WASHINGTON — Republicans abandoned hope of altering Wall Street legislation in a key Senate committee today, clouding prospects for a bipartisan bill and leaving the fight for the full Senate.
Republicans had offered more than 300 amendments to legislation proposed by Senate Banking Committee Chairman Christopher Dodd, but they withdrew them over the weekend. That cleared the way for a quick party-line committee vote on Dodd’s proposal late today or early Tuesday.
The surprise development did nothing to mend the partisan fissures over the legislation and adds even more uncertainty to Congress’ ability to pass a sweeping rewrite of financial regulations this year. The Senate would not take up the bill until April at the earliest.
“You’ll have Easter recess, and that’s when, I guess, over the course of the next several weeks when the real negotiations will be taking place,” said Sen. Bob Corker, R-Tenn., a member of the committee who had held negotiations with Dodd. Corker spoke on CNBC.
The measure aims to avoid a recurrence of the 2008 financial crisis that helped plunge the country into the deepest recession since the Great Depression.
With more than 300 Republican amendments and nearly 100 Democratic changes, committee members had prepared themselves for a long and arduous week of debate and votes on the bill. Instead, senators now planned to make opening remarks later today and then vote on Dodd’s bill. That vote could be pushed back to Tuesday morning.
Industry lobbyists said the decision made it much more difficult to predict what the Senate would ultimately do with the legislation.
Various potential outcomes were likely:
— The legislation would go to the floor but without the support of at least one Republican, it would be blocked by procedural delays that would require 60 votes to overcome. There are 41 Republicans in the Senate, enough to sustain a filibuster.
— The bill would pass out of committee on a party-line vote, but Sen. Richard Shelby of Alabama, the ranking Republican on the committee, would strike a bargain and pass a bill with bipartisan support. That is what happened last year with legislation that changed credit card rules.
— The bill would move out of committee and Democrats would seek to pick off one or two Republicans to support the bill and break a filibuster.
“There is no choice other than a bipartisan compromise solution,” Sen. Evan Bayh of Indiana, a Democrat on the Banking Committee, said on CNBC.
Corker suggested that the bill, the subject of months of negotiations by Dodd and members of his committee, needed a new environment.
“It’s probably true that we have a better opportunity with a different cast of characters, the full Senate, to do something that is sound policywise,” he said.
Meanwhile, Treasury Secretary Timothy Geithner said the administration will not accept a financial overhaul bill that does not provide strong consumer protection and restraints on risk taking by large banks.
Geithner urged lawmakers to listen to the families and businesses that were harmed by the financial crisis and not the financial institutions that brought on the crisis.
“The test we face is whether we can enact real reforms that provide strong protection for consumers, strong constraints on risk taking by large institutions and strong tools to protect the economy and taxpayers from future crises,” Geithner said in remarks prepared for delivery today to the American Enterprise Institute, a conservative think tank.
“We will not accept a bill that does not meet that test,” Geithner said.
Geithner said America’s leadership on global financial matters was at stake in the congressional debate.
“If we fail to act, America will lose this opportunity to set the global agenda, to define new high standards for all financial companies and to lead the debate in shaping a level playing field on terms that play to our strengths,” Geithner said.
“If we fail to act, American firms that operate globally will face a more balkanized system, with higher costs of doing business and riddled with pockets of lower standards designed to attract the kinds of risky behavior we are seeking to end,” he said.
Geithner urged lawmakers to “be careful whose voice you listen to” in deciding what provisions to support. He said lawmakers needed to “listen less to those whose judgments brought us this crisis” and who were complaining about having to live with increased regulations and increased fees to pay for the costs of the crisis.
He said, instead, lawmakers should be listening to the families and businesses “still suffering from this crisis” because they can’t get a loan or because they lost their jobs in the deep recession that was triggered by the financial meltdown.
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