Financial Overhaul Legislation Clears Senate
The most far-reaching overhaul of financial rules since the Great Depression moved to the verge of enactment as senators approved a key procedural measure that sets the stage for a final vote.
Senators voted 60-38 to cut off debate on the sweeping legislation and are expected to hold a final vote later Thursday. Three Republicans — Scott Brown of Massachusetts and Susan Collins and Olympia Snowe, both of Maine — joined all but one Democrat in helping supporters reach the 60-vote margin necessary to overcome a filibuster.
Only a simple majority of the Senate is needed to pass the overhaul, which now is virtually assured.
The 2,300-page bill is the top legislative priority of President Obama and congressional Democrats, who said it will help prevent a repeat of the financial crisis. The House passed it last month, and Obama is expected to quickly sign it once the Senate gives its final approval.
“We believe we’ve done the best we could under the circumstances to see to it we never have another bailout of a major financial institution at taxpayer expense,” said Senate Banking Committee Chairman Christopher Dodd (D-Conn.). The legislation is called the Dodd-Frank bill after him and House Financial Services Committee Chairman Barney Frank (D-Mass.), who were the lead congressional sponsors.
The legislation aims to prevent another financial crisis and end future bailouts by enacting the most dramatic tightening of regulations since the 1930s. The bill would establish a bureau within the Federal Reserve to protect consumers in the financial marketplace, impose tough regulations on complex financial derivatives, grant shareholders a nonbinding vote on executive compensation and give the government authority to seize and dismantle teetering firms whose failure would pose a danger to the economy.
Supporters had hoped to get strong bipartisan support. But Wall Street and the financial industry lobbied heavily against the legislation. And as they did in the House, nearly all Republicans strongly opposed the bill. They said it would lead to more bailouts, not end them, and dangerously expand the government’s role in the financial industry.
Senate Minority Leader Mitch McConnell (R-Ky.) said the legislation will create a “vast new unaccountable bureaucracy” that will impose hundreds of new regulations on struggling businesses.
“It’s just this kind of uncertainty that will deter lending and freeze up credit,” he said. “Once again, the administration and its Democrat allies in Congress have taken a crisis and have used it rather than solved it.”
Posted in: Politics