Obama makes case for financial bill

Republican leaders are struggling to maintain a unified opposition to the White House’s financial-regulation revamp, which is emerging as the next big test of the GOP’s ability to counter the administration’s agenda.

Democrats, assuming they can maintain discipline among the 59 Senate votes they control, need only one Republican to surmount any filibuster. At least one, Maine Sen. Susan Collins, is resisting pressure to sign a letter committing all 41 GOP senators to back such a delaying move, according to a person familiar with the deliberations. Such a strategy would effectively block action on the legislation and push the White House to bend to GOP demands.

The Obama administration is betting that widespread public resentment of Wall Street will make it harder for Republicans to oppose the bill. Administration officials are trying to splinter Republican opposition by courting individual senators, including Scott Brown of Massachusetts, Olympia Snowe of Maine and Christopher “Kit” Bond of Missouri.

Senate Minority Leader Mitch McConnell of Kentucky and four other lawmakers met with President Barack Obama Wednesday about the proposal, and both sides staked out increasingly entrenched positions. After the meeting, Mr. McConnell told reporters the bill was “fatally flawed.” Mr. McConnell has painted the Democrats’ plan as one that would strangle credit markets and allow the government to fund future bank bailouts with taxpayer money.

Mr. Obama, putting the issue at the forefront of his agenda, said Wednesday the bill would end taxpayer bailouts of banks. White House aides also criticized Republicans for rushing to side with Wall Street against tighter reins on banking activities.

The measure would tighten consumer-protection rules, give the Federal Reserve more oversight of big banks and give the government power to break up failing companies.

Party leaders have negotiated for months, but so far no Republican has publicly shown willingness to support the bill. Senate Republicans met privately Wednesday evening to try to unify their base.

Texas Sen. John Cornyn said Republicans had to stick together because “that represents the best negotiating position we have. Otherwise there’s no incentive for the majority to talk to us.”

Ms. Collins, who was a financial regulator in Maine before arriving in the Senate, has declined in recent days to go along with a unified position, in part because she’d not seen details of the proposed letter. But the senator also has more fundamental concerns about standing in the way debate on the financial bill, the person familiar with the deliberations said.

A spokesman for Sen. Collins did not return calls for comment.

In an earlier interview, Ms. Collins of Maine said there were “provisions in the bill that I support,” such as consolidation of bank supervisors and a new council of regulators.

The White House is reaching out to Republicans it believes might be willing to buck their party, as it did during the health-care debate to little avail. White House officials believe the prospect of appearing to side with big banks could compel at least a few Republicans to sign onto the Democrats’ plan.

If Republicans oppose the bill, “they’ll face the wrath of the electorate in the process,” said Democratic Sen. Bob Menendez of New Jersey.

Treasury Secretary Timothy Geithner plans Thursday to meet with Mr. Brown. Democrats think Mr. Brown might be willing to support their legislation because the newly minted senator—he was sworn into office in February—has already broken with Republican leadership to support a jobs bill pushed by Democrats.

Mr. Brown told reporters he hadn’t made a decision whether to support the financial-overhaul bill. He chided the White House for using the debate as “political fodder,” but appeared to leave the door open to a deal, saying, “where there’s problems, we should fix them.”

Lawrence Summers, director of the White House’s National Economic Council, is expected to meet with soon with Ms. Snowe, who administration officials believe could ultimately support the measure. Ms. Snowe, who often was at the center of health-care negotiations in the Senate last year, co-signed a letter with several liberal Democrats in February calling for tougher curbs on trading in derivatives, the complex financial instruments that played a role in the financial markets’ meltdown.

Democrats moved earlier this week to tailor the derivatives portion of the legislation toward that position, but Ms. Snowe said Wednesday she still hadn’t made up her mind. “I have to look at everything and its totality at this point,” she said. “I have not made any decisions on financial regulatory reform.”

It remains unclear how much the White House is willing to offer Republicans for their support. Mr. Geithner said Wednesday that he was “open to their ideas,” but also made clear he was pushing for a vote quickly.

The House of Representatives passed its version of the financial-regulation bill in December, but no Republicans supported the bill and close to two dozen Democrats also opposed it.

Source: WSJ