Politics

Financial Reform Amendment Voting Begins

By Sunlight Foundation & Participatory Politics Foundation

Remember last week when Senate Republicans filibustered beginning debate of the financial reform bill three times in three days over objections to a liquidation fund that they said would be used in the future for bailouts? Well, the fund was officially removed on Wednesday by a an overwhelming vote of 93-5. That makes everyone happy — the Republicans who called it a bailout, the banks who didn’t want to pay into it, and the Democrats who didn’t really care much about it and would rather have Republican cooperation.

The vote came on a Dodd-Shelby perfecting amendment that, although running 52 pages, didn’t do much beyond removing the “orderly liquidation fund” and replacing it with a Treasury line of credit to fund the liquidation process. Creditors and other big, systemically-risky banks would pay the Treasury the costs of liquidation after the fact. Not a huge deal, but it is a slight weakening of the bill’s provisions to protect taxpayers from the cost of failing megabucks. It’s easy to imagine that in an environment where a huge bank like Chase is having to be put to sleep the Treasury wouldn’t follow through on recouping the liquidation costs from, for example, Bank of America, which would likely also be suffering. It probably will also cause the CBO to take away their score showing the bill reducing the deficit by $21 billion over a 10-year window.

The five senators voting against the amendment were Sen. Thomas Coburn [R, OK], Sen. John Cornyn [R, TX], Sen. Jim DeMint [R, SC], Sen. Byron Dorgan [D, ND] and Sen. Orrin Hatch [R, UT].

After taking out the pre-funded liquidation fund, the Senate then voted 96-1 in support of a Sen. Barbara Boxer [D, CA] that seeks to ensure that the government will liquidate failing financial firms rather than bailing them out with taxpayer money. As I explained here, the amendment is completely toothless and is pretty much a symbolic measure. It doesn’t do anything to clamp down on bailout programs that don’t need congressional authorization and it doesn’t lessen the chance that Congress would authorize another bailout if it was determined to be needed.

The one senator voting against the Boxer amendment was Sen. Jon Kyl [R, AZ], who said in a statement that it was “a feel good measure intended to let members go home and tell their constituents that they're doing ‘something' when they're doing nothing at all.”

The Senate also approved two Sen. Olympia Snowe [R, ME] amendment by unanimous consent. The first stuck out Section 1071 requiring banks to collect aggregate, geo-coded data about deposits. Snowe objected to the costs to banks of this kind of data collection and worried that it could lead to details about individual accounts being revealed, even though the bill text required banks to exclude all personal information from their data.

The second Snowe amendment requires the proposed Consumer Financial Protection Bureau to issue rules allowing small business owners to use their home mortgages to finance their businesses.

Now the Senate will move on to more contentious amendment work. Auditing the Fed, exempting certain industries from consumer protection regulations, re-instating Glass-Steagall, limiting the size of big banks, taxing excessive bonuses and banning banks from investing with their own money to make extra profit will likely all get voted on in the next few weeks. In all, more than 100 amendments have been submitted to the bill. The Hill has a continually-updated post describing a lot of them.

There appears to be an informal agreement in place to allow amendments to be voted on without a 60-vote threshold. Basically, what this means is that both parties will allow amendments to come up for votes without filibusters unless an individual senator decides they want to filibuster a particular amendment. If not filibustered, an amendment can pass by a simple majority of 51 votes. If an amendment is filibustered, it takes 60 votes to break the filibuster before a simple majority vote can be taken.

Full post as published by Open Congress on May 06, 2010 (boomark / email).