Dems Fight Each Other Over Major Wall Street Reform Measures

They're close to a deal, they're not close to a deal, they're talking, they're not talking. The final Wall Street reform negotiations have been beset by delays as key members hash out compromises on the two outstanding (and deeply consequential) aspects of financial regulatory reform. First there's the so-called Volcker rule. Then there's the question of derivative regulations. The more difficult fight is over the latter, so let's deal with it first.

House Democrats with close ties to big banks have threatened to bolt from the whole bill over proposed new derivatives rules in the Senate bill. If passed they would require major financial firms to dissociate from their derivative trading desks. Certain New Democrats and members of the New York delegation wants that particular measure scrapped. That sounds complicated, but the basic idea is to forbid federally insured firms from taking the sorts of risky gambles that could cause them to collapse.

The plan was authored by Sen. Blanche Lincoln (D-AR), who's facing re-election this year, running on her far-reaching plan to rein in Wall Street, and loathe to give much ground. She has declined to meet with the restive House Dems, but did meet last night with House Speaker Nancy Pelosi, who supports Lincoln in principle, and yet is trying to hold together a large enough coalition to pass the final legislation.

At her weekly press conference this afternoon, Pelosi was unable to say one way or another whether she could pass a final bill in the House if the swaps desk provision remains in the bill.

The Volcker rule is a somewhat different story. Volcker is a less-targeted series of regulations that would force banks and financial firms from speculating with their profits. Senators are said to be near agreement on the final language of Volcker. Sen. Scott Brown (R-MA) on the one hand is arguing for loopholes that will benefit big banks and insurance companies in his state, and progressives on the other are trying to keep the measure as strict as possible.

As the prospective 60th vote for reform, Brown has a lot of sway in these negotiations. Things would be much different if Democrats were united.

WAKE UP AMERICA

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.