On Monday, Republicans voted to prevent financial reform legislation from moving to the Senate floor for debate. The Democrats’ motion to bring about cloture—which would end the Republicans filibuster of the bill—failed, with every Republican in the chamber voting against it. The Democrats were able to muster just 57 of the 60 votes they needed. Opposition to the bill was technically bipartisan, with Sen. Ben Nelson (D-NE) joining the Republican filibuster after a provision which would have benefited Berkshire Hathaway—the holding company owned by billionaire Nebraskan Warren Buffett, in which Nelson and his wife happen to have more than a million dollars worth of stock—was removed from the bill. But, for once, the Democrats knew they held a winning hand.
Sen. Byron Dorgan (D-ND) told reporters that Democrats were gloating after the vote that Republicans had taken “a stand with Wall Street against Main Street.” Republicans accused the Democrats of much the same thing, saying in a statement that the Democrats were trying to bail out “their Wall Street fat cat friends.” But while the Republicans can certainly point out that Obama and the Democrats took in a lot of money from Wall Street in the last election cycle, Wall Street banks don’t actually support this latest bill and have apparently been lobbying the Republicans hard to block it. Nor does the bill provide for tax-payer funded bailouts, as Republicans claim, but rather it sets up a fund for Wall Street banks to cover bail themselves out with their own money. And the truth is that with or without the bill, banks know that the government will bail them out as long as they are large enough to hold the rest of the economy hostage.
The public isn’t buying the Republican line, in any case. A recent Washington Post/ABC News poll found that a majority supports making banks contribute to what Republicans have been calling a “permanent bailout fund.” In fact, as Ezra Klein points out, more than a third of Republicans themselves say they back the fund. With Goldman Sachs executives getting raked over the coals in Congress for betting heavily against financial products they were selling—and which contributed to the financial crisis—now is not a good time to side with the banks. The Republicans can’t win any concessions without the support of a substantial number of Democrats, anyway. And the Democrats would be quite happy to let them publicly block financial reform over and over again.
So when Sen. Reid threatened Wednesday to force Republicans to spend the night in the Senate responding to quorum calls and blocking the bill, the Republicans finally dropped their filibuster. Sen. Richard Shelby (R-AL), the ranking Republican on the banking committee, more or less admitted they had failed to win any real concessions. It’s a major victory for Democrats, who for once dared the Republicans to filibuster and got them to back down. And with the mood of the country turning against Wall Street, financial reform in some form is likely to pass soon.