Dems, GOP See Thaw in Financial Regulations Overhaul

Mitch McConnell
In this video framgrab image taken from AP Television News, Senate Minority leader Sen. Mitch McConnell, R-Ky. speaks on the floor of Senate, Tuesday evening July 17, 2007 in Washington.
AP Photo/AP Television News
Are Democrats and Republicans nearing a deal to overhaul the nation's financial regulationsy?

That didn't seem in the realm earlier ithis week with both sides appearing resigned to yet another stalemate - maybe not as bitter as the fight they waged over health care, but clearly, it was not shaping up to be a love-fest. Republicans had mocked the Democrats' $50 billion wind-down fund as a "permanent bailout." Democrats returned the favor with Harry Reid coming close to describing the Republican Senate Leadership in a letter - co-signed by Banking Chairman Chris Dodd - as corrupt.

"With 1,500 Wall Street lobbyists trying to water down our bipartisan efforts to hold Wall Street accountable, it is past time for (Minority Leader) Senator McConnell to come clean regarding the nature of his closed-door meetings with Wall Street executives," the letter said. "It's been 12 days since he and Senator Cornyn met secretly with two dozen Wall Street executives to scheme about killing reform. The public deserves to know who attended this meeting and what promises were made by Republicans to big banks."

But verbal pyrotechnics notwithstanding, the respective leaderships seem to be standing down. Indeed, McConnell said he thought that an agreement may be within reach. Speaking Tuesday on the Senate floor, McConnell described himself as "heartened to hear that bipartisan talks have resumed in earnest." At a meeting later with reporters, he said that despite some remaining flaws in the proposed legislation, "I'm convinced now there is a new element of seriousness attached to this, rather than just trying to score political points. . . . I think that's a good sign."

Meanwhile, Dodd and Richard Shelby, the respective leaders of their parties in the Senate banking committee, also reported progress in the latest round of negotiations. Shelby came out to describe the session as "the best environment since December...I think we're going to get there," Shelby said. "I'm optimistic because I think we've got a few days to negotiate, and the spirit is good."

So what changed? Treasury Secretary Tim Geithner has been working the phone lines and it may be bearing fruit.  After meeting with Geithner, Sen. Mike Johanns (R-Neb.) offered praise for the work done on the bill. Are the Democrats ready to trade the $50 billion fund, which was supposed to be funded by the financial services industry, in return for GOP support? If so, they probably can afford to negotiate that one away. Right now they're in a better bargaining position than they were during the healthcare debate. A poll commissioned by the White House and Senate Democrats found overwhelming public support for tougher financial regulations. (And now two Republican senators, Maine's Olympia Snowe and Tennessee's Bob Corker, may be ready to vote for passage. As Democratic pollster Geoff Garin told the Los Angeles Times. when it comes to this issue, "the only people who see benefit in maintaining the status quo are the higher-ups on Wall Street."

  • Charles Cooper On Twitter»

    Charles Cooper is an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie.

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