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Financial Planning > Tax Planning

H.R. 4173: Herding the Butterflies

By Allison Bell

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Backers of the H.R. 4173 financial services bill have been trying to round up the support they need to finish getting the measure through Congress.

House members voted 237-192 to approve the 2,323-page H.R. 4173 conference report, which reconciles the differences between the House and Senate versions of the Dodd-Frank Wall Street Reform and Consumer Protection Act bill.

Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee, was still trying to make sure he will have the 60 votes he needs to get the bill to come up for a vote on the Senate floor, by passing a “cloture motion” that would prevent bill opponents from engaging in a filibuster, or endless round of debate.

Dodd has praised the work House Financial Services Committee Chairman Barney Frank, D-Mass., did to get the conference report approved by the House.

Frank “is often called one of the smartest and hardest working representatives, and this bill required both of those attributes in spades,” Dodd says in a statement. “Today is a proud day for the House of Representatives, and I am anxious for the Senate to join them soon.”

SENATE MATH

Over in the Senate, Dodd has been struggling to close the deal.

He and Frank had hoped to have a bill ready for President Obama’s signature by the Fourth of July.

There are 57 Democrats, 2 independents and 41 Republicans in the Senate, and 2 Democrats — Sens. Russell Feingold, D-Wis., and Maria Cantwell, D-Wash., are loudly refusing to support the bill, arguing that it would do too little to prevent the kind of financial crisis that erupted in 2008 from recurring.

Sen. Susan Collins, R-Maine, says she is inclined to vote for the bill.

If Collins votes for the bill, and all Democrats and independents but Feingold and Cantwell vote for a cloture motion, Dodd will have to persuade at least 2 more Republicans to vote for the cloture motion.

Many are expecting that one of the Republican votes for cloture will come from Sen. Scott Brown, R-Mass., but Brown has refused to declare that he will vote for cloture.

Brown voted for the Senate version of the bill, then balked after the House and Senate conference committee responsible for drafting the H.R. 4173 conference report added a tax on banks, insurers and hedge funds with more than $50 billion in assets. The conference committee returned to work Tuesday to eliminate the tax, but Brown says he still wants to know more about the bill.

“I appreciate the conference committee revisiting the Wall Street reform bill and removing the $19 billion bank tax,” Brown says in a statement. “I remain committed to putting in place safeguards to prevent another financial meltdown, ensure that consumers are protected, and that this bill is paid for without new taxes.”

DEMOCRATS’ OBJECTIONS

On Tuesday, before the House voted on the conference report, Rep. Marcy Kaptur, D-Ohio, attacked H.R. 4173 on the House floor.

“The bill allows financial power to create wealth, the bankers’ awesome power, to be closely held in a few Wall Street and Charlotte- based megabanks,” Kaptur said, according to a version of her remarks printed in the Congressional Record. “The bill does not address the business model of credit rating agencies or how interwoven these nongovernmental agencies are with the institutions they rate. The bill does not require that all derivatives be traded through transparent exchanges. The bill does not adequately support both agencies dedicated to finding and fighting fraud in our financial system, and it really doesn’t do anything to address the continuing mortgage foreclosure hemorrhage, the crisis going on across our country.”

PRESIDENT OBAMA

The White House has been vague about President Obama’s views on the bank tax controversy.

A reporter at a White House press briefing today asked White House Press Secretary Robert Gibbs whether the White House supports removing the bank tax from H.R. 4173 to get 60 votes in the Senate.

“Obviously we are working with the conferees on removing any hurdles to passage of strong financial reform legislation, which we’re on the cusp of doing,” Gibbs said, according to a transcript provided by the White House. “So I would leave it at we’re working with them to ensure that we have 60 votes to move this legislation forward.”

In response to a similar question asked a few minutes later, Gibbs said, “Well, again, we’re working with them to look for any solution that might be needed.”

Photo Credit: National Oceanic and Atmospheric Administration/Department of Commerce

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