Obama's terms for financial overhaul remain mostly intact
Monday, May 17, 2010
The Senate this week could hand President Obama his second major legislative victory of the year, both on administration priorities that seemed in doubt not long ago.
Passage of a 1,400-page bill to overhaul the nation's financial regulations would come just two months after Obama signed a landmark health-care overhaul. But in the case of financial regulation, much more so than with health care, the Senate bill largely reflects the administration's initial blueprint, despite the fervent efforts of lobbyists and lawmakers of all stripes to alter it.
Democratic leaders and administration officials have been careful not to boast about their success in keeping the legislation mostly intact, with some provisions growing even tougher during the Senate debate.
"I'm hesitant to talk about it being done, because it's not," Sen. Christopher J. Dodd (D-Conn.), who has shepherded the bill through the Senate, said in an interview from Connecticut over the weekend. But, he allowed, "we are on the cusp of doing something pretty significant."
From the administration's viewpoint, "this bill has got to be an out-of-the-park home run," said Sen. Bob Corker (R-Tenn.), who had negotiated with Dodd but doesn't support the current Senate bill, saying it unnecessarily expands government power and does not address the core causes of the crisis. "I realize this bill is going to pass. Just policy-wise, it ended up in a different place than I had hoped."
The bill would, among other things, create an independent consumer watchdog aimed at protecting borrowers from lending abuses, establish oversight of the vast derivatives market and enable the government to wind down large, failing firms.
It has its share of critics -- those who think it goes too far, and those who say it doesn't go far enough. But several senior administration officials said they are surprised at how many of their demands have survived.
Administration officials, along with Dodd, who chairs the Senate banking committee, and House Financial Services Committee Chairman Barney Frank (D-Mass.), have walked a fine line: fending off most conservative efforts to scale back core elements of the legislation while resisting most liberal attempts at harsher regulations, including strict caps on the size of big banks. Senate Democrats also have courted key Republicans, including Susan Collins and Olympia J. Snowe of Maine, by accepting some of their recommendations, including adding rules tying capital requirements to risk and clarifying which businesses would be covered by the new consumer agency.
Despite some heated rhetoric, the process has proven far more amiable than the bitter battle over health care. Republicans have added amendments to Dodd's bill and partnered with Democrats on others.
That reflects the fact that the two parties share similar goals in revamping financial rules. But the country's anti-Wall Street fervor also played a clear role, fueled recently by fraud charges against Goldman Sachs and the flash stock market plunge.
Passage of the legislation hasn't always been so certain.