The conference committee that will craft a consensus financial regulation bill from different versions passed by the two chambers of Congress begins at 2:15 today, live on C-SPAN. There won't be any actual conferencing, however, since today's session is set aside for opening statements. After that, the process is fascinating -- and it may favor reform.
Typically, differences between the House and Senate are worked out in private and both chambers end up producing the same bill through an amendment process. Ironically, there hasn't been a conference committee on a banking bill since 1999, when Congress used this method to iron out disagreements in the Gramm-Leach-Bliley act -- yup, that's the bill that ended Glass-Steagall's separation of commercial and investment banks, drastically deregulating the financial industry. Because it's been eleven years, congressional staff have been working to re-learn the procedures.
When you tune into the conference, you'll see a packed room -- the committee is huge (members are listed after the jump) -- with long tables seating members from the House on one side and the Senate on the opposite, in turn divided by party. Presuming all goes as planned, Barney Frank will chair the committee, since the Senate asked for this conference and also chaired the 1999 session. The committee will use the Senate bill, with a few House-bill substitutions, as the default working text, which gives an advantage to reformers, since the Senate bill -- which includes the Volcker rule and tough derivatives-reform provisions -- is stronger than the House bill. In broad strokes, you should expect the Senate to play defense while the House plays offense.
Conference works like this: Going title by title through the bill, House members will submit an offer to the Senate contingent. If any House member wants to change that offer, they can propose an amendment and it will be voted on -- but only by the House members. When the offer is finalized, it goes across the table to the Senate's conferees, who can elect to accept the offer, or amend it to make a counter-offer -- again, voting just among Senate conferees. Conferees may leave the room to negotiate with their respective caucuses, and the offers go back and forth until there is consensus. At no time does the entire conference committee vote on one title or the whole bill; the final version -- the conference report -- is authorized with the signatures of a majority of conferees.*
Each side may propose an unlimited number of amendments, so to avoid a filibuster-type situation, Frank and Senate Banking Chairman Chris Dodd, who leads the Senate delegation, plan to impose time limits on discussion. Nonetheless, it is expected that the meetings will go long into the night and into next weekend, and Republicans could try to force tough votes.
While each side's conferees are supposed to be representing their respective chambers, partisan differences will likely ensure that a majority of Democrats from either chamber control the pace and content of the debate, though Dodd will have to ensure that the final report can muster sixty votes in the Senate. If Blanche Lincoln is still ready to fight for her derivatives-reform bill, and Frank is still smarting from losing some tough votes on financial reform last year while everyone was focused on health care, the conference is likely to strengthen the bill.
Update: I initially wrote that this was the first conference since 1999, but that turns out to be dramatically wrong. There was a conference committee on the stimulus bill last year, several others are in the works, and the one on the No Child Left Behind legislation in 2001 should, apparently, be legendary. The point my source -- who wants to remain anonymous while discussing procedural technicalities -- was making is that this is the first conference between the Banking Committee and House Financial Services since 1999. My apologies, and thanks to everyone who wrote in to correct.
-- Tim Fernholz
*Frank may choose to try and force a symbolic vote on the report at the end of the committee, but it's not necessary and may not occur.