Update--Cloture vote will fail: Cloture is about to fail. Collins and Snowe voted for cloture, while Feingold and Cantwell voted against it. Specter and Begich did not vote. So, even when Specter and Begich come back, Dems will need to find one more vote. Hopefully, that will be accomplished by getting Cantwell a vote on her amendment to reinstate Glass-Steagal.
Wall Street reform legislation continues to unfold in the Senate, with several dramatic developments over the past 24 hours. Here are where things stand at 2:55 pm:
1. Cloture vote delayed
The cloture vote on the overall bill had originally been set for 2:00 p.m. today, but is now delayed indefinitely. Senate Democrats are caucusing to figure out what to do next.
2. Susan Collins and Ben Nelson on board, but progressives blocking passage
Republican Susan Collins, and uber-ConservaDem Ben Nelson came out in favor of cloture today.
If all other Democrats held together, this would mean there are enough votes for cloture to succeed. However, many progressives--Cantwell (reinstating Glass--Steagal), Dorgan (ending naked credit default swaps), Harkin (capping ATM fees at $0.50), Merkley (reinstating Volcker rule), Levin (same as Merkley) and others--remain angry that their strengthening amendments have not received votes, and as such are not promising to support cloture. In fact, Cantwell just said she does not support cloture, as of right now.
Progressive anger over this turned into chaos--or as close as the Senate ever gets to chaos--on the floor last night. Tom Harkin openly angry at Harry Reid, Senators huddled every which way to strategize, strange procedural moves were employed (see bullet point below for the prime example), and more. Ryan Grim and David Dayen have good rundowns of the events.
3. Big strengthening amendment attacked to big weakening amendment
Jeff Merkley and Carl Levin are two of the progressive Senators pissed that their amendment (to reinstate the Volcker rule) did not receive votes. Republicans had been objecting to holding a vote on the Merkley-Levin amendment (unanimous consent is required for amendment votes), and the amendment was also not deemed germane by the parliamentarian for a post-cloture amendment vote. Basically, there was no way to get a vote on their amendment.
So, to "solve" this problem, Merkley and Levin attached their amendment to a horrendous weakening amendment, filed by Republicans, which has been deemed germane for a post-cloture amendment vote. That amendment, filed by Sam Brownback, exempts auto dealers from new consumer protection laws, even though auto loans are the biggest instances of financial malfeasance against consumers, especially military personnel.
Now, to prevent a vote on Merkley-Levin, Republicans would have to also block a vote on the Brownback amendment. From a statement by Senator Merkley:
The Merkley-Levin amendment must now be voted on before the entire Wall Street reform bill receives a final vote. For the Merkley-Levin amendment to ultimately be included in the final Wall Street reform bill, the Merkley-Levin amendment must pass and then the Brownback amendment to which it is attached must pass.
The Merkley-Levin amendment will ban high-risk trading inside our lending and depository institutions to help prevent a future financial crisis and prevent bank capital from being diverted away from loans into trading. The amendment will also end conflicts of interest in cases such as Goldman Sachs and will send a strong message to Wall Street that betting against the best interests of their clients will no longer be allowed.
This leaves a bad taste in my mouth, but it isn't actually a bad bit of gaming from Merkley and Levin. The best way to approach this is to try and get the votes for Merkley-Levin, and simultaneously work to the Brownback amendment anyway. It is still preferable that the Brownback amendment is defeated, thus defeating both amendments, but at least this way there is no way for the Brownback amendment to pass without a big strengthening amendment simultaneously passing (at a 51-vote threshold, Merkley-Levin should be a sure thing). We can't get the best of both worls-passing Merkley-Levin and defeating Brownback, but at least we won't get the worst of both worlds now.
4. Arkansas Senate primary saves derivatives reform (for now)
And here is the most dramatic development of all.
Last night, Chris Dodd (who is managing the Wall Street reform bill), introduced an amendment to gut the derivatives regulation that is at the heart of the bill. The original derivatives language had been written by Agriculture Chair Blanche Lincoln. It was pretty strong, as it required the biggest banks to sell off their derivatives departments. Dodd's proposal would delay implementation of Lincoln's language by two years, and probably forever, by requiring a series of studies led by people opposed to those portions of the bill (such as leading Obama administration figures).
Dodd had planned this course of action all along, but had waited on doing so to prevent embarrassing Blanche Lincoln, who faced a left-wing primary challenge from Bill Halter. If Democrats were to strip Lincoln's populist legislation from Wall Street reform, it would cause her real trouble, as Halter is challenging her from a populist and progressive angle. Lincoln can't afford to look ineffective, like a suck-up to Wall Street, or like someone who only wrote the legislation to get elected.
However, now that Bill Halter not only forced Lincoln into a June 8th runoff, but only polled 2% behind her overall, Lincoln is still in real danger of being defeated in the primary. As such, Dodd withdrew his proposal to gut derivatives regulations.
This is a remarkable example of both good timing, and bow primary campaigns are an effective means of changing Democratic behavior in Congress. Without the progressive pressure on Lincoln specifically, and on Senate Democrats more generally, the derivatives portion of the bill would already be gutted.
More developments as they come in. Everything is up in the air right now.