Without Byrd, Senate Financial Reform Vote In Doubt
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WASHINGTON — A sweeping overhaul of financial regulations faced new obstacles in the Senate on Monday – the loss of one and potentially more crucial votes to guarantee its passage.
The death of Sen. Robert Byrd, D-W.Va., and new misgivings by Republican senators who previously supported the legislation put the bill's fate in doubt. Democrats scrambled to secure votes for one of President Barack Obama's top priorities.
Last month, 61 senators backed an original Senate version of the bill; only four of them were Republicans.
On Monday, three of them – Scott Brown of Massachusetts and Susan Collins and Olympia Snowe of Maine – complained about a $19 billion fee on large banks and hedge funds that House and Senate negotiators added to the bill last week to pay for the cost of the legislation.
With Byrd's death, Democrats can't afford to lose any votes to overcome the 60-vote procedural hurdles that could defeat the legislation.
Brown was the most adamant about his opposition.
"I can't support adding another $19 billion of pass-through taxes to individual consumers, especially in the middle of a two-year recession," he said Monday shortly after officially introducing Supreme Court nominee Elena Kagan to the Senate Judiciary Committee.
Asked whether his stance meant he would vote against a filibuster of the bill, Brown said: "I'm not sure."
The legislation would rewrite financial regulations, putting new limits on bank activities, creating an independent consumer protection bureau, and adding new rules for largely unregulated financial instruments.
The House was likely to vote on the bill as early as Tuesday; the Senate vote would follow, though no date has been set. Congressional leaders had wanted to send the bill to Obama by July 4, but the final vote may now be delayed.
While Collins said she was pleased with a series of provisions in the bill, she said she was "not happy" that the $19 billion fee had not been considered in the original Senate bill. She said she was looking at the new bill before deciding how to vote.
Snowe said she found the bank fee "regrettable" but said she would weigh it against the bill's benefits.
It was also unclear when Byrd's seat would be filled. West Virginia Gov. Joe Manchin, a Democrat, said Monday he had no timetable to consider a replacement for Byrd.
Senate Democrats have been in this situation before. They had to scour for votes to pass the Senate's version last month.
To secure Brown's vote, Senate Majority Leader Harry Reid of Nevada assured him that the bill would not hurt financial institutions in Massachusetts that trade with their own money and that invest in hedge funds and private equity funds.
The House-Senate conference committee that combined the final bill added exemptions in the bill to permit some trading and investing within limits.
Negotiators also made sure provisions backed by Snowe and Collins remained in the bill for fear of losing them as well.
Two Democrats – Sens. Russ Feingold of Wisconsin and Maria Cantwell of Washington – voted against the Senate version last month, saying it wasn't tough enough on banks.
Feingold on Monday reiterated his position.
"My test for the financial regulatory reform bill is whether it will prevent another crisis," he said in a statement. "The conference committee's proposal fails that test and for that reason I will not vote to advance it."
Cantwell spokesman John Diamond said she was reviewing the new bill and had not taken a position. Cantwell did vote with Democrats on one procedural vote last month but resisted other entreaties to support the bill.
Cantwell is likely to hear a pitch for the bill Tuesday when she attends a White House meeting with senators working on energy legislation.
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JIM KUHNHENN 06/28/10 09:25 PM ET Associated Press