Today, at 5 p.m. in the U. S. Senate, the GOP will face a test of their team spirit and cohesion. This is when the Senate Majority Leader has scheduled a procedural vote on the highly anticipated financial reform bill. The question Senate Republicans will have to answer is whether or not they are ready to begin the debate on this “too-big-to-fail” banking regulation bill. The Republicans and Democrats have been negotiating all aspects of this bill for months, with the meetings sputtering at times, but mostly flowing smoothly as both sides believed there was a way for them to jointly support this unique, sweeping reform of the financial services industry.
What causes many GOP Senators to pause before signing onto any legislation is the fact that the democrats have seemed to pull the rug out from under the negotiations a few times here of late. These negotiation breakdowns have occurred at a point where most could see the light at the end of the tunnel and success was just around the corner. The first of these breakdowns was during the second week of April, when the Senate Agriculture Chairman and Ranking member were meeting to finalize their portion of this bill. Remember, when we think about financial reform, we need to take into consideration the Commodity Futures Trading Commission and derivatives regulation. These two subjects are under the jurisdiction of the Agriculture committee and thus this piece of the financial reform bill carries much weight.
Agriculture committee ranking member Senator Chambliss (R-Ga.) issued a strong press release on April 13, when the first of these negotiations broke down. His press release accused the White House of making the negotiations more partisan than they needed to be.
The second of these breakdowns occurred when the president piled on just a few days later using his weekly address to the Nation. During his April 17, 2010, Internet address, the president accused the Senate Republican Leader and the Chair of the Republican Senate campaign committee of meeting with Wall Street executives to discuss how to block the legislation, with an emphasis on the GOP being “on the take.” The president actually called them out specifically, which many veteran Capitol Hill watchers believe is unprecedented for a president to do during his weekly address to the Nation.
Finally, the White House had promised to drop a provision in the bill creating a $50 billion “bailout reserve fund” to be used for future bailouts. This provision, in the view of many Republicans, could serve as an excuse for some in the financial industry to act irresponsibly, knowing there was a safety net waiting for them if they failed in the form of this “bailout reserve fund.” The president had agreed to drop the provision, and then seemed to be in support of leaving it in, causing more skepticism among the Senate Republicans.
So, the trust factor is really in question as the Senate nears this test vote on Monday. The GOP could vote to allow the bill to proceed, knowing there will be two additional procedural votes where they could band together and block the progress. On the other hand, they could hold together on Monday as a show of force. The inside scoop is that some in the GOP ranks think that since the negotiations have already gotten a bit rocky, that this was only a precursor to a repeat performance on the part of the Senate Democrats and the White House at a later time. They believe however that when this behavior repeats itself, it will happen at the end of the legislative process, when it will be too late for the GOP to oppose the bill. Others believe that when the House begins to merge their bill with the Senate version, that a much broader bill from the House will prevail and the Senate Republican negotiated provisions for milder regulation and oversight will get tossed to the curb. ”Trust but verify” a favorite quote from Ronald Reagan, comes to mind as I watch this Financial reform bill legislative process play out over the next week or so.
Meanwhile, on the House side of the U.S. Capitol, the House will be considering a Department of Defense acquisitions bill. This bill will revamp the Defense department’s rules and procedures for carrying out their contracts. You can bet however, many in the House Leadership will be watching the Senate with both eyes wide open to see if the Senate GOP agrees to begin this highly anticipated, highly polarized and already spirited debate.
Elizabeth B. Letchworth is a retired, four-times-elected United States Senate secretary for the Majority and Minority. She is the founder of GradeGov.com.