Financial regulation bill nears finish line with support from Snowe, Brown
Tuesday, July 13, 2010
Two key Republicans said Monday that they plan to support a far-reaching bill to overhaul financial regulations, all but ensuring that the landmark legislation will sail through the Senate in coming days.
GOP Sens. Olympia J. Snowe of Maine and Scott Brown of Massachusetts, whose unexpected election in January threatened to derail the White House's top legislative priorities, on Monday committed the votes that could give President Obama a high-profile victory in his quest to overhaul the nation's financial regulations. The landmark legislation now seems likely to land on the president's desk within days, giving Democrats an opportunity to proclaim during the coming election season that they acted to rein in the recklessness of Wall Street.
"While it isn't perfect, I expect to support the bill when it comes up for a vote," Brown said in a statement. "It includes safeguards to help prevent another financial meltdown, ensures that consumers are protected, and it is paid for without new taxes."
Snowe issued her own statement later in the day. "After thoroughly reviewing the 2,315-page financial regulatory reform conference bill during the July 4 work period, I intend to support passage of the legislation," she said. "To ensure we avoid another financial catastrophe . . . it is imperative that we implement an aggressive overhaul of the American financial regulatory system."
Should the bill pass in coming days as expected, it would be touted as a significant triumph for Democrats. But in the fickle Senate, its success has hinged on a handful of New England Republicans -- including Snowe, Brown and Maine's Susan Collins -- who flexed political muscle to win concessions that altered the bill.
Brown in particular remained noncommittal in recent weeks, demanding a series of changes that Democratic leaders quickly, if reluctantly, accepted in their zeal to win his critical vote. Lawmakers agreed to an exemption pushed by Brown, for example, that would allow banks to continue to invest at least a small amount of their capital in hedge funds and private equity. The measure would prohibit a bank from placing more than 3 percent of its capital in such investments.
Later, after Brown balked at a plan to pay for the financial overhaul with a fee on large banks and hedge funds, Democratic leaders returned to the drawing board. They dropped the fee and instead decided to end the federal government's bank bailout program a few months early and apply some of the projected savings toward the cost of the financial regulation bill.
In addition, they agreed to raise premiums paid by commercial banks to the Federal Deposit Insurance Corp., whose fund serves as a safety net for consumers whose banks fail. Only banks with more than $10 billion in assets would pay the higher premium.
By playing hard to get and eventually bucking his own party, the freshman senator exasperated both Democrats and Republicans, but he got nearly everything he wanted. Any hard feelings -- at least from the Democratic side -- seemed forgotten Monday.
"Today is a good day for Main Street America. With the support of Senators Olympia Snowe, Susan Collins and Scott Brown, Wall Street reform is a step away from heading to the president's desk to be signed into law," said Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate banking committee. "These colleagues demonstrated how bipartisanship is supposed to work."
The question no longer is whether the far-reaching bill will pass in the Senate, but when. Part of that depends on the legislative math.
When the Senate passed an earlier version of the bill in May, Brown was one of four Republicans to support it, along with Snowe, Collins and Charles E. Grassley of Iowa. (As with Brown, top Democrats also made concessions along the way in an effort to keep Snowe and Collins on board.)
Since then, Cantwell has stated that she will vote for the amended bill, saying she is pleased with changes that toughened provisions for overseeing the trading of financial derivatives. Grassley has remained noncommittal and has expressed concerns about raising FDIC premiums and about shifting funds out of the bank bailout, known as the Troubled Assets Relief Program. Collins has said she is inclined to vote for the final bill.
If Democrats remain united and win votes from Brown, Cantwell, Collins and Snowe, they will eclipse the filibuster-proof 60 votes needed to send the bill to Obama. If necessary, they could wait until the Democratic governor of West Virginia names a replacement for Sen. Robert C. Byrd, who died last month.
Like Snowe, Brown said that he reviewed the massive bill over the Fourth of July recess and that he appreciated the efforts to shape it more toward his liking, especially by removing the assessments on banks and hedge funds. True to form, however, he said his vote doesn't imply total satisfaction.
"That doesn't mean our work is done," Brown said. "Further reforms are still needed to address the government's role in the financial crisis, including significant changes to the way Fannie Mae and Freddie Mac operate."
Staff writer Jia Lynn Yang contributed to this report.