Senate to vote on key Wall Street reform component

Reuters via Fidelity.com ^ | May 5, 2010 | Kevin Drawbaugh and Andy Sullivan

[mlocher]

WASHINGTON (Reuters) - The Senate was expected to vote by Wednesday afternoon on a new "orderly liquidation" system for dismantling distressed financial firms that will exclude a proposed $50 billion fund to help pay for it, according to the Senate's chief author of Wall Street reform.

After months of negotiations, Democratic Senator Christopher Dodd said he and Republican Senator Richard Shelby had reached an agreement that instead calls for covering the costs of liquidations after the fact by selling off parts of the troubled firm or assessing a fee on other companies.

The Dodd-Shelby plan is an effort to end the notion that some financial firms have become "too big to fail," while avoiding more debacles like the Bush administration's 2008 taxpayer-funded bailout of mega-insurer American International Group and the collapse of former Wall Street giant Lehman Brothers.

Neither of those firms fit into existing procedures used by the Federal Deposit Insurance Corp to dismantle failing banks. The Dodd-Shelby plan would set up a new protocol that tries to find a middle ground between bankruptcy and bailout.

The plan is a major component of a broader Wall Street reform bill being debated by the Senate. Democrats were expected to schedule more votes on smaller amendments on Wednesday amid stubborn Republican resistance to reform.

[mlocher]

Nearly 60 amendments to the bill had been filed as of late Tuesday, risking gridlock on the Senate floor and challenging the Democratic leadership to work out a procedural plan that will allow debate to proceed under tight time constraints.

Why the tight time constraints. This bill has to die.

[EagleUSA]

That word “reform” keeps getting abused by the radical left. The destruction of free capitalism is not “reform”.

[Ingtar]

Taxing the successful to pay for the failures... consistent at least.

[mulligan]

Whatever is passed by Congress will just add more misery to an already miserable matter. Congress is a disaster and working hard to make an even bigger disaster.

[seanhackbarth]

Senate Republicans are concerned will harm small businesses and community banks. Check out this web video:

http://www.youtube.com/watch?v=703rh-—omE

Sean Hackbarth
Senate Republican Conference