Democratic tensions flare on Senate floor during Wall Street reform debate

Tensions flared between Democrats on the Senate floor Tuesday evening when leaders objected to an effort by liberals to strengthen the Wall Street reform bill.
 
Sen. Byron Dorgan, the fiery populist Democrat from North Dakota, told Democratic leaders he would block further work on the Wall Street reform bill unless his amendment to ban certain derivatives received a vote.
 

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Dorgan had pressed Senate Banking Committee Chairman Chris Dodd (D-Conn.) over the past week to schedule a vote on a proposal to ban the trade of so-called naked credit default swaps.
 
Dodd objected to bringing up Dorgan’s amendment for a vote Tuesday evening, sparking a confrontation on the Senate floor.
 
“I intend to sit here and object as well to most things that are going to go on here if we have a gatekeeper or several gatekeepers that decide that the amendments would get a little tougher on Wall Street are amendments that they don’t want to vote on,” Dorgan said.
 
Dodd argued that consideration of Dorgan’s amendment could stall the entire bill because it’s controversial.
 
“Once consent is given for a pending amendment takes consent to lay it aside and move forward,” Dodd said. “So then we turn over to any one member of this chamber the ability to veto virtually all of their amendments because it takes unanimous consent by this chamber to agree to proceed to something else.”
 
Naked credit default swaps are derivatives that are tied to the potential for an asset to default, but in which traders don't have an actual stake in the underlying asset.
 
Dorgan’s proposal would require investors to take out credit default swaps only on assets they own. It would allow brokers to take out temporary naked hedge positions but only to fulfill customer orders.
 
A Democratic aide said Dorgan’s vote could not be considered because Sen. Richard Shelby (Ala.), the ranking Republican on the Banking panel, objected.
 
But a senior GOP aide disputed that explanation and said Republicans were willing to allow a vote on the Dorgan amendment. The GOP staffer said Democratic leaders had objected to considering the amendment because of internal conference politics.
 
After Dorgan threatened to block the bill, he received a vote on a second-degree amendment to attach his swaps proposal to the broader bill. Democratic leaders then moved to table the amendment, killing it by a vote of 56 to 38.
 
Dorgan grumbled over how leaders handled the floor process.
 
“If from this day forward we have decided -- or from today forward we have decided that someone on the other side who is at this point unknown is going to object to amendments that are uncomfortable, amendments that I think will strengthen the bill, this isn't much of a process any more,” Dorgan said.
 
“We'll, I guess, pick out the amendments that deal with tourism or babies or whatever it is that is uncontroversial to everybody and pass those and then go on to final passage and those who had other amendments of consequence are told some have objected, we're not quite sure who,” Dorgan added.


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