WASHINGTON – Ending three straight days of solid opposition, Senate Republicans agreed Wednesday to start a full-scale debate on the most far-reaching proposals to toughen regulation of financial institutions since the Great Depression.
The Republicans’ decision cleared the way for a pitched battle over important details of the Democrats’ proposed overhaul. It also marked a milestone that substantially increases the odds of approving the sweeping legislation in the weeks ahead.
Tightening the reins on Wall Street and the financial industry is the top legislative priority for President Barack Obama and congressional Democrats as they head toward November’s midterm elections. The House already has approved a version of the overhaul, and Obama has been campaigning vigorously for it.
Obama said he was “very pleased” the Senate legislation was moving forward.
“I want to work with anyone – Republican or Democrat – who wants to pursue these reforms in good faith,” he said during a visit to Quincy, Ill. “What I don’t want is a deal made that is written by the financial industry lobbyists. We’ve had enough of that.”
Two factors apparently led to breaking the legislative logjam: Republicans’ growing awareness of deep-seated public anger over Wall Street’s role in triggering the financial crisis, and a concession by key Democrats to change some controversial provisions.
Sensing that they were not likely to win a more comprehensive compromise, Republicans decided to stop negotiating and accept Democrats’ promises to address their most-touted criticism that the bill does not do enough to prevent future taxpayer bailouts.
Differences over other aspects of the bill remained so wide that Republicans agreed to take those battles to the full Senate and suspend the delaying tactic that made some of their members increasingly uncomfortable.
“It is my hope that the majority’s avowed interest in improving this legislation on the Senate floor is genuine and the partisan gamesmanship is over,” said Senate Republican leader Mitch McConnell, R-Ky., promising “many amendments.”
Democrats had accused Republicans of playing political games in blocking the start of debate on legislation crucial to preventing future financial crises and cheered the decision to move forward. Senate Majority Leader Harry Reid, D-Nev., said he hoped it “foreshadows more cooperation to come.”
Republicans relented in the standoff amid new signs of financial turmoil and reminders of old ones.
The financial markets have been reeling as the Greek government’s teetering finances threaten to destabilize the recovering world economy. And lawmakers and the public were riveted Tuesday by a hearing featuring executives of Goldman Sachs that highlighted some of the controversial practices on Wall Street that helped trigger the financial crisis.
The legislation would be the biggest expansion of financial regulations since the Great Depression.
It would create an agency to protect consumers in the financial marketplace; empanel a council of regulators to monitor the economy for signs of major risk; grant the government power to seize and dismantle teetering companies whose failure would pose a danger to the economy; and impose tough, new regulations on complex financial derivatives.