Senate Votes in Doubt for Financial Reform Bill
Lobbyists Opposing the Deal Resigned to Eventual Defeat, but Democrats Are Still Several Votes Short
Senate Democrats’ ability to clear a financial regulatory reform package this week is suddenly uncertain, with the death of Sen. Robert Byrd (D-W.Va.) costing them a crucial vote and the last-minute inclusion of a bank tax provision jeopardizing already thin GOP support.
Democrats wanted to deliver the Wall Street overhaul package to President Barack Obama by week’s end, when Congress is scheduled to adjourn for the July Fourth recess. But Byrd’s passing, combined with the opposition of Sen. Russ Feingold (D-Wis.) and potential opposition of Sen. Maria Cantwell (D-Wash.), could leave Democrats at least four votes short of the 60 votes needed to overcome an expected Republican filibuster.
Additionally, four Senate Republicans who voted for that chamber’s version of the bill have declined to endorse the final product of the House-Senate negotiations. Republican aides said Sen. Scott Brown (Mass.) was a particularly strong candidate to drop off the bill because of a $19 billion levy on banks and hedge funds that was added to the package in conference committee. Senate Majority Whip Dick Durbin acknowledged Monday that the path forward remains murky.
“It is a tougher road, believe me. A 58-vote majority is not as good as a 59-vote majority,” the Illinois Democrat told reporters. “We’re trying to win more Democratic and Republican votes in support.”
Durbin confirmed that Byrd’s death and the potential of Brown voting “no” complicate the Democrats’ plans, adding that no decision has been made on when to bring the legislation to the floor. However, Durbin emphasized that he has not conducted a whip count since the conference committee finished its work last week.
Both Cantwell and Feingold voted against the Senate version of the financial regulatory reform bill last month. On Monday, a Cantwell aide said the Washington Democrat was studying the conference report and did not yet have a position on the legislation as of press time. Feingold confirmed in a prepared statement that he would vote “no.”
“My test for the financial regulatory reform bill is whether it will prevent another crisis. The conference committee’s proposal fails that test and for that reason I will not vote to advance it,” Feingold said.
Feingold is in a competitive race for re-election this year, and his decision to oppose the bill comes just after Vice President Joseph Biden went to Wisconsin as the headliner for two fundraisers last week.
Meanwhile, K Street was pushing Brown and other Senate Republicans to vote against the conference report, including Sens. Olympia Snowe and Susan Collins of Maine and Chuck Grassley (Iowa) — all of whom supported the Senate version of the financial reform bill.
Brown delivered a statement Friday critical of the tax increase on banks and hedge funds added near the end of conference committee negotiations. The freshman Senator, who won a special election in January, stumped against the idea of taxing banks.
Aides to Snowe, Collins and Grassley said the Senators were still reviewing the conference report and had yet to reach a decision.
Snowe said she also was concerned about the bank tax and that she would be meeting with Banking Chairman Chris Dodd (D-Conn.).
One financial services executive said getting to 60 votes would measure Majority Leader Harry Reid’s (D-Nev.) ability to persuade.
“This is going to test Sen. Reid’s arm-twisting abilities,” the executive said. “He’s got to bring Cantwell, Feingold and pick up some Republicans.”
Banking lobbyists are particularly focused on pressuring Brown to vote against the bill. “He’s the linchpin here,” the executive added.
The heavy lobbying against the bill continues despite concessions by Agriculture Chairman Blanche Lincoln (D-Ark.) on language tightening the regulation of derivatives.
However, opponents of the legislation in the business community lost some clout after the National Association of Manufacturers decided not to lobby against the bill following changes made during the last day of the conference. Dorothy Coleman, NAM vice president of tax and domestic economic policy, said the end product is a lot better than where the legislation started.
“Considering where we came from, which at the beginning of the debate was as extreme as exchange trading for all derivatives, manufacturers have ended up in a place where it appears they will have access to customized derivatives,” Coleman said.
Despite Byrd’s death and Republicans wavering on how to vote, Wall Street lobbyists said they expect the bill to go through.
“I think the timing is a little bit up in the air,” one financial services lobbyist said. “But I think they still can get there.”
As a result, lobbyists have already begun focusing on the next phase of the legislation: regulation. With many of the provisions written vaguely, lobbyists hope to influence the rule-making process at the Federal Reserve, the Treasury Department and the new consumer protection bureau that would be created by the law.
“This is just the third quarter,” said one Democratic lobbyist with financial services clients.