But it met swift opposition from progressives, who are demanding stronger regulation; certain Wall Street officials, who hate the Lincoln plan itself, but prefer it for its predictability; and Lincoln herself, who continues to face a primary challenge, and has been guarding her left flank by running on her anti-Wall Street proposal.
It also faced a raft of negative press. But as soon as the trial balloon took flight, Lincoln's opponent's pounced, characterizing the populist proposal as an election-time ruse meant to dupe voters, and which was always going to be cast aside after primary season. And maybe it would have, if Lincoln's election Tuesday night hadn't ended in a draw, forcing a runoff between her and Arkansas Lieutenant Governor Bill Halter.
But just because Dodd's plan is gone, it may not be forgotten. Though Dodd's decision to drop it likely means financial regulatory reform will pass the Senate leaving Lincoln's plan untouched, Democratic leaders will get one more bite at the apple when the House and Senate meet to iron out the differences between their two bills. The House's derivatives title is significantly weaker than the Senate's and, with the White House's backing, party principals could meet in the middle, scrapping or punting on the spin-off provision as part of a convenient compromise.
But that would still buy Lincoln time (her runoff is on June 8) and would force top Democrats to explain why they scrapped the tough-on-Wall-Street plan behind closed doors.