The conference committee may be over, but the resulting Wall Street reform bill still must clear passage in both branches of Congress in order to reach President Obama’s desk. With the passing of Senator Robert Byrd today, this is now far from a guarantee. Here is the state of play:
In the House Because of a deal made between Blanche Lincoln and the New Dems on derivatives, the House is expected to pass the bill. In all likelihood, the rule will be voted on today, and passage will occur tomorrow.
In the Senate After the bill passes the House, it will go to the Senate. Senator Reid had been expected to file for cloture on Tuesday evening or Wednesday morning, leading to a vote on either Thursday or Friday. However, the outcome of the vote, and thus the process leading to the vote, is now in doubt. Its time for some vote counting:
Narrow margin: Back in May, cloture was achieved on the Senate bill by the narrowest of margins, 60-40.
Robert Byrd: Five weeks ago, Robert Byrd was one of the yes votes for cloture. Since he has passed away, that is one less vote for reform until West Virginia Governor Joe Manchin appoints his replacement. Such an appointment would be extremely likely to vote for reform, but is not available until the appointment is made. It now seems unlikely to me that the appointment would take office this week, as Governor Manchin would likely wait until after Robert Byrd’s funeral. He also may wait until after July 3rd, a move which might prevent an election for the seat from being held in 2010.
Maria Cantwell: Maria Cantwell (D-WA) voted against cloture five weeks ago. However, she was closely engaged in the process during the conference committee, and her specific concerns about the Volcker rule were met. As such, it seems very possible that she is now a “yes” vote, although she has not issued a formal statement to that effect. If she is a yes vote, that makes 60 votes for cloture.
Russ Feingold: Russ Feingold was the other Democrat who voted against cloture five weeks ago. He was never particularly engaged in the process, and for a long time made no specific demands in return for his vote. When he did finally make some demands, it was a long, kitchen-sink type laundry list that could not be met on such short notice. Few, if any, of those demands were met (at least somewhat because Feingold did not engage the process), and as such he is likely still a “no.” So, we stay at 60.
Scott Brown: When Russ Feingold did not engage the process, it gave Massachusetts Republican Scott Brown enough leverage to force an egregious carve-out for hedge funds on the Volcker rule. Despite voting for the bill in May, and despite winning that huge concession during the conference committee, Brown is now talking about voting against the bill anyway because of a $19 billion levy on banks. It looks like Scott Brown has learned quickly about how to play Lucy to the Senate Democrats Charlie Brown.
Chuck Grassley: Even if Feingold and Brown are no votes, and even if no successor to Robert Byrd is made this week, the bill could still pass with one more Republican vote. Enter Iowa Republican Chuck Grassley, who voted against cloture in May but did vote for final passage.
Richard Lugar: The only other possibility of a “no to yes” vote is from Indiana Republican Richard Lugar. It’s a longshot, but not impossible.
At this time, no one is in favor of opening up the bill again, and giving into Brown’s demands to win his vote. That would create a procedural nightmare, likely delay passage the bill past the fourth of July, would give Wall Street lobbyists another shot to gut everything that has already been won.
However, the count is clearly extremely close right now, and very much in doubt. Nothing is guaranteed. As such, while this was supposed to be the week when we turned our attention to the Kagen confirmation hearings in the Senate, and the Afghanistan funding fight in the House, it looks like we still have a lot of drama on Wall Street reform in the Senate.
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.
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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.
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More developments as they come in. Everything is up in the air right now.
Senator Maria Cantwell (D-WA) has signed the Bennet letter on the public option. That makes 35 signatories. Here are the updated whip count totals:
Question #1: Open to using reconciliation to finish health reform? Yes: 45
Maybe: 5
Nope: 1
No comment: 8
Question #2: Include a public option in reconciliation bill? Yes: 37
Maybe: 4
No: 6
No comment: 12
Question #1 remains vitally important, as the House will not take up the Senate health reform bill until the Senate proves to House leaders that the Senate has enough votes to pass a “fix” to the Senate bill through budget reconciliation. On that front, Sherrod Brown makes a bold prediction:
Sen Sherrod Brown predicts Dems will get 52-57 votes for reconciliation on health care reform in the Senate
The higher end of that range sounds about right. So far, only one Senator, Blanche Lincoln, has come out in opposition to using reconciliation to pass health reform.
As far as the public option is concerned, the only chance it has is to be included in the reconciliation bill that will pass the House a couple of days after the House passes the Senate health reform bill. Tom Harkin has already declared that the Senate will not add a public option to that reconciliation bill if the House does not include one. So, if the House does not send the Senate a reconciliation bill that includes the public option, the public option is dead once and for all.
The clock is ticking. Only about two weeks left until the House takes up a reconciliation bill.
Senator Charles Schumer has signed the Bennet letter on the public option. That brings the total number of Democratic Senators open to using reconciliation to finish health reform up to 32, and the number in favor of using the public option in that process up to 18. See the whip count here.
We also have a response from Senator Maria Cantwell’s office. Open Left user RubyK writes in:
XXX from Cantwell’s office got back to me. His short answer was “we’re studying it with caution”
His longer answer was:
Senator’s been in Washington state, doing business there and he hasn’t checked in with her on this yet. She will be back in Washington [DC] next week.
“We’re studying it with caution” b/c she’s had and expressed concerns for using reconciliation for larger sweeping changes.
As a general rule doesn’t want to use a process to end run, use something like reconcilliation to pass something so big.
He told me: she hasn’t given up on health care, and reminded me she’s a supporter of public option
He lastly suggested this to me, one of her reasons for hesitation on reconciliation generally would be that it would create a ten year sunset, which would make it more unstable, and with the health care system needing stability, going back to this in ten years might cause more problems.
Well, at least it wasn’t a no. Even if that isn’t the sort of answer we wanted, it is still useful information. Cantwell appears to be one of the recalcitrant Dems on reconciliation.
If your want to help push the undecided Senators in the right direction, click here to contact one of them.
Update: Jeanne Shaheen signs on, making the totals 33 and 19.
