After financial regulatory reform won 60 votes
in the Senate, but then
lost the requisite super-majority
as the bill went to conference,
Democrats may now have secured the votes once again. At the urging of
Republican Senator Scott Brown, they dropped a $19
billion tax on hedge funds and big banks, which was meant to pay
for the bill's provisions. Now the legislation calls for extra stimulus
funds to be used. How big a deal was this tax? And does this mean that
financial regulatory has returned from doomed to viable?
the Pain Around' The Washington Independent's Annie Lowrey writes, "Rather
than charging the hedge funds and big banks considered most responsible
for the financial crisis a reasonable fee for implementation, the
conference committee will settle for ending a government stability
program and spreading the pain around to all federally insured banks —
including small community-focused banks — to satisfy the demands of one
Republican. So it goes in Washington."
- Republicans Just Made
the Deficit Worse The Atlantic's Daniel Indiviglio calls
this "a very strange choice" for Republicans. Now, "taxpayers will pay
for the regulation, since any TARP money unspent was supposed to go
towards paying down the deficit. Those billions of dollars that would
have been wiped out of the deficit will now have to come from the
American people. Any money from higher bank assessments will ultimately
cost consumers too, since banks will just pass on the expense to them
through higher fees."
- Scott Brown's Weird Logic The
Washington Post's Ezra Klein sighs, "So rather
than a bank tax, which Scott Brown worried would take capital out of the
banking system, we're going to drop part of the TARP program that was
... putting capital into the banking system. And rather than making big
banks and big hedge funds foot the bill, FDIC fees will be hiked so that
small banks have to pay in but hedge funds don't."
Still Holding Out, But Collins 'Inclined' to Vote Yes Talking
Points Memo's Brian Beutler reports, "Scott Brown's playing
cute, but his fellow moderate Republican Susan Collins says she's
basically ready to vote for Wall Street reform. ... The final Senate
vote on financial reform won't occur until after next week's August
recess. Assuming Collins' vote is secure, Democrats will need anywhere
between two and four Republicans to support."
- Obama Can Now
Secure FinReg Votes The Atlantic's Marc Ambinder explains,
"Sen. Scott Brown now has no excuse to oppose the bill, and the two
senators from Maine (Collins and Snowe) should be back in the fold. That
leaves the Democrats one vote short of 60 for cloture. Which means that
President Obama might be giving Sen. Russ Feingold the Dennis Kucinich
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