Tags: Wall | Street | Bill | Delay | Senate

Wall Street Bill Could Face Further Delay in Senate

Monday, 12 Jul 2010 03:09 PM

 

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The biggest rewrite of financial rules since the 1930s could face further delay in Congress, a congressional aide suggested on Monday, as backers had yet to secure votes needed to clear a final hurdle.

Senate Democrats have not yet abandoned their hope to give final congressional approval to the landmark measure this week and send it on to President Barack Obama to sign into law. They picked up an important Republican swing vote on Monday.

But with one Democratic seat vacant and other possible Republican allies tight-lipped after a weeklong break, backers remained short of the 60 votes needed to clear a procedural hurdle in the 100-seat chamber.

"It is still possible we could consider it as early as this week," said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid.

The House of Representatives has already approved the bill, which imposes a range of tough new restrictions on the industry in an effort to avoid a repeat of the 2007-2009 financial crisis.

Passage of the bill would give Democrats a second major legislative achievement, alongside healthcare reform, to show voters as they try to minimize Republican gains in elections this November.

Analysts — and opponents of the bill — expect Reid to ultimately get his 60 votes.

"It's a question of when," Republican Senator Judd Gregg, an opponent, told CNBC.

Reid can count on 57 Democrats to support the measure, and Republican Scott Brown said on Monday he expected to vote for it. Republican Susan Collins has also indicated she is inclined to support the bill.

Republican Olympia Snowe backed an earlier version and could provide the 60th vote, though she told Reuters over the weekend she had not yet made up her mind.

"It's a big issue, and the most important thing is to make sure we get it right," she said at a festival in her home state of Maine. Republican Charles Grassley is viewed as a less likely backer.

Grassley has concerns about how the bill is funded, according to an aide. Snowe has not objected to any specific provision in the bill.

If both Snowe and Grassley decide to oppose it, Reid would probably have to wait until West Virginia Governor Joe Manchin names a successor to temporarily fill the seat of the late Democratic Senator Robert Byrd.

Manchin is expected to appoint a Democrat who would back the bill, but that might not happen this week while officials in the state sort out plans to elect a permanent successor.

Manchin plans to delay naming a successor until the state legislature completes its work, according to a spokesman. That may take until at least Sunday.

Analysts say Snowe would be hard-pressed to justify a "no" vote at after winning concessions earlier in the process.

The legislation would impose a range of new restrictions on the financial industry, from increased scrutiny of consumer loans to limits on their trading activities.

The KBW Banks Index was down half a percent on Monday morning, roughly in line with the broader markets. Since hitting a 2010 high in April, the index has fallen nearly 15 percent as concern grew that the legislation would likely reduce industry profits.

The industry managed to soften the impact of many of its harshest provisions during a final all-night negotiating session, and will have a chance to soften it further over the coming years as regulators gradually put it into effect.

Lawmakers are also expected to revisit the topic with a "technical corrections" bill to fix errors in the 2,300-page bill. That could address questions like whether new restrictions on the $615 trillion derivatives market would apply to existing contracts.

© 2014 Thomson/Reuters. All rights reserved.

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