WASHINGTON (CN) - Senate Republicans on Wednesday agreed to allow debate on financial overhaul legislation, ending a three-day standoff between Republicans and Democrats. In three consecutive votes, Republicans refused to approve a motion for the bill to go to the Senate floor, citing the need for further negotiations.
Senate Majority Leader Harry Reid, D-Nev., had pleaded with Republicans to "stop standing in the way" of a floor debate so they could "water down reform in secret."
Senate Banking Committee Chairman Chris Dodd, D-Conn., and ranking member Sen. Richard Shelby, R-Ala., have worked on the bill together for the past 18 months, but Shelby abandoned the negotiations Wednesday, saying they had reached an "impasse."
"It is now my belief that further negotiations will not produce additional results," Shelby said in a statement, adding that he thought they had given it their "best effort."
"Now that my negotiations with Chairman Dodd have reached an impasse, I thank my Republican colleagues for their support and defer to their individual judgments on whether the Senate begins a floor debate on this bill," Shelby said, opening the door for Republicans to vote for the bill to proceed to the floor.
"It is time for this debate to begin," Dodd said in a statement. "And it must be a serious, vigorous debate."
"It is time for the Senate to operate as the Senate should," Dodd said. "Members must be allowed to offer amendments.
We must allow many voices to be heard as we work to create a sound foundation for our nation's future economic strength," he said.
Shelby said Dodd had made one concession - promising to address the bill's ability to end bailouts for good. Republicans have argued that the bill will not eliminate future taxpayer bailouts as promised, but will instead institutionalize them.
But Shelby cited his continued concern over a "sprawling" new consumer protection agency that "will find and force its way into facets of our economy that had nothing to do with the housing crisis."
Shelby also objected to proposed regulations on derivatives, fearing that it would damage the ability of small businesses to create jobs. Shelby said the provisions would have "far-reaching and devastating effects on these businesses."
Talks between Dodd and Shelby are to continue Wednesday night. Dodd still accuses Shelby of wanting to "weaken consumer protections" and Shelby says Dodd wants to create a "massive new bureaucracy."
Republicans have stated the bill's proposal to place greater restrictions on derivatives will hurt small businesses that rely on derivatives to hedge against losses.
Earlier Wednesday, Senate Republicans blocked a floor debate on financial reform legislation for the third consecutive day in a row, voting against a measure that would move the bill forward.
In the third vote in three days, the Senate voted 56-42 in favor of bringing the bill to the floor, four votes short of the 60 votes needed to overcome a filibuster.
Democratic Sen. Ben Nelson of Nebraska again voted with all Senate Republicans in Wednesday's vote. Nelson claims it is because the bill hurts Main Street, but Nelson also has ties to Berkshire Hathaway Inc., whose firm would be harmed by proposed restrictions on derivatives. Berkshire is Nelson's top campaign contributor.
The 1,400-page bill calls for regulatory powers to wind down big financial firms that pose a threat to the economy, stricter regulations of the derivatives market and added consumer protections.
President Obama, who strongly supports the bill, is taking his Wall Street reform message on a nationwide tour called "White House to Main Street." Obama visited Illinois and Missouri Wednesday as part of the tour.
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