Senate set to vote on financial reform amid growing discord
By DAVID ESPO and JIM KUHNHENN
WASHINGTON — Tempers growing short, Democrats set an initial showdown vote for next Monday on legislation to clamp new regulations on the financial industry while Republicans insisted on more bargaining. President Obama admonished Wall Street leaders "to join us instead of fighting us" to prevent a future national financial collapse.
Words were becoming more heated yesterday among lawmakers who will campaign for re-election this summer on the results of this legislation — written in reaction to the economic crisis that threw the nation into recession — as well as the hard-fought health care overhaul.
"The time for stalling is over," declared Senate Democratic leader Harry Reid of Nevada. That drew a quick response from the Republican leader, Mitch McConnell of Kentucky: "I don't think bipartisanship is a waste of time."
Without an accord with the GOP, which was blocking the start of formal debate on the bill, Democrats would need 60 votes to move ahead in the Senate.
Reid was eager to test the unity of Republican opposition to the pending legislation, even as bipartisan negotiations continued. Reid conceded that the timetable for a vote could change if the talks bear fruit. Without a bipartisan bargain, Democrats were determined to portray Republicans as Wall Street allies and put them through test votes until enough senators agreed to proceed.
At the same time, senior Democrats signaled yesterday they hope to ease day-old restrictions a Senate committee slapped on the trading of financial derivatives, the complex investments blamed as a contributing factor to the economic near-meltdown of 2008.
The sweeping regulations represent the broadest attempt to overhaul the U.S. financial system since the 1930s. A House-passed bill and the pending Senate version would create a mechanism for liquidating large firms, set up a council to detect systemwide financial threats and establish a consumer protection agency to police lending, credit cards and other bank-customer transactions.
Opinion polls show the public is receptive to new federal curbs on Wall Street after twin catastrophes — the recession that has driven unemployment to double-digits and a banking crisis that has led to huge losses in Americans' retirement accounts.
Obama has made the broader legislation one of his congressional priorities. In a speech in New York, he chastised Wall Street for risky practices and at the same time sought its help for "updated, commonsense" banking regulations to head off any new financial crisis.