Tags: Wall | Street | Bill | Passage | Byrd | Death

Wall Street Bill Passage Seen Despite Byrd’s Death

Monday, 28 Jun 2010 02:15 PM

The death of Senator Robert Byrd deprives his fellow Democrats of a crucial vote as they seek to pass a sweeping overhaul of U.S. financial regulations and could delay the process, but the measure is still expected to become law eventually.

Widespread public support for the Wall Street crackdown means that Democratic backers are likely to find the needed votes either from within their own ranks or from Republicans wary of siding with the financial industry, analysts said.

"Passage of Dodd-Frank is not a question of if, but a question of when," wrote Concept Capital analysts Teddy Downey and Chris Krueger in a research note, referring to the name conferred on the bill last week as Congress hammered out the final shape of legislation after earlier passage of different bills by the House of Representatives and the Senate.

The overhaul is the most extensive rewrite of Wall Street rules since the 1930s. It boosts consumer protections and saddles the financial industry with greater oversight and tighter regulation.

Democrats had hoped to give the bill final approval in the House and the Senate this week before sending it on to President Barack Obama to sign into law.

The death of Byrd, 92, on Monday morning leaves the bill's Democratic backers short of the 60 votes they had been counting on to clear a Republican procedural hurdle in the Senate.

With Republican Scott Brown, who supported the bill in the past, also threatening to vote against it, Democrats have been forced back into vote-counting and arm-twisting.

Including the two independents who usually vote with them, Democrats now control 58 seats in the 100-seat Senate.

Republicans were able to block Senate Majority Leader Harry Reid from bringing the first version of the measure to the Senate floor for several days in late April, and he barely mustered 60 votes needed to end debate and move toward a final vote in May.

"It was razor-thin to begin with, so this does introduce a new unknown into the process," Federal Deposit Insurance Corp Chairman Sheila Bair told CNBC.

The House is expected to approve the measure on Tuesday. The Senate is not expected to take up the measure until Thursday or Friday, giving Reid and other Democratic leaders several days to twist arms.

"We will wait for the House to act, but it is still possible that we could take it up this week," Reid spokeswoman Regan Lachapelle said in an e-mail.

Democratic senators Russ Feingold and Maria Cantwell voted against an earlier version of the bill on the grounds that it was not tough enough. They will doubtless face additional pressure to support it from fellow liberals eager to boost consumer protections and rein in the industry's most risky practices.

Cantwell is still studying the 2,000-page bill and has not yet decided whether to support it, a spokesman said.

Backers could also find additional support on the other side of the aisle. Moderate Republican senators Susan Collins and Olympia Snowe have previously voted for the bill and are expected to support its final passage.

Republican Senator Charles Grassley has backed the measure at various stages during its journey through Congress, though his support has not been consistent.

Republican Senator Brown won significant concessions in the final bill sought by mutual funds, insurers and banks in his home state of Massachusetts.

He has voted for the bill in the past, but on Saturday he threatened to withdraw his support due to a $19 billion industry tax that was inserted into the final version in an all-night negotiating session last week.

Brown said he was still reviewing the details of the bill before deciding which way to vote.

"Brown would face significant backlash if he decides to vote against the bill as significant concessions were made for him," wrote FBR Capital Markets analyst Edward Mills.

Finally, Democrats could opt to wait for West Virginia Governor Joe Manchin, a Democrat, to appoint Byrd's interim successor. That choice, most likely a Democrat, could take several weeks, forcing Democrats to miss their goal of having Obama sign the legislation into law by July 4.

"I think probably will hold up the vote, and complicates it somewhat, but I'm not sure it'll be that that impactful on the final legislation," said Michael Nix at Greenwood Capital Associates.

Investors have largely accepted that the bill will become law, he said. The KBW Banks index was down 0.3 percent in midday trading, while the broader markets were up slightly.

Byrd's death brought to mind the policy fallout from the 2009 death of Senator Edward Kennedy.

Kennedy was a leading liberal, and a crucial vote given the Democrats are just short of the 60 seats they would need to shut down procedural obstacles. His death threw a wrench into Obama's efforts to overhaul healthcare — especially when Brown replaced him in a special election that unexpectedly gave victory to a Republican.

Even then, Democrats eventually managed to pass the healthcare bill, which enjoyed considerably less public support than the Wall Street crackdown.

An election to fill Byrd's seat would not take place until November 2011 or November 2012, depending on when Manchin acts.

© 2017 Thomson/Reuters. All rights reserved.

1Like our page
2Share
Headline
The death of Senator Robert Byrd deprives his fellow Democrats of a crucial vote as they seek to pass a sweeping overhaul of U.S. financial regulations and could delay the process, but the measure is still expected to become law eventually. Widespread public support for...
Wall,Street,Bill,Passage,Byrd,Death
859
2010-15-28
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved