Anxious for a big legislative victory to show voters this fall, President Barack Obama and congressional Democrats are aiming for a Thursday vote on the financial reform bill, which they say will prevent future financial meltdowns like the one that plunged the economy into a devastating recession.
Hope for a bipartisan bill is long gone. The best Democrats could muster is the support of three Republicans -- two moderates and one maverick -- and even then they barely reached the 60-vote threshold needed to invoke cloture and send the measure to an up-or-down vote on the Senate floor.
"This reform is good for families, it is good for businesses, and it's good for the entire economy," Obama said during a press conference Tuesday.
New Federal Power, Consumer Protections
The 2,300 page financial reform bill would give federal regulators the power to seize crippled financial institutions in an effort to avoid implosions like those that doomed Bear Stearns, Lehman Brothers and AIG. The collapse of those giant institutions rocked financial markets and triggered the credit crisis.
The bill would give regulators tighter control of hedge funds and private equity firms, as well as the complex financial derivatives at the heart of the subprime mortgage debacle. And it would create a new consumer protection agency designed to combat lending abuse.
On Tuesday, Senate Democrats secured the 60 votes they need to move to a final vote after Sen. Olympia Snowe (R-Maine), Sen. Scott Brown (R-Mass.), and Sen. Susan Collins (R-Maine) said they would support the bill.
Meanwhile, one of the last Democratic holdouts, Sen. Ben Nelson of Nebraska, said he would back the measure as well. Liberal stalwart Sen. Russ Feingold (D-Wisc.) has categorically opposed the bill, saying it doesn't go for enough to crack down on Wall Street firms.
Linking Financial Reform and Unemployment Insurance
A subdued Sen. Harry Reid (D-Nev.), the Senate majority leader, praised the three GOP senators as he linked financial reform to the extension of unemployment benefits -- which Republicans continue to block.
"Wall Street reform and unemployment insurance are two approaches to the same problem -- and to our number one priority -- and that's jobs," Reid said at a press conference. "By cleaning up Wall Street we're going to make sure that big bankers can never again gamble away our future. But we also have to help those who are hurting and that's what unemployment insurance does."
"Wall Street reform is preventive care, unemployment insurance is emergency care," Reid added. "Our economy needs both."
Republicans have blocked an up-or-down vote on extending unemployment benefits, saying the $35 billion measure is too costly. They prefer to focus on the ballooning deficit. On Tuesday, GOP senators announced that they would work to reduce the top-line figure for the federal budget.
"The American people are saying to us, 'You're spending too much, you're running up too many debts, and we expect you to do something about it,'" Senate Minority Leader Mitch McConnell (R-Ky.) said at a press conference.
Obama, Democrats Aim for Final Vote on Financial Reform