GOP’s reform approach softens

WASHINGTON – Less than a week after Senate Republicans unleashed a blistering attack on pending legislation to rein in Wall Street, they began striking a more conciliatory tone Tuesday that improves prospects for the bill that is the next major item on President Barack Obama’s domestic agenda.

Many Republicans appear to be shying away from another scorched-earth battle like the one they waged over health care, a sign that they may have reached their limit for being portrayed as the “party of no,” particularly on the issue of financial reform.

Last week, Senate GOP leader Mitch McConnell, R-Ky., charged that the Democratic legislation left the door open to big government bailouts. He produced a letter opposing it signed by all 41 Republican senators – the number of votes needed to sustain a filibuster.

But now Republicans seem intent on making it clear that they want to change the financial overhaul bill, not kill it.

“This one is a little bit different,” said Sen. John McCain, R-Ariz., leader of the opposition to the health care and economic stimulus bills. “We want to keep 41 votes together to have a negotiating position; on health care, we didn’t like any of it.”

Even McConnell softened his tone Tuesday, saying he was “heartened to hear that bipartisan talks have resumed” – even though Democrats say they were never suspended.

The Senate bill, approved by the banking committee on a party-line vote in March, aims to prevent economic crises by tightening government oversight of financial companies, creating an agency to protect consumers in the financial marketplace and granting the government new powers to seize and dismantle huge financial companies on the brink of failure if their collapse threatens the economy.

The bill includes a $50 billion fund, financed by the financial services industry, to help the government cover the costs of such a forced shutdown.

The last – and among the most controversial – elements of the legislation will be put in place today, when the Senate Agriculture Committee is expected to approve strict rules for the unregulated market for derivatives. Those complex instruments, which among other things enable vast sums to be bet that other securities will lose value, led to some of the key failures and bailouts of the crisis and are at the heart of the government’s recently filed fraud case against Goldman Sachs.