WASHINGTON AP) — Unable to muster bipartisan agreement on key banking provisions, Senate Banking Committee Chairman Christopher Dodd said today he will offer his own version of a sweeping overhaul of financial regulations without Republican support. “Clearly, we need to move along,” he said.
A month of talks between Dodd and Republican Sen. Bob Corker had found common ground, but details on key provisions, including consumer protections and other sticking points, remained unsettled.
“As time moves on, you just limit the possibilities of getting something done, particularly a bill of this magnitude and this complexity,” Dodd said.
He said he hoped the Senate could act on a bill sometime in the spring.
Dodd’s go-it-alone choice comes in the midst of an emerging culture of high partisanship on Capitol Hill, where Democrats and Republicans have been at odds for over a year on health care changes, little progress has been made on climate change and energy legislation, and members of both parties watch warily as an angry voting public continues to show heavy disdain for incumbents.
While Dodd praised Corker and insisted his proposed bill would incorporate many Republican ideas, the development raised new questions about Congress’s ability to respond to a financial crisis that erupted more than 18 months ago with the collapse of Lehman Brothers.
Congress and the administration have been trying to assemble an overhaul of regulations in hopes of preventing a recurrence of the 2008 Wall Street meltdown. It has not been an easy task. The House passed its version of a bill in December on a party-line vote.
“It will continue to be a challenge to reach a bipartisan deal,” said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, an association of the banking industry.
Corker today said he and Dodd had made significant progress and had agreed in principle on consumer protections, one of the most contentious issues. He described himself as disappointed in Dodd’s decision but said he expected Dodd’s proposal would be more moderate than a bill Dodd drafted late last year.
Still, Corker blamed Dodd’s rush to propose a new bill on the current dispute over health care and pressure on Dodd to offer a bill before the Senate puts the health care bill through a bitterly partisan fast-track process.
“He made me aware that with reconciliation coming, he felt a need to go ahead and, regardless of where we were in negotiations, to put forth a bill on Monday,” Corker said, using the term that describes the process that makes it easier for majorities to succeed. “I understand the pressure that he is under.”
Dodd, who is retiring when his term ends in January, said the attention to health care was one of several factors driving the clock on financial regulations. He pointed out that this is an election year and that there few opportunities ahead to get a bill through committee, pass it in the Senate and then reconcile the differences with the House version.
“The time is shrinking to get this done,” he said.
Sen. Judd Gregg, R-N.H., a member of the Banking Committee, said he remained optimistic that the committee could still write a bipartisan bill. But Gregg said the use of reconciliation has damaged relations in the Senate.
“It clearly poisons the well, it’s a clear attempt to ram something through the minority,” he said
Dodd in November proposed a draft bill that drew swift Republican objections. Dodd, aware that he now needs Republicans on the bill to overcome a Senate filibuster, then tried to negotiate with the committee’s ranking Republican, Sen. Richard Shelby of Alabama. When those talks stalled, Dodd turned to Corker, of Tennessee, in hopes of bridging some differences.
The main obstacle remains a proposed Consumer Financial Protection Agency that the president has made one of the central provisions in the bill. The House version provides for such a stand alone agency, which would regulate institutions that offer credit, mortgages or other consumer financial products.
Though Corker said he and Dodd had an agreement on the main details of a consumer plan, Dodd said it remained an outstanding issue.
Republicans, bankers and many in the business sector oppose a separate agency, saying it would add another layer of regulation and bypass existing bank regulators.
Dodd had proposed placing such an agency inside the Treasury Department and giving federal bank supervisors some say in the consumer entity’s regulations. Corker countered with a proposal to place the agency inside the Federal Reserve. But the two were unable to find common ground on how much independence to give it.