WASHINGTON (Reuters) - As Round Two of the U.S. Congress’ punishing fight over financial regulation gets under way this month, one big question is whether Senate Banking Committee Chairman Christopher Dodd will lead with his left.
Down in the opinion polls ahead of November’s elections, Dodd has every reason to press a populist attack on big banks and financial interests as he seeks votes back home in Connecticut and support for reform on Capitol Hill.
As chairman of the Senate Banking Committee, he will be the leading player in early 2010 for Democrats and President Barack Obama on sweeping regulatory reforms they want to push through to prevent a repeat of 2008’s global financial crisis.
Dug in deeply in opposition are Republicans and the “fat cat bankers on Wall Street,” as Obama has labeled them. They suffered a defeat on December 11, when the House of Representatives approved a bill loaded with reforms that the bankers opposed.
Now they are throwing everything they’ve got into blocking reforms in the Senate, knowing it is an arena where millionaire lawmakers often look after their own, and where the slimmest of Democratic majorities means change comes very hard.
Dodd is a centrist. He has long-standing ties to Wall Street, having raised millions of dollars over the years from employees of firms such as Goldman Sachs and Citigroup, many of whom go home to Connecticut from New York City every night.
How he handles the situation will go a long way toward determining the outcome, as well as Dodd’s legacy, said policy analysts who expect the Senate debate to last well into 2010.
Dodd introduced an 1,139-page reform bill in November that was in some ways more ambitious than the 1,279-page bill pushed through the House last month by Representative Barney Frank, who had to make some key compromises to win passage.
The Dodd measure was slammed immediately by Senator Richard Shelby, the top Republican on the banking committee. Dodd responded by setting up four bipartisan teams of two committee members each to work on controversial issues.
The Senate will not fully reconvene until January 20. To get his legislation through, most analysts say, Dodd, too, will have to make compromises.
“The legislation must get more moderate in order to clear the Senate in 2010,” said Jaret Seiberg, financial services policy analyst at investment firm Concept Capital.
Reporting by Kevin Drawbaugh; Editing by Jan Paschal
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