House passes financial overhaul; Senate leaders postpone vote

Barney Frank
Barney Frank (Andrew Harrer - Bloomberg)
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By Brady Dennis and Jia Lynn Yang
Washington Post Staff Writers
Thursday, July 1, 2010

The House approved new financial regulations Wednesday, but Senate leaders postponed a vote on the bill, preventing the landmark legislation from reaching President Obama's desk until at least mid-July.

House members voted 237 to 192 to approve the final version of the bill, which emerged from the House-Senate conference committee earlier in the week. The sweeping legislation would, among other things, set up an independent consumer bureau within the Federal Reserve to protect borrowers from lending abuses, establish oversight of the vast derivatives market and enable the government to wind down large, failing firms.

After two final hours of debate, 234 Democrats and three Republicans voted for the overhaul. The margin of victory was greater than when the House initially voted on its version of the bill in December, when no Republicans voted yes.

"No longer will recklessness on Wall Street cause joblessness on Main Street," said House Speaker Nancy Pelosi (D-Calif.). "No longer will the risky behavior of a few threaten the economy of the whole."

Rep. Barney Frank (D-Mass.), who guided the bill through the House, called the final 2,300-page product "a very good bill."

"Yes, it's a very big bill because it was a very big set of problems," Frank said after the vote. "This bill got better at every stage of the process. . . . I believe we have a piece of legislation that's going to show its merit."

Republicans continued to insist that the new rules would perpetuate the potential for federal bailouts and hinder access to credit.

"The bad and the ugly far outweigh" the good elements of the bill, said Rep. Spencer Bachus (R-Ala.). "In total, this bill is a massive intrusion of the federal government into the lives of every American."

The relatively smooth vote in the House contrasted with the legislative wrangling that has bedeviled the bill in the Senate.

The uncertainty over key Republican votes, coupled with the loss this week of Sen. Robert Byrd (D-W.Va.), prompted Senate Majority Leader Harry Reid (D-Nev.) to delay the Senate vote until after the July 4 recess. Reid will likely push for a final vote the week of July 12.

The bill hit an unexpected speed bump Tuesday when a handful of centrist Senate Republicans, whose votes Democrats need to overcome procedural roadblocks, balked at a $19 billion bank fee added late in the conference committee negotiations to offset the bill's cost. Sen. Scott Brown (Mass.), one of four Republicans who voted for the Senate's earlier version of the overhaul last month, withdrew his support because of the provision.

Democratic leaders reopened the House-Senate conference for two hours late Tuesday to revise how the bill's cost would be financed.

Lawmakers had originally wanted to impose a fee on banks with more than $50 billion in assets and hedge funds with more than $10 billion in assets. Instead, the final bill offsets costs by ending the government's bank bailout program, known as the Troubled Assets Relief Program, ahead of schedule and using leftover money to pay for the financial regulatory bill. The conference committee also approved a measure raising premiums paid by banks to the Federal Deposit Insurance Corp.

The changes seemed to satisfy at least one Republican, Sen. Susan Collins of Maine, who said Wednesday she was inclined to support the final bill. Democrats are also counting on support from GOP senators Olympia Snowe (Maine) and Charles Grassley (Iowa), both of whom previously backed the legislation. Democratic leaders are also wooing Sen. Maria Cantwell (D-Wash.), who previously opposed the bill but has not ruled out voting to let a final vote go forward. Before the bill can come to a final vote, at least 60 senators must agree to let it proceed.

Brown, who won other concessions in the legislation, remained a wild card Wednesday, saying he hadn't decided whether to support the final bill.

"I appreciate the conference committee revisiting the Wall Street reform bill and removing the $19 billion bank tax," he said in a statement. "Over the July recess, I will continue to review this important bill."

Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) pleaded with colleagues to allow a final vote on the bill.

"I don't know what else I could have done to make this more inclusive . . . to respond to the concerns my colleagues have raised," Dodd said.

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