Lawmakers Gird For Fight On Financial Overhaul Bill

The long-awaited overhaul of financial regulations is set to hit the Senate floor in a matter of weeks, and both sides are hunkering down to strategize — while planning to meet with the president Wednesday. Republicans cannot agree on an alternative plan. They want to oppose the Democrats' bill while not appearing too cozy with Wall Street in an election year. Liberals aren't interested in making the kind of concessions they did on health care. They're daring Republicans to stage a public battle over bank regulation.

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ROBERT SIEGEL, host:

From NPR News, it's ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris.

It's been more than 18 months since lawmakers voted to pour billions of dollars into Wall Street. But Congress has yet to agree on new financial regulations that could prevent another meltdown. The House passed a bill last fall. Now it's the Senate's turn. Democrats in the White House are looking for a populous victory to take them into the midterm elections. And Republicans, they don't want to look cozy with the banks, but still, they say they aren't ready to give ground to Democrats either.

NPR's Audie Cornish reports.

AUDIE CORNISH: Democrats are downright confident that this debate will go down a lot more smoothly than the health care overhaul.

Senator BYRON DORGAN (Democrat, North Dakota): I don't think the Republicans are going to want to tell the American people we're going to filibuster Wall Street reform.

Senator SHERROD BROWN (Democrat, Ohio): Well, I think Republicans understand when they go home that they don't want to look like they're protecting Wall Street at the expense of Main Street, no matter where you're from. And I think Republicans will vote for some of these pro-consumer issues.

CORNISH: Democrats Byron Dorgan of North Dakota and Sherrod Brown of Ohio. They echo sentiments from the White House and consumer advocacy groups such as Americans United for Change. Americans United is already testing out the Main Street versus Wall Street message this week in some not-so-subtle ads on cable TV. The ads say Wall Street is squealing like a pig over reform.

(Soundbite of TV ad)

Unidentified Man: Fortunately, for the American taxpayer, pigs cannot vote in Congress. But there are those elephants in the room.

CORNISH: Bipartisan negotiations are continuing on some aspects of the bill, like oversight of the derivatives market and the powers to be given to a new consumer protection bureau. But Republicans are prepared for a fight over plans for financial firms considered too big to fail.

The Senate bill would give regulators more power to monitor such companies. Regulators would be able to impose stricter capital requirements on risky firms and dissolve failing ones that threaten the entire system. But who should have the power to set that in motion and who should pay? These questions are central to Republican arguments against the bill, says Texas Republican John Cornyn. He chairs the committee responsible for electing GOP senators this fall.

Senator JOHN CORNYN (Republican, Texas): I have no problem going to the mat opposing a permanent TARP.

CORNISH: That's the Troubled Asset Relief Program, a main source of bailout funds.

Sen. CORNYN: That's in essence what this is. It's a slush fund that's used to bail out big financial institutions. We could do a lot better than that.

CORNISH: Republicans are dealing with a tricky political calculation, one that takes into account not only the public anger at Wall Street, but also the rancorous health care debate. Here's Taylor Griffin, a former economic adviser to the McCain presidential campaign.

Mr. TAYLOR GRIFFIN (Former Economic Adviser, McCain Presidential Campaign): The big question is, are people more angry at Wall Street or are they more angry at Washington? And how that question is answered is going to determine the political implications of this debate. If people are more angry at Wall Street, then they're going to side with the Democrats. If they're more angry with Washington, they may side with the Republicans.

CORNISH: You don't have to go farther than the visitors center in the basement of the Capitol for an answer that complicates things.

Ms. CAROL WALKER(ph) (Retired Teacher): I'm really upset with both.

CORNISH: This is Carol Walker, a retired teacher from Midland, Michigan.

Ms. WALKER: I'm upset that the Congress can't work together. That it's, you know, a constant conflict. I'm very disturbed about that. And of course, I can't agree with supporting those Wall Street leaders who have gobbled all our monies with the bonus business. I think that's a crying shame.

CORNISH: So that's probably one reason for a bipartisan meeting at the White House tomorrow on financial reform. The Senate floor debate is coming soon, but many insist that it's not too late to come up with an agreement.

Audie Cornish, NPR News, the Capitol.

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