Eighteen months after the 2008 financial crisis brought the American economy to the brink of collapse, the Senate passed a bill to add significant regulations to Wall Street firms and banks in an effort to prevent a similar crisis in the future.
The bill passed by 59 to 39. Four Republicans -- Sen. Scott Brown, Sen. Charles Grassley, and Maine's senators, Susan Collins and Olympia Snowe -- supported the bill, while two Democrats, Sen. Russ Feingold of Wisconsin and Sen. Maria Cantwell of Washington, joined Republicans in opposing it.
Senate Majority Leader Harry Reid said Thursday that the Senate was past due in adding restrictions to Wall Street's activities.
"You can draw a straight line from the unchecked greed on Wall Street and the layoffs and foreclosures in Nevada and the rest of the country," Reid said, calling the bill "a strong statement to Wall Street that business as usual is over."
The Senate-passed legislation creates several new sets of rules and regulations for financial institutions. It provides instructions for seizing and unwinding failing firms; creates a new agency for financial consumer protection, puts new regulations on hedge funds and requires large banks to spin off their derivatives trading units.
Sen. Richard Shelby (R-Ala.), the ranking member of the Senate Banking Committee, said he opposed the bill because it does not address what he felt were the primary causes of the financial meltdown -- the mortgage giants Fannie Mae and Freddie Mac.
"It's simply a failure of will that nothing is being done to reform" Fannie Mae and Freddie Mac, he said Thursday. "There is no end in sight. Losses continue to mount and the taxpayer exposure is unlimited...how much will they have to lose before my Democratic friends say enough is enough?"
Other Republicans, like Sen. Mike Enzi of Wyoming, warned that the new consumer protection agency would have too much freedom to access Americans' financial data without strict oversight. "I don't get mad very often," Enzi said of the provision. "But this has got me mad."
Although Shelby, Sen. Bob Corker (R-Tenn.), and other Republicans worked with Democrats in the beginning phases of drafting the legislation, most dropped their support for the bill as it progressed, even mounting a filibuster to stop its progress and drag the Senate's debate on for three weeks.
Democrats lost a vote to end the filibuster Wednesday, but picked up two critical votes Thursday, when Sen. Arlen Specter returned to Washington after his loss Tuesday in the Pennsylvania Senate primary, and Brown switched his earlier no vote to yes.
Brown had lobbied for changes to the bill regarding the Volcker Rule, which restricts banks from engaging in some high-risk securities trading, but the changes never made it into the measure. On Thursday, knowing the bill could not advance without Brown's support, Rep. Barney Frank (D-Mass.) sent the senator a letter, assuring him changes he wants will be made in the conference committee after the measure passed the Senate.
With House and Senate passage complete, leaders of the two chambers will now meet to hammer out differences between the two versions, and presumably to add the changes that Brown demanded in exchange for his crucial vote.