Last night the Senate floor was a tense place, with Republicans objecting and Democrats livid, particularly liberal Democrats with important amendments that had either been left to languish (Dorgan, Harkin) or that Republicans continued to block (Merkley-Levin).
As the bill nears the end of consideration, its had some incremental improvements and sets some good consumer protection measures in that there's any kind of consumer protection agency at all. That consumer protection was blunted yesterday when the Carper amendment to constrict the power of states to impose stringent consumer protection regulations passed. But its major weakness is that it doesn't get to the heart of what allowed the economic crisis to happen--the practices that led the too big to fail banks to put profits over anything else.
However, one new piece of promising news: TPM is reporting that Dodd is "abandon[ing] effort to water down derivatives provision." At least until after the Arkansas run-off, presumably. Thank you, Bill Halter!
The other major hope for significant reform is Merkley-Levin, which Republicans have now blocked from consideration twice, despite an agreement for a 60 vote threshold. Merkely had a small trick up his sleeve this morning, offering the amendment as a second degree amendment to the only amendment that has been deemed germane: Brownback's car-dealer protection effort which would exempt autodealers from consumer protection regulation. So the amendment can get a vote even if cloture is invoked.
His office sent this statement:
Refusing to give up their effort to ban high-risk trading in the banks that families and small businesses depend upon and to end conflicts of interest on Wall Street, Senator Merkley and Senator Levin this morning offered the Merkley-Levin amendment implementing the Volcker rule as a second degree amendment that alters an amendment from Senator Brownback. While both Senators Merkley and Levin would have preferred to have a full debate and vote on their amendment last night, Wall Street was afraid of that option and Republican leadership blocked the Merkley-Levin amendment from coming up for a vote on its own.
This move stops Republican attempts to hide from the vote. 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.
Brownback could be dealt with in conference, if necessary. Update: jj32 reminds me that a similar provision to Brownback's is in the House bill, so for the important reform in Merkley-Levin to survive, we might also be stuck with this one.
This would help the bill tremendously, though a handful of Senate Democrats have frustrated and have threatened to block final passage, [sub req] including Maria Cantwell, Tom Harkin, and Byron Dorgan. Stay tuned. The Senate could be very interesting today.