Senator Byrd's Death May Stall Passage Of Wall Street Bill

Senator Robert Byrd's Death Leaves Wall Street Bill In Doubt


Sen. Robert Byrd’s death Monday cast serious doubt on whether Senate Democrats can pass the Wall Street reform bill this week.

The combination of Byrd’s passing and early negative reactions to the conference report by at least one key Republican, Sen. Scott Brown of Massachusetts, signals Democrats face the real possibility of falling several votes shy as they try to finish the bill.

"It is a tougher road, believe me," Senate Majority Whip Dick Durbin (D-Ill.) said Monday. "A 58-vote majority is not as good as a 59-vote majority."

Senate Majority Leader Harry Reid (D-Nev.) spent Monday trying to line up votes, and Senate Banking Committee Chairman Chris Dodd (D-Conn.) was planning to sit down Monday evening with one of the Republican holdouts, Sen. Olympia Snowe of Maine.

But at least one Democrat, Sen. Russ Feingold of Wisconsin, who previously opposed the bill has told Reid that he was still not supportive. Reid asked him to help Democrats at least break a Republican filibuster, but that was “not really” something he would consider, Feingold said.

"They'd like me to vote for cloture," Feingold told POLITICO, adding that he hears from leadership "all the time."

"I'm not going to enable something that doesn't do the job to be passed so that people can pretend it does the job," he continued. "It does not do the job. The American people deserve a bill that prevents the kind of collapse that occurred a couple years ago and I don't think this bill does it."

Reid could attempt to bring up the bill this week and force Republicans to vote against it, or he could wait until West Virginia Gov. Joe Manchin, a Democrat, appoints a replacement for Byrd’s seat, which may not come until after the July 4 recess, according a senior Senate Democratic aide.

"It's hard to see how we do it this week, unless one of our members is willing to change his mind or if Scott Brown stops his retreat," the aide said. "But overall, people remain confident it will pass sooner rather than later."

The House could vote as early as Tuesday, but action could get pushed to Wednesday, said a spokesman for House Speaker Nancy Pelosi (D-Calif.).

Even before Byrd’s death Monday, the prospects for the financial regulatory overhaul appeared cloudy in the Senate.

Visit msnbc.com for breaking news, world news, and news about the economy

Two Democrats, Feingold and Maria Cantwell of Washington, opposed the bill last month, and they have no given no indication to Democratic leaders that they will switch their votes. Without their backing, Democrats would need to hold the support of at least three of the four Republicans who have voted for the bill — Brown, Olympia Snowe of Maine, Susan Collins of Maine and Chuck Grassley of Iowa. Without Byrd, Democrats would need all four Republicans.

But the late addition of a 10-year, $19 billion tax on banks came as a surprise to Republicans, who have typically used new taxes as reason enough not to support a bill. Democrats added the tax to ensure the bill was deficit-neutral and satisfied pay-go rules in the House.

A conference report cannot be amended, so Democrats will be unable to promise any changes in order to mollify Brown or win other votes.

“There is much to like in the bill, but I do not like the new $19 billon tax that was slipped in at the wee hours of the morning,” Collins told reporters Monday. “I'm looking at how that works and what my options are.

There is much in the bill that I think will strengthen oversight of financial institutions. I'm very pleased my capital standards amendment was included and that auto dealers and other small businesses were not swept up in the bill. So I have to weigh all those factors."

Snowe said Monday that she needed to study the bill before making a decision.

"It's regrettable that in the course of business, in this case in the House-Senate conference, that different initiatives emerged that clearly should not have," Snowe said, adding that Dodd had given her no advance warning about the provision.

But Snowe suggested the bank tax might not be a deal-breaker for her vote. When asked whether the tax was "more palatable" because it calls for a fee against banks with more than $50 billion in assets, and hedge funds and hedge funds with more than $10 million, Snowe said "absolutely."

"I think that is certainly preferable that it's on the larger banks where the legislation is appropriately designed and for including private equity and hedge funds. Absolutely," Snowe said. "I mean, if you have to draw the line some place, that's where to draw it.”

Durbin said Democrats, including Dodd, were surprised to see Brown's statement Friday. Brown said he was "surprised and extremely disappointed" with a $19 billion bank tax added to the conference report and signaled he might switch his vote from yes to no.

"Senator Dodd went the extra mile to try to address his concerns in the bill, so I hope he reconsiders," Durbin said.

Brown was one of the driving forces behind a change in the bill to temper the Volcker Rule, winning an amendment that allows banks to make modest investments in hedge funds and private-equity funds with their own money. Massachusetts banks including State Street would be helped by the change, as would others nationwide.

Dodd defended the $19 billion bank tax when it was first debated by the conference committee about 3 a.m. Friday. He said the amount of the tax could effectively be paid for if Wall Street executives were willing to forgo their bonuses.

Those executive’s firms “are alive because the American taxpayer wrote a check,” Dodd said early Friday morning, referring to the $700 billion bank bailout plan. “To ask them to forego their bonuses ... ought not to be a lot to ask.”

Brown, at least, didn’t sound persuaded.

“While I'm still reviewing the bill's details, these provisions were not in the Senate version of the bill which I previously supported,” Brown said. “My fear is that these costs would be passed on to consumers in the form of higher bank, ATM and credit card fees and put a strain on lending at the worst possible time for our economy. I’ve said repeatedly that I cannot support any bill that raises taxes.”

If Democrats are able to persuade Cantwell to support the bill — and hold Collins, Snowe and Grassley — they would have a path to 60 votes.

But the likelihood of that scenario remained unclear Monday.

House Financial Services Committee Chairman Barney Frank (D-Mass.) said the opposition from Feingold and Cantwell was empowering Republicans.

"No one has shown me a strategy by which my friends on the left can get a better bill," Frank said. "So I mean, if they vote against cloture, what they do is they increase the leverage of people who want to weaken it. So I don’t understand how, if you start out in the position that you want a stronger bill, you take an action which can only have the effect of weakening the bill."


View Larger Map


Sources: MSNBC, Politico, Google Maps