The Senate on Wednesday rejected an effort by Democratic leaders to complete work on a sweeping financial regulatory bill as two key Democratic holdouts said it still did not sufficiently tighten rules on Wall Street.
The holdouts, Senators Maria Cantwell of Washington and Russ Feingold of Wisconsin, joined with 39 Republicans to block an effort by the majority leader, Harry Reid of Nevada, to wrap up debate on the bill.
Two Republicans, Senators Susan Collins and Olympia J. Snowe of Maine, voted with Democrats in favor of ending debate.
Senator Arlen Specter, Democrat of Pennsylvania, who lost his primary race on Tuesday, was not in Washington on Wednesday, denying Democrats a critical vote. In that sense, Mr. Reid demonstrated to Republicans that he will have the 60 votes to advance the bill once he addresses the concerns of Ms. Cantwell and Mr. Feingold.
The vote was 57 to 42, with Mr. Reid switching to “no” at the last minute so that he can call for a new vote at any point.
Ms. Cantwell is fighting for votes on two amendments she has proposed, including one with Senator John McCain, Republican of Arizona, that would restore the Glass-Steagall Act, which maintained a firewall between commercial banking and investment banking from the 1930s until it was repealed by Congress in 1999.
Ms. Cantwell has another amendment to close a potential loophole in the proposed new rules for derivatives trading.
In a statement, Mr. Feingold said he favored restoring the firewall between commercial and investment banking.
“After 30 years of giving in to the wishes of Wall Street lobbyists, Congress needs to finally enact tough reforms to prevent Wall Street from driving our economy into the ditch again.” Mr. Feingold said. “We need to eliminate the risk posed to our economy by ‘too big to fail’ financial firms and to reinstate the protective firewalls between Main Street banks and Wall Street firms. Unfortunately, these key reforms are not included in the bill.”
Can anyone explain to me how Feingold and Cantwell are wrong, because I think those two are right on the money.
BTW- I’m sure this will lead to another drop in the DOW, as our brave banksters (you know, the tough guys who eat what they kill and who will swoop in and take your shitty job if we impose financial reform) will get nervous and the market the “jitters” because of “uncertainty.” You just don’t want to upset those delicate flowers.
Mike Kay
I wouldn’t trust Cantwell, she’s trying to create a loophole so venture capitalists only have to pay a 15% tax rate, instead of the current 35% rate.
O.T.
Rand Paul channels George Wallace
http://www.oliverwillis.com/2010/05/19/rand-paul-thinks-businesses-can-be-whites-only/
JMY
I won’t say they are wrong, but what’s the likelihood that these amendments will come to a vote and pass? That’s the question. This is a stronger and tougher bill than expected. Hell, even K-Thug agreed. So it’s not as if these aren’t tough reforms already. Sure there can be more, but this is definitely the right step. This bill needs to be passed and passed soon.
Maude
Also the swaps proposal got watered down. Reid may be worried that the delay will make the bill harder to pass.
Just pass the damn bill.
Xenos
It sure is nice of all those republicans to be automatically voting against cloture on every issue every single time — we could end up with a much more progressive law as a result. As usual, they are winning the skirmishes yet losing the battles.
Sentient Puddle
I’d have to see the exactly what amendments they want a vote on, but my sense is they’re exactly right. Some good amendments have gotten totally ignored, and I have no idea what Reid was thinking when he said “Fuck it, let’s vote on it now.”
Derek
I agree.
Mike Kay, got any links for that venture capitalist claim?
(Doesn’t every rich investment bastard c#nt pay the capital gains rate instead of the rate of their actual tax bracket?)
me
“I am Andrew Ryan and I am here to ask you a question:
Is a man not entitled to the sweat of his brow?”
Xenos
@Derek: I think you are right – any VC gains are going to be capital gains.
Is there anything in this bill that will tax the hedge fund managers’ salaries and bonuses as regular income?
Zifnab
I’m once again impressed with the cajones on the Republican Senators. Feingold is holding the door for Merkley-Levin. If two more Republicans had broken rank, they could have ended debate and stemmed some of the blood flow. As it stands, they’re voting against financial reform (political loser, in my book) and for increased regulation (not directly, obviously, but in effect) in one blow. All because they believe obstructionism is the clearest path to victory in Nov 2010.
I’m not seeing it. But what do I know? I’m not paying Luntz to push poll friendly numbers up my ass.
Mike Kay
@Derek:
http://www.huffingtonpost.com/2010/05/19/dems-fighting-over-tax-lo_n_581711.html
the capital gains rate applies to investment partnerships, which are used in some hedge funds and VC funds and I imagine real estate investment trusts.
Mike Kay
@Xenos: yes. they’re eliminating the loop hole for hedge funds, which oddly enough, is being supported by max baucus.
Martin
They’re not wrong. The question is whether those two amendments will prevent the bill from passing in total. Having McCain’s name on one of them sounds like it should help, but then McCain dug in to prevent his own amendement to be voted on. It’ll be close.
Plus, the Senate bill, unlike with HCR, is turning out to be much tougher than the House bill. We’ll have to see if the House will support much of this stuff. I think they would.
Derek
@Xenos:
Mike Kay’s link in comment 10 seems to indicate, if I’m reading correctly, that their income would be taxed as regular income, but venture capitalists would continue to be taxed at the lower capital gains rate.
Certainly better than what we have now, but I say make them all pay in their bracket, no capital gains tax rates for any of them.
New Yorker
They’re not wrong. Repealing Glass-Steagall was a contributing factor in the disaster we got in the fall of 2008. I’m cheering them for having the cojones to do this right now. Let’s get financial reform right.
Polish the Guillotines
@Zifnab:
That’s banner-worthy.
Kinda don’t get why McCain is in favor of this. Seems awfully rational for someone who’s lurching dangerously around the bend. Am I missing why this would appeal to AZ voters in the current climate?
Lev
I’d be all in favor of bringing back Glass-Steagall and just beating the hell out of financiers in general, but I’m getting a bad vibe from this. How many senators are really going to vote for this stuff? Glass-Steagall could be a poison pill for this bill, I worry. No way there’s 60 senators going to swallow that pill in the end.
If there’s really a possibility of making the bill stronger, then do it, I say. But this is still the Senate that voted heavily against cramdown protection. Lest we forget…
mai naem
@Mike Kay: I see the HuffPo article quotes Jon Kyl. Everybody talks about John McCain but the real scumball of the Arizona senators is Jon Kyl. He does way more damage to Dem. legislative goals than John McCain could ever dream of.
Derek
McCain has actually been trying to restore Glass-Steagal for a little while now, according to Wikipedia:
I know, it’s weird.
PTirebiter
I don’t think they’re wrong, but I always question their motivation and wait for the fine print. I imagine the banksters are arguing that reinstating the firewall would put them at a competitive disadvantage with their foreign counterparts.
Besides, they already said they were sorry and kind of promised to try to not do it again.
Comrade Dread
I would like to filibuster the whole thing until we pass my “Plague of Fire Ants” amendment.
It involves banksters. And honey. And fire ants. And napalm.
Just to be sure.
Mike Kay
@Derek: what makes it weirder is that mccain voted to repeal glass-steagal in the first place, as the repeal was written by his BFF, phil gramm.
Polish the Guillotines
@Mike Kay: Ultimately, I just don’t trust McCain anywhere near financial reform, given that he was front-and-center in the S&L debacle in the ’80s. Not that this is keeping me awake at night. He’s just so wacky right now that it’s kind of a parlor game to figure out his motivations.
Heavy regulation doesn’t sit well with the teabaggers, but he’s got such a tainted history with the banking industry that maybe he needs to shield himself.
Alex
I think it all depends on the calculation of whether we can get Glass-Steagal or the Volcker rule passed, eventually, that makes it either good or bad for financial reform. Personally, I think reforms can be made stronger than they are now, and I think Cantwell and Feingold were right to vote no.
Also, does TPM have something against Harry Reid? All of their commenters seem to think he’s an incompetent pantywaist. I think that he’s done as good as can be expected with keeping the caucus together and bringing important issues to the floor, but I guess that’s all perception.
Mike Kay
don’t forget reid has a whip count on amendments, and if he doesn’t have the votes, he doesn’t bring it to the floor for a vote.
when they’re a couple of votes shy, they sometimes bring it to the floor and try to stampede the holdouts, but if they’re 10 to 15 votes down, then it’s a bridge too far. A good example of this is the public option. That petition could never get more than 40 odd votes. I mean, it’s not as if reid could shelve an amendment if it had 75 senators demanding a vote.
Sentient Puddle
None of the amendments that would be considered would endanger passage of the final bill unless someone discovers a provision somewhere that mandates baby raping. Sure, you’ll get a number of Republicans bitching and moaning about some things, but in the end, they will not block financial reform. It would be terrible politics for them.
No, what’s really going to limit how strong this bill is is actually how much Dodd thinks he can get away with scaling back key provisions. For someone who wants to stake his legacy on this bill, he’s sure doing a shitty job at crafting it.
Uloborus
First, I’m largely of a ‘pass the damn bill’ frame of mind, but I don’t know I’d say they’re ‘wrong’. There are all sorts of great things you can put in a financial regulation bill. These sound like two. I just hope they’re not endangering the whole bill by digging in their heels this way. Sounds to me like Reid figured he had the best bill he was pretty sure he could get and decided it was time to push the button and vote. Small difference in tactics facing a difficult task, not some huge ‘why are you sinking HCR?!’ thing.
Secondly, @me: that game seems pretty damn prophetic to me these days. Funny it came out well before the Randians really came out in the open. However, I will always prefer #2 because of the visceral joy of applying a drill to the face of anyone who messes with my Little Sister.
norris hall
Republicans and their banker pals are fighting tooth and nail to block a measure that would allow states to limit the rate they can charge consumers on credit cars.
Right now states can charge as much as the state they are headquarterd in.
So credit card companies have all moved their headquarters to states where there is virtually no limit on the rate cards can charge.
Next time you get dinged a interest charge on your credit card
You’ll know who to thank. The Republicans
They don’t want reform. They want whatever their business handlers want.
Take the other contentious issue. Republicans want to exempt automobile from consumer protection agency rules.
That’s great. That way it’s easier for auto manufacturers to not be held responsilbe for manufacturing defects.
Chuck Butcher
Isn’t this where Cantwell and Feingold get accused of obstructionism in service to leftwing purity? Or something? Feingold isn’t a Rockefeller Republican so…
Derek
@norris hall:
IIRC, most are headquartered in South Dakota, because SD has no limit on interest rates. A couple minutes of cursory research indicates Delaware has similar laws and some companies have their headquarters there.
FlipYrWhig
I know people don’t like the 11-dimensional chess argument, but given that a couple of Republican senators were recently quoted saying that it might be a good idea to just vote already before the bill gets “worse,” i.e. tougher, who’s to say that Reid didn’t want to make the Republicans sweat a bit more? The supposed “failure” looks to me like a decent way for Reid to say to the GOPsters, “You could vote for this one, and get this all over with; or you can keep at it and watch more and more tough stuff get into the final package. Shit or get off the pot already.” And they just kept sitting on the pot.
jwb
@FlipYrWhig: Except do we have any evidence that Reid has shown that sort of tactical savvy in the past? I’m not hating on Reid at all, it’s just that this just doesn’t seem to be part of his game. He’s more a “cobble together a coalition however he can” type.
Polish the Guillotines
@Derek: Don’t forget Wilmington, DE:
True, it was a Republican governor who was largely responsible, but I wish someone had gone after Joe Biden back during the prez primary over this.
Derek
Yeah, I edited my comment to say that Delaware is a similar situation.
John Cole
@Derek:
McCain’s been trying to restore everything to the way it was in 1933. Not sure why this would be any different.
Mike Kay
I also have to wonder why Cantwell and Feingold didn’t bring up their amendments when the bill was still in the senate banking committee.
There’s no need to amend the bill on the floor of the senate, if you can get it added to the original bill, which can easily be accomplished during the committee mark-up.
can’t help sensing some grandstanding or kabuki with these late hour amendments.
Jay B.
@Uloborus: @Maude:
Is there anything you won’t pre-compromise on? ALL of the politics are in the favor of strong reform — even more than in health care, when a whole lot of Democrats turtled at the earliest possible moment in service to Republican throat-clearing. The Democrats SHOULD, for the good of the Republic, fight for the most progressive bill possible. And it seems possible to get better and more.
It’s mostly Reid’s fault, again, that it got to this point — especially when the GOP voted on all their amendments, then blocked further Democratic ones. Nice work, Harry!
But hilariously enough, he also got fucked by Scott “Encyclopedia” Brown who reneged on his previous commitment to Reid.
Reid has some GOP defectors for this already and there’s no doubt that after yesterday there’s much stomach for doing nothing. Feingold and Cantwell will come around. And Brown, now that he’s being publicly called out by being a welcher, might too.
Derek
@John Cole:
Zing!
Nick
@Chuck Butcher: I
It depends on what their beef is…Reid thought he could reach cloture without them (Scott Brown was apparently on board and Mark Begich was supposed to be in town, them and Reid would’ve made 60).
If Reid can get 60 with whatever Cantwell and Feingold want, then great, if he can’t and they obstruct anyway, then they’re obstructing in service to leftwing purity.
Politics is the art of the possible, if what they want isn’t possible, they need to decide whether or not it’s worth killing the whole thing and supporting what we got.
Keep in mind that even though McCain proposed the repeal of Glass Steagall with Cantwell, he won’t vote for a bill that has that amendment in it.
Nick
@Jay B.:
Lies; (noun): things that Jane Hamsher convinces her minions are facts.
The GOP did not get a vote on all their amendments, they were blocking some of their own, remember how we were making fun of them for it?
Uloborus
@Jay B.:
I don’t see this as ‘pre’ compromising. It’s partly a poker game. Reid got the best deal he thought he could (and they’ve been around the table many times already, remember) and decided to call.
It didn’t work out. Someone disagreed, and he doesn’t have the power to make that decision all by himself. I’m not even saying they’re wrong and we shouldn’t try for better. If anything I’m saying the opposite – these are just different senators disagreeing about how much we can wring out of the bill. It doesn’t look like trying to add this stuff will sink it, so I’m not bothered. On the other hand, I can understand why Reid would want to get a vote now.
TenguPhule
Any bill not mandating red hot pokers and banker rectums automatically fails.
James in WA
@Mike Kay:
What’s your basis for saying this, Mike?
I ask seriously, and without snark, because I have a great deal of respect for Cantwell, but I don’t want to be mister “epistemic closure” here (although I really hate that fucking phrase), and because I’ll be deciding whether or not to vote for her again not long from now.
But too and also, this kinda sounds like you’re talking out of your ass. So I’m definitely curious about where you’re coming from.
death chickens
http://www.researchhealthcare.com/public/senate-fails-to-end-debate-on-bank-regulation-bill.html
The vote and Wednesdays maneuvering over a handful of remaining amendments represented the final lumps and bruises of a bill that appeared headed for approval. The legislation, which seeks an overhaul of financial regulations unseen since the 1930s, would set up a mechanism to watch out for risks in the financial system, make it easier to liquidate large failing firms and write new rules for complex securities blamed for helping precipitate the 2008 economic crisis. It also would create a new consumer protection agency, a key point for President Barack Obama.