Feingold explains 'no' vote: Washington once again caved to Wall Street

Senate passes sweeping bank reform bill

The US Senate voted Thursday to send President Barack Obama the most sweeping rewrite of Wall Street rules since the Great Depression of the 1930s, handing him a historic political win. The bill passed 60-39.

However, a top Democratic senator who voted "no" is arguing that "Washington once again caved to Wall Street."

Lawmakers voted 60-38 to end a year of often bitter partisan debate on the 2,300-page measure and set the stage for a final passage ballot expected shortly after a last procedural test at 2:00 pm. (1800 GMT).

The bill, Obama's top domestic priority, aims to rein in risky investment practices blamed for the 2007-2009 global financial meltdown and give regulators an arsenal of new weapons against shady big-bank dealings.

"We will fundamentally change the way our financial system is regulated, to rein in Wall Street and create a sound foundation to grow our economy and create jobs," said Senate Banking Committee chairman Christopher Dodd, a Democrat and a key author of the legislation.

It creates a new consumer financial protection agency, an early-warning system to predict and prevent the next crisis, and mechanisms aimed at liquidating rather than saving companies once deemed "too big to fail."

The legislation also closes loopholes in regulations and requires greater transparency and accountability for hedge funds, mortgage brokers and payday lenders, and arcane financial instruments called derivatives.

It also includes a somewhat diluted version of the so-called "Volcker Rule" -- named for former Fed chairman Paul Volcker -- curbing commercial banks' ability to make speculative investments that are not on behalf of clients.

Republicans mostly opposed the bill, charging it gives too much more power to regulators who failed to stem the previous crisis and does nothing to rein in activities by government-backed mortgage giants Freddie Mac and Fannie Mae.

"What we're going to wind up doing is we're going to be driving jobs and business overseas with this massive piece of legislation that truly doesn't address the problem," Republican Senator Saxby Chambliss charged Thursday.

Dodd said the bill was not "perfect" but underlined: "We must act now. Many of the same risks to our financial sector remain."

Just three of the Senate's 41 Republicans -- Olympia Snowe and Susan Collins of Maine and Scott Brown of Massachusetts -- lined up with 55 Democrats and two independents behind the bill, while Republican Senator Mike Crapo of Idaho did not vote.

Democratic Senator Russell Feingold opposed the measure, which he charged did not go far enough to curtail the dealings that led to the international economic collapse.

"I made clear that my test for this bill would be whether it prevents another economic crisis. Unfortunately, this bill falls short," he said in a statement after the vote.

Feingold's statement added,

The reckless practices of Wall Street sent our economy reeling, triggered the worst recession since the Great Depression, and left millions of Americans to foot the bill. Despite these cataclysmic events, Washington once again caved to Wall Street on key issues and produced a bill that fails to protect the American people from the pain of another economic disaster. I will not support a bill that fails to adequately protect the people of Wisconsin from the recklessness of Wall Street.

Amid stubbornly high unemployment near ten percent and deep US public anger at Wall Street four months before November mid-term elections, Obama has led Democrats in painting Republicans as opposed to common-sense reforms.

Republicans have repeatedly denounced key planks of the Democratic platform as "job-killing" and accused the president of not doing enough to fix the crisis he inherited from Republican predecessor George W. Bush.

The US House of Representatives approved the legislation on June 30 in a largely party-line 237-192 vote.

Final passage of the bill would hand Obama a second historic legislative triumph after successfully pushing the US Congress to overhaul the US health care system over fierce Republican objections.

(with additional reporting by RAW STORY)