06/28/2010 05:12 am ET | Updated May 25, 2011

Financial Reform Filibuster: Who Blinked To End It?

Threatened with the prospect of having to spend the entire night sleeping on a cot inside the white sepulchre known as the United States Capitol, Senate Republicans have apparently assented to allowing a debate on the financial regulatory reform bill. Victory for Main Street! Unless, of course, Senate Democrats decided to back down on a strong(ish) bill so that the seeds of bipartisanship could be sown. In which case: Victory for David Broder!

No one exactly knows what is happening, but here's what the New York Times is reporting:

Republicans insisted that they had won some crucial concessions from Democrats, including the elimination of a proposed $50 billion fund that would be paid for by big financial companies and would be used to help pay for putting failed banks out of business.

The Obama administration also had expressed opposition to the fund, out of concern that it would complicate efforts to deal with more costly failures of financial companies. And the Democrats already had expressed a willingness to remove the fund from the bill.

Oh, well, that's just great! You know, it seems like only a week ago, Republicans were calling that provision the "permanent bailout fund" because that was the precise lie that Frank Luntz coached them to tell, over and over again. Incensed Democrats complained about this falsehood, over and over again, and actually did pretty well in getting the media on their side. But now, it's just one more thing that nobody really liked anyway, whatever -- hope you enjoyed the Kabuki theater.

Of course, we now have the benefit of viewing Senator Christopher Dodd's FinReg bill alongside the one put forth by the GOP, and can appreciate the ways in which they parted company. (The Washington Independent's Annie Lowrey has a great comparative analysis of which you can avail yourself.) Significantly, the two proposals aren't exactly worlds apart. But one way in which they part company dramatically is in the area of consumer protection. Per Matt Yglesias:

The ugly part of the bill is what it does to consumer protection. On the one hand, it seemingly weakens the independence of the consumer regulator. On the other hand, it has the consumer regulator preempt any and all state regulations. This is a helpful reminder that nobody on the right actually gives a damn about federalism except as a tool to advance conservative substantive policy--federal preemption of strong state regulation is always welcome.

So, if you're worried about what the Democrats had to relent on to move this bill to debate, that's where your area of concern is.

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