Last night, in a surreal process that from gavel to gavel took less than 25 minutes, the Senate Banking committee approved Chairman Dodd’s financial reform legislation on a party-line vote.
18 months after Wall Street speculation and greed caused the near-collapse of the nation’s economy and the taxpayer bailout of the nation’s largest financial firms (and 4 months after Dodd introduced a much stronger bill) it’s good to finally see some action on financial reform in the Senate.
The vote moves Dodd’s bill forward before the upcoming two-week Congressional break. Gaining some momentum for the floor is a good thing since it’s long past time to re-regulate Wall Street, and could thwart the bankers’ strategy that presumes delay gives Richard Shelby (Banking Committee Ranking Member) and the Republican Party “more leverage” (as ABA President Ed Yingling put it) to water down the bill.
The strange bit was that Shelby went along smiling. What was expected to be a week-long discussion of the merits and downfalls of 400+ amendments – a discussion that would have helped the public sort out just where their Senators stand on Wall Street reform – became a set piece with no debate and the Republicans cordially withdrawing all their amendments.
This despite the fact that Dodd spent four months negotiating with various members of the GOP. His concessions to their demands included devastating weakening of an independent consumer financial protection regulator, which Dodd’s bill now: houses in the hostile Federal Reserve, gives existing bank regulators a veto over its actions, and strips it of the authority to enforce the rules it writes.
Dodd and Shelby both said more time to talk will help pass a bill. But Senators cannot avoid taking a stand forever. The trick is to not let summer roll around with all the deals still being made behind closed doors.
Big bank lobbyists are spending $1.4 million a day to cripple reform efforts. The best place for the industry to press that attack is in back-room negotiations where Senators won’t have to take the heat for publicly siding with Wall Street over Main Street.
Opponents of reform can’t be allowed to avoid public debate entirely by cutting deals behind closed doors before the bill reaches the floor. That tactic is likely to skew in favor of the banks, not the public. Senate Democrats should force debate of the biggest issues in the full light of day, on the Senate floor, so a strong bill can’t be negotiated away.
It’s time the Senate start making the distinction between passing any bill, and passing a bill that works to protect the public, and the economy, from the next financial meltdown.