Scott Brown (R-MA) to vote yes on Wall Street Reform: passage all but assured

Scott Brown (R-MA) has announced today he will be supporting the financial reform bill being debated in the Senate. He came to this decision after having extracted concessions in conference committee, notably the removal of the $19 billion bank tax which would have affected many Boston banks. His vote will be joined by Senate moderates Olympia Snowe (R-ME) and Susan Collins (R-ME). The vote of conservative Iowa Senator Chuck Grassley will not be known until the cloture vote, though it is likely to be no. This bill has not been followed by the progressive community with the same intensity as the health care bill but it is a very big deal. It begins to reverse the trend of financial deregulation begun under President Reagan in a powerful way. It does not solve some of the problems which led to the financial meltdown, but does rein in some of the worst abuses by banks. It also shows there is still potential for negotiation with moderate Republicans, such as Scott Brown. This will likely hurt his standing among conservative Republicans, however.

Derivatives trading reform transformed into a uniquely populist issue

It was three weeks ago when Blanche Lincoln (D-AR), the moderate Democratic chairman of the Senate Agriculture Committee, released her proposal to regulate derivative trading. Regulating derivatives is a mild way of describing this proposal. It effectively bans banks from participating in derivative trading altogether. Judd Gregg has described it as left as you can go on the issue of derivatives. Coming from a Southern Democrat, such a liberal economic proposal is extremely unusual. It is less unusual when you consider she is facing a runoff against the liberal Bill Halter.

Ok, so Blanche Lincoln is facing pressure when it comes to derivatives. So what then, is Chuck Grassley (R-IA) doing in voting for it? Chuck Grassley is an extremely conservative senator who did not even support the motion to begin debate on the financial reform bill. He has seen his approval ratings crash as a result of health care negotiations with Max Baucus (D-MT). On a similar note, Scott Brown ended up voting for a strengthened bill, even though he did not support the weakened one. Even in the House, moderates such as Mike Castle (R-DE) who did not vote for the weaker financial reform bill, are publicly considering supporting the more liberal version.

The reason so many Republicans are signing on to the derivative trading ban and to the larger financial reform bill is that they are scared. They know they have been trashing a popular president's agenda for almost two years now and it will eventually catch up with them. Something as shady as derivative trading is a good area to side with the Democrats on, as it is a uniquely non-partisan issue. Expect to see many GOP backers when the bill comes up for final consideration. This is only if Dodd does not go through with plans to scrap the ban.

Wall Street Reform fails to garner 60 votes needed to end debate

In what is possibly a sign of trouble to come, Senate Democrats have failed to achieve the 60 votes needed to move their "Wall Street reform" bill. The opposition comes from both the left and right, though it is widely expected the measure will gain the 60 votes needed to move it to conference once the differences have been settled between various senators and the leadership. Those voting "no" on the cloture motion but expected to votes "yes" eventually include Russ Feingold (D-WI), Maria Candwell (D-WA), and Scott Brown (R-MA). Chuck Grassley (R-IA) and George Voinovich (R-OH) are both considered gettable votes based on previous statements they have made regarding the bill. Additionally, Olympia Snowe (R-ME) and Susan Collins (R-ME) both voted to end debate.

What Christopher Dodd (D-CT) said earlier this month, that financial reform has been a uniquely non-partisan issue, seems likely to be true. The Senate Republicans who are considered in play are all considered fairly moderate, and most have a history of supporting the Obama Administration on key issues. The bipartisan support for this bill stands in contrast with statements John McCain and Lindsay Graham made earlier this year, which indicated bipartisanship would be dead for the remainder of the 111th congress because of the health care debate. Clearly it is not. These moderate Republicans in the senate may be what is left of the once noble GOP who knew how to compromise and did what is right for the country.

In contrast with these moderate GOP voices, Mitch McConnell blasted the "government takeover" of the financial industry. We have heard this argument repeated for every single controversial piece of legislation which has come up these last two years. It is one thing to be prudent about spending, it is another to not want anything done at all. The fact of the matter is, Mitch, you were elected to the United States government. Any decision you make is a government intervention. If you want so little government intervention, go work for a multinational corporation.

Update: The Senate has now passed the measure on a vote of 69-39. Chuck Grassley, Arlen Specter and Scott Brown joined the Senators previously supporting the measure. The measure now moves to conference committee with the House where the differences will be reconciled in the coming weeks.