Senate Democrats will drop a $50 billion fund in financial legislation that could be used to dissolve failing financial firms, a Republican aide said Wednesday.
Republicans had made the fund their top concern in the financial bill, and they held up the Senate from debating the bill in part over the provision.
Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Sen. Richard Shelby (R-Ala.), the top Republican on the banking panel, said they had made significant progress in bipartisan talks about how to wind down failing financial firms. The Senate agreed Wednesday to open debate on financial reform after deciding the bipartisan talks had reached an impasse on other matters.
Shelby "secured assurance" on Wednesday that his concerns about the fund would be included in legislation offered on the floor by Dodd, the Republican aide said. Shelby's concerns were that the bailout fund be dropped from the bill, the aide said.
Dodd's spokeswoman, Kirstin Brost, declined to spell out the agreement between the two senators.
"Dodd agreed to work with Shelby," Brost said.