Financial Regulatory Forum

After clash, Senate filibuster ends with a whimper

April 29, 2010

Just a few minutes after the Senate failed for a third time in as many days to reach the 60-votes needed to approve a cloture motion on the financial reform bill (failing 56-42), Senate Majority Leader Harry Reid rose to his feet and asked the chamber’s presiding officer: “Mr President, I now ask unanimous consent the motion to proceed to S 3217 be agreed to”.
After the president officer asked for objections, and heard none, he replied “Without objection, it is so ordered”, according to the Congressional Record, Reuters columnist John Kemp writes. 
And with that the Senate decided to commence debate on the Restoring American Financial Stability Act of 2010 (S 3217). No roll call, no vote on the record, no 60th vote to cut off debate, just an absence of naysayers.
In effect, the bill moves forward by a lopsided margin of 98-0 as dissent melted away, for the moment [ID:nN28161159].
Reid’s unanimous consent agreement provides both parties with a neat way out of an embarrassing impasse while preserving maximum flexibility for further negotiations.
For Senate Democrats it gets the bill onto the floor in exchange for a token concession (dropping the pre-funded $50 billion bank rescue levy most had not wanted in the first place). It ends a high-risk series of cloture votes and represents a significant victory for the strategy pursued by Reid and the bill’s principal author, Banking Committee Chairman Christopher Dodd.
For Republicans, it ends a filibuster that threatened to embarrass the party and reveal divisions in the caucus about how far to go defending unpopular Wall Street interests in an election year.
In reality, the bill presented today is not much changed from the version the Republican caucus strenuously opposed last week and for the last three days. Dodd had already indicated the pre-funded levy could be dropped. In a narrow sense the filibuster has not achieved much in the way of change.
But it was clearly becoming uncomfortably costly for the Republican caucus to maintain. Party unity was beginning to fray, with several caucus members signalling they would not support a filibuster indefinitely. The writing appeared on the wall when Senator George Voinovich (R, Ohio) noted “I have an idea how much time it takes to cut a deal”.
Now the real work of serious bargaining begins. Republicans, and Democrats such as Nebraska’s Ben Nelson (who has objected to the derivatives section of the measure), will still be able to offer a flurry of amendments on the floor, and could resurrect a filibuster later if the bill remains unsatisfactory. So they still have some leverage.
In practice, though, it will be hard to round up all 41 Republicans and resurrect the filibuster now it has been broken.
Neither the administration nor Dodd appears interested in compromise on the main outline. Democrats appear fairly unified (with the exception of Nelson). Republicans may find it difficult to collect 51 votes in favour of substantive amendments.
Note the disparity: Republicans need 10 Democrats to shape the bill, Democrats need only 1 or possibly 2 Republican votes to preserve the text and carry it. This was why Senate Republican Leader Mitch McConnell and the party’s ranking member on the Banking Committee, Senator Richard Shelby (R, Alabama), were so keen to try to extract concessions before it hit the floor.
The next couple of weeks will see frenetic lobbying to modify some provisions at the edges. On derivatives, lobbyists will try to restore exemptions from margining for end-users, at least some of them, and grandfather existing contracts so they do not need to post collateral for deals already done.
It should be possible to reach agreement on narrowly tailored exemptions (the administration has already indicated some flexibility for genuine end-users). But the bill’s main outlines seem set and unlikely to change much.
The task for negotiators on both sides is to find those marginal changes that can get a bill carried by both the Senate and House of Representatives, and soften, if not eliminate, industry opposition.
For more columns by the same author, Reuters customers can click on [KEMP/]
((john.kemp@thomsonreuters.com; reuters messaging: john.kemp.reuters.com@reuters.net; +44 207 542 9726))

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