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Getting Tough on Wall Street

April 12, 2010 - by Donny Shaw

Politico reports that some Democrats are preparing a big push to strengthen financial reform legislation when it comes to the Senate floor in a couple weeks:

Liberal Democrats see an opportunity to reassert their power in the Senate this spring on the Wall Street reform bill, after being forced to swallow a series of compromises on everything from health care reform to jobs legislation.

A group of Democrats, joined by Senate Majority Whip Dick Durbin of Illinois, are planning an aggressive spring offensive to strengthen key provisions of the financial reform bill – and daring Senate Republicans to vote against them.

“Given that [large financial firms] steered this country into the ditch, it’s going to be very hard to stand up on the floor and say don’t do financial reform or do it without teeth,” said Sen. Byron Dorgan (D-N.D.). “There are a number of people in our caucus who feel like there are things that can be done to strengthen it.”

Two things make this actually sort of possible. 

1. Reforming Wall Street, especially fixing the problem of too big to fail, is extremely popular. It polls so well that both parties are looking for a way to vote for it. Some Republicans and moderate Dems may be willing to accept a bill that goes further than they would like in some areas (i.e. the CFPA) so they can go down on the record reeling in the excesses on Wall Street that necessitated a massive government bailout and caused extended 10% unemployment and recorded foreclosure. A strong push for reform is seen as a winning issue for the Dems 2010 — either if they win or if they try and get blocked by Republicans.

2. Health care reform showed Democrats that they can win. At a certain point in the health care debate, the Democrats made a strategic decision that not finishing health care would be a political nightmare and that they should do everything in their power to get it done. The Democrats have spent much of their past three years in power playing cautiously, and the “go for the win” approach that led them to victory on health care seems to have created a sort of psychology shift in the caucus.

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