Financial Reform Momentum Building
Democratic and Republican Senators appeared to be closing in on a financial regulatory reform deal Wednesday, but Democrats said that regardless of the outcome of talks, they are confident they have Republicans on the run and are in a position to force the bill to the floor next week.
“There is no question we have the upper hand on the bill in general and message-wise, because we want to move forward with real strong reform and the other side keeps finding reasons not to move forward,” Democratic Conference Vice Chairman Charles Schumer (N.Y.) said.
Schumer added that bipartisanship is still very possible, but “whether we get it or not, we will move forward, because I believe we will get Republican votes to pass a bill.”
Schumer’s prediction appeared to be backed up by the fact that Sen. Chuck Grassley (R-Iowa) broke with his party Wednesday to support a derivatives bill sponsored by Agriculture, Nutrition and Forestry Chairman Blanche Lincoln (D-Ark.). That measure, which could be merged with the larger financial reform bill, has been described as more far-reaching than either Senate leaders or the White House had requested.
Still, Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) and ranking member Richard Shelby (R-Ala.) both said Wednesday they felt an agreement on the larger measure could be reached by week’s end.
“We’re more optimistic than we’ve ever been,” Shelby told reporters. Shelby noted that he hopes Senate Majority Leader Harry Reid (D-Nev.) “would give us enough time to finish what we started.”
Dodd said on the floor late Wednesday afternoon that he expected to present financial reform legislation “in a matter of hours.” As of press time, no deal had been announced.
Dodd’s comments came as momentum to bring up a bipartisan measure was building on both sides of the aisle. Dodd told reporters after his floor remarks that he presented Shelby with an offer and that talks between the two have been constant.
[IMGCAP(1)]Shelby briefed GOP Senators Wednesday evening, but the Conference did not appear ready to sign on to a deal yet.
Republican Policy Committee Chairman John Thune (S.D.) said he did not think a deal could be reached “tonight or tomorrow” but hedged on whether Republicans would stand together against the Democratic bill if it comes to the floor without an agreement. “I’m not entirely confident, but I’m hopeful. There are still issues that need to be worked out,” he said.
Shelby and all other Banking Republicans declined to offer amendments and voted against the Dodd bill when it passed the committee last month. But as Democrats began the drumbeat leading up to the floor debate, Shelby and other Republicans re-engaged in negotiations with Dodd.
If a deal is reached, it would likely have to be vetted with other Members in both caucuses before Reid would move forward with it.
But if talks do not wrap up this week, Democratic leaders said they are not willing to give Dodd and Shelby much more time to come to a resolution.
“Unless and until Members are forced to vote, they don’t commit themselves to a position,” Majority Whip Dick Durbin (D-Ill.) said. Reid is expected to file a motion to force the beginning of debate as early as today. A vote on that motion, which would need 60 votes to prevail, could come Monday.
One Democratic aide explained, “Our hope is that bipartisan talks do yield fruit, but we learned our lessons from the health care fight, and we’re not going to let Republicans drag this out on promises of some bipartisan deal that may never materialize.”
Privately, some Democratic aides said leaders hoped the hardball strategy would force a deal and avert a showdown on the floor over a potential GOP filibuster. All 41 Republicans signed a letter last week calling for a bipartisan measure, and though the missive did not overtly threaten a filibuster, GOP leaders expressed confidence that they would be able to do just that if Democrats pursued the bill the Banking panel approved.
And while Republicans appeared to fully realize that Democrats were planning on going forward with or without them, they did not repeat the mantra they used during the health care talks in which they charged Democrats with pursuing “arbitrary timelines.”
“I think they realize, you know, this is not an issue you want to be seen squabbling about,” Sen. Jack Reed (D-R.I.) said.
But there was no question Republicans were still softening their tone. Just a week ago, Senate Minority Leader Mitch McConnell (R-Ky.) said Democrats were pursuing a bill that would “guarantee” future bailouts of Wall Street banks.
Thune said his colleagues were committed to a bipartisan solution, but he acknowledged that Democrats have been effective in applying political pressure on Republicans by creating the perception that any opposition to the bill was a defense of the status quo.
“It’s the facts versus perception,” Thune said. “The Democrats believe they can get political advantage by painting Republicans as defending Wall Street. … I think once you get the issues out there and help people realize what’s really at stake here and how important it is that we get it right so we don’t drive capital overseas, then I think it’s an argument you can win. But the perception right now is I think what’s driving this. You know, Republicans believe we are right on the substance.”
Republicans also bristled Wednesday because — even as they were trying to be more accommodating on the issue — liberal Democrats were continuing to rail against them on the Senate floor.
“It’s not helpful,” one Senate GOP aide said.
David M. Drucker contributed to this report.