Senate sets new clash on Wall Street rules

President Barack Obama’s Democratic allies in the Senate set a new vote Tuesday on a sweeping bill to rein in Wall Street, looking to heap pressure on Republicans blocking the popular measure.

Lawmakers were to vote on whether to formally start debate on the most ambitious regulatory overhaul of its kind since the Great Depression of the 1930s — the same proposal they narrowly defeated late Monday.

ADVERTISEMENT

Polls show the legislation enjoyed support of nearly two-thirds of the US public, amid still-smoldering anger at big banks blamed for the 2008 collapse that was expected to shape the November mid-term elections.

The move came as a key Senate committee grilled top Goldman Sachs executives Tuesday about the embattled Wall Street investment giant’s controversial actions in the run up to the worldwide meltdown.

Democratic Senate Majority Leader Harry Reid, wielding parliamentary rules, set up a 4:30 pm (2030 GMT) vote on the issue, amid no signs that back-room talks had moved much closer to a compromise bill Republicans would accept.

Reid denounced the “absurd, stunning, unheard of” Republican resistance to starting debate on the measure until a middle-ground version has been worked out and accused the minority of siding with Wall Street over US families.

“Senate Republicans are claiming we’re moving too fast,” he said. “The American people undeniably demand we protect them from Wall Street, which has run wild.”

ADVERTISEMENT

Reid claimed that Republicans were too afraid to discuss the issue out in the open.

President Kennedy once said, ‘Let us not be afraid of debate or discussion Ã¢â‚¬â€œ let us encourage it.’ I ask my Republican colleagues, What are you so afraid of? As I have said before, the right response to disagreement is not dismissal; it is discussion. For far too long there has been too much secrecy and too little transparency on Wall Street. The American people have paid the price with their jobs and their life savings, and they demand we fix whatÃ¢â‚¬â„¢s broken. As long as Republicans insist on secrecy and resist transparency here in the Senate Ã¢â‚¬â€œ and if they donÃ¢â‚¬â„¢t let us address the problems we were sent here to solve Ã¢â‚¬â€œ we will never fully recover.

Democrats and the White House have been eager to portray Republicans as in the pocket of Wall Street, while Republicans say they want tough new rules but that the bill as currently crafted is not ready and must be changed.

ADVERTISEMENT

“Last night, the Democrat majority forced a vote on a bill that wasn’t ready for prime-time,” said Republican Senate Minority Leader Mitch McConnell, who highlighted media accounts of worries about the measure among businesses including iconic motorcycle maker Harley Davidson and candy maker Mars.

“Does anyone really believe that the people who make Harley Davidsons and Snickers bars are responsible for the financial crisis?” he said.

ADVERTISEMENT

“Unfortunately, the Democrat majority seems less interested in fixing this bill than in some political win they think they’re scoring by not fixing the bill,” said McConnell. “It’s a total waste of the people’s time.”

The US Senate voted 57-41 late Monday to open debate, falling short of the 60 needed under parliamentary rules to move ahead with Obama’s top domestic goal, and drawing a swift rebuke from the president.

“I am deeply disappointed that Senate Republicans voted in a block against allowing a public debate on Wall Street reform to begin,” Obama said in a statement.

ADVERTISEMENT

Republicans “may believe that this obstruction is a good political strategy, and others may see delay as an opportunity to take this debate behind closed doors, where financial industry lobbyists can water down reform or kill it altogether,” said Obama.

Democratic Senator Ben Nelson joined 39 Republicans in voting against the motion, while two Republicans did not vote.

Reid voted no for procedural reasons — it enabled him to bring up the bill again at a moment’s notice.

The bill aims to usher in sweeping new regulations on Wall Street a decade after Democrats and Republicans together stripped the system of rules enacted after the Great Depression.

ADVERTISEMENT

The measure, championed by US Senate Banking Committee Chairman Chris Dodd, a Democrat, would erect a mechanism for dissolving rather than bailing out financial institutions whose collapse could risk crippling the US economy.

The legislation — which would need to be merged with the bill the House of Representatives passed in 2009 — would also establish a new agency to protect consumers from risky lending practices and products.

The legislation also aims to tighten regulations on the giant market in derivatives — complex, privately traded instruments tied to the underlying value of a commodity and seen as vehicles for dangerous speculation.

Reid’s full statement follows:

####

Ã¢â‚¬Å“The American people undeniably demand that we protect them from a Wall Street run wild.

ADVERTISEMENT

Ã¢â‚¬Å“Two-thirds of Americans support us cracking down on big bankersÃ¢â‚¬â„¢ reckless risk-taking. And a majority supports us asking banks to pay for their own funerals Ã¢â‚¬â€œ thatÃ¢â‚¬â„¢s the fund financed by the big financial firms to cover the cost of their liquidation. Not to bail out banks that threaten the larger economy, as some have mischaracterized it, but to shut them down for good.

Ã¢â‚¬Å“The American people also demand that their leaders discuss these details and improve on these ideas. They have two simple requests: One, that their leaders look out for their economic security; and two, that their legislators legislate. In other words, they want us to look out for their jobs and they want us to do our own.

Ã¢â‚¬Å“Right now, Senate Republicans are refusing to do either.

Ã¢â‚¬Å“Yesterday they stood together, en bloc, to block us from moving this bill to the floor. They didnÃ¢â‚¬â„¢t even want the Senate to talk about legislation as part of the normal legislative process.

Ã¢â‚¬Å“More than two years after the financial collapse that sparked a worldwide recession, Senate Republicans are claiming weÃ¢â‚¬â„¢re moving too fast.

ADVERTISEMENT

Ã¢â‚¬Å“They are claiming that only a fully negotiated and agreed-upon bill can come up for debate. They want all the details to be worked out beforehand, behind closed doors and out of view from the public.

Ã¢â‚¬Å“That is unprecedented in the 220 years of the United States Senate. As we all learned in civics class, thatÃ¢â‚¬â„¢s not how the legislative process works.

Ã¢â‚¬Å“We want to bring our bill to the floor so we can discuss it, debate it, amend it and improve it. We want to do it out in the open.

Ã¢â‚¬Å“After all, if we are not debating Ã¢â‚¬â€œ if Senators refuse to let the Senate do its job Ã¢â‚¬â€œ what are we doing here?

ADVERTISEMENT

Ã¢â‚¬Å“What purpose does the Senate serve? Why do we have rules for debate and the opportunity to offer amendments?

Ã¢â‚¬Å“President Kennedy once said, Ã¢â‚¬ËœLet us not be afraid of debate or discussion Ã¢â‚¬â€œ let us encourage it.Ã¢â‚¬â„¢ I ask my Republican colleagues, What are you so afraid of?

Ã¢â‚¬Å“As I have said before, the right response to disagreement is not dismissal; it is discussion.

Ã¢â‚¬Å“For far too long there has been too much secrecy and too little transparency on Wall Street. The American people have paid the price with their jobs and their life savings, and they demand we fix whatÃ¢â‚¬â„¢s broken.

ADVERTISEMENT

Ã¢â‚¬Å“As long as Republicans insist on secrecy and resist transparency here in the Senate Ã¢â‚¬â€œ and if they donÃ¢â‚¬â„¢t let us address the problems we were sent here to solve Ã¢â‚¬â€œ we will never fully recover.Ã¢â‚¬Â

####

(with AFP story)