US Democrats are mounting a final push to send US President Barack Obama their landmark overhaul of financial regulations, but the death of a colleague and cold feet among Republican allies could postpone a final victory.
Democrats could bring the sweeping bill up for a vote in the House of Representatives, where it is expected to pass easily, as early as yesterday.
They hope to pass the measure through the Senate by tomorrow, but they could see final action slide into the middle of this month.
Senator Christopher Dodd, the Democrats’ point man on the issue, said on Tuesday that it was “doubtful” the Senate would act by the end of the week.
Legislative action will be out of the question for much of today as the late Democratic Senator Robert Byrd lies in state in the Senate chamber.
Furthermore, Dodd and other backers had yet to nail down the support of wavering moderate Republican senators whose support will be needed to overcome a procedural hurdle.
Lawmakers are also doubtless eager to get out of town for a week-long break for the July 4 holiday.
That would mean several more weeks of uncertainty for the financial industry, which is bracing for tighter regulations, tougher oversight and diminished profits.
Still, analysts say it is a question of when, not if, the most sweeping rewrite of Wall Street rules since the 1930s becomes law.
The bill, which aims to prevent a repeat of the 2007-2009 financial crisis that shook the global economy, is a top priority for Obama and would give him and fellow Democrats a big legislative win ahead of November congressional elections.
It would force banks to reduce, but not cease, risky trading and investing, set up a new government process for liquidating troubled financial firms and establish a new consumer-protection bureau. It would saddle financial firms with a host of new regulations and reduce their profits.
Wall Street and many Republicans have tried to delay or water down the bill, but it has grown stronger during its yearlong journey though Congress as Democrats have ridden a wave of public disgust at an industry that has awarded itself fat paydays while the rest of the country struggles with high unemployment.
Democrats thought they had hammered out a final version of the bill during an all-night negotiating session last week.
With no margin for error in the Senate, Byrd’s death left them one vote shy of the 60 needed to overcome procedural hurdles in the 100-seat chamber.
On top of that, moderate Republicans who had previously backed the bill objected to an US$18 billion tax that was added to the bill to cover its costs.
Dodd and other Democrats reopened negotiations on Tuesday to remove that tax, replacing it with other funding sources. The bill now taps US$11 billion from an unpopular bank-bailout fund and raises the amount that larger banks must pay to insure their customer’s deposits.
That approach is not without its political risks. Republicans involved in the negotiations said that the US$11 billion would fall on the shoulders of taxpayers, because it otherwise would be used to pay down the national debt.
But Dodd and other Democrats do not expect them to back the bill. Instead, they are focused on the handful of Republican moderate senators — Scott Brown, Olympia Snowe and Susan Collins — who had previously supported it.
Snowe and Collins are studying the final version and have yet to decide how to vote, aides said on Tuesday night. A Brown aide declined to comment.
Representative Barney Frank, who has led the reform effort in the House of Representatives, said the three moderates helped to craft the new funding mechanism. He said he would not have bothered to change the bill unless it would pick up the votes needed to pass the Senate.
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