Bloomberg Anywhere Remote Login Bloomberg Terminal Request a Demo

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Republican Concerns, Byrd's Death May Delay Finance Bill

The Democratic Senator Robert Byrd, died aged 92. Photographer: Win McNamee/Getty Images
The Democratic Senator Robert Byrd, died aged 92. Photographer: Win McNamee/Getty Images

June 29 (Bloomberg) -- Republicans who had supported new rules for Wall Street expressed concern yesterday about a fee on banks and hedge funds that has been added to the bill, complicating the measure’s prospects for passage.

Reservations yesterday from Maine Senators Susan Collins and Olympia Snowe came after Massachusetts Republican Scott Brown had expressed unhappiness with the fee, which House-Senate negotiators added to the package during the final day of talks to offset an almost-$19 billion funding shortfall.

“There’s much I like in the bill, but I do not like the new $19 billion tax that was slipped in the wee hours of the morning,” Collins said. Neither Collins nor Snowe made a firm statement about how she would vote.

The death yesterday of West Virginia Democratic Senator Robert Byrd, and Wisconsin Democrat Russell Feingold’s refusal to back the final package, underscored the need for some Republican support to obtain 60 votes necessary to proceed to final Senate action on the financial-regulatory bill approved June 25 by a House-Senate committee.

Byrd’s absence and possible opposition from Brown, who voted for an earlier Senate version of the legislation, means Democratic leaders may come up short if they try to bring the measure to the floor before July 4, as they had planned.

Senate Judiciary Committee Chairman Patrick Leahy, a Vermont Democrat, told Bloomberg Television yesterday that consideration of the bill may be postponed until West Virginia’s Democratic Governor Joe Manchin appoints a successor to Byrd, possibly not until after the funeral.

Possible Delay

“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 Democrats enjoy a wider margin and can pass the measure with a simple majority, Financial Services Committee Chairman Barney Frank said he’s confident he’ll have the votes he needs and passage will occur “probably Wednesday.”

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.

Byrd’s death and possible Republican changes of heart may increase pressure on Democratic Senator Maria Cantwell of Washington. Cantwell and Feingold voted against the measure on May 20 because they said it wasn’t strong enough. Cantwell had said she wanted stricter rules on derivatives trading.

Preventing Crises

Feingold said yesterday that he wouldn’t change his opposition. “My test for the financial regulatory reform bill is whether it will prevent another crisis,” Feingold said in a statement. “The conference committee’s proposal fails that test and for that reason I will not vote to advance it.”

Without Byrd, Feingold and Cantwell, Democrats could get 60 votes by holding on to support from four Republicans: Brown, Collins, Snowe and Charles Grassley of Iowa.

Snowe told reporters yesterday she has concerns with the fee proposal “because it emerged during the course of the conference,” and wasn’t in either House or Senate versions of the legislation. “This is an issue that should have been debated before the House and the Senate at the time,” she said.

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 added the fee on banks and other financial institutions.

Costs Passed On

“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.”

Collins said yesterday that she is “taking a look at the specifics” of the House-Senate compromise before deciding how to vote.

Collins and Snowe backed the initial bill after the Senate accepted an amendment by Collins that aims to make capital standards uniform for large and small banks, and one by Snowe limiting the new consumer-protection bureau’s authority over small businesses.

Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, said last week the two Maine Republicans have had frequent discussions with committee aides and lawmakers involved in the final negotiations.

Election Pressure

Byrd’s death leaves Democrats with 56 seats in the 100-member Senate. Two independents -- Senators Joe Lieberman of Connecticut and Bernie Sanders of Vermont -- caucus with the party.

Democrats have struggled to muster 60 votes to bring contentious bills to the floor. As November elections approach, Republican leaders may press rank-and-file members to make it harder for President Barack 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 at the Brookings Institution in Washington. “It’s all about trying to regain the majority.”

To contact the reporters on this story: Patrick O’Connor in Washington at poconnor14@bloomberg.net; Alison Vekshin at avekshin@bloomberg.net

To contact the editor responsible for this story: Mark Silva in Washington at msilva34@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.