Sen. Reid: Wall Street reform legislation likely to hit Senate floor next week

Senate Majority Leader Harry Reid (D-Nev.) said Thursday that he hopes to bring financial regulatory reform to the Senate floor next week, setting up a partisan clash.

Senate Republican Leader Mitch McConnell (R-Ky.) has blasted the bill as flawed legislation that would enable future bailouts of massive financial institutions.

McConnell has tried to unify the Republican conference to oppose the bill crafted by Senate Banking Committee Chairman Chris Dodd (D-Conn.) and to pursue a more bipartisan approach.

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But Reid made clear that he is not willing to spend much more time courting Republicans.

“We’re doing our best to get it on the floor as quickly as possible, we hope to get it on the floor next week,” Reid said.

Reid slammed Republicans for not cooperating with Democrats.

“I’m been very disappointed by the statements of some my Republican colleagues opposing our efforts on Wall Street [reform],” Reid said. “They seem clearly focused on protecting these big banks.”

Reid said the current regulatory system allows banks to become to big to fail, requiring the federal government to come in to save them with taxpayer money to prevent meltdowns of the financial system.

But McConnell has argued that the Democratic legislation would set up a $50 billion fund that could be used to bail out banks in the future.

“Its authors claim that the bill gives the government the authority to wind down failing firms with no exposure to the taxpayer,” McConnell said in a speech Wednesday. “But as a factual matter, the bill creates bailout funds, authorizes bailouts, allows for “back door” bailouts from the FDIC, Treasury and the Fed, and even expands the scope of future bailouts.

McConnell argued the bill would create “a new permanent bailout fund” by setting up a prepaid $50 billion bailout fund.

But Sen. Charles Schumer (D-N.Y.), a member of the Banking Committee who helped negotiate the bill, dismissed McConnell’s critique.

“Sen. Dodd’s bill explicitly says the money that will go for any future bailout for any large institution because it failed has to come from the large institution, not the taxpayer,” Schumer said.

“Nobody understands what he’s saying in the sense the bill doesn’t have a taxpayer bailout but he says he’s against the bill because it’s a taxpayer bailout,” Schumer added. “If he wants to toughen up the provisions to make sure that taxpayers are not on the hook as they once were, good we welcome it.”