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Geithner Unlikely to Sway GOP on Regulatory Overhaul

Treasury Secretary Timothy Geithner’s sales pitch this week to GOP Senators on a sweeping regulatory reform package doesn’t appear to be winning over the support necessary to prevent a filibuster of the legislation.

Geithner this week has reached out to a select group of rank-and-file Republican Senators who are seen as open to cooperating with the White House, including veteran Sens. Orrin Hatch (Utah) and Dick Lugar (Ind.), and freshman Sen. Scott Brown (Mass.). Brown met with Geithner on Thursday but remains opposed to the bill. Hatch and Lugar, scheduled to meet with Geithner on Friday, aren’t inclined to budge either, Republican sources said.

However, Republicans maintain that compromise on this issue is possible if the administration is open to substantive changes to the package. Majority Leader Harry Reid (D-Nev.) said Thursday he plans to bring the bill to the floor next week.

“There are vast areas of agreement that nearly every Republican can discuss with Secretary Geithner. But there are key differences as well,” a senior Republican Senate aide said. “If wooing means a willingness to make changes, then I suspect they have a lot to talk about.”

Senate Republicans are accusing President Barack Obama of forcing Senate Democrats to shut down the financial regulatory reform negotiations, saying Democrats would prefer a bill that passes with minimal GOP support so that they have a political issue to take into the November elections.

Republicans say they have responded by sticking together against the measure.

Asked Thursday what is standing in the way of a bipartisan bill capable of garnering widespread GOP support, Sen. Judd Gregg (R-N.H.) said tersely: “The White House.”

Sen. Mike Johanns (R-Neb.) said that two weeks ago he was “ready to uncork the Champagne” to celebrate a bipartisan financial regulatory overhaul. Johanns said on all of the key issues — addressing “too big to fail,” derivatives, resolution authority and systemic risk — Senators were heading in the right direction.

“Then all of a sudden, four or five days ago, this thing just blows up,” Johanns said. “I can’t help but believe that what the White House has done is ramped up the pressure on its Members. And if they would just back off, we’ll get a bill. So, it really is frustrating to me. I still believe we can get a bill.”

“What it’s done is stall the negotiating process. People are still talking to each other on the floor. But the White House just needs to stand down,” Johanns continued. “Health care is hugely unpopular. They know that. They got a bill passed — but they got a bill passed that the American public doesn’t like. I think they want to champion something they can take out in the fall and say, ‘We passed a tough regulatory reform bill,’ and hope people support that.”

Senate Democrats vehemently dispute Republicans’ charges. Leaders say any rift with the GOP is based on substantive policy disagreements; they contend Republicans are stalling because they want to kill the effort.

“We’ve been working this for months, coaxing, urging, cajoling — doing everything we can to find out what the Republicans want in this bill,” Reid told reporters Thursday. “There’s been a lot of work done with the Republicans. It’s time we start legislating.”

Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) has similarly blamed the Republicans, saying he tried for more than a year to negotiate a deal and finally had no choice but to move forward when it appeared the GOP was stalling. Dodd and Banking ranking member Richard Shelby (R-Ala.) continue to negotiate, and the Alabama Republican said Thursday that the talks remain fruitful.

Most Republicans point to the negotiations on derivatives between Agriculture, Nutrition and Forestry Chairman Blanche Lincoln (D-Ark.) and ranking member Saxby Chambliss (R-Ga.) as the tipping point in their move this week to close ranks. Republicans say Lincoln and Chambliss were on the cusp of a deal when the White House pulled her back.

Chambliss said Lincoln has been very forthright with him throughout their talks. But he concurred with his colleagues that the White House forced her to back out.

“When you have a problem with the White House, particularly at the last minute like this — I mean, this has been going on for months,” Chambliss said. “It’s almost too obvious.”

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