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Lincoln’s Derivatives Plan Meets Resistance in Her Caucus

Senate Agriculture, Nutrition and Forestry Chairman Blanche Lincoln (D-Ark.) appears to be fighting an uphill battle to get her piece of the financial regulatory reform bill into the larger package before it hits the floor, possibly next week.Though the Agriculture panel approved a bill this week that would regulate complicated financial instruments known as derivatives, Senate Democratic leaders and Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) do not appear to be making it easy for Lincoln to plant her flag in Dodd’s broader measure, which already includes a less rigorous derivatives piece. Lincoln’s bill has been described as to the left of what most Democrats and the Obama administration have been seeking, but she did draw the support of one Republican —Sen. Chuck Grassley (Iowa) — during committee consideration.The issue flared Wednesday during a meeting of Democratic committee chairmen, when the topic of derivatives came up. After Dodd suggested that her measure may not be folded into his bill but would have to battle it out on the floor as a stand-alone amendment, Lincoln “threw a fit,” one source said, and argued passionately for her committee’s bill.Senate Majority Leader Harry Reid (D-Nev.) told Lincoln to work out her differences with Sen. Jack Reed (D-R.I.), a Banking panel member whom Dodd tapped to work on derivatives. But sources said Lincoln would prefer to work with Dodd on a chairman-to-chairman level.Fans of Lincoln’s bill came to her aid at Thursday’s regular Democratic Policy Committee lunch with harsh criticisms for Dodd and Reid, sources confirmed.At one point, Sen. Maria Cantwell (D-Wash.) stood up and attacked leaders for not showing Lincoln the respect she deserved on the issue. Cantwell also implied derisively that Banking Democrats believed they were smarter than others in the caucus, the sources said. With White House Senior Adviser David Axelrod, Communications Director Dan Pfeiffer and other presidential staff in attendance, Cantwell saved her sharpest criticisms for White House economic adviser Larry Summers and Treasury Secretary Timothy Geithner, who she said were working at cross purposes with Democrats in the Senate.Cantwell’s office did not return calls seeking comment.Sen. Bill Nelson (D-Fla.) also rose to speak in Lincoln’s defense, sources said, but his rhetoric was more tempered.Though she declined to characterize either meeting, Lincoln acknowledged that she is seeking equal treatment for her bill.“First of all, I’m very grateful for, you know, a lot of support from colleagues that we’ve done a good job and I think they see that,” Lincoln said Thursday afternoon.She added that she is determined to make sure her legislation, or a compromise she approves of, makes it into the underlying bill and does not get set up for near-certain failure as a stand-alone amendment.

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