WASHINGTON -- Senate Democrats and Republicans today braced for a showdown vote on legislation to impose sweeping new regulations on the nation's financial industry.
A vote scheduled for 5 p.m. could determine whether Republicans have enough votes to filibuster the bill, which could stop debate and force negotiators from both parties to go back to the bargaining table.
A key role could be played be Senator Scott Brown, the Massachusetts Republican who has said he would back the filibuster in hopes of forcing major changes in the legislation. Several other Republicans have been targets for Democrats, including the two senators from Maine – Susan Collins and Olympia Snowe.
But, at least for now, Republicans seem united in blocking the initial vote.
"I don’t believe we’ll have a deal today," Senator Richard Shelby, the top Republican negotiator, said this morning on ABC’s “Good Morning America." Still, he added, "I believe we’re going to get a good bill."
Shelby has been negotiating with Senator Christopher Dodd, the Connecticut Democrat and chairman of the Senate Banking Committee, for several weeks. The two are planning to meet again this afternoon, hours before the vote.
Democrats feel they will have a victory either way: by winning the vote, or by being able to portray Republicans as protectors of Wall Street greed.
The 5 p.m. vote is mostly a procedural one that would allow debate to begin. But it will also test overall support for the bill, and could set the stage for the next week or two of debate. The 59 Democrats, who are all expected to vote in favor, need at least one Republican to join them if they want to prevent a filibuster.
If the vote fails, Republicans would have more leverage to negotiate changes before Democrats could bring it up for another vote later in the week.
Brown, the newly-elected Massachusetts Republican, has said he would join a Republican filibuster unless changes are made to the bill.
"I haven’t been briefed by the teams," he said in a brief interview on Thursday. "But I’m encouraging everybody to stay at the table and try to come up with a real bill that we can all be proud of."
Brown has largely criticized the bill as one that would hurt some Massachusetts companies because they would be caught up in a “web” of new investing rules that would hamper their ability to do business. Several large insurance firms, including Massachusetts Mutual and Liberty Mutual, have been lobbying against the current bill for those reasons.
The legislation is designed to crack down on practices that lead to the economic collapse in 2008, when the federal government had to intervene and prop up failing financial institutions deemed "too big to fail."
It would establish a system for shutting down failing interconnected firms without disrupting the entire financial system. It would also establish a council that would be charged with monitoring the system for potential problems, and would establish a consumer protection agency to help prevent people from getting into trouble with mortgages and credit cards they can't afford.
The bill also aims to crack-down on a complex financial tool called derivatives. The trading of derivatives would have to be done on an open market, and some firms would be unable to continue their current operations.
At least two Republican senators – Snowe, and Charles Grassley of Iowa – support the current approach on derivatives.
One of the main targets of Republican opposition has been a $50 billion fund that would be used to wind down failing institutions. The fund would be comprised of fees from large financial institutions, but Republican opponents have said that it could still allow for bailouts of large firms.
But not all Republicans are united on that issue. Senator Bob Corker, a Tennessee Republican and a key negotiator, last week defended the fund and criticized his own party and said their lines of attack "miss the point and I think take us off on a bunch of rabbit trails."
Republicans also oppose the so-called Volcker rule, named for former Federal Reserve chairman Paul Volcker. The rule would put new investment restrictions on large institutions, including preventing them from owning private equity funds. That provision is opposed by Massachusetts life insurance companies, because it would force them to stop investing in the Massachusetts Capital Resource Company, a consortium formed in 1977 that has invested about $575 million in 300 businesses.
The House has already passed its bill, which was drafted by Representative Barney Frank of Newton, who is chairman of the Financial Services Committee.
Matt Viser can be reached at firstname.lastname@example.org.
About Political Intelligence
Glen Johnson is Politics Editor at boston.com and lead blogger for "Political Intelligence." He moved to Massachusetts in the fourth grade, and has covered local, state, and national politics for over 25 years. E-mail him at email@example.com. Follow him on Twitter @globeglen.