* Senator Byrd's death means Democrats need one more vote
* Another Democrat likely to fill Byrd's Senate seat
* Final passage could slip to mid-July
(Adds cost estimate of bill)
By Andy Sullivan and Kevin Drawbaugh
WASHINGTON, June 28 The death of U.S. Senator
Robert Byrd on Monday deprived his fellow Democrats of a
crucial vote as they seek to pass a sweeping overhaul of U.S.
financial regulations and could delay the process, but the
measure is still expected to become law eventually.
Widespread public support for the Wall Street crackdown
means Democratic backers are likely to find the needed votes
either from within their ranks or from Republicans wary of
siding with the financial industry, analysts said.
Byrd's replacement is also likely to be a Democrat, though
that person may not be in a position to cast a vote for several
"Passage of Dodd-Frank is not a question of if, but a
question of when," wrote Concept Capital analysts Teddy Downey
and Chris Krueger in a research note, referring to the name
conferred to the bill last week after negotiators hammered out
a final version from competing measures passed by the House of
Representatives and Senate.
The overhaul is the most extensive rewrite of the rules
regulating Wall Street since the 1930s. It boosts consumer
protection and saddles the financial industry with greater
oversight and tighter regulation.
Democrats had hoped to give the bill final approval in the
House and the Senate this week before sending it to President
Barack Obama to sign into law by July 4.
But that timetable has been thrown into doubt with the
death of Byrd at 92, as the bill's backers are one vote short
of the 60 they had been counting on to clear a Republican
procedural hurdle in the Senate.
The House is expected to pass the measure on Tuesday or
Wednesday, aides said. But a Senate aide indicated that action
in the upper chamber could slip until the week of July 12,
after Congress takes a week-long break following the July 4th
Independence Day holiday.
"It is still possible that we could take it up this week,"
said Regan Lachapelle, a spokeswoman for Senate Majority Leader
Byrd's death and a threat from Republican Senator Scott
Brown to withdraw his support for the bill have forced
Democrats back into vote-counting and arm-twisting.
U.S. Treasury Secretary Timothy Geithner and White House
economic adviser Larry Summers will reach out to lawmakers this
week to get the bill to Obama's desk, a White House official
Including the two independents who usually vote with them,
Democrats now control 58 seats in the 100-seat Senate. In May,
Democrats had to scramble to muster the bare minimum 60 votes
needed to end debate and move toward final approval.
Brown won significant concessions in the bill and voted for
the Senate's version last month. But he has threatened to
withdraw his support due to a $19 billion industry tax that was
inserted into the final version in an all-night negotiating
session last week.
A Brown aide said lawmakers could find $19 billion worth of
cuts elsewhere in the budget rather than raising taxes.
Senator Olympia Snowe, another moderate Republican who had
previously supported the bill, also said she was concerned by
the new tax.
"I'm still looking at the legislation ... I would have
preferred the bank tax not to be included," she told Reuters on
The tax would help to offset the cost of breaking up
troubled financial firms and enforcing consumer protections.
Democrats originally had envisioned taxing large financial
firms to set up a $150 billion fund to cover the cost of
seizing companies whose stability threatens the economy, but
dropped that idea over sustained Republican objections.
Without the fund, that authority would cost the government
$20.3 billion over 10 years, the nonpartisan Congressional
Budget Office said in an estimate released late on Monday,
while the new consumer-protection bureau would cost $4.6
billion. Taken as a whole, the bill would have no effect on the
budget deficit over 10 years, CBO said.
Two Democratic senators, Russ Feingold and Maria Cantwell,
who voted against the Senate bill last month on grounds it was
not tough enough, are likely to face additional pressure to
support the legislation now.
Feingold said he would not change his position.
"My test for the financial regulatory reform bill is
whether it will prevent another crisis," he said in an e-mail.
The final version "fails that test and for that reason I will
not vote to advance it."
Cantwell is still studying the 2,000-page bill and has not
yet decided whether to support it, a spokesman said.
Another possible target is Republican Senator Charles
Grassley, who has backed the bill at various stages in its
journey through Congress. He has not made up his mind, an aide
said on Saturday.
DELAY FOR A SUCCESSOR?
Democrats could also opt to wait for West Virginia Governor
Joe Manchin, a Democrat, to appoint Byrd's interim successor.
Manchin is expected to appoint a Democrat who would hold the
seat until an election is held in November 2012, but that
process could take several weeks.
There was no formal word from the governor's office on who
Manchin may pick or when the temporary appointment may be made.
Manchin refused to discuss it on Monday, saying he was focused
on the death of Byrd, an aide said.
"I think (Byrd's death) probably will hold up the vote, and
complicates it somewhat, but I'm not sure it'll be that
impactful on the final legislation," said Michael Nix, a
principal at Greenwood Capital Associates.
Investors have largely accepted that the bill will become
law, he said. The KBW Banks index .BKX closed down 0.37
percent, slightly lower than the markets as a whole.
Byrd's death brought to mind the policy fallout from the
2009 death of another Senate icon, Edward Kennedy.
Kennedy's death threw a wrench into Obama's efforts to
overhaul healthcare -- especially after Brown replaced him in a
Even then, Democrats eventually managed to pass the
healthcare bill, which enjoyed considerably less public support
than the Wall Street crackdown.