Senate Majority Leader Harry Reid says he plans to move forward with financial reform legislation despite there being no guarantee that he has the single Republican vote he needs to overcome a GOP filibuster.
It’s a move that The Hill describes as “playing a game of chicken” with Senate Republicans. But Reid may well not be afraid to lose the game because, as The Hill notes, “if the bill derails, Democrats say they will make it a prominent issue in the midterm elections.”
That suggests Democrats are confident they have the American public on their side in the effort to overhaul financial reform regulations, and believe they can paint the Republicans as being in the pockets of the banks.
A recent poll from the Pew Research Center showed that 59 percent in the US wanted financial reform to be an immediate priority. Some other polls have been more ambiguous. A poll released this week showed 46 percent support for financial reform, with 43 percent opposed — although support jumped to 50 percent when asked about “Wall Street banks” instead of “financial institutions.”
But much of the Senate Republican caucus appears resolute in its opposition to the bill. Last week, all 41 GOP Senators signed a letter opposing the “partisan” bill currently being hashed out in Senate committees by Sen. Chris Dodd (D-CT).
“As currently constructed, this bill allows for endless taxpayer bailouts of Wall Street and establishes new and unlimited regulatory powers that will stifle small businesses and community banks,” the letter said.
That referred to a clause in the proposed legislation that creates a $50-billion “bailout fund” to help struggling banks without forcing them into bankruptcy court. That idea, in earlier forms, had been slammed by many financial observers, including renowned Rolling Stone reporter Matt Taibbi, as “creating a permanent bailout.”
There are signs some Democrats may not want the bailout fund either. House Majority Leader Steny Hoyer said Tuesday that the fund is not “central to what we’re doing.” Hoyer said “financial institutions should pay for winding down failed firms, not the taxpayer,” Politico reports.
Other elements in the bill include a Consumer Financial Protection Agency that would act as a watchdog to ensure banks treat investors and depositors fairly; limitations on what sort of investments commercial banks can make (a variation of what has come to be known as “the Volcker rule“); and regulation of derivatives trading. (Derivatives have been widely blamed for the bank collapses of 2008.)
To pass the bill as is, Reid would need the support of at least one Republican senator. The Hill reports that eyes are trained on Maine’s two moderate senators, Olympia Snowe and Susan Collins. Neither one has so far declared they would support the bill; both had their signatures on the letter to Reid.
Late last week, Reid laid out an aggressive agenda to first push through five of President Obama’s 22 stalled judicial nominations, then move on to getting financial reform onto the Senate floor, something that MSNBC reports will happen late this week or early next week.
Reid sounded a confrontational tone Monday when he declared lawmakers would work “around the clock” to break the GOP’s holds on Obama’s judicial nominees.
“We’ll be in session around the clock until we have votes on all these nominations with speeches and votes taking place at that time,” Reid said.