Updated: 5:31 p.m.
All 41 Republican Senators are standing together to demand Majority Leader Harry Reid (D-Nev.) produce a bipartisan financial regulatory reform bill, rather than going with a package backed by only Democrats.
“A bipartisan bill should address the damaging financial practices of big Wall Street firms and government-sponsored entities that led to unprecedented taxpayer bailouts and caused our government to take on enormous amounts of debt,” the GOP Conference wrote in a letter to Reid on Friday. “We simply cannot ask the American taxpayer to continue to subsidize this too big to fail’ policy.”
Minority Leader Mitch McConnell (R-Ky.) has worked to hold his caucus together on the issue and so far has kept even his moderate Members from cutting a deal with Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.). A handful of Republicans, including Sens. Susan Collins (Maine) and Bob Corker (Tenn.), have shown some willingness to reach an agreement, and Dodd continues negotiating with Banking ranking member Richard Shelby (R-Ala.). Reid has said he would bring a bill to the floor as soon as next week.
The Banking panel approved Dodd’s financial reform bill along party lines last month. Collins was initially hesitant to sign on to McConnell’s letter. According to a spokesman, she signed on because the letter “reflects her opposition to the financial reform legislation reported by the Senate Banking Committee.”
“But she also feels strongly that the Senate must produce a bipartisan reform bill because the current system is also flawed and the status quo is unacceptable,” the Collins aide added.
Meanwhile, GOP Sens. Orrin Hatch (Utah) and Dick Lugar (Ind.) met with Treasury Secretary Timothy Geithner on Friday to discuss the issue. After the meeting, Hatch criticized what he said was a partisan process. “We are more than willing to work in good faith to come up with a consensus proposal to fix the problems that contributed to the financial crisis,” Hatch said in a statement. “But allowing this bill to go down the same partisan path as the health care bill is not what our country needs at a time when our economy is still struggling to recover.”
Hatch did leave the door open for an agreement, however.
“There’s still time to get a good, solid bipartisan bill, and I hope the Majority and the Administration reverse course and come back to the table where Republicans are waiting,” he said.
Earlier Friday, President Barack Obama signaled that he would veto any bill that does not include strict regulations of the derivatives market. Sen. Blanche Lincoln (D-Ark.) is expected to lead a markup of legislation to that effect in the Agriculture, Nutrition and Forestry Committee next week. Lincoln had been working on an agreement with Sen. Saxby Chambliss (R-Ga.), the panel’s ranking member, but opted to go in a different direction after the White House indicated it wanted stronger language. The move caused a stir among Republicans but rallied liberal Democrats. Lincoln’s language could be melded into Dodd’s broader bill, which is said to be far reaching enough to appease concerns among House Democrats and possibly avoid a battle in conference.
In a response, Reid dared Republicans to block the measure from coming to the floor.
“If Republicans want to allow the same Wall Street greed and excess that crippled our economy to continue, that is their choice,” Reid said.