Wall Street Reform Bill Sputters, Cloture Blocked

By Alex Pepper

May 19, 2010 5:50pm

ABC’s Z. Byron Wolf reports: Wall Street reform suffered a big set-back on Capitol Hill today. Amid sniping among Democrats on whether certain amendments should get votes and Republican opposition to having votes on those amendments, Senators voted 57-42 not to cut off debate on the bill. Democrats Maria Cantwell of Washington and Russ Feingold of Wisconsin voted with Republicans, arguing that the bill as written does not do enough to regulate the financial industry. Cantwell insisted she will not vote for cloture because she sees a loophole in language that would regulate the shadowy derivatives market that is widely seen to have caused the financial crisis in 2008 when large institutions could not cover side bets they made on the mortgage industry. “I know there's other good parts of this legislation that people care deeply about. but if you have this $600 trillion market and you are not truly going to have exchanged trading and clearing and aggregate position limits across all exchanges, you are not going to rein in the derivatives problem. You’re not,” said Cantwell on the Senate floor after the vote. Democratic leaders sought to blame Republicans, all but two of whom voted to filibuster. “Today as republicans demonstrated, they did the bidding of big bank executives,” said Senate Majority Leader Harry Reid after the vote. He switched his vote on the procedural motion at the last minute for procedural reasons, which means Democrats fell two votes short of breaking the Republican filibuster and moving toward final passage. The bill has been on the Senate floor for three weeks. Two Republicans – Sens. Olympia Snowe and Susan Collins, both from Maine, voted in favor of cloture. Reid said another Republican had told him he would vote for cloture and then didn’t. He did not name the Senator. “A Senator broke his word with me,” Reid said. The procedural motion required 60 votes and its failure jeopardizes Democrats’ plan to pass the bill this week. Democrats are expected to revisit the cloture vote as soon as tomorrow. Today’s failure obviously caught Democratic leaders off guard. They delayed the vote by an hour early in the afternoon and then held it open for more than hour as they grappled with falling several votes short. While Cantwell seems likely to support the bill if changes are made regarding derivatives, Sen. Russ Feingold, D-Wisc, said it fails on more fundamental levels. Here is a paper statement he issued on why he opposed cloture. “After thirty years of giving in to the wishes of Wall Street lobbyists, Congress needs to finally enact tough reforms to prevent Wall Street from driving our economy into the ditch again.  We need to eliminate the risk posed to our economy by ‘too big to fail’ financial firms and to reinstate the protective firewalls between Main Street banks and Wall Street firms.  Unfortunately, these key reforms are not included in the bill.  The test for this legislation is a simple one – whether it will prevent another financial crisis.  As the bill stands, it fails that test.  Ending debate on the bill is finishing before the job is done.”

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