Senate Resumes Work on Financial Reform
With Finish Line in Sight; Amendments Roll In

Senate Majority Leader Harry Reid (D-Nev.) moved forward May 17 with plans to end debate on financial regulatory reform legislation (S. 3217), but said both parties will continue to negotiate amendments for much of the upcoming week. Reid and 15 other Democrats filed a cloture motion late May 17, setting up a likely May 19 vote to end debate on the bill. But the process of crafting the legislation could continue several days after that, the majority leader hinted. With dozens of amendments awaiting consideration, the Senate resumed work late May 17 with consideration of several of the less-controversial proposals.

The Senate unanimously approved an amendment (S. Amdt. 3986) from Sen. John Cornyn (R-Texas) that would change U.S. procedures regarding the International Monetary Fund. The amendment would require the Obama administration to evaluate any proposed bailout of a foreign nation where that nation’s public debt exceeds its annual gross domestic product, and then to certify to Congress whether the bailout loan will be repaid. The proposal, which passed 94-0, is a response to the IMF’s May 9 decision to approve a roughly $40 billion loan to Greece to help ease the country’s debt crisis (89 DER EE-7, 5/11/10). Cornyn said approximately $7 billion of that amount can be attributed to U.S. contributions.

Banking Chairman Christopher Dodd (D-Conn.) also expressed support for the measure, but said the proposed language may need refinement later in the legislative process. “I believe the thrust of the amendment is a good one,” he said. Karen Shaw Petrou, managing partner of Federal Financial Analytics Inc., said the practical implications of the amendment remain unclear. “The substantive merits of this campaign are dubious, but it’s a political winner,” she said in a May 14 note to clients. “Members of Congress have long had trouble remembering that the IMF is an international organization that answers to others even though the U.S. funds a lot of what it does,” she said.