Financial reform bill heads to full Senate

WASHINGTON — Democrats sent a massive Wall Street regulation bill to the full Senate on a party line vote Monday after a temporary retreat by Republicans that still left the bill's chances for bipartisan passage in doubt.

In a surprise move, the Senate Banking Committee met briefly to approve the bill 13-10, but not before Republicans jettisoned more than 300 amendments they had planned that could have put their imprint on the measure. Senators had been expecting a long week of votes and debate, only to find themselves voting as they were still easing into their seats.

Despite a conciliatory tone struck by the committee's Democratic and Republican leaders, the development did nothing to mend the partisan divide over the legislation and adds even more uncertainty to Congress' ability to pass a sweeping rewrite of financial regulations this year.

The Senate would not take up the bill until April at the earliest.

President Barack Obama applauded the committee's vote, declaring: "We are now one step closer to passing real financial reform." But Obama said he would seek to strengthen the bill, a stance that would certainly complicate efforts at bipartisanship.

In their opening remarks before the committee vote Monday, committee chairman Christopher Dodd, D-Conn., and the committee's top Republican, Sen. Richard Shelby of Alabama, chose to sound optimistic about the bill's prospects.

"We will have reform this year," Dodd said.

"I just don't believe we're quite there yet," Shelby cautioned.

Dodd unveiled his bill last week, 18 months after Wall Street's spectacular failures helped plunge the nation into the worst recession since the Great Depression. The legislation would give the government unprecedented powers to split up firms considered a threat to the economy, put together a council of regulators to watch for risks in the financial system and create an independent consumer watchdog.

Shelby said seeking changes in committee would have been pointless. He said he hoped he and Dodd would find agreement before the bill reaches the Senate floor.

Democrats and Republicans are mostly split over the need for an independent consumer entity. But other issues also divide the parties, including how to regulate complex trading instruments and what firms should be exempt from new rules.