Progressives Buck Democratic Leaders On Wall Street Reform

Lauren Victoria Burke

The Wall Street reform bill has no doubt drifted leftward in the past several days. But that doesn’t mean all Senate liberals are happy. Several progressive and populist senators think the bill’s broad approach does not call for the fundamental reforms Wall Street needs. They’ve been pushing far-reaching amendments that would shrink major financial companies, and further limit high-risk trading and though their efforts likely do not have enough votes to pass, they at the very least want to get a fair hearing. And they’re banding together to make sure they get one.

“[Democrats] will insist on having the opportunity to have the key amendments offered and debated and voted on,” Sen. Byron Dorgan (D-ND) told me this morning.Democrats have (with a few exceptions) held together fairly harmoniously throughout the debate over Wall Street reform. But in a rare moment of dissension between Dem senators on the floor this morning, Banking Committee Chairman Chris Dodd swatted down Dorgan’s move to bring up an amendment that would ban a major financial product. The skirmish is emblematic of a small, but growing fissure between Democratic leaders, and a number of progressives in their caucus, who think the bill should be dramatically more restrictive on Wall Street.

Dorgan wants to put an end to naked credit default swaps, by which investors speculate on the success or failure of separate financial entities in which they have no stake. Why did Dodd object? Republicans and Democrats want to offer dozens of amendments and, according to Dodd, if he lets every amendment get a hearing, the entire reform bill will be at risk.

“If we start this process, which i’m fearful will be the case, we run the risk of losing this bill,” Dodd said on the floor. “No amendment, in my view, is more important than the underlying bill.”

Dorgan, though, says he’s been all but blocked out of the process, and that other senators have been given priority. He predicts he’ll ultimately prevail.

How? Progressive Democrats could use their leverage. They could make their support for ending debate on the bill contingent on getting votes on their amendments. That’s what Sen. Maria Cantwell (D-WA) said last week, when leadership tried to scotch a number of amendments aimed at shrinking, or breaking up, too big to fail firms. Dorgan says he’ll make issue of this at a caucus meeting this afternoon. And he hinted on the floor today that he won’t relent until he’s given a fair shake.

“I will continue to come and ask consent to be able to offer this amendment,” Dorgan said. “[A]s Governor Schwarzenegger said in a previous life, I’ll be back, and soon.”

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