No deal found on financial rulesThe Senate’s top negotiators on financial overhaul legislation said Sunday they were not optimistic about striking a bipartisan agreement on key features of the sweeping bill before a showdown vote on Monday.
By: By Jim Kuhnhenn, The Associated Press , The Jamestown Sun
WASHINGTON — The Senate’s top negotiators on financial overhaul legislation said Sunday they were not optimistic about striking a bipartisan agreement on key features of the sweeping bill before a showdown vote on Monday.
Sen. Richard Shelby, the top Republican on the Senate Banking, Housing and Urban Affairs Committee, predicted all 41 GOP senators would vote to delay the start of debate, unless continuing weekend talks led to a deal.
Senate Minority Leader Mitch McConnell said he didn’t expect the bill, as drafted by Democratic Sen. Christopher Dodd, the chairman of the committee, would go forward.
“We want to make sure that they don’t have the same kind of approach on financial services that they did on health care,” McConnell, R-Ky., said on “Fox News Sunday.”
Dodd said he hoped at least one or two Republicans would vote Monday with Democrats on beginning debate. He said he held out hope a deal could be struck in the coming days.
Both men have negotiated a bill off and on for months. The impasse reflected differences over how to contain large, interconnected financial firms and how to liquidate them when they fail. But Democrats and Republicans also differed on how to protect consumers and how to set limits on previously unregulated exotic instruments such as derivatives.
“We’re conceptually very, very close,” Shelby said. “We’re closer than we’ve ever been.”
Senate Majority Leader Harry Reid has vowed to push forward with the bill, determined to either get enough Republican support to overcome delays or brand Republicans as obstructionists and handmaidens of Wall Street.
Reid and Dodd need 60 votes to begin debate on the bill— and there are 59 Democrats and Democratic-allied independents.
After health care, the financial regulation legislation has emerged as a top priority for President Barack Obama. The House has already passed its version of the legislation. Both the House and Senate bills represent the broadest overhaul of Wall Street regulations since the Great Depression. They would create a mechanism for liquidating large firms, set up a council to detect systemwide financial threats, and establish a consumer protection agency to police lending. The legislation also would require derivatives, blamed for helping precipitate the meltdown, to be traded in open exchanges.
Dodd and Shelby, in a joint appearance on NBC’s “Meet the Press,” spoke more as partners than antagonists. But the lack of a deal at this stage underscored the pressure on Dodd to not cede any more ground than he already has during months of negotiations with Shelby and with Sen. Bob Corker of Tennessee, another Republican on the banking committee.
“We can’t take care of everything in the bill,” Dodd said, referring to his talks with Shelby. “Obviously our colleagues will want to be heard.”
Corker, appearing on ABC’s “This Week,” said he hoped Dodd and Shelby would reach agreement on a “template” that would permit more changes to occur through amendments on the Senate floor.
McConnell on Sunday reiterated his call for Democrats to drop from the bill a $50 billion fund, financed by large banks, that would be used to pay for the costs of liquidating a large, interconnected financial firm that is failing. The Obama administration has also said the fund could give creditors false assurances and contribute to risky behavior.
Democrats have declined to get rid of the provision unless assured the step would provide Republican votes. But McConnell said Republicans have additional concerns and want those addressed as well.
Despite their differences, Republicans and Democrats have both wrapped themselves in anti-Wall Street rhetoric.
Corker on Sunday said he intends to offer an amendment that would recoup earnings from executives of firms that fail and have to undergo liquidation. Under Dodd’s bill, management of a firm undergoing liquidation would be fired.
The broad regulatory overhaul has already passed the House. It aims to prevent a recurrence of the financial crisis that struck Wall Street in 2008 and prompted a massive government bailout of some of the nation’s biggest financial institutions.
Shelby said he specifically wanted to tighten language in Dodd’s draft bill that he said would give the Federal Reserve and the Federal Deposit Insurance Corp. too much flexibility to assist banks in trouble.
One of Obama’s chief economic advisers, Lawrence Summers, disputed Republican criticism that the bill left the government open to future bailouts, stressing that the legislation would end firms deemed “too big to fail.”
“We do that by providing for death for financial institutions that run themselves into the ground, their systematic liquidation, the wiping out of their equity holders, the removal of their managers,” Summers said on “Face the Nation” on CBS. “That is central to our vision.”