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Wall Street's Big Day: House And Senate Weigh Gutting Key Financial Reform Proposals

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Reformers are excited about that plan, but it's not by any means etched in stone. There remains tremendous resistance to the measure among House Democrats, particularly members of the New Democrat Coalition, and of the New York delegation, many of whom are making a lot of noise in opposition. But the House bill didn't have a corresponding section in its bill, and as such House negotiators have their hands tied.

An open question, then, is: What happens if this creates a vote count problem for Nancy Pelosi? The arcane rules of the conference committee allow negotiators on the Senate side to make a counteroffer to the House, and in that counteroffer they could gut, or eliminate, the Lincoln provision, but Lincoln is reportedly refusing to budge, threatening to tie the bill up in the conference committee indefinitely. House and Senate conferees could ping pong counteroffers back and forth over and over, but eventually somebody will have to blink.

And that's just derivatives.

As I reported last night, House and Senate staff are finalizing an offer based on a proposal originally authored by Sens. Carl Levin (D-MI) and Jeff Merkley (D-OR), to limit speculation at big banks and other financial firms--a variant of the Volcker rule. And it looks like they'll be including a loophole demanded by Sen. Scott Brown (R-MA), which could--depending on how it's written--undermine the intent of the rule itself.

This is deeply complicated stuff, but the stakes are tremendous. Check back for updates throughout the day.

About The Author

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Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight and the debt limit fight. He can be reached at brian@talkingpointsmemo.com