GOP: We're Closer than Ever to Financial Reform Bill


Republican leaders in the Senate today said they are closer than ever to reaching a deal on financial reform legislation, but they stopped short of saying when they would reach a final agreement, CBS News Capitol Hill Producer Jill Jackson reports.

"We're making progress," Sen. Richard Shelby (Ala.), the top Republican on the Senate Banking Committee, told reporters. "We're trying hard to forge a bipartisan bill, a substantive bill... We're not there yet, but I think we're closer than we've ever been."

Shelby and Banking Committee Chair Chris Dodd (D-Ct.) are continuing to negotiate over issues such as how to stop banks from becoming "too big to fail," whether community banks should have access to the Federal Reserve discount window and whether banks should be banned from trading all derivatives.

The Senate Agricultural Committee earlier today passed a measure limiting the ability of Wall Street banks to trade derivatives. The measure is expected to be included in the final financial reform bill. President Obama has said he will veto any financial reform bill that doesn't regulate the derivative market.

Meanwhile, Senate Democrats have indicated some willingness to modify a provision to create a $50 billion bank liquidation fund that would be used to dismantle failing banks. Republicans referred to it as a "bank bailout," even though the fund would be financed by banks and, if used, wipe out shareholders of failing companies. Dodd said earlier this week that, in fact, the provision would end the implicit guarantee of a government bailout for failing banks.

Republican Sen. Kay Bailey Hutchison (Texas) said today that Democrats and Republicans have the same goal: "We want too big to fail to go away," she said.

Some have suggested Republicans were doing the bidding of large banks by labeling the financial reform bill a "bailout" bill, and Shelby deflected questions today about donations to his campaign from investment firm Goldman Sachs.

"We don't represent Wall Street. Nobody does," Shelby said. "I don't believe the Democrats represent Wall Street, although they get a lot more money than we have."

The securities and investment industry has given more money to Democrats in the 2010 election cycle, although documents show that Goldman Sachs has ramped up its donations in recent months, with most money going to Republican committees.

Goldman currently faces fraud charges filed by the Securities and Exchange Commission, and some Republicans are questioning whether the timing of the SEC's charges was politically motivated. Shelby said today he would only return donations from the bank if they are found to have done something wrong.

In an interview with CNBC today, President Obama said the idea that there was political interference into the SEC's decision to pursue the charges is "completely false."

"The SEC is an entirely independent agency that we have no day-to-day control over," he said. "And they never discussed with us anything with respect to the charge that will be brought."

Mr. Obama will travel to New York on Thursday to campaign for the financial regulation reforms. He is expected to tell an audience that includes leaders of the financial industry and consumer advocates that the bill draws on ideas from both sides of the aisle.

Democrats are interested in beginning to vote on the legislation early next week, Democratic Whip Dick Durbin (Ill.), said this afternoon.

In Advance of Financial Reform Debate, Goldman Gears Up PAC and Lobbying Spending