When senate Democrats' test-vote for cloture to open debate on financial regulatory reform failed with every Republican and one Democrat opposed, it would seem to put reform at an impasse. Democrats had hoped that public outrage regarding the economy and the SEC case against Goldman Sachs would make Republicans more willing to bring regulatory reform. But they sure haven't been. Far from going along with Democrats, Republican senators have put forward their own, entirely distinct plan for regulatory overhaul. Is it any good? Does this mean they're not going to join with Democrats?
- The 8-Point Plan The Wall Street Journal's Damian Paletta summarizes the GOP plan into eight points. Here's the first: "RESOLUTION: Would create an orderly liquidation process for financial companies the government believes could have an adverse impact on the financial stability of the country if it collapsed."
- Actually Very Similar to Dem Plan The New York Times' Edward Wyatt and David Herszenhorn write, "While the Republican alternative was intended to draw contrast with the Democrats’ approach, it also revealed many areas of broad agreement, potentially bolstering the Democrats’ argument that the remaining differences could be worked out quickly and that there was no reason for delay." Both "provide for the liquidation of a troubled financial company" and "establish a consumer protection agency to deal with financial companies."
- Why That Could Be Good or Bad The Washington Post's Ezra Klein agrees "It's really similar to the Dodd proposal!" He concludes, "Optimistic spin: The two sides aren't that far apart on policy, so compromise, and thus passage, will be easy. Pessimistic spin: The two sides aren't that far apart on policy, which proves this is a political fight, which means compromise will be nearly impossible."
- The Three Big Differences The Washington Independent's Annie Lowrey explains them. One: Resolution authority, which would guide regulators in bailing out a failed bank, would get bailout funds differently. Two: It includes "a series of reforms of the government-sponsored entities Fannie Mae and Freddie Mac. Dodd and the Democrats plan to deal with housing finance in a separate comprehensive bill, though Republicans have said they want housing finance reforms in financial regulatory reform." Three: The bill "creates a kind of consumer protection council; creates a supermonitor for financial stability; and gives regulators the authority to put swaps on exchanges."
- Too Vague to Tell Liberal blogger Matthew Yglesias shrugs. "Overall it’s extremely vague, but appears to be . . . staggeringly similar to what’s already in Chris Dodd’s bill," he writes. "It also does . . . something . . . on Fannie Mae and Freddie Mac but it’s impossible to tell what."