At 5 p.m. this evening, the Senate will vote on whether or not to discuss financial reform on the floor of the chamber. Democrats wish to continue to the discussion and eventually pass a bill, while Republicans are filibustering and seem intent on voting en masse against going forward.“Remember, a vote against cloture is not a vote against financial reform, it's a vote for a bipartisan bill,” Taylor Griffin, a political consultant for Hamilton Place Strategies who served in the Bush administration, apparently tells his clients.
Which is of course a silly lie. The immutable political calculus of the financial reform has been set in stone for nearly a week now. The only way we'll see a truly bipartisan bill is with a deal struck between the two parties that makes tonight's cloture vote a mere formality and could seriously water down portions of the bill that are most needed.
However, there are only two real outcomes tonight: Republicans join together to stop debate on the bill, leading to a knock-down, drag-out political fight and, presumably, a repeat attempt at breaking the filibuster. Or, a handful of Republicans -- Scott Brown, the Mainers, Bob Corker, Chuck Grassley, George Voinovich -- might decide that they won't vote to stop debate, and the legislation moves forward. (It's possible, too, that some Democrats will vote with the filibusterers, but I consider that unlikely.)
Things get really interesting in the next phase, which is likely to be a relatively open amendments procedure. Sen. Jack Reed will introduce an amendment to take Sen. Chris Dodd's Fed-housed Consumer Financial Protection Bureau and make it an independent agency. Sens. Brown and Ted Kaufman will propose their amendment to cap the size of the banks and, in effect, break them up.
Both of these amendments have a pretty strong chance of passing if given an open floor; others good (Fed audit?) and bad (new exemptions) will follow. Any changes might serve to hurt any delicately negotiated pre-voting agreements. Reformers want an open process, but Republicans and leadership vote-counters would prefer to settle everything beforehand. Possible concessions include Blanche Lincoln's ban on derivatives trading at commercial banks, a reform that many observers are surprised is still in the conversation, and the ex ante resolution fund, where banks would pay an insurance fee to protect the financial system if regulators have to liquidate a failing bank.
As it is, though, Dodd is currently on the floor urging senators to vote for cloture, saying that policy differences can be solved on the floor, which doesn't point to a last-minute deal. "How can I even resolve it, if I can't even bring up the bill?" a terrifically exasperated Dodd said.
Assuming no further filibusters arise and votes are found to pass the bill, don't worry, we won't be done yet. Staffers in the House and Senate expect a conference committee to be created to reconcile the two chambers' differing versions of financial reform, which will lead to yet another series of fraught votes in both chambers and more chances to weaken and strengthen the bill. Get excited.
-- Tim Fernholz
