By Silla Brush - 05/07/10 12:41 PM EDT
The Senate is moving to dampen the loudest
in the Wall Street overhaul.
In quick succession on Thursday, senators softened an amendment requiring new audits of the Federal Reserve and then voted down an amendment to cap the size of the nation's biggest banks.
The populist outrage at Wall Street banks and the
regulators that bailed them out appears to be reaching its limit. Plenty
other amendments fiercely opposed by Wall Street could still pass, and
underlying bill aims directly at the biggest financial institutions.
Sen. Bernie Sanders (I-Vt.), the principle backer
of the Fed
audit amendment, agreed to alter his legislation to require audits of
bank's activities during the financial crisis. An earlier version of the
amendment met stiff opposition from the White House and Federal Reserve,
argued the legislation would compromise the independence of U.S.
policy. The amendment had drawn strong support from conservative
Republicans and liberal Democrats.
Sanders said the new legislation would still force the Fed to disclose its many steps to bail out banks. Sanders said on the Senate floor that preserving the independence of the Fed was important to him.
Rep. Ron Paul (R-Texas), the libertarian critic of
said Thursday on his Facebook page that Sanders "sold out" on the
amendment. The liberal Firedoglake blog chastised Sanders as well.
But the Treasury Department and Senate Banking Committee Chairman Chris Dodd (D-Conn.) quickly lent support to the new amendment from Sanders.
The Senate held off on final voting on the Sanders
amendment. But later on Thursday, the Senate shot down a high-profile
impose additional restrictions on big banks.
Sens. Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del.) proposed legislation that would have limited the size of big banks. They and other supporters argued that clear caps on the size of banks are necessary to fully rein in Wall Street's excesses.
The amendment drew strong backing from consumer
But the Senate voted it down on a 33-61 vote. The amendment split Democrats, with 27 opposing the measure. Sen. Joe Lieberman (I-Conn.) also opposed the measure.
Sens. Tom Coburn (Okla.), John Ensign (Nev.) and Richard Shelby (Ala.) were the three Republicans to support the amendment.