WASHINGTON – With no bipartisan deal on how to rein in Wall Street, Democrats stepped up their efforts Sunday to splinter unified Republican opposition to their sweeping regulatory overhaul.
In a move that could attract the support of at least two Republicans, Democratic Sen. Christopher Dodd, the chairman of the Senate Banking Committee, agreed to toughen his sweeping bill with rules on derivatives despite objections from the Obama administration, according to a Democratic official familiar with the negotiations.
The restrictions adopted by Dodd were written and approved by the Senate Agriculture Committee last week. They include a requirement that banks spin off their derivatives businesses into subsidiaries with separate sources of capital. Banks fiercely opposed the provision. The Obama administration has called for banks to end trading in speculative securities, but not to jettison operations that create derivatives markets for clients.
The Agriculture Committee language had the support of Republican Sens. Charles Grassley of Iowa and Olympia Snowe of Maine.
It was unclear Sunday night whether adding the derivatives restrictions would be enough for Snowe and Grassley to join Democrats and vote to permit the start of debate on the larger Wall Street bill.
Senate Republican Leader Mitch McConnell on Friday blocked Democrats’ efforts to bring the bill up for debate, setting up a vote today that will require 60 votes to move ahead. McConnell said Sunday that if Republicans did not strike a deal with Dodd on several aspects of the bill, all 41 Republican senators would vote to delay the start of debate.
Dodd and Sen. Richard Shelby, the top Republican on the banking committee, professed to be close to a deal Sunday during a joint appearance on NBC’s “Meet the Press.” But, as Shelby said, “inches sometimes are miles.”