With the country still struggling to rebound from a severe recession, Senate Democrats tonight secured the two Republican votes that could help them pass the biggest overhaul of the nation's financial system since the Great Depression, after the GOP's Scott Brown and Olympia Snowe voiced their support.
As the Senate returns from a week-long Independence Day recess today, Democrats are trying to finish work on a Wall Street reform bill that has been in the making since the financial crisis in the fall of 2008.
If the Senate passes the measure, possibly as soon as later this week, it would then go to President Barack Obama's desk for his signature, marking the administration's second-biggest legislative achievement after the health care reform bill that passed earlier this year.
In order to get anything done in the Senate, Democrats need 60 votes to overcome Republican filibusters. At the moment, Democrats appear to have secured the votes they need.
Brown of Massachusetts and Snowe of Maine both said Monday they would support the bill.
"After thoroughly reviewing the 2,315-page financial regulatory reform conference bill during the July 4 work period, I intend to support passage of the legislation when it's brought before the Senate for consideration," Snowe said in a paper statement.
"While it isn't perfect, I expect to support the bill when it comes up for a vote," Brown said in a statement Monday. "It includes safeguards to help prevent another financial meltdown, ensures that consumers are protected, and it is paid for without new taxes. That doesn't mean our work is done. Further reforms are still needed to address the government's role in the financial crisis, including significant changes to the way Fannie Mae and Freddie Mac operate."
Without the GOP support, Democrats would have had to wait until an interim replacement is named for the late West Virginian Sen. Robert Byrd.
Democrats in Congress and the White House know that a crackdown on Wall Street will go over well on Main Street, where Americans are still wrestling with 9.5 percent unemployment.
Obama, for one, has seen his popularity among independents plummet from 56 percent approval one year ago to 38 percent today. White House senior adviser David Axelrod blamed that drop on the devastating recession that the administration inherited in January 2009.
Governing in a Difficult Economy
"When you're governing in a very difficult economic time, the worst economy since the Great Depression -- and that's what we walked into -- people are going to be unhappy, and they have a right to be unhappy," Axelrod told ABC News' Jake Tapper on "This Week" Sunday.
"These are difficult times and so this is not unexpected," he said. "And the best thing we can do is make the right decisions for the country, and that's what the president is going to do."
The sweeping Wall Street overhaul bill would create a consumer financial protection agency, let the government dismantle large failing firms, bring new oversight to the murky derivatives market, and cap the fees that debit card companies can charge retailers.
"America's economic future depends on a thriving financial sector to provide the capital families require to meet their needs and businesses must have to grow and hire," Obama said in a statement when the House of Representatives passed the bill June 30. "But, as we have seen, it also must operate within a sensible framework of rules and regulations, adequate to hold financial institutions accountable."
"This is a strong bill," Treasury Secretary Tim Geithner said at the time. "It will provide essential protections for consumers and investors and help make sure the financial system meets the credit needs of Main Street America. With action by the Senate, we will be able to turn our attention to putting these protections in place."
But some critics claim that the Wall Street overhaul does not go nearly far enough.
Simon Johnson, a former chief economist for the International Monetary Fund, blasted Geithner and the administration for "taking their victory laps and congratulating themselves on retaining 'business as usual' after the biggest crash-and-bailout in world financial history."
On his Baseline Scenario blog, Johnson called the end of congressional negotiations on the bill a "meaningless conclusion," arguing that "essentially nothing in the entire legislation will reduce the potential for massive system risk as we head into the next credit cycle."
Criticism of Compromise
"This administration and this congress had ample opportunity to confront this problem and at least wrestle hard with it," Johnson said. "Some senators and representatives worked long and hard on precisely this issue. But the White House punted, repeatedly, and elected instead for a veneer of superficial tweaking. Welcome to the next global credit cycle ... with too big to fail banks at center stage."
Whether the Wall Street bill will ultimately keep the financial system in check and prevent it from causing future recessions remains to be seen but, for now, Democrats tout the measure as a signature achievement of the current Congress.