WASHINGTON (CN) - The Senate began debate on the financial reform bill Thursday, ending a three-day stalemate between Republicans and Democrats in trying to bring the bill to the floor.
"We are as vulnerable today ... as we were in the fall of 2008," Senate Banking Chairman Chris Dodd, D-Nev., said in a floor speech, calling for quick passage of the bill. Dodd is the bill's sponsor.
Much of the division in the Senate over the issue of bringing the bill to the floor came from extended negotiations between Dodd and committee ranking member Sen. Richard Shelby, R.-Ala. The two men met for five months on the bill, but failed to reach a compromise. In a statement issued Wednesday afternoon, Shelby said the two leaders were at an "impasse," and reluctantly gave his approval for Republican Senators to move the bill forward.
"They have been productive talks," Dodd said Wednesday, "but I cannot agree to (Shelby's) desire to weaken consumer protections given the enormous abuses we have seen."
Dodd addressed the tension when the bill broke on the floor Thursday afternoon. "Trust is a big issue," he said, adding that the Senate needed to focus on "repairing some of the tensions and stress that exist in our legislative body." He invited senators to offer amendments up for debate and called for a discussion that's as "civil as it is passionate."
Shelby stood up directly after Dodd and said the bill still needed a number of changes "before I can consider supporting it," he said.
"It doesn't matter what we say," Shelby said, "it matters what language is in the bill." Shelby said the bill ensures bailouts, echoing a constant Republican theme voiced over the past few weeks. Republicans object to a proposed $50 billion fund, the "honeypot," that banks would prepay into to cover costs if they failed. Republicans say the fund ensures future bailouts.
Shelby also said the bill helps the "big banks get bigger" and will "help the likes of Goldman Sachs."
Shelby said the bill as-is will create "massive and intrusive government bureaucracies ... under the rubric of consumer protection," which "signals to the rest of the world this country's failure to act in a fiscally responsible manner."
Shelby also said the proposed clearinghouses, designed to bring transparency to the derivatives market, will concentrate risk, making the system poised for future bailouts.
Shelby said he hopes to reach a joint amendment by Tuesday.
Chair of Agricultural Committee, Sen. Blanche Lincoln, D-Ark., insisted that the bill was not "regulation for regulation's sake." Lincoln, whose committee approved a measure outlining stricter oversight on derivatives last week, said the derivatives issue was "at the heart of the legislation." The derivatives market, which deals with commodities such as corn and wheat, has previously been completely unregulated, Lincoln said. Her proposed amendment, the Dodd-Lincoln substitute amendment, puts "appropriate restraints on regulators," she said.
Sen. Saxby Chambliss, R-Georgia, the ranking member on Lincoln's committee, derided Democrats for denying him the chance to participate in the derivatives bill. Chambliss said the bill clamps down on derivatives across the board, treating all financial institutions the same and hurting farmers and ranchers who rely on the trades to hedge against fluctuating prices.
"Can anybody tell me why we are treating John Deere or Ford Motor Credit exactly the same as Goldman Sachs?" Chambliss asked. He encouraged other senators to oppose the derivatives part of the bill.
Sen. Barbara Boxer, D-Calif., presented a collage of apocalyptic headlines from the past two years on the Senate floor, saying, "We can't go back to the days we just left."
Sen. Mark Warner, D-Va., said he was happy to see the bill "fully aired on the floor of the Senate."
President Obama still stands firmly behind the bill.
"You shouldn't have to wait another day for the protections from some of the practices that got us into this mess," the president told an audience in Quincy, Ill., on Wednesday, during his "White House to Main Street" tour. "The time for reform is now."
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.