Senate Republicans threw in the towel on their filibuster of the financial reform bill Wednesday in the face of growing pressure from the party's moderate wing and a Democratic threat of all-night votes.
The GOP surrender Wednesday afternoon cleared the way for debate on the sweeping Wall Street overhaul after a three-day standoff in which neither side seemed willing to give an inch. Democrats gambled that Republicans would ultimately give in — or fracture — amid charges that they were protecting large financial firms and obstructing consumer protections.
In the end, Republicans said they agreed to begin debate after having secured key concessions from Democrats on the bill's too-big-to-fail provisions aimed at preventing future taxpayer bailouts. Democrats said they had a basic agreement on that section days ago, but GOP Senators were not ready to come aboard. The reality, Democratic aides argued, was that Republicans buckled after facing a public pummeling over their refusal to even allow the bill to come to the Senate floor.
Indeed, Republicans had pushed hard for weeks to weaken regulations on derivatives and a new consumer protection agency, but Democrats gave them nothing, feeling they had finally backed the GOP into an untenable corner on a major issue strongly backed by the public. For their part, Democratic leaders faced internal pressure from liberal rank-and-file Members not to water down the bill. Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) said that it was presumptuous for people to expect that he and ranking member Richard Shelby (R-Ala.) would hammer out a deal on everything before other Senators had a chance to weigh in.
In the end, the agreement came together just as Senators were staring down a possible all-night session, with a vote set for 1 a.m. Thursday. In the late afternoon, Shelby announced that he had concluded his talks with Dodd after saying he realized the duo would not achieve a broad bipartisan consensus. Shortly thereafter, Republicans agreed to bring the measure to the floor.
Before Shelby's announcement, Democrats said they sensed several moderate Republicans were ready to give in — and that if they didn't, momentum was on their side. Reid seemed prepared to keep forcing procedural votes on Republicans until they gave up.
And while Democrats were claiming victory, Republicans were quick to add their spin. Conference Chairman Lamar Alexander (Tenn.) said the three-day standoff had yielded important benefits for Republicans. "We acted together to exercise our 41 votes in a very effective way," he said, noting the apparent agreement on too-big-to-fail language.
"I think we have a better starting place than we would have had earlier," echoed Minority Leader Mitch McConnell (R-Ky.), saying Republicans had secured critical agreements from Democrats to have an open amendment process.
"Let me say as clearly as I can, and certainly the leader has said this as well, it's nothing new: I believe in an open process where people's ideas can be brought to the debate, that no one ought to be excluded from the amendment process," Dodd said at a press conference. "But don't tell me what ideas you have and that you'd like to bring to this and at the same time vote against a motion that would allow us to even consider your amendment."
Democrats had charged the GOP with trying to avoid a lengthy amendment process on the floor, hoping to avoid having to debate politically risky amendments that some would charge benefit Wall Street rather than consumers. "They are trying to do it without their fingerprints on the amendments," Sen. Benjamin Cardin (D-Md.) said Wednesday.
Clearly, moderate Republicans had grown tired of voting down procedural motions to debate the issue, particularly in a week featuring a hearing with Goldman Sachs executives defending charges from Senators that they bet against their clients and spread toxic mortgages that fueled the collapse of the housing industry in 2008.
Sen. George Voinovich (R-Ohio), for one, said he wouldn't sustain the filibuster indefinitely, saying he would eventually vote to bring the bill to the floor unless Shelby could show he was still making progress. Voinovich said the standoff allowed Republicans "to stay at the table and see what they could work out."
But he noted Republicans could still change the bill later on. "We still have the right at the tail end to not give cloture," he noted.
Moderate Sen. Susan Collins (R-Maine) immediately jumped at Shelby's announcement to declare she would join Democrats in voting to move to the bill.
"As I have said all along, there is no question that Congress must pass legislation that fundamentally restructures our nation's outdated financial regulatory system," she said.