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GOP and Ben Nelson Block Debate on Financial Reform -- Here's What Happens Next

April 26, 2010 - by Donny Shaw

As expected, Senate Republicans have successfully sustained their filibuster of debating of the Democrats’ financial reform bill, the Restoring American Financial Stability Act of 2010. They stuck together and even one over one Democrat tonight on a motion “to invoke cloture on the motion to proceed” — or ending debate on whether or not to begin debate the bill itself — which required 60 votes for approval. It was rejected 57-41. Moderate Dem Sen. Ben Nelson [D, NE] sided with the Republicans, and Majority Leader Sen. Harry Reid [D, NV] voted against the bill in order to preserve his right to bring the bill back to the floor again for another vote in the future.

But the Democrats aren’t giving up. Here’s what happens next.

Now that the Democrats know they don’t have the votes to bring the bill to the Senate floor for an open debate and amendment process in front of the C-SPAN cameras, Senate Banking Committee Chairman Sen. Chris Dodd [D, CT] will take the bill into informal, behind-the-scenes negotiations with the Republicans and Nelson.

Specifically, Dodd will continue talks with the top Republican in change of financial issues, Sen. Richard Shelby [R, AL], who could potentially convince more rank-and-file Republicans to support the bill, or with some of the moderates who are seen as potential supporters of financial reform — Scott Brown [R, MA], Susan Collins [R, ME], Olympia Snowe [R, ME], Kit Bond [R, MO], Judd Gregg [R, NH], Richard Lugar [R, IN] and Ben Nelson [D, NE]. At the top of the Republicans’ wish list for concessions they’d like from Dodd are more veto power for bank regulators over the Consumer Finance Protection Agency, an exemption for non-customized derivatives from exchange trading requirements, and a liquidation fund that is paid into after a bank failure by the failing bank’s competitors, not pre-funded as it would be in the Democrats’ bill. They’re also hoping to remove a provision that would give state attorneys general the power to bring lawsuits against financial companies that violate rules that are et by the Consumer Financial Protection Agency.

Meanwhile, the Democrats may bring the bill back to the floor later this week for another vote or two on invoking cloture on the motion to proceed. They’re framing tonight’s vote as being for or against the big corporation on Wall Street, and they seem to think that each time the Republicans vote against even debating the financial reform bill, their chances in the 2010 mid-terms look a little better. The Republicans for their part said today that they might introduce their own financial reform bill in order to avoid a repeat of the health care reform debate where they were caught saying “no” without a clear alternative.

When a deal is finally struck with either Shelby or the moderates — all signs point to an eventual bipartisan deal — Dodd will give the Republicans assurances that the contents of the deal will be included in a substitute amendment or a manager’s amendment that will be added to the bill as soon as debate begins. In cases like this where support for passing a bill rests on a delicately crafted deal, the party pushing the bill usually likes to hold debate under a restricted rule so that senators can’t offer poison-pills or other amendments that haven’t been vetted by the leadership to preserve the deal if they are adopted. But Sen. Russell Feingold [D, WI] is out with a statement that he will not support beginning debate of the bill under a restricted amendment rule, so the leadership may not have that option.

As for timing, my best guess is that we can expect to have a deal in place and a debate on the Senate floor next week.

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