Parties edge closer on financial regulation

Parties edge closer on financial regulation

April 26th, 2010 by Wire Service in Politics National

By Joseph Berger

The New York Times

Top Republicans appear nearer to a deal with Democrats on a bill that would overhaul the nation's financial regulatory system.

Sen. Richard Shelby, R-Ala., the ranking senator on the banking committee, said Sunday on "Meet the Press" that they were "very close" to agreeing on the key particulars of the legislation.

"We're getting there," he said. "We are working closely together. I think we're conceptually very, very close. This is very complicated piece of legislation - over 1,300 pages as the Dodd bill now stands."

Sen. Bob Corker, R-Tenn., appearing Sunday on ABC's "This Week," said he was not yet ready to open debate but suggested that a compromise was possible. He emphasized the prospects for reaching a bipartisan agreement before the bill gets to the floor, rather than promptly opening debate as the Democrats want to do.

"I want to see a bill," said Sen. Corker, who also sits on the banking committee. "What we need to do is have a template. We don't need to address every issue in this compromise, but one that deals with derivatives, one that deals with consumer protection and one that deals with this orderly liquidation. If we get that template agreed to in a bipartisan way, then we can debate some of the amendments."

Also appearing on "This Week," Sen. Sherrod Brown, D-Ohio and a member of the banking committee, said, "I wish there were more Bob Corkers in the Senate Republican caucus because he's been very open with negotiations."

Sen. Shelby appeared on "Meet the Press" alongside Sen. Christopher J. Dodd, D-Conn., the committee's ranking Democrat and sponsor of the bill.

Sen. Shelby's hopeful tone contrasted sharply with the combative posture taken in recent weeks by the party's Senate leader, Mitch McConnell of Kentucky, who repeatedly has warned that the bill would set the stage for "endless taxpayer-financed bailouts."

But the Republican opposition, facing a popular backlash to the bank profits and executive bonuses reported while millions of Americans were losing their homes or jobs, began to crumble last week.

That happened most vividly when Sen. Charles E. Grassley, R-Iowa, voted with Democrats on the Senate Agriculture Committee in favor of imposing tougher regulations on derivatives, the complex securities that many analysts blamed for setting off the financial crisis two years ago.

Also last week, Sen. Corker took issue with Sen. McConnell's description of a $50 billion fund in the bill as encouraging bailouts, saying that it was designed only to arrange "orderly liquidation" of failing banks.

Sen. Dodd expressed the hope that Democrats would be able to pass a motion today to proceed to a debate on the Senate floor. Postponing that vote, he said, would be delaying regulation that is urgently needed and that has not been imposed months after the causes for the financial crisis have been apparent.

"Here we are 17 months after someone broke into our house in effect and robbed us, and we still haven't even changed the locks on the doors," he said. "So we need to get it done."

Even Sen. McConnell sounded like less of a doomsayer about the bill. Appearing on "Fox News Sunday," he said, "We don't have a bipartisan compromise yet, but I think there's a good chance we're going to get it."

Still, he added, "What I'd like to see is an opportunity to prevent the Democrats from doing to the financial services industry what they just did to the health care of this country."

To win his support, he said, the bill needs to eliminate what he called the $50 billion bailout fund and create a system where creditors can expect to be treated fairly - unlike what happened in the bailout of General Motors where, he contended, the government treated the unions better than the bondholders.

He also said the bill needs to augment requirements for how much capital banks have on hand to make it virtually impossible for banks to be too big too fail.

Sen. Shelby also had vigorous criticism of the financial industry.

"From my perspective and the perspective of a lot of people in America, we've got to end once and for all the casino atmosphere on Wall Street, where they're gambling basically on synthetic ideas and so forth, with somebody else's money, putting banks and our whole banking system at risk and producing nothing."