Wall Street reform in peril

WALL STREET REFORM IN PERIL…. It’s not at all unusual for Congress, on the verge of a major legislative breakthrough, to start getting cold feet. Lawmakers start feeling antsy and decide they have disproportionate leverage, putting passage in doubt. Hill watchers have come to expect some 11th-hour wrangling.

That said, after months of work, a major Wall Street reform package, which seemed almost certain to pass, is now in very deep trouble.

The death of Sen. Robert Byrd (D-W.Va.) instantly made passage considerably more difficult, given the non-existent margin of error. Democrats hoped Sen. Russ Feingold might make up for Byrd’s passing by supporting the policy, but the Wisconsin Democrat announced yesterday he will vote with Republicans.

Sen. Russ Feingold (D-Wis.) said Monday he would vote against advancing Wall Street overhaul legislation. […]

“As I have indicated for some time now, my test for the financial regulatory reform bill is whether it will prevent another crisis,” Feingold said in a statement. “The conference committee’s proposal fails that test and for that reason I will not vote to advance it.”

To clarify, Feingold isn’t just talking about opposing the legislation; he’s also promising to side with far-right Republicans on a filibuster, preventing the Senate from even voting on the bill. The consequence of Feingold’s support for GOP obstructionism may kill the legislation, leaving an industry regulatory structure in place that nearly collapsed the global economy. Feingold, in effect, prefers a broken status quo to a reform bill he believes doesn’t go far enough — which is exactly the outcome sought by the Wall Street lobbyists the senator claims to oppose.

Of course, it’s not just Feingold. Sen. Scott Brown (R-Mass.) is prepared to kill the bill over a modest bank fee that would help pay for the broader reform effort. Yesterday, Maine Sens. Susan Collins (R) and Olympia Snowe (R) said they’re also prepared to walk away from the bill over the bank fee. Making matters even worse, Sen. Ben Nelson (D-Neb.) said he’s “concerned” about the fee, suggesting his vote is far from secure, too. Sen. Maria Cantwell (D-Wash.), who supported the GOP filibuster last month, is non-committal, for now, as is Sen. Chuck Grassley (R-Iowa), who backed the filibuster but supported final passage.

Remember, to break a Republican filibuster in May, the majority had exactly 60 votes, which included three Republicans (Brown, Collins, and Snowe). Byrd’s death puts the number at 59, meaning the majority will need to make up at least one vote somewhere. Instead, yesterday, the bill was losing votes, not gaining them.

The goal has long been to have the final bill on the president’s desk by the 4th of July. That now appears increasingly unlikely.