Dems Alter Wall Street Reform Bill In Dash For Votes
By Kyle Trygstad
The death of Sen. Robert Byrd means Democrats have one extra vote to pick up to give final approval to Wall Street reform, which was first reported out of conference committee late last week. But the shuffle for votes was on well before the nine-term West Virginia Democrat passed away Monday morning, and that fact was reemphasized over the last two days.
The conference committee reconvened late Tuesday afternoon and agreed on new ways of funding the bill's increased regulation, removing a $19 billion bank tax that threatened the votes of a handful of Republicans. The committee agreed last night to Sen. Chris Dodd's (D-Conn.) proposal to effectively end TARP now, three months before its scheduled sunset, and increase the percentage banks with more than $10 billion in assets pay into the FDIC's Deposit Insurance Fund.
Democrats hope the move will bring enough senators on board to pass the conference report this week, before a replacement for Byrd is appointed.
At least six senators' votes have been in flux since May 20, when the Senate approved the plan with no margin for error. Four Republicans joined Democrats on final passage of the Senate bill -- Iowa's Chuck Grassley, Massachusetts' Scott Brown and Maine's Olympia Snowe and Susan Collins -- and two Democrats opposed it, Wisconsin's Russ Feingold and Washington's Maria Cantwell.
However, on Tuesday, Feingold and Brown had already announced they would not support the bill as written. In a letter to the lead proponents of the bill, Sen. Chris Dodd and Rep. Barney Frank, Brown wrote that he could not support it after the conference committee inserted the bank tax.
"This tax was not in the Senate version of the bill, which I supported," Brown wrote. "If the final version of this bill contains these higher taxes, I will not support it."
Brown's reluctance to support a bank tax pushed negotiators back to the table Tuesday afternoon in search of alternate ways to pay for the new regulation. Meanwhile, Feingold wants the bill to go further, explaining that his opposition is due to the bill's failure to stop a future financial crisis, including leaving out his push to break up "too big to fail" banks.
Feingold and Cantwell also co-sponsored an amendment that would have restored the Glass-Steagall firewall separating Wall Street and Main Street banks.
"Unfortunately, these crucial reforms were rejected," Feingold said in a statement Monday. "While there are some positive provisions in the final measure, the lack of strong reforms is clear confirmation that Wall Street lobbyists and their allies in Washington continue to wield significant influence on the process."
To overcome an expected GOP filibuster, Democrats need 60 votes to approve the reform package. Without Byrd, Feingold and Cantwell, who has not yet announced how she'll vote, Democrats would need to pick up four Republican votes. While four supported the original bill, getting all four to support the conference report is not a given.
And so begins the full-court press for votes, with the possibility remaining of a postponed Senate vote until after the Fourth of July recess, when a replacement for Byrd may be appointed by West Virginia Gov. Joe Manchin, a Democrat.
Even before the conference committee reconvened, Democrats were unsure they could hold a vote this week. House Democrats were planning to take the conference report to the floor Tuesday, but held off filing the bill because the Senate did not yet have 60 confirmed votes -- allowing for a reconvening of the conference committee.
Republicans who vote against Wall Street reform should expect some heat from Democrats. House Minority Leader John Boehner's analogy of the reform bill as "killing an ant with a nuclear weapon" in an interview with the Pittsburgh Tribune-Review led to an outcry from Democrats from both ends of the Capitol.
"Republican Leader John Boehner just sent a wake-up call to the American people about the dangers of turning back the clock to a Republican Congress," said Rep. Chris Van Hollen, chairman of the Democratic Congressional Campaign Committee.
Senate Majority Leader Harry Reid's office jumped in as well. "Senate Republicans should say whether they agree with Boehner's assessment," said spokesman Jim Manley. "If they do, it would explain why nearly all of them voted against holding Wall Street accountable."
The majority of Republicans will oppose the bill and link it to what they call the Democrats' job-killing agenda. A Boehner aide defended the statement to Politico's Mike Allen: "He was simply pointing out that Democrats have produced a bill that will actually kill more jobs and make the situation worse."