Financial Regulation After Robert Byrd

Brian Darling /

Because of the death of Sen. Robert Byrd (D-WV), prospects for passage of the conference report on Financial Regulatory Reform is now in a holding pattern. This conference report is expected to pass the House this week, but prospects for passage in the Senate are in doubt. President Obama has called on Congress to pass this bill by the July 4th recess next week. Conservatives worry that this bill establishes permanent bailout authority for failing businesses and that the regulatory provisions will hurt American competitiveness.

The so called “Financial Services Reform” passed both the House and Senate before a final product was negotiated between the chambers. H.R. 4173 passed the House on a 223-202 vote in December of last year. The bill passed the Senate on May 20th of this year on a 59-39 vote (Byrd and Specter not voting) with Republican Sens. Scott Brown (MA), Susan Collins (ME), and Olympia Snowe (ME) voting for the bill. Democrats opposing the bill included Sens. Maria Cantwell (WA) and Russ Feingold (WI).

Right now there are not enough votes to pass this conference report in the Senate without a replacement for Senator Byrd or a switch of at least one vote from Nay to Yea. If you include the likely support of Specter, the bill would have a filibuster proof 60 vote majority. Sen. Brown complicated passage of the conference report when he expressed opposition to one provision that was inserted into the legislation.

Scott Brown released a statement noting “I was surprised and extremely disappointed to hear that $18 billion in new assessments and fees were added in the wee hours of the morning by the conference committee. While I’m still reviewing the bill’s details, these provisions were not in the Senate version of the bill which I previously supported. My fear is that these costs would be passed onto consumers in the form of higher bank, ATM and credit card fees and put a strain on lending at the worst possible time for our economy. I’ve said repeatedly that I cannot support any bill that raises taxes.” If you count Brown as a “Nay” vote on final passage, then you are down to 59 votes for passage of a bill that needs 60 votes to overcome a filibuster. Further complicating passage of the bill are rumors that Sen. Chuck Grassley (R-IA) may be wavering in support. It is hard to imagine this conference report passing by the July 4th recess.

Also complicating passage of the bill is an emerging controversy over a replacement for the empty Senate seat of the late Senator Byrd. According to the web site Five Thirty Eight, “I just got off the phone with Jake Glance, the Public Affairs and Communications officer for West Virginia Secretary of State Natalie E. Tennant. Glance told me that no decision has been made yet on when a special election would be held to replace Robert Byrd, who passed away early this morning. Various interpretations of the law might require the special election to be held this November — or not until November, 2012, when Byrd’s term was set to expire anyway.”

The Governor is expected to send an interim replacement for Senator Byrd, but timing on that appointment may be held up while West Virginia figures out how long this replacement will serve. This seat may stay vacant while the government of West Virginia works out a means to replace Senator Byrd. Even if a replacement is sent to Washington this week for a replacement Senator, supporters of the bill may fall a vote short.

One of two things needs to happen for this conference report to pass this week. Either 1) a replacement for Senator Byrd will be seated and one Senator switches from Nay to Yea or 2) both Cantwell and Feingold vote with the Democrats to get cloture on the Conference report. It will be difficult for Senate Majority Leader Harry Reid to garner the 60 votes necessary to overcome a filibuster on Financial Regulatory Reform with all of these questions remaining.