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Though riding high from last week’s GOP capitulation, Senate Democrats are hardly holding their breath for Republicans to strike a deal with them on financial regulatory reform.

Even though the majority needs several crossover votes to get its bill across the finish line, Democrats say they are not willing to bend over backward or craft any “backroom” deals to get Republicans on board for the 60 votes needed to kill a filibuster.

So how will Democrats get it done? The same way they did last week: dare Republicans to oppose them.

“Cutting a deal could open the floodgates to a wave of Republican votes on final passage, but there are enough cracks in the Republican dam already that we don’t need a deal to get 60,” one senior Senate Democratic aide said.

Senate Majority Whip Dick Durbin (D-Ill.) indicated Monday that Democrats feel they have the stronger hand to play during the debate.

Asked whether he thought his party would have to cut significant deals, Durbin suggested that Republican leaders would not be able to hold their Conference together regardless of whether the bill is significantly altered.

“I think [GOP leaders] learned last week that Members of the Republican Conference may see this differently,” Durbin said.

Of course, a “deal” could be in the eye of the beholder, and a few key GOP amendment wins could draw the five or six Republican votes that Democrats estimate they will need to clear any filibuster hurdles to final passage.

Republican leaders allowed the bill to come to the floor after asking their cadre of 41 to block it three times last week — and even then only after Democrats agreed to drop a controversial $50 billion bank-financed fund to shut down troubled financial firms. To be sure, it was hardly the concession that Republicans made it out to be, considering Democrats had signaled for weeks that they would be willing to jettison the provision — which the White House opposed — in exchange for the GOP’s agreement to move to the bill.

Republicans claimed a victory nonetheless, suggesting that they will want some sort of face-saving cover in the form of amendment deals in order to let the bill move to final passage.

“Republicans will work to make sure this bill actually addresses the problems at hand and that in an effort to rein in Wall Street, this bill doesn’t actually end up hurting those who had nothing to do with this crisis,” Senate Minority Leader Mitch McConnell (R-Ky.) said on the floor Monday.

McConnell also telegraphed Monday that Republicans would be seizing on the bill’s silence on Fannie Mae and Freddie Mac as a serious oversight, given the two mortgage giants’ role in the meltdown of the housing and financial markets.

One senior Senate GOP aide said that “collectively” the Republican Conference “thinks [the bill] is absolutely horrible. So there need to be some major changes.”

The aide hinted that Republicans would try to exploit Democrats’ misgivings about their own bill, particularly in regards to the strict regulation of derivatives that would ban large banks from selling bets on the future prices of commodities and other financial products.

“There’s a shared commitment among some moderate Democrats to make some improvements,” the GOP aide said.

What remains to be seen is how hard Republicans will push Democrats on consumer protection provisions in the bill. The GOP aide indicated that the entire section would need to be rewritten to make sure that small businesses do not get caught up in the red tape that Republicans contend the bill would create.

Durbin suggested, however, that Democrats would be hard-pressed to make major changes to that section, calling it “a critical element in making sure we empower consumers across America.”

Wary of Backroom Dealing

After coming under withering criticism during the health care debate for the “Cornhusker Kickback” and “Louisiana Purchase,” Democrats are clearly wary of anything that could be considered a backroom deal with Republicans.

“There aren’t going to be deals just for deals’ sake,” another senior Senate Democratic aide said.

But Democrats said they are willing to let the amendment process play out on the floor and predict — as Republicans do — that internal divisions in their own party could prove advantageous to the minority.

On derivatives, for example, Democrats and Republicans have expressed concerns that Senate Agriculture, Nutrition and Forestry Chairman Blanche Lincoln’s (D-Ark.) provisions could push the market to unregulated countries overseas. The White House is less than enthusiastic about the stringent requirements Lincoln’s language lays out, and Federal Deposit Insurance Corp. Chairwoman Sheila Bair penned a letter this weekend saying it would create a riskier environment for the complicated financial instruments. However, it’s unclear whether there are enough votes in both parties to meet a potential 60-vote threshold on changes to the Lincoln language.

But even as some Democrats will be quietly cheering for the GOP on that particular issue, Democratic leaders are also crafting a strategy to insulate themselves from the worst of the Republicans’ talking points. For example, the first amendment considered is a Sen. Barbara Boxer (D-Calif.) proposal to clarify that no taxpayer money can be used to bail out banks. Before they allowed debate to go forward, Republicans said the bill did not adequately end “taxpayer bailouts” on the scale of the October 2008 rescue of Wall Street.

In the absence of any bipartisan deal, the first senior Senate Democratic aide said: “One by one, a series of Democratic amendments will strip away whatever remains of the Republican arguments against reform. And then at the end, we think it will be pretty hard to justify voting against final passage.”

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