The financial regulation bill, which passed out of conference last week, may have trouble making its way to the president's desk. When the Senate reached cloture on the bill with 60 votes the first time around, it had the support of Robert Byrd, who passed away today, and Scott Brown, who is now threatening to vote against the conference report because of "$18 billion in new assessments and fees were added in the wee hours of the morning by the conference committee."

If Brown votes "no," Democrats will need either Russ Feingold or Maria Cantwell, the two Democrats who voted against the bill in March, to switch to "yes." Both votes would be needed until Robert Byrd's seat is filled.

The Wall Street Journal editorial page and Nicole Gelinas have to good pieces today on what's wrong with the bill.

From the Journal:

It's as if Tony Hayward of BP were allowed to write new rules on deep water drilling.

The Federal Reserve, which promoted the housing mania and failed utterly in its core mission of monitoring Citigroup, will now have more power to regulate more financial institutions and more ability to dictate the allocation of credit.

The Treasury, which bailed out institutions willy-nilly without consistent rules, will now lead the Financial Stability Oversight Council that will have the arbitrary power to define which financial companies pose a "systemic risk" and which can be shut down without recourse to bankruptcy. Willy-nilly will now be the law.

And the SEC, which created the credit-ratings oligopoly and missed Bernie Madoff, will get new powers to decide how easy it should be for union pension funds to get their candidates on corporate proxy ballots.

Oh, and Fannie Mae and Freddie Mac? They aren't touched at all, even as they continue to lose billions of taxpayer dollars each quarter.

In other words, our Washington rulers have taken 2,000 or so pages to double and triple down on the old system that failed.

Nicole Gelinas:

in a move that's guaranteed to push jobs out of New York, the feds want big investment firms, insurers and hedge funds to front $20 billion in two years for a "financial crisis special assessment fund." All this does is give funds time to send assets abroad to escape the fee.

The compromises hammered out by Sen. Chris Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.) and others don't address their bill's fatal flaws -- starting with the bill's disastrous effort to end taxpayer bailouts.

The obvious -- and correct -- way to end Wall Street rescues is to let a failed financial firm go bankrupt. That is, the people who invested in a failed company -- including bondholders, people owed money on derivatives and other lenders -- should take the losses.

Instead, Congress would "end" bailouts by directing the feds to rescue the creditors to any failed "too big to fail" financial company. Later, the feds would make the failed firm's competitors pay the cost.

Read the rest here.
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