Reid Looks to Make Sale on Financial Reform

Posted July 13, 2010 at 6:35pm

Senate Majority Leader Harry Reid struggled once again to cobble together the votes for a major policy endeavor, but the Nevada Democrat appears to be betting that Wall Street reform will be more of a winner at the polls this November than similar legislative lifts such as health care reform and the economic stimulus package.

But just as he did with other Democratic priorities this Congress, Reid — with considerable effort and no lack of last-minute surprises — secured the 60 votes he needed to overcome GOP objections on the financial reform conference report. He said he hopes to have a vote that would send the bill to President Barack Obama by Thursday morning.

By making the connection between the financial industry meltdown and the deep recession the country has been in since 2008, Reid on Tuesday articulated the reason Democrats believe the financial overhaul will help their uncertain electoral prospects this year.

“Everyone knows that the greed on Wall Street caused the problems we’re having with our financial — with our financial problems around the country,” Reid told reporters Tuesday. “It triggered the recession. It’s what suffocated the job market and robbed trillions of dollars of people’s savings — trillions. By cleaning up Wall Street, we’re going to make sure big bankers can never again gamble away our future. We’re going to make sure that there’s not a next time.”

Though he now appears to have the bare minimum to beat back a certain GOP filibuster attempt of the bill, Reid said GOP objections could delay final passage until Saturday morning. Thursday passage would require Republicans to agree to an expedited vote.

Of course, Reid had to do some eleventh-hour lobbying to make sure he would end up with a filibuster-proof majority for the package after moderate Sen. Ben Nelson appeared to waffle late Monday.

Nelson spokesman Jake Thompson said the Nebraska Democrat, who supported the original Senate version of the measure, had heard concerns from home-state bankers about a new consumer financial protection agency and how much input Senators would have into who headed the agency.

Nelson “looked into it,” Thompson said, and found that the agency director would have to be confirmed by the Senate and that Congress would have considerable control over how the agency is funded. Those answers appeared to address Nebraskans’ concerns, Thompson added.

[IMGCAP(1)]Democratic sources said Nelson’s sudden reservations about the bill took them by surprise but noted that it was not hard to assuage his concerns and convince the perennial swing voter that he did not want to be painted a flip-flopper on the bill that Democrats see as a key accomplishment to tout to a volatile electorate.

However, a Washington Post/ABC News poll this week cast some doubt on that political calculation, showing that 50 percent of people disapprove of the president’s handling of financial reform, while only 44 percent approve.

Similarly, polling on the health care reform effort has been mixed, with many voters scratching their heads over why Democrats took their eyes off the economy. And despite the passage of the $787 billion economic stimulus in early 2009, many poll respondents said neither Obama nor Congress was handling the economy well.

But unlike those undertakings, Democrats have had a more aggressive, proactive public relations campaign surrounding financial regulatory reform, which allowed them to successfully put pressure on Republicans such as Massachusetts Sen. Scott Brown and Maine Sens. Olympia Snowe and Susan Collins to come aboard. Of course, to get those votes, Democrats also had to sacrifice some key policy points, notably a nearly $19 billion tax on banks and hedge funds.

In 2009, a similar cast of characters, including Snowe, Collins and Nelson, forced Reid to cut more than $100 billion from the economic stimulus bill. And last year, Nelson withheld his support for the heath care bill until he secured changes to abortion language as well as an assurance that the federal government would pick up the tab for Nebraska’s Medicaid expenses — a deal that became known as the “Cornhusker Kickback.”

Though Democrats feel like they are on firmer ground this time around, Senate leaders are still not taking the vote on financial reform for granted. For example, Senate Banking Chairman Chris Dodd refused to predict a win Thursday despite the public pronouncements of support from all three Republicans as well as Nelson.

“I’m never confident until I see the votes counted,” the Connecticut Democrat said.

He and others took pains to point out how helpful the three moderate Republicans had been.

“I just want to note a breakthrough that we’ve had on our efforts to pass the most comprehensive reform of Wall Street since the Great Depression,” Obama said Tuesday. “Three Republican Senators have put politics and partisanship aside to support this reform, and I’m grateful for their decision, as well as all the Democrats who’ve worked so hard to make this reform a reality.”

Then Obama took the time to preview what is certain to become a Democratic mantra in the next four months: “This reform is good for families. It’s good for businesses. It’s good for the entire economy.”

Jennifer Bendery contributed to this report.