The financial reform bill designed to prevent another economic blowout like the one seen in 2008 may die in a Republican filibuster after Sen. Scott Brown (R-MA) announced he has serious reservations about it.
Brown is seen as being the necessary 60th vote in the Senate to overcome a filibuster. Though he had voted in favor of the bill in May, Brown now says he can’t abide by the recent inclusion of a $19-billion tax on banks in the bill. The new tax is meant to pay for the oversight agencies being created under the financial reform package.
“Brown’s possible defection from the bill increases the chance of a successful Republican filibuster this time unless Democratic leaders can find another vote,” Reuters reported Sunday.
Ã¢â‚¬Å“While IÃ¢â‚¬â„¢m still reviewing the billÃ¢â‚¬â„¢s details, these provisions were not in the Senate version of the bill which I previously supported,Ã¢â‚¬Â Brown said, as quoted at the Boston Herald. “I’ve said repeatedly that I cannot support any bill that raises tax.”
Brown became a household name earlier this year when he won the election to replace the late Sen. Ted Kennedy as senator from Massachusetts.
Brown has already played a large role in the shaping of the reform bill. As Pat Garofalo reports at ThinkProgress, he successfully managed to water down the “Volcker rule” provision in the bill. That rule would restore a regulation, in place until 1999, that prevents commercial banks from “proprietary trading.” Under the rule, banks would only be allowed to go into risky investments on behalf of customers, not on behalf of themselves.
Many economists argue that the lack of a “Volcker rule” led to to the bank collapse of 2008. But Brown’s compromise means that, under the new regulatory structure, banks would still be allowed to set aside a portion of their capital — about three percent — to use for investment in hedge funds and private equity funds.
If passed into law, the financial reform bill will create a new consumer protection agency to monitor banking activities; create a process for dismantling failed banks without using taxpayers’ money; and regulate derivatives, the financial instruments blamed for the banking crisis.
In his Saturday radio address, President Obama pushed for final passage of the bill, earlier forms of which have already been approved by the House and Senate.
“I don’t have to tell you why these reforms are so important,” Obama said. “We’ll put in place the strongest consumer financial protections in American history, and create an independent agency with an independent director and an independent budget to enforce them.”
“As I speak, we are on the cusp of enacting the toughest financial reforms since the Great Depression,” he said.
According to the president, securing progress on Wall Street reform has not been easy, and those opposed to it had spent millions of dollars and hired an army of lobbyists to stop reform dead in its tracks.
“But because we refused to back down, and kept fighting, we now stand on the verge of victory,” Obama pointed out.
— With a report from AFP