After three entire days, the Republicans finally relentedWednesday after reducing bailout language in the current Dodd bill, but the debate and amendment process is just beginning.
Sen. Shelby said, “Chairman Dodd has assured me that he will address a number of concerns I have expressed with respect to ending bailouts. We have been unable, however, to make any meaningful progress on other important components of the legislation. It is now my belief that further negotiations will not produce additional results.”
The major points of contention for Shelby and the Republicans remain the following:
With the filibuster ended, the main procedural question will be over how many amendments will be allowed to be voted on in the Senate.
During the health care debate, Rep. Sen. Collins was provided assurances that amendments would be allowed to be filled when the bill hit the floor and Sen. Reid didn’t allow more than 2% to get a vote. Once bitten, twice shy. Here’s what she said yesterday: “I do hope that Sen. Reid will keep his commitment to have a free and open debate, with the opportunity for all of us to offer relevant amendments. There are many amendments that I’m going to offer to this bill, and I hope we will now be able to proceed.”
This is one reason why there is a lack of trust between the parties. Both sides want to create a bill that gets 70-80 votes for approval. Unless the majority provides for a more than a minimum of 50% of amendments, I doubt they will get anymore votes than 55. (Remember, the Democrats can filibuster amendments.) Like health care, this means that any bill that passes will not be supported and be challenged after the next election.
The Republicans may also take the tactic of allowing some of the bad parts to become law without a fight. This would enable the legislation to be enacted, have a negative effect, and then let the Democrats take the fall for being the authors. The only problem is that it’ll take time for the law to be in full force and impacting the economy…..but maybe in time for the next presidential election.
FRR will undergo changes as it twists and turns through this process, but they won’t be a major overhaul of what is already in place.
Given the heightened emotions from the Goldman hearingsthis week, I would hope that this august body can be deliberative and thoughtful in this process and not vindictive. What happens over the next two to three weeks will have drastic ramifications for the availability of credit, for the competitiveness of US financial institutions, and for the US economy. The potential for a negative unintended consequence of the legislation is extremely high. US financial firms will be impacted and I expect their stocks to suffer on the passage of the legislation.
Andrew B. BuschDirector,