WASHINGTON — The Senate on Thursday voted 60-39 to approve the most sweeping overhaul of the nation's financial regulatory system since the Great Depression, clearing the historic legislation for President Barack Obama to sign into law.
Obama hailed the measure's passage, calling it "a Wall Street reform bill that will bring greater economic security to families and businesses across the country. ... All told, this reform puts in place the strongest consumer financial protections in history ...
"Because of this reform, the American people will never again be asked to foot the bill for Wall Street's mistakes."
Congressional passage of the 2,323-page bill was a striking triumph for Obama, the third landmark legislative victory of his 18-month-old presidency. Like the other two — last year's $862 billion economic stimulus and the health care overhaul approved earlier this year — it came with little Republican support.
The financial overhaul bill aims to put government rules and tools in place to prevent a repeat of the 2008 financial industry meltdown that helped send the nation's economy reeling into what's been called the Great Recession, whose ill effects still linger.
"It is not a perfect bill. I will be the first to admit that," said Sen. Christopher Dodd, D-Conn., the chairman of the Banking Committee. "But we believe we have done the best we could under the circumstances to see to it we never have another bailout of a major financial institution at taxpayer expense."
Treasury Secretary Timothy Geithner saluted the legislation and its primary sponsors, Dodd and Rep. Barney Frank, D-Mass., the chairman of the House Financial Services panel: "The Dodd-Frank reforms will put in place new rules of the road for America's banks; to protect the financial security of Americans; to protect consumers and investors from fraud and abuse; and to enable businesses to finance future innovation and investment. These rules will make sure that banks — not the taxpayers — will pay for future bank failures."
Republican Sens. Olympia Snowe and Susan Collins of Maine and Scott Brown of Massachusetts joined 55 Democrats and two independents in voting yes. However, 38 Republicans voted no.
Sen. Russell Feingold, D-Wis., was the only Democrat to vote no, saying the bill isn't tough enough on Wall Street.
"Washington once again caved to Wall Street on key issues and produced a bill that fails to protect the American people from the pain of another economic disaster," he said.
'Legislative monster,' Shelby says
Most GOP senators insisted that the Senate was making a grave mistake, but for different reasons.
Sen. Richard Shelby of Alabama, the top Republican on the Banking Committee, labeled the bill a "legislative monster that I believe ... expands the scope and the power of ineffective bureaucracies ... the bill does very little to make our financial system safer."
Republicans tried to extend debate on the bill, but that effort failed 60-38.
The House of Representatives passed the bill last month, and Obama is expected to sign it within days.
As the Senate debated the bill, House Republican leader John Boehner of Ohio said: "I think it ought to be repealed," calling the legislation "unwise."
"I think it institutionalizes 'too big to fail,' and gives far too much authority to federal bureaucrats to bail out virtually any company in America they decide ought to be bailed out," Boehner said.
Democrats readily conceded that the bill wasn't perfect, but contended that it should be seen as an important, even bold, step toward curbing potential abuses.
"This bill corrects a regulatory structure that today allows reckless gambling on Wall Street, that creates 'too big to fail,' where government bailouts are necessary to keep companies afloat because there's no other option," said Sen. Ben Cardin, D-Md.
The bill, the product of painstaking negotiations, largely among Democrats, would set up a new consumer protection agency to write rules for credit products such as mortgages, student loans and credit cards; require federally insured financial institutions to spin off riskier investments; and make it easier for the government to break up large institutions that have financial problems.
The differences between the two parties over the bill remained stark Thursday, and the debate throughout the day was one likely to be heard on the campaign trail in the 3½ months until the Nov. 2 congressional election.
"As it turns out, the American people don't seem to like this government- driven solution to the financial crisis any more than they liked the Democrats' government-driven solution to the nation's health care crisis," said Senate Republican leader Mitch Mc-Connell of Kentucky.
"They don't think this bill will solve the problems in the financial sector any more than they think the health care bill will lead to lower costs or better care," he added.
No guarantees it will work
One of the Republicans' key arguments was that no one knows if the bill could prevent a 2008-style collapse.
"The Democratic majority chose to adopt legislative language penned by federal regulators in search of expanded turf," Shelby said. "They chose to legislate for the political favor of community organizer groups and liberal activists seeking expansive new bureaucracies."
Countered Dodd, "I can't legislate integrity. I can't legislate wisdom. I can't legislate passion or competency. What we can do is create the tools and the architecture that allow good people to do a good job on behalf of the American public."