WASHINGTON – Nearly two years after a Wall Street meltdown left the economy reeling, the House on Wednesday passed a massive overhaul of financial regulations that would extend the government’s reach from storefront thrifts to the executive suites of Manhattan.

Senate support for the far-reaching bill remained in flux, however. The Senate was forced to delay its vote to mid-July, denying President Obama a victory before Independence Day. Democrats struggled to secure the votes of a handful of Republican senators even after meeting their demands and backing down on a $19 billion tax on big banks and hedge funds.

The legislation, swelling to more than 2,000 pages, would rewrite the nation’s regulatory books and put the entire financial system on a risk watch in hopes of thwarting the next threat of a financial crisis.

Obama hailed the vote as “a victory for every American who has been affected by the recklessness and irresponsibility that led to the loss of millions of jobs and trillions in wealth.”

The 237-192 House tally fell along party lines but attracted more support than in December when no Republicans voted for the House version of the bill.

Republicans portrayed the bill as a vast overreach of government power that would do little to prevent future bailouts of failing financial institutions. They complained that it failed to place tighter restrictions on Fannie Mae and Freddie Mac, the mortgage giants forced into huge federal bailouts after their questionable lending helped trigger the housing and economic meltdowns.

“This legislation … purports to prevent the next financial crisis, but it does so by vastly expanding the power of the same regulators who failed to stop the last one,” said Rep. Eric Cantor of Virginia,

Only three Republicans voted for the bill: Joseph Cao of Louisiana, Mike Castle of Delaware and Walter Jones of North Carolina. Nineteen Democrats voted against it.

House and Senate negotiators were forced to reconvene Tuesday to remove a $19 billion tax on large banks and hedge funds, hoping to overcome objections from Sens. Scott Brown, Susan Collins and Olympia Snowe, all Republicans.

Democratic Sens. Barney Frank, Chris Dodd and Obama administration officials then scrambled to drop the tax and devise another means of financing the bill.

In the end, House and Senate negotiators, voting along party lines, agreed to pay for the bill with $11 billion generated by ending the unpopular Troubled Asset Relief Program.

 

Copy the Story Link