This vote was on whether to begin debate on a bill that aims to close gaps in financial regulations, strengthen oversight of consumer lending and more closely oversee financial derivatives. Derivatives are, in essence, very complex financial contracts that businesses use as a hedge against large changes in the price of some commodities such as gasoline, but that have also become popular with speculators looking to gamble on big profits. Speculation in derivatives, relatively unhampered by regulation, is often blamed for partially contributing to the financial meltdown in 2008.
Typically bills are brought to the floor through a procedural motion called a “motion to proceed,” which is usually approved by voice vote as a routine matter. However, if a senator wants to hold up consideration, all he or she has to do is remove consent – which was the case with this bill. Instead, the Democratic leadership called a vote on beginning debate on the bill. This was necessary because Republicans had threatened to hold up the bill’s consideration indefinitely with a filibuster, causing Senate Majority Leader Harry Reid, D-Nev., to file what is known as a “cloture motion,” which, in essence, is a vote on bringing debate on a bill or amendment to a close, which is what this vote was on.
If the Senate votes to “invoke cloture” – or bring debate to a close – then lawmakers must either hold a vote on the legislation, amendment or motion in question, or move on to other business. This type of motion is most often called on contentious legislation where the leadership is concerned that consideration could be held up indefinitely by a handful of senators. This was the second cloture vote on the motion to proceed called on the bill (see vote 124, which was unsuccessful).
President Obama has made this Wall Street overhaul one of his top priorities. Democrats say the bill would help prevent the kinds of activities that contributed to the 2008 financial collapse, but Republicans argue that in fact the bill would just open the door to more financial malfeasance.
Judd Gregg, R-N.H., said the bill is complex and that Republicans feel that the bill should not go forward until they are given a chance to improve it.
“We are not asking that there be no bill; just the opposite. We are saying there is a lot in this bill that just plain needs to be improved,” Gregg said. “People ask: Well, why are the Republicans stopping this bill at this point? Because we want a better bill, and we have specific proposals for accomplishing that. We want language which does accomplish too big to fail and ends that policy. We want language which makes the derivative market not only safe and not a systemic risk but a sound and strong force for credit in this country. We want language which addresses better underwriting standards. And we want language which addresses the failures of the credit rating agencies. We don’t want a lot of extraneous language which is simply brought along because the train was leaving the station and it was thrown on it, and which, in many instances, in my mind at least, undermines rather than becomes a constructive force for a better financial system in this country.”
Byron Dorgan, D-N.D., said Republicans aren’t blocking the bill because they want to improve it, they’re blocking the bill because they’d rather not have one at all.
“Does anybody really believe that? They want to weaken it. They do not even want it in the first place, to the extent they can avoid it. That is why they didn’t do anything in the committee. There were negotiations for weeks in the Banking Committee. Then they had a markup, and the Republicans didn’t offer one suggestion,” Dorgan said. “If they have a whole backpack full of suggestions on how to improve the bill, why was there not one amendment offered in the committee? So now we have the spectacle of the desperate need for reforming Wall Street finance in this country and the entire Republican caucus in the Senate votes no—every single one of them.”
By a vote of 57-41, the Senate rejected the motion to begin debating the bill. Though more voted yes than no, this particular type of vote required 60 votes in order to be considered approved. All but one Democrat present voted to open debate (Harry Reid voted no; he changed his vote to no at the last minute in order to preserve his right to call the measure back for a revote at a later time). Every Republican present voted against opening debate. The end result is that the Senate rejected the motion to begin debating a bill that would overhaul the financial system, for the second time.