GOP drops amendments to banking bill, setting up partisan vote in committee

By Jim Kuhnhenn, AP
Monday, March 22, 2010

Bank bill set to pass committee on party-line vote

WASHINGTON — Republicans abandoned hope of altering Wall Street legislation in a key Senate committee Monday, clouding prospects for a bipartisan bill and leaving the fight for the full Senate.

Republicans had offered more than 300 amendments to legislation proposed by Senate Banking Committee Chairman Christopher Dodd, but they withdrew them over the weekend. That cleared the way for a quick party-line committee vote on Dodd’s proposal late Monday or early Tuesday.

The surprise development did nothing to mend the partisan fissures over the legislation and adds even more uncertainty to Congress’ ability to pass a sweeping rewrite of financial regulations this year. The Senate would not take up the bill until April at the earliest.

“You’ll have Easter recess, and that’s when, I guess, over the course of the next several weeks when the real negotiations will be taking place,” said Sen. Bob Corker, R-Tenn., a member of the committee who had held negotiations with Dodd. Corker spoke on CNBC.

Dodd unveiled his bill 18 months after Wall Street’s spectacular failures helped plunge the nation into the worst recession since the Great Depression. The legislation would give the government unprecedented powers to split up firms considered a threat to the economy, put together a council of regulators to watch for risks in the financial system and create an independent consumer watchdog.

With more than 300 Republican amendments and nearly 100 Democratic changes, committee members had prepared themselves for a long and arduous week of debate and votes on the bill. Instead, senators now planned to make opening remarks later Monday and then vote on Dodd’s bill. That vote could be pushed back to Tuesday morning.

One person familiar with the weekend negotiations said Republicans concluded that most of their amendments would be voted down in committee and that their work would be drawn out and “unproductive.” The source, who spoke on condition of anonymity because he was not authorized to discuss the talks publicly, said the Republicans were convinced there was too big a gap between Dodd’s bill and what Republicans were ready to accept.

Dodd did accept 25 Democratic amendments, including one sought by Federal Deposit Insurance Corp. Chairwoman Sheila Bair that she said would prevent unintended bailouts of large financial institutions.

Democrats and Republicans are mostly split over the need for an independent consumer entity. But other issues also divide the parties, including how to regulate complex trading instruments and what firms should be exempt from new rules.

Industry lobbyists said the decision to move swiftly through committee made it much more difficult to predict what the Senate would ultimately do with the legislation.

Various potential outcomes were likely:

—The legislation would go to the floor but without the support of at least one Republican, it would be blocked by procedural delays that would require 60 votes to overcome. There are 41 Republicans in the Senate, enough to sustain a filibuster.

—The bill would pass out of committee on a party-line vote, but Sen. Richard Shelby of Alabama, the ranking Republican on the committee, would strike a bargain and pass a bill with bipartisan support. That is what happened last year with legislation that changed credit card rules.

—The bill would move out of committee and Democrats would seek to pick off one or two Republicans to support the bill and break a filibuster.

Corker suggested that the bill, the subject of months of negotiations by Dodd and members of his committee, needed a new environment.

“It’s probably true that we have a better opportunity with a different cast of characters, the full Senate, to do something that is sound policy-wise,” he said.

Treasury Secretary Timothy Geithner, keeping up Obama administration pressure on Congress, said the country faced a “defining moment” in the battle to overhaul financial oversight.

“The test we face is whether we can enact real reforms that provide strong protection for consumers, strong constraints on risk taking by large institutions and strong tools to protect the economy and taxpayers from future crises,” Geithner said in remarks prepared for delivery Monday to the American Enterprise Institute, a conservative think tank.

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