Research Briefing

While GOP Working To Get Financial Reform Right, Obama & Reid Have Decided It’s Politically Advantageous To Have No Bill At All

SENATE MAJORITY LEADER HARRY REID (D-NV) LAST WEEK: “If A Single Republican Is Not Willing To Join With Us, There Will Be No Wall Street Reform … Republicans Will Have Killed Wall Street Reform.” (Alexander Bolton, “Reid Plays Chicken On Wall Street Reform,” The Hill, 4/20/10)

BUT IT’S REID WHO CHOSE TO PLAY PARTISAN POLITICS WITH FINANCIAL REFORM

WHILE REPUBLICANS ARE WORKING TO GET IT RIGHT 

Senate Republicans Have Been Working In Bipartisan Fashion To Get Financial Reform Right, Imploring Senate Democrats Not To Rush It Through. “‘I hope that Senator Reid abandons his plan to force a premature cloture vote on Monday,’ said Sen. Susan Collins (R-Maine), whom Democrats have been courting in recent days. ‘A divisive vote on cloture at this point would be unfortunate.’ The lead Republican negotiator on the far-ranging legislation, Sen. Richard C. Shelby of Alabama, also cautioned Democrats against trying to force the bill. ‘I wouldn’t want to rush it and make a lot of mistakes,’ he said. ‘We're making progress, but we're dealing in something very complex.’” (Brady Dennis and Paul Kane, “Reid Aims To Move Forward With Financial Regulation Bill,” The Washington Post, 4/23/10)

But By Holding Vote Today, Reid “Has Decided To Play A Game Of Political Chicken” On Financial Reform In Order To “Make It A Prominent Issue In The Mid-Term Elections.” “Senate Majority Leader Harry Reid (D-Nev.) has decided to play a game of political chicken with Senate Republicans, daring them to kill a Wall Street reform bill. Reid said he plans to move ahead with immediate consideration of the financial regulatory reform bill … Reid has shown a willingness to force Republicans to vote on and kill the legislation. If the bill derails, Democrats say they will make it a prominent issue in the mid-term elections.” (Alexander Bolton, “Reid Plays Chicken On Wall Street Reform,” The Hill, 4/20/10)

• Reid’s Decision To Hold Vote Today Just A Political “Side Show.” “Reid's push may just be a side show to put Republicans on the spot for a moment as Republicans and Democrats continue to actually negotiate a bipartisan deal on financial reform.” (Martin Kady II, “Side Show Vote?” Politico’s “The Huddle,” 4/23/10)

Dems Want To Use Financial Reform Debate As Political “Piñata” To Hit Republicans. CNBC’s JOHN HARWOOD: “It seems as if what’s happening is Democrats don’t want this party to end too quickly … so they want to hit the piñata one more time. So … they have this cloture vote. Then they come out and say, ‘Well, look, Republicans are filibustering,’ and then the deal gets made later. If they wait a little bit longer, they might have a deal without having to go to that step … Once you get to the part of the negotiation where you know the other guy wants to buy your house, then you take a tougher line on what the price is.” (MSNBC’s “Morning Joe,” 4/23/10)

•  “A Senior Democratic Aide Said A Failed Vote Would Benefit Democrats Politically In A Tough Election Year … ‘We’ll Be Able To Hit Them The Rest Of The Year On This.’” (Alexander Bolton, “Votes In Doubt As Sen. Harry Reid Sets Monday For Showdown On Wall Street,” The Hill, 4/22/10)
• Dems Willing To Have No Financial Reform Bill At All In Order To Blame Republicans This Fall. “[S]ome Democrats … argue that the White House would be better off -- politically, anyway -- if Democrats could hit the campaign trail in the fall and blame ... Republicans for blocking the reform bill.” (Manu Raju and Eamon Javers, “Dems Bristle At Reform Deadline,” Politico, 4/5/10)

AND IT’S OBAMA WHO SHOT DOWN BIPARTISAN NEGOTIATIONS 3 TIMES IN THE LAST 3 MONTHS

FEBRUARY: White House Pulled Sen. Chris Dodd (D-CT) Away From Negotiation With Sen. Richard Shelby (R-AL). “Just six days earlier, Dodd had said he hit an impasse with Senator Richard Shelby, the committee's top Republican, in talks that have dragged on for more than a year over tightening oversight of banks and capital markets ... Gregg said he believes Dodd and Shelby had an agreement on consumer protection before talks broke off. 'If the white house hadn't sort of pulled back the Democratic membership on that issue, we could all go forward in a bipartisan way.'“ (Kevin Drawbaugh, “GOP's Gregg Sees Progress On Financial Regulation,” Reuters, 2/12/10)

MARCH: White House Pressured Dodd To Abandon Bipartisan Negotiations With Sen. Bob Corker (R-TN). “Dodd announced Thursday he would schedule a committee markup the week of March 22 even though he and Sen. Bob Corker (R-Tenn.) had not struck a final deal... Corker said negotiations were on 'the 5-yard line' and blamed politics ... for complicating the talks ... 'There is no question that White House politics and healthcare have kept us from getting to the goal line,' ...” (Silla Brush, “Banking Chairman Dodd To Go It Alone On Financial Overhaul,” The Hill, 3/11/10)

APRIL: Sens. Blanche Lincoln (D-AR) And Saxby Chambliss (R-GA) Were Nearing Bipartisan Deal On Derivatives Until “White House Raised Objections To A Potential Compromise.” “White House officials have raised objections to a potential compromise between Democrats and Republicans on the Senate Agriculture Committee regarding rules governing derivatives trading ... The pressure from the White House and Treasury Department could complicate the broader congressional effort to rework financial regulation, as it could derail a bipartisan deal. ... The Senate Agriculture Committee proposal, spearheaded by panel chairman Blanche Lincoln and Saxby Chambliss was seen by many as one of the few parts of the bill that could attract bipartisan support.” (Damian Paletta, “Hurdle Emerges To Financial Revamp,” The Wall Street Journal, 4/13/10)