Ending a three-day Republican filibuster, Senators Thursday kicked off what will likely be a lengthy debate of legislation (S. 3217) to overhaul the financial regulatory system (see Daily GPI, April 29; April 28; April 27).

“That’s [the filibuster] behind us. We’ve now started” the debate, said Sen. Christopher Dodd (D-CT), chairman of the Senate Banking Committee and chief architect of the reform bill. The Senate has a “long journey in front of us” before it can complete action on the bill, he noted. Votes on amendments won’t begin until next week.

In three separate votes this week (Monday, Tuesday and Wednesday), Republicans blocked Democrats from bringing the measure to the floor for debate. But Republicans relented later Wednesday. The breakthrough came in a bipartisan agreement on a single contentious element of the overhaul proposal — the creation of new government authority to wind down failing financial firms.

Although the standoff has ended, CQ Today warns that more battles lie ahead. “The next battle may be over how many amendments senators in each party can offer and whether attempts to change the bill will be subject to filibusters.”

The bill before the Senate is a substitute amendment, which “takes the best of both [the Banking and Agriculture] committees’ products,” said Senate Agriculture Chair Blanche Lincoln (D-AR). Regulating the over-the-counter (OTC) derivatives market “is at the heart of financial reform,” she noted. Lincoln’s committee has jurisdiction over the Commodity Futures Trading Commission, which regulates OTC derivatives.

The broad financial regulatory reform bill was voted out of the Senate Banking Committee in March (see Daily GPI, March 24). The OTC derivatives bill cleared the Senate agriculture panel on April 21 (see Daily GPI, April 22).

Now that the bipartisan talks between Dodd and Sen. Richard Shelby of of Alabama, the ranking Republican on the banking panel, have ended, “it is my hope that the majority’s avowed interest in improving this legislation on the Senate floor is genuine and the partisan gamesmanship is over,” said Senate Minority Leader Mitch McConnell of Kentucky Wednesday.

“Thus far [a] compromise has eluded us,” said Shelby, referring to himself and Dodd. The 1,400-page bill will only get bigger, he noted, and will “tilt the political playing field” away from smaller companies.

Sen. Ben Nelson of Nebraska, the only Democrat to vote with Republicans, applauded the agreement between the two sides. “Now the Senate can hold a full and thorough public debate on the Senate floor, rather than negotiate behind closed doors,” he said.

Nelson has expressed his opposition to language in the substitute amendment that would make the new regulations on derivatives retroactive to existing derivatives contracts.

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