The death of Democratic Senator Robert Byrd of West Virginia may delay the vote on a package of new rules for Wall Street.
Senate Democrats had been counting Byrd’s vote as one of the 60 needed for final passage of the financial-regulatory bill approved June 25 by a House-Senate committee. With his death, and with Massachusetts Republican Senator Scott Brown suggesting he might switch from yes to no, Democrats could come up short if they bring the measure to the floor as planned before July 4.
Senate Judiciary Committee Chairman Patrick Leahy, a Vermont Democrat, told Bloomberg Television today that consideration of the bill could be postponed until West Virginia’s Democratic Governor Joe Manchin appoints a successor to Byrd, possibly not until after the funeral.
“The hope was that the Senate would vote this week, and now you have lost a vote,” Leahy said. “I am not sure what will happen. It is possible they put this off until after a replacement has been appointed by the governor.”
Leahy said he expects the bill “will eventually pass.” In the House, where the Democrats enjoy a wider margin, leaders expect to hold a vote as early as tomorrow.
The regulatory package would create a consumer protection agency at the Federal Reserve, give the government more authority to unwind failing financial firms and impose new requirements on over-the-counter derivatives markets and the banks that oversee these trades.
The latest developments may increase pressure on two Senate Democrats, Maria Cantwell of Washington and Russell Feingold of Wisconsin, to switch their votes and support the bill. Cantwell and Feingold voted against the measure May 20 because they said it was not strong enough.
Feingold said today that he wouldn’t switch his vote. “As I have indicated for some time now, my test for the financial regulatory reform bill is whether it will prevent another crisis. The conference committee’s proposal fails that test and for that reason I will not vote to advance it,” he said in a statement.
Without Byrd, Democrats could still pass the bill if they hold onto support from four Republicans: Brown; Susan Collins and Olympia Snowe of Maine; and Charles Grassley of Iowa. If any of the four vote no, leaders would need one Democrat to switch.
Cantwell opposed the earlier Senate bill because she said she wanted stricter rules on derivatives trading. She argued that a change made by Democrats on the Banking Committee would give banks too much authority to decide what trades needed to be registered on a clearinghouse. She also wanted more transparency of the largely unregulated markets.
During debate in May, Cantwell complained that the legislation “fails to close the very same loopholes in derivatives trading that led to the biggest economic collapse since the Great Depression.”
Brown, who won a special election this year in Democrat- dominated Massachusetts by casting himself as a small-government advocate, issued a statement on June 25 raising doubts about his vote after negotiators included a fee on banks and other financial institutions to make sure the legislation doesn’t add almost $19 billion to the U.S. budget deficit.
“My fear is that these costs would be passed onto consumers in the form of higher bank, ATM and credit-card fees and put a strain on lending at the worst possible time for our economy,” Brown said. “I’ve said repeatedly that I cannot support any bill that raises taxes.”
Grassley and Snowe haven’t commented on the final package since negotiators in the House and Senate wrapped up their work.
Collins said today that she also is concerned about the bank fees. Before deciding how to vote, “I’m taking a look at the specifics,” she said.
Collins and Snowe backed the initial bill after the Senate accepted their amendments. Collins’s bars bank holding companies from holding less capital than their subsidiaries, and Snowe’s would limit the new consumer-protection bureau’s authority over small businesses.
Senate Banking Committee Chairman Christopher Dodd, the Connecticut Democrat who wrote much of the legislation, said last week that the two Maine Republicans have had frequent discussions with committee staff and lawmakers involved in the final negotiations.
Byrd’s death leaves Democrats with 56 of the Senate’s 100 seats; two independents -- Senators Joe Lieberman of Connecticut and Bernie Sanders of Vermont -- also caucus with the party. Byrd, whose declining health forced him to miss votes in recent years, cast critical votes in favor of President Barack Obama’s health care bill when Republicans united against it.
Democrats have struggled to muster the 60 votes they need to bring contentious bills to the floor whenever Republicans have united against them. As November elections approach, Republican leaders may press rank-and-file members to make it harder for Obama and his allies to score legislative wins.
“The level of unity in opposition across the board is almost without precedent,” said Thomas Mann, a congressional expert with The Brookings Institution, a Washington-based nonpartisan, non-profit policy center. “It’s all about trying to regain the majority.”