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GOP on sidelines as Dodd offers new financial rules

The Democrat was hoping for a bipartisan bill that seeks to prevent another crisis, but time is short.

The Associated Press

WASHINGTON — With one eye on the calendar and the other on elusive bipartisanship, Senate Banking Committee Chairman Christopher Dodd plans to offer his own version of a sweeping overhaul of financial regulations without Republican support.

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Senate Banking Committee Chairman Christopher Dodd, D-Conn., is pursued by the media Thursday after his Capitol Hill news conference on his bill to reform financial system rules. Republican Sen. Bob Corker, who had worked with Dodd on the bill’s key provisions, said he was disappointed that Dodd was moving ahead without GOP support.

The Associated Press

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"Clearly, we need to move along," he said.

Dodd said he would release his proposal Monday and would begin the committee's work on the bill the week of March 22.

His decision immediately complicated the prospects for a Senate bill already months in the making, and it raised new questions about Congress' ability to respond to a financial crisis that erupted more than 18 months ago with the collapse of Lehman Brothers.

Four weeks of negotiations between Dodd and Republican Sen. Bob Corker had closed differences over key provisions, including consumer protections, but details on that and other sticking points remained unsettled.

"As time moves on, you just limit the possibilities of getting something done, particularly a bill of this magnitude and this complexity," Dodd said.

Dodd's decision to move without a final deal comes during an era of high partisanship in Congress that has entangled health care, blocked progress on climate change and energy legislation, and angered the public.

Congress and the administration have been trying to assemble an overhaul of regulations since last summer in hopes of preventing a recurrence of the 2008 Wall Street meltdown. It has not been an easy task. The House passed its version of a bill in December on a party-line vote.

"It will continue to be a challenge to reach a bipartisan deal," said Scott Talbott, chief lobbyist for the Financial Services Roundtable, an association of the banking industry.

Corker said Thursday that he and Dodd had made significant progress and had agreed in principle on consumer protections, one of the most contentious issues. He described himself as disappointed in Dodd's decision, but said he expected Dodd's proposal would be more moderate than a bill Dodd drafted late last year.

Still, Corker blamed Dodd's rush to propose a new bill on the current dispute over health care, and pressure on Dodd to offer a bill before the Senate puts the health care bill through a bitterly partisan fast-track process.

"I understand the pressure that he is under," Corker said.

Dodd, who is retiring when his term ends in January, said the attention to health care was one of several factors driving the clock on financial regulations. He noted that this is an election year and that there were few opportunities ahead to get a bill through committee, pass it in the Senate and then reconcile the differences with the House version.

"The time is shrinking to get this done," he said.

Despite lingering differences, some key aspects of the legislation have bipartisan support. Those include a mechanism for dismantling large, failing firms by having the financial industry pay the costs, and to create an oversight council that includes the Treasury Department and the Federal Reserve to look out for firms and practices that could pose a risk to the entire financial system.

In a Senate where Democrats control 59 seats, Dodd needs Republican support to get the 60-vote margin he needs to overcome a filibuster.