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GOP Running Out Clock On Wall Street Reform

Banks

First Posted: 05/19/10 02:21 PM ET Updated: 05/25/11 05:30 PM ET

Senate Republicans are running out the clock on Wall Street reform, reaping dividends from the long-term strategy of delaying Senate action on issues big and small since President Obama took office. From the routine nominations that have been filibustered to the months of useless bipartisan negotiations over health care, the GOP has been explicit: its goal has been to eat up floor time and stall any agenda it opposed.

Now that strategy is paying off. With a long line of progressive amendments that appear to have majority support waiting for a vote, Republicans are objecting to holding a vote. Under intense time pressure, Democratic leadership is working to wrap up the debate and a cloture vote could come as early as Wednesday afternoon.

After all, there's a war to fund. And an economy to deal with. And unemployment benefits expiring. And tax credits for business languishing.

Sen. Sheldon Whitehouse (D-R.I.) has an amendment to allow states to cap credit-card interest rates stalled. He called out the GOP tactic on the Senate floor.

"Now that we're squeezed for time, they're refusing to give time agreements to amendments like mine that would actually make a difference. They don't want to vote in favor of out of state corporations and against their home states' ability to help their home states' fellow citizens. But they do want the out-of-state corporations to win. They don't want to vote in their favor, but they do want them to win," he said on the Senate floor Monday.


Senate Minority Leader Mitch McConnell (R-Ky.) urged outright opposition to the bill on Wednesday. "Now, everyone recognizes the need to rein in Wall Street to prevent another crisis. But the bill the Majority wants to end debate on today does not do that. Instead, it uses this crisis as yet another opportunity to expand the cost and size and reach of government. It punishes Main Street for the sins of Wall Street. Worst of all, it ignores the root of the crisis by doing nothing to reform the GSEs," he said, referring to Fannie Mae and Freddie Mac.

A Democratic aide said that Whitehouse may indeed get a vote on his amendment Wednesday, but many others could be left behind. Other amendments in line would address abuses by payday lenders, cap ATM fees at 50 cents, reinstate a form of Glass-Steagall, ban the trading of naked credit default swaps, and prevent the deregulation of the insurance industry. In order to be considered after cloture, the amendments would need to be ruled germane.

One last way to get aboard the departing train is to attach an amendment to another that has already been ruled germane. They only candidate for this tactic is an amendment from Republican Sen. Sam Brownback (R-Kan.) that would exempt auto dealers from a new Consumer Financial Protection Bureau. The amendment passed the House and is strongly opposed by a coalition of military and consumer advocates.

Seeing no other option, Sens. Carl Levin (D-Mich.) and Jeff Merkley have decided to attach their amendment to Brownback's. The measure would require banks to cease trading taxpayer-backed money for their own gain. The current bill leaves the decision of whether to ban such activity up to regulators. The gambit would put progressives in the uncomfortable position of being forced to back the auto-dealer loophole in order to pass the Levin-Merkley amendment. (But then again, they could then tell auto dealers back home, who tend to have significant political sway in local communities, that they stood up for them. However, an aide to Merkley said that the pair won't encourage colleagues to vote one way or the other on Brownback's amendment.)

In the midst of the dispute, Larry Summers, President Obama's top economic adviser, came to the Capitol Tuesday to urge Senate Democrats to finish debate on Wall Street reform. "If you vote for cloture right now and don't add any more amendments, we will have solved the issues that led to crisis. Had this been law, as is, in 2007, we would not have had the crisis," Summers said, according to a person briefed on his discussion and confirmed by a senior Democratic aide. Matt Vogel, a Summers aide, said that the quote wasn't rendered accurately but did capture the spirit of his remarks. "He did say that if the bill had been law there would have been a totally different situation," said Vogel. He definitely did talk about what a difference it would have made in responding to the crisis if the bill had been law then."

Vogel said that Summers did not intend to weigh in on the debate within the Democratic caucus over whether to cut off the amendment process and move to a cloture vote Wednesday, which would set up a final vote on the bill for Friday. Rather, he was putting forward the standard and oft-repeated administration position that the bill is a strong one and deserves passage.

On Wednesday, the White House pushed to wrap it up, with @barackobama tweeting: "It's time for Wall St. reform that gives greater security to folks on Main Street. Call your Republican Senators today: http://j.mp/cwhtg7"

Following the lunch, Levin and Merkley attempted to bring up their amendment on the floor but Republicans, who had also been meeting at the same time as Democrats, objected, blocking it from consideration. They also blocked the naked swaps amendment and the payday lending measure. Democratic leadership, in response, decided not to bring up any further controversial amendments throughout Tuesday.

The quandary Democrats face is also the result of their earlier success in forcing Republicans to allow debate. By embarrassing the GOP for several days by calling the bill up for debate, Democrats succeeding in gaining their consent, but not in the typical way that also spells out an agreement on what amendments can be offered. With no agreement, individual senators can block consideration of an amendment by themselves. The only route around them is a cloture vote, which takes several days worth of precious time.

Whitehouse said that the GOP tactic makes perfect sense if they oppose the amendments still in line. "If that's your position the perfect thing is to delay and delay and delay until it gets to be here at the end, crunch time and take the amendments that worry you, the amendments that will really get after big banks, the amendments that will really be fair to consumers and refuse to give time agreements and vote agreements on those and basically run out the clock," he said.

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