Senator Richard Shelby (R-Ala.) said on Tuesday that negotiations between Republicans and Democrats over financial reform legislation have progressed to the point that the debate now centers on specific language rather than individual proposals.
"We are not going back to the drawing board," the Alabama Republican, who serves as the ranking member on the Banking Committee said, in response to a question from the Huffington Post. "I have said all along that we are probably conceptually together on -- I've even said -- 85 percent... Now we are getting down to words and phrases."
The comments were the most optimistic remarks to come from the Republican side of the aisle with respect to the prospects of regulatory reform. Shortly after Shelby spoke, House Minority Leader Mitch McConnell (R-Ky.) convened a press conference to explain that "a very serious" effort had been made on the part of Democrats to restart bipartisan negotiations.
"The process to achieve that has been reconstituted if you will," he said.
Democrats, notably Sen. Chris Dodd (D-Conn.), had quibbles with McConnell's reading of negotiations, noting that talks never ended between Dodd and Republicans. It was the GOP leadership that was late to the game, they claimed.
"Talk about taking credit," Dodd said. "It's like the rooster taking credit for the morning. I mean, this has been ongoing for people who have followed the thing. Welcome to the discussion. But it hasn't stopped for months... [T]he idea that these talks just started somehow: Where has the leader been?"
Either way, Dodd echoed Shelby's point about a merging consensus on reform. At this juncture, the prospects for getting bipartisan bill are getting better, he said. But the party won't abandon the legislation if Republicans decline to come on board.
"It may work. It may not," said the Connecticut Democrat. "I hope it does. If it doesn't, then we are going to move forward."
As for the remaining points of difference, the outlines for resolution are beginning to emerge. While Republicans have wailed against a supposed $50 billion bailout fund for banks (which is a mischaracterization), Democrats, including the White House, have shown a willingness to drop the provision. As for other provisions in the bill that would ensure there is limited systemic risk for banks that are failing (a liquidation process that doesn't affect interconnected institutions), Shelby hinted that simply stronger language would suffice.
"There are a lot of concerns," he said. "But I think the overriding issue on Too Big To Fail is to make sure the language in there is tight and sends the message, unambiguously, that no bank is going to be bailed out in the future."
That said, there are some hurdles remaining. Negotiators are waiting to see what the Agriculture Committee will do with respect to its bill governing the trading of derivatives. But on Tuesday, the committee's ranking member, Sen. Saxby Chambliss (R-Ga), said Republicans aren't pleased with the product.
"There are a lot of issues with [Senator Blanche Lincoln's] bill. It is pretty far away from what we had agreed to," he said. "We are going to put a lot of people out of the business of hedging their bets, and what that is going to do is cause energy prices to go up, cause consumer prices to go up..."
Shelby and Dodd, meanwhile, appear far-removed from each other with respect to when they want legislation considered on the Senator floor. While Dodd suggested that next week was not out of the question, Shelby said he thought that the next month and a half would be good for negotiation.
"I think that it is an opportune time between now and Memorial Day to reach an agreement," he said.
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