The High Stakes in Financial Regulation Test Vote

A Senate vote this evening begins reform's final push

Senate Majority Leader Harry Reid has scheduled a vote for 5:30 p.m. on financial regulatory reform. While the Senate will only be voting on cloture to open debate, the motion requires 60 votes and thus could be a crucial test vote to see if Democrats have enough support to pass a reform bill. Formally in the works since the beginning of the year, financial regulatory reform seeks to bring new accountability and regulation to U.S. banking institutions.

• Dems Unite, Putting GOP On Defensive  The New York Times' David Herszenhorn says Democrats have "bridged internal party differences and coalesced around a plan to tighten regulation of derivatives, the complex financial instruments that were a major factor in the 2008 economic crisis." This unity has "raised the pressure on Senate Republicans, who said that they were still fighting for changes to the bill and planned to block" today's vote.

• ...Except For These Two Key Dems  The Washington Post's Roberta Rampton and Rachelle Younglai warn that Democrats risk splitting, "as Senate Banking Chairman Christopher Dodd and Senate Agriculture Chairman Blanche Lincoln try to hash out how best to clamp down on derivatives, blamed in part for accelerating the recent financial crisis." Their two committees must reconcile their differences if Democrats are to put forward a single bill they all agree on.

• How Will Dems Get Their One Republican?  Reuters' Roberta Rampton notes that Democrats need one of the 41 Republican Senators to vote with them. Sen. Richard Shelby, the ranking Republican on the relevant banking committee, has not come around. The White House is courting Maine Republican Senators Olympia Snowe and Susan Collins, both of whom hinted they could have joined with Democrats on health care but ultimately backed out. Will they come around this time? If not them, who?

• Why Selling It to Americans Will Be Difficult  Robert Reich explains in the Financial Times that, although the bill "takes a hard line in many respects," Americans are wary. "The American public has no independent means of judging how tough the bill is. Most people do not understand the intricacies of finance, and still do not know exactly what Wall Street did to bring the economy to the brink. The dependence of both parties on the financial industry for political support inevitably feeds suspicions that the bill is not nearly tough enough."

• As Goldman Testifies, Congress Rallies Against Banks  The Washington Post's Brady Dennis writes, "lawmakers will be preparing to condemn the alleged sins of Wall Street's past and also wrestling over how to prevent such excesses in the future. Top executives from Goldman Sachs, beset by charges that the bank misled its clients by selling them mortgage investments secretly designed to fail, will face questions Tuesday about how the firm profited from betting against the U.S. housing market."