It's a slim hope, but it's at least possible.
As mentioned in a front page post today, there is an amendment being offered to the Financial Reform Bill that at least makes it a possibility:
Sens. Sherrod Brown, Ted Kaufman, Robert Casey and Sheldon Whitehouse are introducing a new financial-reform bill, the Safe Banking Act of 2010, to limit the size of the banks -- and, in the process, break up existing firms.
We've already seen some unlikely things happen with this bill. Such as conservative DINO Blanche Lincoln's primary-induced come-to-Jesus moment that persuaded her to add tough language on derivatives to the bill in the Senate Agriculture Committee. The vote was passed with the help of none other than Chuck Grassley. It was somewhat watered down by her fellow Democrats, but remains tougher than anything else offered by either the House or the Senate. Who saw that coming?
Now there's this amendment offered by no fewer than four Democratic Senators:
"We can either limit the size and leverage of 'too big to fail' financial institutions now, or we will suffer the economic consequences of their potential failure later," Kaufman said in a joint statement.
Brown added "This bill would not only prevent bailouts and protect against economic collapse, it will help boost lending to small businesses."
The American Prospect lays out the bill's central points:
* Imposing a strict 10 percent cap on any bank-holding-company’s share of the United States’ total insured deposits
* Reducing the maximum amount of non-deposit liabilities at financial institutions (to 2 percent of United States GDP for banks, and 3 percent of GDP for non-bank institutions)
* Setting into law a 6 percent leverage limit for bank-holding companies and selected non-bank financial institutions
Could such a plan even hope to pass a Senate that is owned by the banks? A tough political climate can make some strange things happen. After all, what good are campaign contributions if you've got no office to run for? Blanche Lincoln has apparently already made that calculation.
A lot hinges on President Obama's big speech tomorrow, a speech that in the words of the Washington Post:
...will take aim at the "multi-trillion" derivatives industry and will take the opportunity to remind voters of the irresponsibility that had taken hold in the financial firms.
We'll see how tough Obama's language is tomorrow. We know that the current political climate favors a tough bill. We've seen how Republicans have uncharacteristically backed down on their threats to filibuster. Republicans don't usually do such things. And Democrats usually don't hang tough on the issues. A lot of unusual things have been happening with this bill.