Two key Republicans have come out in favor of the financial-reform bill, moving it closer to a final Senate vote that could occur this week.
After spending the July 4 recess studying the 2,300-page overhaul measure, Sens. Scott Brown, R-Mass., and Olympia Snowe, R-Maine, announced yesterday that they will support the bill. The other Republican senator from Maine, Susan Collins, also backs the measure.
That means three out of four of the Senate Republicans who backed the Senate’s original version of the reform bill are now on board with the final bill that emerged from House-Senate negotiations in June. That may be enough to get the 60 votes required to overcome any potential filibuster.
In a statement Monday night, Senate Majority Leader Harry Reid, D-Nevada, said the Senate will complete work on the bill this week. The House approved the bill, which touches nearly every facet of the financial sector, June 30. If the Senate also passes it, the legislation will be sent to President Barack Obama to sign into law.
The Republican votes are crucial following the death of Sen. Robert Byrd, D-W.Va., last month. With Mr. Byrd’s passing, the Senate Democratic caucus has fallen to 58. West Virginia Gov. Joe Manchin is expected to appoint an interim replacement, who will certainly be a Democrat, later this week.
Even without the vote of Mr. Byrd’s replacement, Senate Democrats may have pulled in enough support to get the legislation over the finish line.
“I commend Senators Snowe, Collins and Brown for standing up for middle-class families and supporting strong accountability for Wall Street banks,” Mr. Reid said in a statement. “Despite the difficult political climate, these Republicans have joined Democrats to support these common-sense protections for consumers, investors and financial institutions that will help prevent another financial crisis.”
To secure the GOP support, the House-Senate conference was reconvened on June 30 to remove a $19 billion tax on big banks to pay for the bill. Instead, the reforms are now paid for by ending the Troubled Asset Relief Program early and raising the assessment that the Federal Deposit Insurance Corp. charges large banks.
“As a result, it is a better bill than it was when this whole process started,” Mr. Brown said in a statement Monday. “While it isn’t perfect, I expect to support the bill when it comes up for a vote. It includes safeguards to help prevent another financial meltdown, ensures that consumers are protected, and it is paid for without new taxes.”
Republicans on the House-Senate conference committee, however, denounced the redirecting of the TARP funds, which they said were meant to reduce the national debt rather than pay for new spending.
One of the two Democrats who voted against the Senate bill, Sen. Maria Cantwell, D-Wash., said earlier this month that she plans to back the final legislation. Ms. Cantwell changed her mind after a revision to the bill toughened up the regulation of derivatives trading.
Sen. Russell Feingold, D-Wisc., remains opposed to the reform legislation, which has been officially renamed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in honor of Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, and Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.
Among scores of reforms, Dodd-Frank creates a mechanism for liquidating large institutions that pose a systemic threat to the economy. It also establishes a new consumer protection agency
Mr. Frank was instrumental in ensuring that the final bill includes a provision empowering the Securities and Exchange Commission to impose a uniform standard of care on broker-dealers, insurance agents, and investment advisers. The SEC can proceed to rulemaking after conducting a six-month study of the differences between oversight of broker-dealers and investment advisers.
“We gave the SEC the power to do it,” Mr. Frank said just before the House vote. “And they're going to do it.”