US inches towards financial reforms
Opposition Republican senators agree to debate bill after blocking it for three days.
Democrats had threatened to hold an extraordinary all-night session to press the Republicans after the opposition blocked action on the bill for three consecutive days.
‘Absurd’
Harry Reid, the Democratic senate majority leader, denounced as “absurd, stunning, unheard of”, the Republican resistance to starting debate on the measure, and accused the opposition of siding with Wall Street over US families.
“The American people undeniably demand we protect them from Wall Street, which has run wild.”
The senate will begin debate on the bill on Thursday, Reid added.
Polls show the legislation enjoys support of nearly two-thirds of the US public, and continued anger at big banks blamed for the 2008 financial collapse is expected to shape congressional elections set for November.
The bill aims to prevent large firms from taking billions of dollars in government aid when their failure threatens the broader economy and create, for the first time, an agency to protect consumers from shady financial dealings.
It also looks to regulate trade in derivatives, complex financial instruments often used by firms to smooth out volatile commodity prices but blamed for warping the market and encouraging speculation.
‘Vigorous debate’
Democrats and the White House have been eager to portray Republicans as siding with Wall Street, while Republicans insist the bill as currently crafted is not ready and must be changed.
Republicans acknowledge a need for reform but say the Democrats’ bill is a government overreach, signalling the congressional fight is far from over.
Even after the deadlock was broken on Wednesday, following an agreement over plans to restrict bailout aid, the two sides continued to snipe at each other over the consumer proection agency.
“I cannot agree to his desire to weaken consumer protections given the enormous abuses we have seen,” Chris Dodd, the Democrat chairman of the Senate Banking Committee, said.
“It is time for this debate to begin. And it must be a serious, vigorous debate.”
But Richard Shelby, the panel’s senior Republican, said: “This massive new bureaucracy would have unchecked authority to regulate whatever it wants, whenever it wants, however it wants.”