Will the third time be the charm on Wall Street reform?

WILL THE THIRD TIME BE THE CHARM ON WALL STREET REFORM?…. On Democratic Wall Street reform efforts, yesterday afternoon looked an awful lot like Monday afternoon — Senate Republicans still refuse to allow a floor debate on the bill — but the pressure continues to get a little more intense.

President Obama went to the heartland to pitch financial reform Tuesday, but unimpressed Senate Republicans blocked the overhaul for a second straight day.

With Obama in Iowa, one Democrat and every GOP senator stayed united to block the start of debate on the bill. The measure would regulate Wall Street’s trading in complex investments known as derivatives, curtail “too big to fail” bailouts and create a consumer financial watchdog.

The President declared the unified front shows the GOP is answering to greedy financiers’ lobbyists.

“It’s one thing to oppose reform, but to oppose just even talking about reform in front of the American people, and having a legitimate debate, that’s not right,” Obama said. “The American people deserve an honest debate on this bill.”

For their part, Senate Republican leaders began circulating their own version of the legislation, which wasn’t too terribly dissimilar to the Democratic proposal, though it would water down key provisions, and tighten regulation of Fannie Mae and Freddie Mac — a step Dems believe is better suited for a separate bill. GOP senators continued to reserve their strongest opposition to the creation of a new Consumer Financial Protection Agency — a point of particular interest to the Monthly right now — and Republican said their version would limit its authority to regulating smaller banks and nonfinancial companies, leaving the industry’s heavy hitters alone.

Dems will reportedly try, once again, to get 60 votes to allow the Senate to debate the bill today, but there’s at least some evidence that Republican unity is starting to crack. Sen. George Voinovich (R-Ohio) indicated late yesterday that he’s leaning towards switching his vote and allowing the debate to proceed to the Senate floor.

And what about the efforts to find a bipartisan agreement? Sen. Bob Corker (R-Tenn.), who recently said a deal was near, told reporters yesterday that he is “far less optimistic” about reaching a resolution than he was. “I don’t think any time in the near future there’s going to be a bipartisan agreement,” he said.

It’s counter-intuitive, but the lack of progress on bipartisan talks actually makes legislative progress more likely, not less. Senators like Voinovich, for example, were apparently prepared to allow the filibuster to continue while the behind-the-scenes talks worked towards a deal. Now that a compromise appears increasingly unlikely, some GOP members are more inclined to let the bill advance.

The question, then, is how much longer Voinovich and his like-minded allies will wait before giving up on the talks and allowing the floor debate to begin. The third attempt to break the GOP filibuster will be this afternoon. If it fails, expect a fourth try tomorrow.