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Bipartisan tensions ease as U.S. financial reform inches toward vote

2010-04-23 15:03 BJT

WASHINGTON, April 22 (Xinhua) -- With a softening tone in the debate between Democrats and Republicans over U.S. financial reforms, some of the most sweeping proposals in decades might soon be made into law.

Relieving signs are that both corners, rather than engaging in a bare knuckle brawl-- like the one during the knock-down, drag-out fight over healthcare, are likely to greet each other on a number of provisions.

Analysts tend to agree that congressional bipartisanship hardens in face of life-bettering issues like health care and it should soften in life-sustaining issues like financial viability, all because of the affordability to the resulting risks.

On Wednesday, the Senate Agricultural Committee passed legislation to tighten oversight of derivatives, which is expected to come with the final bill.

Treasury Secretary Tim Geithner described Wednesday's passage of The Wall Street Transparency and Accountability Act of 2010 as having moved the process a step closer toward overhaul of the U.S. financial system.

"Today, the Senate took another step towards comprehensive financial reform," he said.

"The Senate Agriculture Committee voted out a bipartisan bill that will bring derivatives trading out of the dark, provide strong oversight of market participants, and combat fraud, abuse and manipulation."

The treasury secretary added his department would continue to work with the Senate leadership to craft strong derivatives provisions that close loopholes, provide necessary transparency, and reduce threats to financial stability as part of a final, comprehensive financial reform bill.

In the meantime, Sen. Richard Shelby of Alabama, the highest ranking Republican on the Senate Banking Committee, and Banking Committee Chair Sen. Chris Dodd, D-Ct. continue working toward a deal, and a vote may occur as early as next week.

"In spite of the rhetoric, there is no one who does not want a bill," said Mark Calabria, director of financial regulation studies at the Cato Institute think tank, adding that Shelby has been working with Dodd all along and a feeling that the mud slinging was going too far led to a desire to tone it down, he said.

Back in March, all 41 Senate Republicans penned a letter to Senate Majority Leader Harry Reid, calling the negotiations one-sided.

"We are united in our opposition to the partisan legislation reported by the Senate Banking Committee," the letter read.

But this week, GOP members have expressed optimism, and Shelby said the two sides are making progress toward each other.

Calabria said that neither Shelby nor Dodd are driven by politics, and Dodd, who is close to retirement, has his legacy in mind and is not looking for a campaign issue.

Darrell M. West, vice president and director of Governance Studies at Brookings Institution think tank, said the political dynamics of financial reform are very different from the battle over healthcare reforms.

Unlike the healthcare debate, Democrats were on sound footing in pushing for strong financial regulations because of the financial crisis that much of the public blames on Wall Street.