TPM News

There's now officially a plan to scale back Blanche Lincoln's far-reaching proposal to regulate derivatives, and it comes from a leading Democrat.

At issue remains Lincon's plan to force financial companies to spin off their derivatives trading desks into distinct entities. Today, minutes before the noon filing deadline, Senate Banking Committee Chairman Chris Dodd introduced legislation to delay the spin-off provision for two years, pending review by federal regulators, and likely scotching it altogether.

Already, progressive and conservative senators are rebelling against the Dodd plan--though it's unclear if or when the plan will get a vote. And, as reported here last week, the timing spares Lincoln, who's facing a primary election tonight, the political embarrassment that would have accompanied gutting the most controversial and populist element of her plan. In fact, the plan itself could give Lincoln cover to argue that her proposal has been preserved. Though in a statement issued today, Lincoln reiterated her support for her amendment and vowed to fight to preserve it.

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Sen. Mitch McConnell (R-KY) is ready to get behind Rand Paul.

McConnell endorsed Kentucky Secretary of State Trey Grayson in the state's Republican Senate primary -- the race in which Tea Party favorite Rand Paul just walloped McConnell's hand-picked establishment candidate.

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Trey Grayson, the Kentucky Secretary of State, has officially conceded the Republican primary race for Senator, CNN reports.

"We must unite behind Dr. Paul," Grayson said, adding, "We have more things that unite us."

Grayson was the establishment Republican in the race -- winning endorsements from Senate Minority Leader Mitch McConnell's (R-KY) and the Chamber of Commerce -- while Rand Paul has been the tea party favorite. Polls in recent weeks showed Paul taking a commanding lead of the race.

As if it wasn't bad enough for Trey Grayson, the establishment candidate, to apparently lose the Republican primary in the Kentucky Senate race to conservative Rand Paul -- he even lost his home county. In a landslide.

Boone County, where Grayson lives with his family, went to Paul 67%, with all precincts reporting. Grayson only got 31% of the vote.

Overall, with 32% of precincts reporting, Paul has 59% of the votes to Grayson's 37%.

The Senate just voted 56-38 to table Sen. Byron Dorgan's amendment to the Wall Street reform bill that would have banned trading in naked credit default swaps, essentially eliminating a huge gambling market, wherein speculators bet on the success or failure of entities in which they have no financial interest.

That may complicate matters for Democratic leaders, who quite possibly just lost Dorgan's vote.

"I'm not very interested in moving a bill that doesn't address the central issue that I want to address," Dorgan told me a few minutes before his amendment was tabled. "But we'll see. We'll work tonight and see what happens."

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Updated at 11:07 ET

The tea party movement got its best chance at winning a seat in the U.S. Senate tonight when Kentucky voters chose Rand Paul as the the GOP nominee. As expected, Paul has won decisively, dealing a blow to Senate Minority Leader Mitch McConnell and the GOP establishment, which spent much time and effort trying defeat Paul's insurgent campaign and secure the nomination for Kentucky Secretary of State Trey Grayson.

Rand currently leads Grayson by 59% to 35% with 99 percent of the precincts reporting.

Paul faces a general election campaign that will put the purest form of the tea party message on the Senate ballot so far this year. Democrats are enjoying the opportunity to mock McConnell for losing a battle with the ultra-right in his home state, but they haven't said much about how they plan to beat Paul themselves. Republicans, meanwhile, have said they're ready to stand behind Paul and say signs are good he'll hold the seat for the GOP.

The polls give Republicans reason to be confident -- Paul has performed well against Democrats in hypothetical matchups all year, and definitely starts the general election race as the frontrunner. In a matchup with Democratic nominee Jack Conway, the TPM Poll Average shows Paul ahead by a margin of 44.7-38.4.

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Pennsylvania Gov. Ed Rendell (D) told me a few hours before the polls close in the Democratic primary election that the weather isn't helping Sen. Arlen Specter as he fights to keep his seat.

"The weather is a blow to him," Rendell told me in an interview. "Senator Specter does better the more Democrats come out and vote and the rain all over the state today is not good for him." Rendell is backing Specter, who became a Democrat last spring with a promise from the White House to help him win reelection. Earlier today, Rendell said Specter would be fine since the campaign was handing out personalized ponchos to voters.

Specter said on MSNBC tonight that he needs his voters to get to the polls before they close at 8 p.m., urging each of his constituencies to turn out. "If I get out my vote, Chris, I win," Specter told Chris Matthews.

Additional reporting by Lucy Madison

The two candidates vying for the late John Murtha's set have been battling in a race that's been neck and neck for the last two months. So it's no surprise this race is going to depend on voter turnout -- which is lower today because of the rain -- and where the parties can get their supporters out.

Terry Madonna, the well-known political analyst at Franklin & Marshall College told us that for Critz to win, he will need a big margin in the Democratic strongholds of Cambria County, particularly in the Johnstown area, and in Westmoreland county, particular in the New Kensington area.

At the center of the latest showdown over financial reform legislation is a proposal to strengthen the Volcker rule, which would limit on risky trading on Wall Street. The amendment, which was scheduled for a vote by bipartisan agreement, is now being objected to by GOP leadership. But Progressive Dems say without a vote on their amendment, they may not allow the bill to proceed.

For his part, Sen. Chris Dodd (D-CT) supports the measure, but is not inclined to put it in his manager's amendment in order to make sure it gets a vote.

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