Financial Overhaul Pact Is 'Conceptually Very Close'

A top Republican on the Senate banking panel said Sunday that a deal with Democrats appeared closer on a bill that would tighten regulation of the nation's financial system. But he also said his party was prepared to block debate until the key planks of the legislation were in place. Democrats set a first procedural vote for this afternoon, apparently calculating that some Republicans would not want to go on record as opposing the measure when much of the country is deeply disillusioned with the banks and their executives.

A top Republican on the Senate banking panel said Sunday that a deal with Democrats appeared closer on a bill that would tighten regulation of the nation's financial system. But he also said his party was prepared to block debate until the key planks of the legislation were in place.

Democrats set a first procedural vote for this afternoon, apparently calculating that some Republicans would not want to go on record as opposing the measure when much of the country is deeply disillusioned with the banks and their executives.

"We're getting there," Sen. Richard Shelby, R-Ala., said on the NBC television program "Meet the Press." "We are working closely together. I think we're conceptually very, very close."

Shelby, who said it might take several more days before an agreement could be reached, did not offer a specific explanation for wanting to delay debate, but the reason appeared to be largely tactical. The Republicans may want to slow the Democrats' momentum and burn time in a high-stakes election year.

They may also want to win some more concessions. Shelby said one flaw in the current language was that the bill allowed "too much flexibility" for regulators such as the Federal Reserve and the Federal Deposit Insurance Corporation in deciding when to step in if a bank makes overly risky investments.

Still, his conciliatory tone, while sitting alongside Sen. Christopher Dodd, D-Conn., the committee's ranking Democrat and sponsor of the bill, contrasted sharply with the combative posture taken in recent weeks by the party's Senate leader, Mitch McConnell, R-Ky., who has repeatedly warned that the bill would set the stage for "endless taxpayer-financed bailouts."

The unity of the Republicans, who control 41 votes and can block final passage, began to crumble last week in the face of a popular backlash to the bank profits and executive bonuses reported while millions of Americans were losing their homes or jobs.

Chinks began appearing as Sen. Charles E. Grassley, R-Iowa, voted with Democrats on the Senate Agriculture Committee in favor of imposing tougher regulations on derivatives, the complex securities that many analysts blamed for setting off the financial crisis two years ago. Also last week, Sen. Bob Corker, another banking committee Republican, took issue with McConnell's description of a $50 billion fund in the bill as encouraging bailouts, saying that it was designed only to arrange "orderly liquidation" of failing banks.

Even McConnell sounded like less of a doomsayer about the bill. Appearing on "Fox News Sunday," he said, "We don't have a bipartisan compromise yet, but I think there's a good chance we're going to get it."

Corker, appearing Sunday on the ABC program "This Week," said he was not yet ready to open debate but suggested that a compromise was possible. He emphasized the need to reach a bipartisan agreement before the bill gets to the floor, rather than promptly opening debate as the Democrats want to do.

Some Democrats held out hope of a last-minute deal today that would allow Republicans to join them on the first procedural vote. All 41 Republicans had signed a letter saying they would oppose the bill in its current form, but Republican leaders have been concerned about how well they can hold their ranks together.

source : stltoday