- The Washington Times - Sunday, April 25, 2010

UPDATED:

WASHINGTON (AP) — The Senate’s top negotiators on financial overhaul legislation said Sunday they were not optimistic about striking a bipartisan agreement on key features of the sweeping bill before a showdown vote on Monday.

Sen. Richard C. Shelby, Alabama Republican, who is the top GOP member on the Senate Banking, Housing and Urban Affairs Committee, predicted all 41 Republican senators would vote to delay the start of debate, unless continuing weekend talks led to a deal.

Senate Minority Leader Mitch McConnell, Kentucky Republican, said he didn’t expect the bill, as drafted by Sen. Christopher J. Dodd, Connecticut Democrat and chairman of the committee, would go forward.

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“We want to make sure that they don’t have the same kind of approach on financial services that they did on health care,” Mr. McConnell said on “Fox News Sunday.”

Mr. Dodd said he hoped at least one or two Republicans would vote Monday with Democrats on beginning debate. He said he held out hope a deal could be struck in the coming days.

Both men have negotiated a bill off and on for months. The impasse reflected differences over how to contain large, interconnected financial firms and how to liquidate them when they fail. But Democrats and Republicans also differed on how to protect consumers and how to set limits on previously unregulated exotic instruments such as derivatives.

“We’re conceptually very, very close,” Mr. Shelby said. “We’re closer than we’ve ever been.”

Senate Majority Leader Harry Reid, Nevada Democrat, has vowed to push forward with the bill, determined to either get enough Republican support to overcome delays or brand Republicans as obstructionists and handmaidens of Wall Street.

Mr. Reid and Mr. Dodd need 60 votes to begin debate on the bill — and there are 59 Democrats and Democratic-allied independents.

The House already has passed its version of the legislation. Both the House and Senate bills represent the broadest overhaul of Wall Street regulations since the Great Depression. They would create a mechanism for liquidating large firms, set up a council to detect systemwide financial threats and establish a consumer protection agency to police lending. The legislation also would require derivatives, blamed for helping precipitate the meltdown, to be traded in open exchanges.

Mr. Dodd and Mr. Shelby, in a joint appearance on NBC’s “Meet the Press,” spoke more as partners than antagonists. But the lack of a deal at this stage underscored the pressure on Mr. Dodd to not cede any more ground than he already has during months of negotiations with Mr. Shelby and Sen. Bob Corker, Tennessee Republican, who also is on the banking committee.

“We can’t take care of everything in the bill,” Mr. Dodd said, referring to his talks with Mr. Shelby. “Obviously, our colleagues will want to be heard.”

Mr. Corker, appearing on ABC’s “This Week,” said he hoped Mr. Dodd and Mr. Shelby would reach agreement on a “template” that would permit more changes to occur through amendments on the Senate floor.

Despite their differences, Republicans and Democrats both have wrapped themselves in anti-Wall Street rhetoric.

Mr. Corker on Sunday said he intends to offer an amendment that would recoup earnings from executives of firms that fail and have to undergo liquidation. Under Mr. Dodd’s bill, management of a firm undergoing liquidation would be fired.

The broad regulatory overhaul already has passed the House. It aims to prevent a recurrence of the financial crisis that struck Wall Street in 2008 and prompted a massive government bailout of some of the nation’s biggest financial institutions.

Mr. Shelby said he specifically wanted to tighten language in Mr. Dodd’s draft bill that he said would give the Federal Reserve and the Federal Deposit Insurance Corp. too much flexibility to assist banks in trouble.

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