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Financial Reform Update

By Anonymous

Cloture vote at 2 p.m. today, which would start the 30-hour clock, and put the final vote on financial reform at 8 p.m. tomorrow. Yes, I think Reid has the votes on cloture. I know Dorgan, Levin, and Cantwell have suggested that they won?t vote for cloture unless they get a vote on their respective amendments, but when it comes down to it, I don?t think they?ll have the stomach to vote against cloture on Wall Street reform. (Or, more accurately, I don?t think they?ll have the stomach to be the deciding vote against cloture on Wall Street reform.) I think Reid is calling their bluff. We?ll know at 2 p.m. today though.

Dodd offered a compromise at the last minute on Blanche Lincoln?s disastrous Sec. 716, which would require regulators to study whether banks should be forced to spin-off their swaps desks, and then essentially make a recommendation to the Treasury Secretary. The banks are not at all happy with Dodd?s compromise though. Personally, I think they?re being ridiculous ? this is the legislative equivalent of striking the language entirely.

The Republicans will probably offer a second-order amendment to Dodd?s compromise, which will weaken it even further, and that will probably be enough to get some Republicans on board. I know some so-called ?reformers? will probably portray this as a huge loss for progressives. It?s really not. It doesn?t make the bill ?less progressive,? it makes the bill ?less ridiculous.?

As to all the Merkley-Levin nonsense, I?m obviously not upset that it failed. It was a bad amendment, and Wall Street would have eviscerated it without even breaking a sweat. (And memo to Merkey?s office: if you think you were just respecting the principle of ?international comity,? then you got rolled by the banks? lobbyists. You were not.)

Merkley and Levin were offered an eminently reasonable compromise yesterday that wouldn?t have touched their prop trading ban and would have guaranteed them 60 votes, but they chose to walk away. So let?s be honest here ? this wasn?t about getting a Volcker Rule (which the Dodd bill already has). This was about getting a Volcker Rule with Merkley and Levin?s names on it.

It?ll be interesting to see if Merkley and Levin try to bring up their amendment post-cloture. To do so ? that is, to prove the germaneness of their amendment ? they would essentially have to admit that there?s already a Volcker Rule in the Dodd bill, which is something they?ve gone to great lengths to obscure to the press.

Full post as published by Economics of Contempt on May 19, 2010 (boomark / email).