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McConnell Strikes More Conciliatory Tone on Financial Reform

Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that he expects the financial regulatory reform package to hit the floor this week or early next week, and Minority Leader Mitch McConnell (R-Ky.) expressed newfound optimism that the bill might enjoy bipartisan support.

McConnell was noticeably less combative than he had been in recent days. He credited his change in outlook to an update on negotiations that Sen. Richard Shelby (R-Ala.), the ranking member on the Banking, Housing and Urban Affairs Committee and chief GOP negotiator on the bill, delivered to the minority Conference during Tuesday’s weekly caucus lunch.

However, Reid remained on the attack, accusing Republicans of siding with Wall Street and against the interests of ordinary Americans, and assailing the lobbying efforts of the financial services industry. Reid cited a news story about the number of industry lobbyists hired to — in his view — work with the GOP to kill financial regulatory reform legislation.

“Wall Street reform is very complex. But at its heart, it’s pretty simple,” Reid told reporters during a news conference. “You either believe we need to strengthen protections for consumers or you don’t. It becomes fairly simple, what we’re driving at here. Here’s one of the most confusing parts of Wall Street reform: the decision by many Republicans to not only stand on the sidelines but shout out falsehoods about the legislation.”

Last week, McConnell accused the White House and Senate Democrats of pushing a partisan bill in an effort to score political points in advance of the November elections. Later in the week, all 41 Republicans signed a letter vowing to block a reform bill on the floor absent substantive policy changes. On Tuesday, McConnell said he believed that letter was partly responsible for forcing the Democrats to retreat.

McConnell, in citing Shelby’s report on the negotiations, declined to relay what the Alabama Republican said. Nor would McConnell say whether the White House had backed off. The Minority Leader maintains that top Democrats were pressured by the administration to suspend their negotiations with Republicans just when they looked the most promising, and he claimed President Barack Obama and top White House officials acknowledged as much during a meeting last week.

However, a Republican source familiar with what was discussed at Tuesday’s closed-door lunch said Shelby told GOP Senators that his discussions with Banking Chairman Chris Dodd (D-Conn.) were headed in the right direction. This source said Sen. Judd Gregg (R-N.H.) delivered a similar update. Gregg and Sen. Jack Reed (D-R.I.) have been tasked with negotiating the framework of a new set of consumer protections within the reform package.

“Sen. Shelby believes that there is a very serious effort to re-engage now and get a result. We welcome that,” McConnell told reporters. “I believe that serious discussions are under way. That’s a good sign. Look, we’d like to see a bipartisan bill. That’s been our goal from the beginning.”

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