Comment: Another 2,000 pages no one is going to read until it’s already in effect
The Washington Post
By Brady Dennis
Key House and Senate lawmakers agreed on far-reaching new financial rules early Friday after weeks of division, delay and frantic last-minute deal making. The dawn compromise set up a potential vote in both houses of Congress next week that could send the landmark legislation to President Obama by July 4.
Lawmakers pulled an all-nighter, wrapping up their work at 5:39 a.m. — more than 20 messy, mind-numbing, exhaustive hours after they began Thursday morning.
“It’s a great moment. I’m proud to have been here,” said a teary-eyed Sen. Christopher J. Dodd (D-Conn.), who as chairman of the Senate Banking Committee led the effort in the Senate. “No one will know until this is actually in place how it works. But we believe we’ve done something that has been needed for a long time. It took a crisis to bring us to the point where we could actually get this job done.”
Both the House and Senate must approve the compromise legislation before it can go to Obama for his signature.
Despite myriad changes in recent days, Democrats appear poised to deliver a final bill that largely reflects the administration’s original blueprint unveiled almost precisely a year ago. While it would not fundamentally alter the shape of Wall Street or break up the nation’s largest firms, the legislation would establish broad new oversight of the financial system.
A new consumer protection bureau housed in the Federal Reserve would have independent funding, an independent leader and near-total autonomy to write and enforce rules. The government would have broad new powers to seize and wind down large, failing financial firms and to oversee the $600-trillion derivatives market. In addition, a council of regulators, headed by the Treasury secretary, would monitor the financial landscape for potential systemic risks.
“The finish line is in sight. The bill that has emerged from conference is strong,” Treasury Secretary Timothy F. Geithner said in a statement early Friday. “It will offer families the protections they deserve, help safeguard their financial security and give the businesses of America access to the credit they need to expand and innovate.”
On the House side, the final tally was 20 to 11 to approve the conference committee’s report. On the Senate side, it was 7 to 5. The votes fell along party lines, earning no support from Republicans on the two panels.
“This legislation is a failure on both counts,” Sen. Judd Gregg (R-NH) said in a statement that denounced the compromise as failing to address “shoddy underwriting practices” or problems with the government-sponsored entities Fannie Mae and Freddie Mac. “It will not encourage much-needed stability and confidence in our financial markets. It will not significantly reduce systemic risk in our financial sector.”
The final and most arduous compromise began to fall into place just after midnight. Sen. Blanche Lincoln (D-Ark.) agreed to scale back a controversial provision that would have forced the nation’s biggest banks to spin off their lucrative derivatives-dealing businesses.
Thursday evening, members of the House-Senate conference committee also reached accord on the “Volcker rule,” named after former Federal Reserve chairman Paul Volcker. That measure would bar banks from trading with their own money, a practice known as proprietary trading.
Lincoln’s provision had for months remained a particularly thorny issue for Democrats, causing internal divisions that threatened to derail the massive legislation.