This piece by Noam Scheiber is a good read:
That left Lincoln with a dilemma: She’d been planning on moving the compromise through the Agriculture Committee with bipartisan support, meaning she could afford to lose a few liberal Democrats. Now that she’d be losing Republican votes to win the administration’s imprimatur, she’d have to construct a political coalition that would bring the liberals aboard. The result was the apparent lurch from what was widely expected to be the weakest derivatives bill on the Hill to what’s far and away the strongest.
That was last Tuesday. As of Thursday night, it still wasn’t entirely clear whether Lincoln had calibrated correctly. The bill was so much more hawkish than anything that had come before it—one provision could effectively ban big banks from trading derivatives outright—that it risked repelling not just Republicans but moderate Democrats. (Ben Nelson and Max Baucus both sit on Lincoln’s Agriculture committee.) Then came Friday’s Goldman revelations and suddenly Lincoln had the upper hand. “I’ve heard there’s been some folks on her committee pushing back a little bit,” says a former Democratic Senate aide who now consults for the financial services industry. But, “if you’re a Democrat, it’s harder to vote against something after the Goldman stuff. It puts pressure on Republicans and pressure on Democrats.”
This same person sees an analogy to Sarbanes-Oxley, the tough regulation of corporate accounting statements that Congress enacted after Enron. The bill had begun to stall in the Senate while its sponsor, Paul Sarbanes of Maryland, spent months methodically holding hearings. Then WorldCom imploded, and the bill became a juggernaut. “It was like a freight train. It was on the floor and no one was getting in front of it,” recalls the former aide. “Goldman to me is a little analogous… Except that [financial reform] was already on the track. It had some momentum. This helps give it a considerable amount more.”
We’ll see what passes. My guess it that, as with health care, what we get is much more than could reasonably be expected a year ago but much less than what liberals want.
This liberal will view this as a small victory. Many others will view it as further proof that Rahmbama hates hippies. Who know? Maybe we’re both right.