WASHINGTON (CN) - The Senate on Monday voted 57-41 on a motion to proceed with the financial reform bill, three votes shy of the 60 needed to bring the legislation to the floor. All Senate Republicans, and Democratic Sen. Ben Nelson of
Senate Majority Leader Harry Reid, D-Nev., also voted against the motion as a strategic tactic, switching his vote from affirmative to negative so he could be on the prevailing side and file a motion to reconsider.
Two Republicans, Robert Bennett of Utah and Christopher Bond of Missouri, were not present for the vote. Republicans hoped to stall debate on the bill in order to continue negotiations.
"I'm sorry today that my colleagues today decided to stand up for Wall Street instead of standing up for Main Street," Kay Hagan, D-N.C., said after the vote, pointing out that it is nearing the two-year anniversary of the economic collapse.
Earlier in the day, Sen. Mark Warner, D-Va., also called for quick action on the bill. "I hope we move past the procedural back and forth," Warner said. "It is time to debate this bill out in the open."
Before the vote, the Republican leadership warned that Senate Republicans were united going into the procedural vote.
Addressing a conference of community bankers Monday morning, Sen. Richard Shelby of Alabama, the lead Republican negotiator on the bill, said, "I believe that 41 Republicans for right now are going to stand together."
"We're conceptually very close ...we're not there yet," Shelby said. "I hope we will not rush the judgment on this."
During voting, Senate Minority Leader McConnell entered the Senate chamber flanked by Republican leadership in a show of solidarity.
During the past week, Democrats and Republicans claim to be united on the major facets of the bill, expressing a joint eagerness to rein in big Wall Street firms.
"We're 90 percent there," said Sen. Chris Dodd, D-Conn., the bill's sponsor, said in a floor speech just before the vote. "Obviously we're not all there. But you can't ever get all there."
One of the biggest points of contention is the bill's proposed restrictions on derivatives - the complex financial instruments that attain their value from underlying investments.
Republicans argue that derivatives keep the economy vibrant, making capital available to entrepreneurs. Democrats have been characterizing the instruments as part of a "shadow economy" that needs stricter regulation.
The proposed bill provides that derivatives desks at large banks be "spun off." Republicans said this restriction could push American business abroad and threaten domestic capital markets.
Sen. Judd Gregg, R-N.H., said the spin-off concept will do "fundamental harm" to the economy, as businesses go abroad to find capital. "In the end, it's going to cut off our nose to spite our face," Gregg said.
The 1,300 page bill is titled the Restoring American Financial Stability Act of 2010.
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