By Silla Brush and J. Taylor Rushing - 03/24/10 11:59 PM EDT
Democrats on Wednesday made financial reform their new top domestic priority, vowing to enact an overhaul of Wall Street this year and warning opponents not to stand in the way.
President Barack Obama is looking to Congress to pass a regulatory bill in the next few months, and key congressional Democrats said they are emboldened to act following the passage of healthcare legislation on Sunday night.
“My hope is that they’ll want to talk about solutions,” Dodd said. “Or they can just sit there and explain to people why they want to side with the largest financial institutions ... If they want to reject this bill for whatever false reasons they come up with, they’ll have to bear the responsibility of having it happen again when they were given a chance to correct it.
“So we’ll see how they respond, and I hope they don’t make the same mistake they made on healthcare,” Dodd concluded.
Obama held a White House meeting Wednesday with Dodd and House Financial Services Committee Chairman Barney Frank (D-Mass.), as top Treasury Department officials this week fanned out across Washington to stump for reforms.
Neal Wolin, deputy Treasury secretary, went to the U.S. Chamber of Commerce’s summit on the financial industry and repeatedly slammed the association for lobbying against administration-backed reforms.
“Despite the urgent and undeniable need for reform, the Chamber of Commerce has launched a $3 million advertising campaign against it,” Wolin said Wednesday. “That campaign is not designed to improve the House and Senate bills. It is designed to defeat them. It is designed to delay reform until the memory of the crisis fades and the political will for change dies out.”
Bruce Josten, the Chamber’s senior lobbyist, described Wolin’s speech as “political grandstanding” and insisted the business lobby is committed to a bipartisan effort.
Republicans recognize Democrats have new momentum to push financial legislation through Congress and expressed concern about having limited power to shape or, if necessary, defeat it.
Sen. Judd Gregg (R-N.H.) was “100 percent” confident the Senate would pass financial legislation this year; Sen. Bob Corker (R-Tenn.) pronounced it “very difficult” to see how the bill would not be approved.
“I think it’s going to be very, very difficult to get 41 members to hold, especially if many of the provisions in this bill address concerns that everyday people on Main Street have,” Corker said.
The new energy on financial legislation comes roughly 18 months after financial markets melted down, spawning the worst crisis since the Great Depression. Democrats are pushing a package of reforms aimed at ending the notion that some companies are “too big to fail,” bolstering consumer protections and regulating the multi-trillion-dollar derivatives market, among other provisions.
Senate Minority Leader Mitch McConnell (Ky.) said it’s possible some Republicans will support the bill once it hits the Senate floor.
“I don’t know that anybody’s made a decision to oppose it. We don’t have a bill to react to yet, other than the one in committee,” McConnell told The Hill. “The discussions are going to continue, and I hope we can get a bipartisan agreement. Nobody’s in favor of allowing ‘too big to fail’ to occur again.”
The package of policies has been hotly debated in Washington, New York and financial centers around the world. And even if the issue is a lower priority for voters than the broader state of healthcare or the economy, recent polls suggest strong support for new regulations.
A February Pew poll showed 59 percent of Americans believe it is a good idea to have stricter regulations on financial companies.
Nearly 80 percent of Democrats support a crackdown, and almost an equal number of Republicans say it is a good idea, (45 percent) as believe it is a bad idea (48 percent.)
Democrats realize that financial regulation and clamping down on big banks, Wall Street speculation and lavish bonuses makes good politics, and say they won’t be reluctant to apply pressure either to ensure a successful, bipartisan vote.
“They’d better consider at least the impact of voting with the big banks at this point,” said Senate Majority Whip Dick Durbin (D-Ill.), referring to Republicans. “Most people believe the big banks have not been fair to the people of this country, and they’ve taken a lot of tax money.”
When the House passed its financial overhaul bill in December with unanimous Republican opposition, Democrats responded that they would look to make the vote a campaign issue in the midterm election.
Bryon Allen, Republican pollster at Wilson Research Strategies, said there isn’t any evidence yet that financial regulatory reform is a key issue in the 2010 elections. But Republicans are wary about Democratic messages on the issue.
“I don’t think anybody in Republican politics is looking for this to be the headline story,” Allen said.
Corker said he recognized six months ago that the politics of financial reform are simply different from healthcare.
“You don’t pull the game-book out for healthcare and apply it to financial reform,” said Corker.
Corker said it was a “strategic mistake” to allow the overhaul package to pass the Senate Banking Committee on Monday evening on a party-line vote. The markup took only 21 minutes, after Republicans decided to pull hundreds of amendments.
Democrats and Republicans said they are still pursuing bipartisan negotiations and were hopeful that they could reach a consensus package of reforms. Last year, the Banking panel passed a major credit card bill on a mostly party-line vote, but bipartisan negotiations continued and the Senate approved the final bill on a 90-5 vote.
But Corker is concerned that it will be more difficult to make changes to the bill on the Senate floor or later in the process.
Already on Wednesday, Democrats said they were looking at how to reconcile the House and Senate bills.
“Barney and I are going to work very closely together in the coming days to try and harmonize, where we can, our proposals, so to minimize a conference when it occurs, if necessary,” Dodd said in front of the White House.
Sam Youngman contributed to this article.