The Politics of the Senate Financial Reform Bill

Yesterday, I wrote about the surprising news that it took the Senate Banking Committee all of 22 minutes to mark-up its 1,336-page financial reform bill. That averages to about 61-pages per minute. Who knew Congress could be so efficient?

News outlets I read yesterday weren't clear on why mark-up was essentially skipped, consisting only of passing Chairman Dodd's manager's amendment (which lacked much substance and was mostly correcting technicalities) and then the final vote. Republicans and Democrats had nearly 500 amendments they had hoped to offer. So what happened?

I'm hearing that Dodd drove the speed in getting the bill out of committee for two reasons. First, he's generally in a hurry. That's already been made clear through his decision a few weeks ago to kill seemingly productive talks with committee Republicans to craft a bipartisan bill. He initially said he'd allow a measly week for markup (the House Financial Services Committee took several weeks to complete their markup). But he feared amendments would cause the committee process to take more than a week. With close to 500 amendments, he was probably right.

But the second reason was because he's reported to have wanted to shield Senate Banking Committee Democrats from having to take hard votes. As a result, he told committee Republicans that all Democrats would simply vote in unison to kill any Republican amendments, so it would be a waste of their time to bother offering any of their changes. Indeed, that's how the final vote went -- strictly along party-lines. With a 3-vote edge, it's pretty easy for Democrats to get a simple majority in committee.

Because of this, Republicans decided that it would probably be more productive to save their amendments for the floor of the Senate. After all, if committee Democrats would justĀ oppose them anyway, then Republicans can't possibly fare any worse by introducing changes before the entire chamber. Republicans, however, do remain optimistic that a bill will ultimately be agreed to.

So really, yesterday's vote, while an important procedural step, isn't so significant in terms of actually making tangible progress towards a final bill in the Senate. Instead, it just indicates that the committee punted to the floor. Even Dodd admits that some sections, including the entire derivatives portion, are still works-in-progress. Any time that would have been spent offering amendments in committee will just be spent doing so on the floor of the Senate -- drawing out that debate much longer than it might have been if a cleaner, more bipartisan bill had come out of committee. So any sound bites you might hear by members of Congress or the Obama administration praising yesterday's vote is pure rhetoric: nothing was actually accomplished. The committee just pushed its work onto the Senate floor.

Dodd can't pass this bill without at least one Republican. He might believe he has a better chance at luring non-Banking Committee Republicans to vote for the bill with fewer changes than would have been necessary to get Republicans on the committee to go along. And he could be right. But I'm not at all convinced that he'll necessarily have all 59 Democrats with him, so he may very well need several Republicans to come to his side. After all, even in the more liberal House, financial reform only passed by five votes, despite that chamber's much stronger Democrat majority.

At this point, there's no timetable for when the Senate will begin considering Dodd's bill. But when it does, expect some intense debate and hundreds of amendments.

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