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Financial Planning > Tax Planning > Tax Reform

Financial Reform Bill: Sen. Cantwell Switches to 'Yes' Vote

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Now that Senator Maria Cantwell (D-Washington) has said she will support the financial services reform bill, Democrats now only need to secure the support of two Republicans who have not committed to vote in favor of the bill in order to avoid procedural hurdles in the Senate, where a vote is expected on or after July 12.

Cantwell was opposed to the reform bill because she thought it didn’t go far enough to rein in derivatives, but has since been convinced by Gary Gensler, Chairman of the Commodity Futures Trading Commission (CFTC), that the bill provides the CFTC and SEC with sufficient measures to regulate derivatives.

Russ Feingold (D-Wisconsin) is still voting against the reform bill; It remains to be seen if the bill can win the support of Senators Scott Brown (R-Massachusetts) and Charles Grassley (R-Iowa), as well as Maine Republicans Susan Collins and Olympia Snowe.

“I will vote in support of the conference report because it makes great strides toward our ultimate goal: bringing all standard derivatives onto exchanges and clearinghouses, with aggregate position limits and strong anti-manipulation tools,” Cantwell said in a July 1 statement.

“Since even before the financial crisis of fall 2008 I have been fighting to bring the $600 trillion derivatives market out of the dark, unregulated betting hall where it has existed and into the bright light of transparency and regulation,” he added.

Cantwell continued, saying that this legislation “is not perfect, and I will continue to push for even bolder action–including a return to the Glass-Steagall separation of commercial and investment banking–to reign in Wall Street, put an end to the concept of ‘too-big-to-fail.’ But this bill makes significant strides toward preventing the kind of financial meltdown that we saw in the fall of 2008.”

Members of Congress are attending memorial services for the late Senator Robert Byrd (D-West Virginia) in Charleston, West Virginia, Friday, July 2. Byrd died early Monday, June 28.

The House of Representatives on Wednesday night, June 30, passed the financial services reform bill in a 237 to 192 vote, mostly along party lines. The Senate, however, has delayed its vote on the bill until Congress returns from recess on July 12.

After the House vote, Treasury Secretary Tim Geithner said in a statement that “this is a strong bill. It will provide essential protections for consumers and investors and help make sure the financial system meets the credit needs of Main Street America. With action by the Senate, we will be able to turn our attention to putting these protections in place.”

Senate Banking Committee Chairman Christopher Dodd (D-Connecticut) released a statement after the House vote in which he said he congratulated “the House on being the first to pass the Wall Street Reform and Consumer Protection Act.” Dodd said he is “anxious for the Senate to join them soon.”

Senate Democrats need at least four Republicans to vote for the bill because the death of Senator Robert Byrd (D-West Virginia) early June 28 left them with only 56 of the 60 votes needed to pass the bill.

Democratic negotiators removed late on June 29 a $19 billion tax on big banks designed to help fund the bill that was inserted into the bill during the conference.

Senator Scott Brown (R-Massachusetts) said he would vote against the reform bill if the tax remained in the bill. Lawmakers revised the bill and instead opted to fund the Wall Street reform bill by ending the Troubled Asset Relief Program (TARP) and by charging an extra premium to large banks by the Federal Deposit Insurance Corp. (FDIC).

It remains to be seen if the revised bill will win the votes of Brown and Maine Republicans Susan Collins and Olympia Snowe.


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