percent of their capital in hedge funds and private equity funds.
Even with Brown's support, Democrats would need to find additional votes to avoid a filibuster. Those votes could come from a variety of places.
For starters, Sen. Charles Grassley (R-Iowa) voted against ending debate on the Senate's original bill but supported the legislation in the end. This time around, his vote on a procedural motion known as cloture could enable final passage.
In addition, two Senate Democrats -- Russ Feingold of Wisconsin and Maria Cantwell of Washington -- also have opposed the legislation. Fellow Democrats are likely to try to persuade them to vote for cloture, even if they decide to reject the final bill.
A bit of conventional wisdom floating around the Capitol late last week also held that more Republicans might back the legislation this time around, either because of changes made during the conference process or simply because they don't want to be perceived as voting against new rules for Wall Street only months before angry voters head to the polls.
If true, the financial overhaul bill will sail through the Senate and land on Obama's desk by week's end. But if Republicans close ranks and try to block the legislation, Byrd's absence could mean a rocky, hard-fought finish to a massive bill that only days ago seemed like a sure thing.
Sen. Christopher J. Dodd (D-Conn.), who shepherded the legislation through the Senate, remained cautious at the end of last week's conference negotiations, even as he said he still aims to deliver a bill to the president by July 4.
"I feel like we're in good shape," he said Friday, "but I'm going to reserve judgment until after I have a chance to talk to my colleagues."
He now has a lot more talking left to do.