By: Jordan Young
Welcome to our third and final piece in the Financial Reform 101 series. If you've actually taken the time to read the first two pieces (on the crisis and the Senate bills), you probably deserve some sort of medal as they were quite long. As a reward, I'm going to try to explain the process for passing financial regulatory reform legislation through Congress as concisely as possible.
To recap our progress so far, let's take a look at the work already completed in the House and in committee.
Rep. Barney Frank (D-MA), chair of the House Committee on Financial Services passed a piece of legislation fairly similar to the Dodd bill on a party-line vote in December of last year. And as the political world focused its attention on the Senate's health care reform floor debate, the full House passed the Frank bill on December 11.
In the Senate, the two committees with jurisdiction, Chris Dodd's Banking Committee and Blanche Lincoln's Agriculture Committee, both passed their legislation earlier this year. Banking worked on their language for months, with Dodd splitting the committee members into bipartisan teams of two to tackle sections of the bill. At the end of the day, none of the committee's Republicans were willing to support the bill, but Ranking Member Richard Shelby (R-AL) and Senator Bob Corker (R-TN) emerged as point people who expressed willingness to continue to work toward a bipartisan deal. On March 22, Banking passed the Dodd bill without any Republican amendments being offered. Ag passed its derivatives regulations language just last week with a single Republican supporter, Senator Chuck Grassley of Iowa.
As of last night, the standoff between the parties has finally broken and the Senate unanimously agreed to begin debating the Dodd bill.
So where do we go from here?
From this point, debate is likely to last about two weeks, followed by a final vote. While a full floor schedule hasn't been circulated yet, we do know that Majority Leader Harry Reid (D-NV) intends to keep the amendment process open, which means anyone can offer amendments to the legislation. Unlike health care reform, where Republicans used the floor process largely to offer unrealistic and 'gotcha' amendments, financial regulatory reform seems far more likely to attract numerous GOP votes.
Many of the Senators likely to support the final legislation, on both sides of the aisle, are legitimately desirous of an opportunity to amend the bill. In fact, Majority Whip Dick Durbin (D-IL) and six of the chamber's more liberal members have already expressed an intention to mount an aggressive offense to try to strengthen some of the bill's key provisions. Last night on MSNBC's The Rachel Maddow Show, Senator Barbara Boxer (D-CA) committed to offering amendments addressing future bailouts and ratings agencies and revealed that Senators Bernie Sanders (I-VT) and Jeff Merkley (D-OR) will offer amendments to audit the Federal Reserve and fully implement the Volcker Rule, respectively.
Once the Senate has finished debate, the bill will likely have to overcome another filibuster and will then see final passage. Once this has been accomplished, the House and Senate will convene a Conference Committee to iron out the differences between their respective bills. Rep. Frank had promised this exercise would be "spirited" at a time when many were unsure how strong the Senate's language would be. It now seems clearer that Senate Democrats are willing to play hardball to keep their bill strong, so Conference may be a smoother process than was originally assumed.
The final combined legislation, known as the conference report, will be sent back to both houses for final passage and then submitted to President Obama for signature. At this point, it is entirely possible, though admittedly optimistic, that financial regulatory reform may be the law of the land sometime near the end of May.
There, that was relatively short and painless, right?