The Senate Banking Committee moved quickly Monday to approve financial overhaul legislation without GOP support, effectively postponing major changes until later in the debate.
The panel passed the overhaul bill on a 13-10 party-line vote. The vote came after Republicans withdrew hundreds of amendments filed late last week and said they would pursue changes later in the legislative process.
“We will adopt reforms of the financial system this year,” said Sen. Chris Dodd (D-Conn.), chairman of the committee.
Sen. Richard Shelby (R-Ala.), the ranking member on the panel, said Republicans would continue to influence the legislation after the markup.
“I do not view today’s markup as the end in the road,” Shelby said.
The legislation aims to end taxpayer-funded bailouts, regulate the multitrillion-dollar derivatives market and bolster consumer protections on financial products, among other changes.
Dodd unveiled the financial bill earlier this month without Republican support, despite months of bipartisan negotiations. Dodd wanted to pass legislation out of committee before the Easter recess to give the full Senate more time to consider the measure.
Senate Majority Leader Harry ReidHarry Mason ReidThe Hill's 12:30 Report - Presented by Connected Commerce Council - Biden faces reporters as his agenda teeters Biden hits one-year mark in dire straits 'All or nothing' won't bolster American democracy: Reform the filibuster and Electoral Count Act MORE (D-Nev.) wants to pass the financial overhaul through the Senate by the Memorial Day recess.
Senate Democrats will need to attract at least one Republican vote for the bill to overcome a possible filibuster. The bill’s future likely will hinge on private negotiations between the two parties. Several Republicans have said there is a great deal of bipartisan agreement on financial reforms.
“I think there is probably a better opportunity to get a middle-of-the-road bill done before it goes to the floor,” Sen. Bob CorkerRobert (Bob) Phillips CorkerRepublicans, ideology, and demise of the state and local tax deduction Cheney set to be face of anti-Trump GOP How leaving Afghanistan cancels our post-9/11 use of force MORE (R-Tenn.) said on CNBC on Monday. Corker spent a month in private negotiations with Dodd in an effort to craft a bipartisan measure.
Meanwhile, the Obama administration is redoubling its efforts to pass financial regulations after achieving a historic victory late Sunday in the healthcare debate. President Barack ObamaBarack Hussein ObamaNo Hillary — the 'Third Way' is the wrong way Biden should pivot to a pro-growth strategy on immigration reform One year on, a critical role needs to be filled by the administration MORE on Saturday devoted his weekly radio address to financial regulations, and Treasury Secretary Timothy Geithner gave a speech on Monday in support of the changes.
“When you see amendments designed to weaken the basic protections of reform, when you see amendments proposed to exempt certain types of financial firms or financial instruments from rules, ask why we should be protecting those private interests at the expense of the public interest,” Geithner said in a speech at the American Enterprise Institute (AEI).
Corker and other Republicans had criticized Dodd for veering to the left of where the legislation had stood during private negotiations.
Senators could make major changes throughout the bill after the committee acts, and lobbyists were already shifting their attention away from the committee action.
Democrats and Republicans will continue to debate a new consumer protection office housed at the Federal Reserve, while lobbyists for parts of the financial industry seek specific changes or exemptions.
Lobbyists at the National Association of Federal Credit Unions (NAFCU) and Credit Union National Association (CUNA), for example, are urging senators to leave credit unions out of authority of the new consumer bureau, arguing that the industry did not contribute to the financial crisis.
A key area of attention will be on new regulations of the derivatives market.
Sens. Jack ReedJack ReedDefense bill sets up next fight over military justice Ukraine president, US lawmakers huddle amid tensions with Russia Photos of the Week: Tornado aftermath, Medal of Honor and soaring superheroes MORE (D-R.I.) and Judd Gregg (R-N.H.) had been working on a bipartisan measure on derivatives, but they failed to strike a deal at the end of last week.
Financial and business lobbyists are pressing for a broad exemption for “end users” of derivatives who say they use the tools to hedge commercial or other business risks, rather than for speculation.
The derivatives portion could also change significantly once the Senate Agriculture Committee acts. The Agriculture panel has jurisdiction over the Commodity Futures Trading Commission (CFTC), which would play a key role in overseeing derivatives.
Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) will not unveil derivatives legislation until after the Easter recess, a committee spokeswoman said on Monday.