Senate Prepares For Banking Bill Battle
LINDA WERTHEIMER, host:
This is MORNING EDITION from NPR News. I'm Linda Wertheimer.
RENEE MONTAGNE, host:
And I'm Renee Montagne. We're going to spend the next few minutes on money and regulations, starting with Wall Street.
WERTHEIMER: The Senate Banking Committee took action yesterday on legislation to revamp the rules for financial markets. As it now stands, the bill prevents bailouts for the financial sector and gives regulators new power to liquidate failing companies which threaten the entire system.
The bill was approved along party lines with little debate. It now goes to the full Senate. Lawmakers of both parties say they are saving their fire for a battle on the Senate floor. NPR's Audie Cornish reports.
AUDIE CORNISH: The day started with 400 amendment proposals on the pipeline. Then there were none, in part because GOP lawmakers decided not to offer them. Tennessee Republican Bob Corker.
Senator BOB CORKER (Republican, Tennessee): I know it's incredibly unorthodox, to say the least, to pass a 1,336-page bill out of a committee after a year and a half of hearings in 21 minutes. But I think there was a sense that the amendment process could create a hardening of the two sides.
CORNISH: And it's clear that banking chairman, Senator Dodd, eager to get the bill to the floor next month, was only too happy to oblige and get on with the vote.
Senator CHRISTOPHER DODD (Democrat, Connecticut): I know there's going to be a spirited debate and discussion in the days and weeks ahead. But I expect that all the members of this committee and the full Senate will understand very clearly that we are moving forward on this issue.
CORNISH: The Banking Committee approved the bill on a vote of 13-10. But take a peek of the original list of amendments and you'll see that there are many roadblocks to come.
Ranking Republican Richard Shelby of Alabama has targeted several areas for changes. For instance, one of his suggestions was to strip a proposed financial stability oversight council of the power to put risky firms under the eye of the Federal Reserve.
Another idea would cut a $50 billion industry-funded pool intended to cover the cost of a failing financial giant.
Senator RICHARD SHELBY (Republican, Alabama): Although this bill takes some steps in the right direction, I believe it still falls short of ending bailouts and the associated moral hazards.
CORNISH: And instead of an independent consumer protection agency to watch over home loans and other credit, Shelby pitched a council that would protect consumers, but also the safety and profitability of banks.
On the other end of the spectrum, New Jersey Democrat Robert Menendez wants the consumer protection agency to have more power to enforce rules than what's in Dodd's bill. Menendez also wants the financial industry to put in three times as much on a pre-funded bailout pool.
Senator ROBERT MENENDEZ (Democrat, New Jersey): As I said to the chairman, you know, I'm happy to move the process along to get it to the floor. But I am not committed to, you know, the bill as it is without the opportunity to offer some of these amendments.
CORNISH: But the Obama administration wants this bill to move. In a speech before the Conservative American Enterprise Institute yesterday, Treasury Secretary Timothy Geithner said the stakes were too high not to get something done soon.
Secretary TIMOTHY GEITHNER (Department of Treasury): We are still living with the same financial system that brought us to the edge of collapse. And this success - this initial success of this crisis response without financial reform will make future crises more likely.
CORNISH: Both sides agree they aren't done talking, and the bill can't go the floor before the Senate finishes its work with the health care reconciliation legislation.
So don't expect to see debate on the Financial Reform Bill before April.
Audie Cornish, NPR News, the Capitol.
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