WASHINGTON (AP) - Republicans are voting "no" so that some of
them can get to "yes" on tightening the reins on Wall Street.
Outnumbered by Democrats, Senate Republicans have held together
for two days, twice blocking the start of debate on new financial
regulations in hopes of negotiating changes they would be unable to
win through amendments on the Senate floor.
In the protracted fight, Republicans also have tried to score
political points, casting the Democrats' proposal as a perpetuation
of taxpayer bailouts - a hot-button issue with the public - and
accusing Democrats of writing an overambitious bill that will hurt
Democrats scheduled another vote for Wednesday to sustain
pressure on Republicans in the expectation that some incremental
changes to the pending bill ultimately would force several
Republicans to relent and back the legislation.
Few doubt that the Senate will pass a broad overhaul of
financial regulations in an attempt to prevent a recurrence of the
crisis that nearly caused a Wall Street collapse in 2008. But
Republicans want their imprint on the bill. And bankers appear to
want them to succeed as well.
If campaign contributions are any barometer, large Wall Street
institutions approve of what Senate Republicans have been doing to
alter the regulatory regime envisioned by the Obama administration
and its Democratic allies.
The political action committee of Bank of America, for instance,
has contributed 57 percent of its $336,000 in 2009-10 donations to
Republicans, according to the Center for Responsive Politics. In
the 2007-08 cycle, 53 percent of the bank's PAC contributions went
A spot check of contributions by The Associated Press showed
that Goldman Sachs' PAC, which contributed predominantly to
Democrats between 2007 and 2009, shifted to Republicans in March,
contributing $167,500 to Republican members of Congress and their
political committees and $117,000 to Democrats. Similar patterns
emerged for JPMorgan Chase and Morgan Stanley, whose PACs both
shifted to Republicans last month.
Testifying before a Senate investigative subcommittee on
Tuesday, Goldman CEO Lloyd Blankfein said he generally supported
the pending Democratic bill but said "there are details of it that
I think I'm less sure of."
Senate Banking Committee Chairman Christopher Dodd, D-Conn., and
the committee's top Republican, Alabama Sen. Richard Shelby, have
been conducting on-and-off negotiations for months but have not
arrived at a compromise. Dodd incorporated some Republican
proposals into his bill and appeared ready to accept new
alterations that addressed Republican claims that the bill could
still result in government bailouts.
But Shelby also was seeking changes in the bill's consumer
protection provisions - a key feature and a priority for President
Barack Obama. Dodd on Tuesday said that if Republicans wanted to
change his consumer measures, they should do so by amendment in the
"We're not going to write this whole bill between two
senators," Dodd said.
The Republican tactics in the Senate carry risks for the party.
The public is angry at Wall Street, and Democrats have taken the
opportunity to charge Republicans with doing Wall Street's bidding.
Under attack for twice voting to stall the pending regulatory
bill, Republicans on Tuesday floated a 20-page summary of a GOP
alternative to Dodd's measure.
The Republican plan would prohibit the use of taxpayer funds to
bail out failing financial giants in the future and impose federal
regulation on many but not all trades of complex investments known
as derivatives. Unlike the Democrats' bill, large banks would not
have to help pay for the failure of their peers. It also calls for
consumer protections that are narrower than what Democrats and the
White House seek, and it would place restrictions of financial
assistance to mortgage giants Fannie Mae and Freddie Mac.
"Everybody is going to want to be for a solution," said Sen.
John Cornyn, R-Texas, "so it offers a potential alternative
solution instead of just voting no against the Dodd bill."
Republicans also were counting on the public to forget the
Republican stalling tactics.
"You know, what happens on Monday or Tuesday versus what
happens later is something largely lost on the general public,"
Senate Republican leader Mitch McConnell said.
But there were signs that Republicans would only stick with the
strategy for so long.
Sen. George Voinovich, R-Ohio, said he would vote to let the
bill advance to the Senate floor if bipartisan talks were no longer
"I have an idea of how much time it takes to cut a deal," he
said. "If that's not possible, then we go on."