Senate Agriculture Chairman Blanche Lincoln has a lot riding on Thursday’s expected wrap-up of the financial regulatory reform conference committee.
The committee will turn to one of the bill’s most controversial provisions, language authored by the Arkansas Democrat that would impose strict regulations on the derivatives market. The contentious matter has swing votes hanging in midair and committee chairmen and K Street insiders counting heads.
Facing a tough re-election battle, Lincoln’s derivatives fight is a way to distance herself from Wall Street interests and to raise the profile of her Agriculture Committee clout. But her strong language caused heartburn in the Senate last month when financial reform legislation was on the floor, and it has emerged as a roadblock for passage in both chambers, with the financial services industry stridently opposed to the measure.
Lincoln met with House and Senate leaders Wednesday to plead her case, but waning support among House Members suggests that the language could be watered down.
“There are some that are not as interested in being as aggressive in making sure that the possibilities of this financial crisis don’t happen again,” Lincoln said after the meeting.
“Our objective has always been to make sure we create more stable markets for businesses and investors,” she added. “I think we have a good plan to do that, but there’s going to be those that push back.”
At least 81 House Democrats, nearly one-fifth of the chamber, have expressed their concern in writing with Lincoln’s language imposing strong regulations of the derivatives market. House Financial Services Chairman Barney Frank (D-Mass.) told Lincoln on Wednesday that the opposition could be enough to stymie the conference report on the House floor, which prompted an outcry from a handful of House Democrats, including Reps. Bart Stupak (Mich.) and Rosa DeLauro (Conn.), who demanded the final product include Lincoln’s derivatives provision.
A stalemate in either chamber to pass the conference report would be a huge blow: Both Frank and Senate Banking Chairman Chris Dodd (D-Conn.) have maintained that Congress would send a conference report to the president’s desk for his signature by July 4, and Democrats are eager to tout the sweeping measure at parades and constituent visits when they return home for the holiday break.
Dodd does not have much wiggle room in the Senate, where his measure passed last month 59-39. Democratic Sens. Russ Feingold (Wis.) and Maria Cantwell (Wash.), who voted against the bill, have not yet been swayed to vote in favor. Four GOPers voted for the bill, and their support is crucial in this last legislative step to reforming the financial sector.
Negotiations on other key provisions so far would suggest the odds of Lincoln’s language staying intact are low. When conferees have tried to strike a balance on language that could find support from both chambers, the end result has been to weaken the legislation. For example, auto dealers are now exempt from the rules most lenders must adhere to, and the financial consumer protection agency is within the Federal Reserve, instead of keeping it independent.
Sen. Susan Collins, who supported Dodd’s bill on the floor, said the derivatives language “needs to be refined” and added that other tweaks need to be made to keep her in the “yes” category.
Roll Call has launched a new feature, Hill Navigator, to advise congressional staffers and would-be staffers on how to manage workplace issues on Capitol Hill. Please send us your questions — anything from office etiquette, to handling awkward moments, to what happens when the work life gets too personal. Submissions will be treated anonymously.
