The US Senate on Wednesday unanimously agreed to take up the most sweeping finance industry overhaul since the Great Depression of the 1930s, US President Barack Obama’s top legislative goal.
After months of closed-door talks and three days of bitter partisan gridlock, lawmakers scheduled the start of what were expected to be two weeks of debate on the popular bill for 12:15pm yesterday.
“The American people have waited long enough for their leaders to get to work cleaning up Wall Street,” Democratic Senate Majority Leader Harry Reid said.
“It is time to move this debate from the sidelines to the playing field,” he said.
The move came after Republicans abandoned their lockstep opposition to starting debate on the bill, amid signs US public anger at big banks blamed for the 2008 global economic meltdown will shape November mid-term elections.
The measure enjoys the support of nearly two-thirds of the US public, struggling with an economy that has yet to heal from the collapse, with stubbornly high US unemployment, a struggling housing sector and other woes.
The bill aims to ban big firms from tapping billions of dollars in government aid when their failure threatens the broader economy and create, for the first time, an agency to protect consumers from shady financial dealings.
It also looks to regulate trade in derivatives, complex financial instruments often used by firms to smooth out volatile commodity prices but blamed for warping the market and fanning speculative flames.
Obama cheered news of the breakthrough as he headed home from a two-day campaign-style trip to mid-western states badly hit by the economic crisis.
“I am very pleased that the United States Senate has decided to proceed to the financial regulatory bill by unanimous consent,” Obama told reporters aboard Air Force One. “It is the right thing to do.
Obama declined to comment on the grilling faced by Goldman Sachs executives on Capitol Hill on Tuesday, citing the current investigation into the firm by the Securities and Exchange Commission.
But he spoke about some of the more exotic instruments pieced together by the finance industry, after bundles of bad loans traded on the markets were partly blamed for triggering the financial crisis.
“I will say that I think most Americans would say that some of the behavior generally on Wall Street, even if it’s legal, doesn’t seem to serve much of an economic purpose and puts, as we’ve discovered, the entire economy at risk.”
The logjam broke after Senate Banking Committee Chairman Chris Dodd, a Democrat, and the panel’s top Republican, Senator Richard Shelby, agreed on a compromise regarding how to handle failing firms whose collapse threatens the US economy, lawmakers said.
They were unable, however, to reach an agreement on derivatives trading or on the new consumer protection agency.
“I cannot agree to his desire to weaken consumer protections given the enormous abuses we have seen,” Dodd said. “It is time for this debate to begin. And it must be a serious, vigorous debate.”
“This massive new bureaucracy would have unchecked authority to regulate whatever it wants, whenever it wants, however it wants,” Shelby said.
The breakthrough, however, was merely one step in a long and uncertain legislative journey.
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