Tags: Reform | Bill | Votes | Pass

Financial Reform Passage Likely After Nelson Backs Bill

Tuesday, 13 Jul 2010 02:45 PM

 

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Senate Democrats on Tuesday appeared to nail down the votes needed to approve a historic overhaul of U.S. financial regulations and moved to set up a final vote on it by the end of the week.

Senator Ben Nelson, one of the Senate's most conservative Democrats, said he would support the bill after earlier raising concerns about how regulators might implement it.

His backing probably gives Democrats the 60 votes they need to clear an expected Republican procedural hurdle in the 100-seat chamber, which would allow them to give final approval to the broadest rewrite of the Wall Street rulebook since the Great Depression and send it on to President Barack Obama to sign into law.

"We must rein in rash Wall Street behavior and appropriately regulate the financial services industries," Nelson said in a statement.

Before Nelson's announcement, Senate Democratic Leader Harry Reid said he expected to bring the bill to the Senate floor later in the day, which would set the stage for votes later in the week.

The procedural vote could happen on Thursday, with final passage soon after, Democratic aides said.

"If Nelson is a yes, we are in a good place," a senior Democratic aide said.

The House of Representatives has already approved the measure and Democrats are eager to get it to Obama's desk.

Final passage would give Democrats an important legislative victory alongside healthcare reform as they try to minimize Republican gains in the November congressional elections.

The Dodd-Frank bill — named for its chief authors, Senator Christopher Dodd and Representative Barney Frank — would impose tough new restrictions on the financial industry in an effort to avoid a repeat of the 2007-2009 financial crisis, which touched off a deep recession.

The bill establishes new consumer protections and gives regulators the authority to seize and dismantle large, troubled financial firms. It limits banks' ability to engage in risky trading practices and imposes new regulations on much of the $615 trillion over-the-counter derivatives market.

"This reform is good for families, it's good for businesses, it's good for the entire economy and I urge the Senate to act quickly so that I can sign it into law next week," Obama said.

Passage would allow Democrats to capitalize on public disgust with Wall Street, which sucked up hundreds of billions in bailout funds as the financial meltdown pushed the wider economy into a deep recession.

Three moderate Republicans senators have said they will vote for the bill and have had a hand in shaping it.

Senator Scott Brown won concessions for mutual funds and other financial players in his home state of Massachusetts, while Senator Susan Collins added a provision that will require many banks to set aside more capital to help them ride out future crises.

Republican Senator Olympia Snowe, who won protections for small businesses, said she was disappointed that more Republicans did not support it.

"It doesn't engender the kind of public confidence in an initiative of this scope," Snowe told reporters. "On an issue of this kind you would hope to have broader support."

Reid could pick up an additional Republican vote from Charles Grassley, who had backed an earlier version. However, Grassley is concerned with how the final bill is funded and has not yet decided how to vote.

If Reid cannot find 60 votes this week, he could wait until next week, when West Virginia Governor Joe Manchin is expected to appoint a Democrat who backs the bill to fill the seat of the late Robert Byrd.

Most Republicans have firmly opposed the bill, painting it as an intrusive overreach that fails to address problems in the housing market that spurred the crisis.

But former Treasury Secretary Henry Paulson, a Republican who struggled to contain the meltdown at its height in 2008, said his job would have been easier had the bill been in place, particularly a provision that would allow regulators to seize and dismantle troubled financial firms if they threaten the broader economy.

"We would have loved to have something like this for Lehman Brothers," Paulson told The New York Times, referring to the investment bank that roiled markets when it declared bankruptcy.

© 2014 Thomson/Reuters. All rights reserved.

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