Sens.Dodd,Corker Try to Bring New Life to Financial Reform Negotiations

Sen. Chris Dodd, the chief author of the Senate's financial system reform legislation and chairman of the committee where it's being negotiated, selected Sen. Bob Corker to participate in subsequent bipartisan wrangling after talks stalled with the committee's ranking Republican. Corker, R-Tenn., will replace the senior Republican Sen. Richard Shelby, R-Ala., in one-on-one negotiations with Dodd, D-Conn., according to an announcement from Dodd's office.

Though the U.S. House of Representatives has long since passed a wide-reaching package of financial legislation that attempts to re-work the system in the wake of its failures, hashing out an agreement has been more difficult on the Senate side. Dodd had offered a draft of similar legislation to his Banking, Housing and Urban Affairs Committee, but it has since been stalled in negotiations. And now that Democrats in the Senate can no longer count on a block of 60 votes to beat a Republican filibuster, the emphasis on creating a bipartisan package has become key.

In the announcement, Dodd called Corker "a serious thinker." In a Feb. 10 meeting between the two senators, Dodd asked Corker to take over negotiations, and "given the importance of these issues, he agreed."

The primary issues for insurers within these negotiations will include the question of whether major insurers are to be lumped in with regulation for systemically risky companies, whether insurance will be included under the authority of a consumer protection agency and also the potential formation of a federal insurance office -- likely to have a supervisory but not regulatory role.

On Feb. 5, Dodd issued a statement that he had reached the impasse with Shelby. "While I still hope that we will ultimately have a consensus package, it is time to move the process forward. I have instructed my staff to begin drafting legislation to present to the committee later this month."

On that same day, Shelby said in a statement, "We must craft a resolution regime that ensures taxpayers will never again bear the losses for risks taken in the private marketplace. I will not agree to any legislation until I am satisfied this goal is also achieved."

Dodd had pointed out at a Feb. 4 committee hearing on financial reforms: "Nearly two years after the collapse of Bear Stearns, we still have not updated the laws governing our financial sector, leaving our fragile economy with the same vulnerabilities that led to the economic crisis in the first place."

"While I'm disappointed that Chairman Dodd and Ranking Member Shelby have reached an impasse, it won't alter my efforts toward a bipartisan bill," Corker had said in a Feb. 5 statement, days before accepting the role as the committee's chief Republican negotiator.

Dodd said he is "more optimistic than I have been in several weeks that we can develop a consensus bill."