Is GOP Coming Around on Financial Reform?

Liberals gets optimistic

Supporters of financial regulatory reform are optimistic about a sign that it could become law: a small number of crucial Senate Republicans are now signaling their support. Senators Bob Corker of Tennessee, Olympia Snowe of Maine, and Richard Shelby of Alabama are all suggesting that they could vote "yes." Senator Chuck Grassley of Iowa, in a key Agriculture Committee vote on a bill to regulate derivatives trading, shocked observers by voting with Democrats. Does this ensure passage?

• Why GOP Suddenly Got on Board  Talking Points Memo's Brian Beutler and Christina Bellantoni explain, "Within 48 hours, the Republican line on financial regulatory reform went from 'filibuster' to 'we're very close to a deal.' ... Key Republicans, sincere about passing new rules for Wall Street, but intimidated by the notion of blocking financial regulatory reform, let it be known to their leadership that, at some point, they would side with Democrats to break a filibuster. Maybe not on round one, or even round two. But eventually."

• A Deal Could Come Next Week  The Washington Post's Brady Dennis and Paul Kane get bullish. "Key members of both parties said Wednesday that they are close to agreeing on the main elements of a bill to overhaul the nation's financial regulations, raising the prospect that the Senate could begin formal discussion of the landmark legislation early next week," they write. "With both parties eager to claim that they are tackling financial excesses, Republicans have been focusing their objections on specific tenets of the legislation rather than on its overall thrust, allowing for more compromise."

• ...But With GOP Concessions  EconoBlogger Pete Davis says GOP support makes "enactment likely" but with concessions. "There will be plenty of amendments seeking to eliminate or reduce the impact on banks and on end users of derivatives.  The banks are fighting to keep their swaps desks, often their biggest profit center, which Lincoln's bill would force them to divest or else lose federal assistance in a future crisis.  They also are trying to ease the Volcker rule restrictions on proprietary trading and connections with hedge funds and private equity firms."

• Thoughtful GOP Rebukes Palin-Beck Wing  The Guardian's Michael Tomasky says the Sarah Palin-Glenn Beck opposition is "hardened and will never stop." But Senate Republicans could get in. "They want a bill for the obvious reason that there's lots of populist rage against Wall Street out there - as much of it coming from the grassroots right as the grassroots left - and they want to be seen as placating it. So a few GOPers - not many, to be sure, but enough - are ready to sign on and help pass a bill."

• The Key Grassley Agriculture Vote  The Washington Post's Ezra Klein is please with the "extremely aggressive" bill in the agriculture committee, which passed with a Republican vote. "To get a sense of why this was a surprise, recall that [GOP Sen.] Judd Gregg had scorned the proposal as 'about as far left as you could get on the issue of derivatives.' That Grassley, who's up for reelection in 2010, decided to cross over for this is the best evidence I've yet seen that financial regulation is going to pass."

• Republicans Have 'No Sympathy' for Derivatives  So says Mother Jones' Kevin Drum. "Republicans are obviously feeling some heat on this, and it's not as though anyone outside of Wall Street has any sympathy for the derivatives industry. For now, this remains a possible bright spot on the financial reform horizon."