Dodd: Defending a Senate bill against all comers
June 21, 2010 There were the Republican senators, the House Democrats, the
financial sector lobbyists. At the back of the room were two of
Treasury Secretary Timothy Geithner's top lieutenants.
All of them are tugging at Dodd, D-Conn., as a House-Senate
conference works to fuse separate versions of the biggest rewrite
of Wall Street regulations since the Great Depression. As chairman
of the Senate Banking Committee, Dodd's final career test before
retiring in January is to protect his and the Senate's version from
changes being demanded by House members, bankers and the Obama
administration.
Negotiators will confront the knottiest differences between
their two bills this week. With 60 votes needed in the Senate to
overpower GOP opposition to enacting the sweeping measure, Dodd
can't risk cracking the fragile coalition of 57 Democrats and only
four Republicans who have supported the Senate bill.
"I've gotta keep things together," he said in an interview
Friday with The Associated Press.
Both bills would rein in the financial sector in similar ways,
adding oversight, consumer protections and new rules for largely
unregulated markets. The differences are in the margins, but it's
in margins where Dodd counts his votes.
Chairing the House-Senate conference is Rep. Barney Frank, a
Democrat from Massachusetts with an acerbic sense of humor and a
sharp command of the legislation. He and Dodd want Congress to send
a final bill to President Barack Obama by July 4.
Last week, Frank needled Dodd for his efforts to protect deals
he cut with Republicans Richard Shelby of Alabama and Bob Corker of
Tennessee, two senators who ultimately voted against the Senate
bill.
"I'm a little bit perplexed as to the untouchability of
bipartisan agreements joined in by people who voted no," Frank
said.
For Dodd - 66, white-haired, amiable and shrewd - it's all a
political bank shot. He's hoping his effort at bipartisanship with
unyielding opponents of the bill will help him retain the good will
of the handful of Republicans who voted with him.
No, he said, he didn't expect to convert senators such as
Shelby, Corker or other Republicans on the conference committee.
"But there are others who I think see how this is operating and it
does influence their votes," he said.
He was thinking of the four Republicans who voted to pass the
Senate bill last month - Charles Grassley of Iowa, Scott Brown of
Massachusetts and Olympia Snowe and Susan Collins of Maine.
Dodd also must take care not to alienate Democrats. He cut a
compromise on credit rating agencies last week to keep Sen. Al
Franken, D-Minn., in the fold. And he and Frank are fending off
moderate Democrats, New York lawmakers and worried Treasury
officials to accommodate Sen. Blanche Lincoln, D-Ark., who wants to
make large banks spin off some of their lucrative derivatives
business into separate affiliates with their own funding sources.
"You almost have to have some kind of schematic that looks like
the wiring diagram of the space shuttle to figure out who's
where," said Ross Baker, a congressional scholar at Rutgers
University.
Dodd's difficulties were evident late last week. The five Senate
Republicans on the conference decided to back a House position and
dilute a contentious Senate provision that defines the assets that
banks can count as reserves for protecting against losses.
Collins, a former Maine banking regulator, inserted the proposal
in the Senate bill to restrict banks from using certain hybrid
securities as capital. Moderate House Democrats agreed that banks
should not count future hybrid securities as part of their capital,
but they wanted to grandfather in any such assets already in a
bank's reserves.
Dodd offered a compromise that would only protect banks with
assets of less than $10 billion. He called for a vote. Lincoln,
whose state's largest bank has assets greater than $10 billion,
voted with Republicans against Dodd's compromise. The 6-6 tally
defeated the Republican measure by the slimmest of margins. Dodd
called Collins afterward to assure her he would continue defending
her position.
The Obama administration wants its own changes to Collins'
proposal, saying it ties U.S. officials' hands in negotiating
international financial regulations.
"Treasury would prefer to have no legislation in this area at
all," Collins said. Letting international agreements dictate the
rules, she said, would result in "a race to the bottom if we are
held hostage to standards that are imposed in other countries. So
I'm not too sympathetic to that argument."
The administration is pushing for other changes. For example, it
sides with banks and House members who say Lincoln's derivatives
plan goes too far.
Shortly before 9 p.m. Thursday, after lawmakers cleared away
from the conference clutter, two SUVs pulled up to the House
Rayburn Building, where the negotiators had been meeting. Geithner
and White House Chief of Staff Rahm Emanuel made their way through
the empty hallways to Frank's second-floor office for a strategy
session with Frank and Dodd. Also at the meeting were Deputy
Treasury Secretary Neal Wolin and Assistant Secretary Michael Barr,
key architects of the administration's regulatory plan who had been
monitoring the conference.
Dodd said any differences with the White House remained
unresolved. He downplayed their significance.
"I never met a White House yet that didn't exaggerate the
importance of these matters, and this is no exception," Dodd said.
While he welcomed the administration's advice, he said, "In the
end, they don't have any votes in that conference."