Scott Brown: A Firm 'No' on Wall Street Bill as it Now Stands

June 29, 2010 12:20 PM

 ABC News’ Jonathan Karl & Matthew Jaffe report:

The Wall Street reform bill is no longer the slam dunk it seemed to be just last week.

Republican Senator Scott Brown of Massachusetts has helped Democrats overcome filibusters in the past, but he is now trying to derail one of the Obama administration’s signature efforts: a bill that would be the biggest overhaul of Wall Street regulations since the Great Depression. 

Brown said today he will oppose the bill unless lawmakers remove a $19 billion bank tax.

“I am writing you to express my strong opposition to the $19 billion bank tax that was included in the financial reform bill during the conference committee,” Brown said in a letter to Senate Banking Committee chairman Chris Dodd and House Financial Services Committee chairman Barney Frank. “This tax was not in the Senate version of the bill, which I supported. If the final version of this bill contains these higher taxes, I will not support it.”

The bank tax was only added in the wee hours of the final conference committee negotiations at 5am last Friday morning.

Brown’s opposition is a real blow for Democrats. Brown was one of four Republicans who supported the bill. Two of the other Republicans who backed the measure may also be wavering: Sen. Susan Collins of Maine has raised concerns similar to Brown’s and Sen. Chuck Grassley of Iowa is still reviewing the bill.

Democrats will also no longer have the “aye” vote of Sen. Robert Byrd of West Virginia, who passed away early Monday morning. In addition, two Democrats that voted against the bill the first time around appear set to do so again.

Sen. Russ Feingold of Wisconsin said Monday that he would not support the bill because it was not tough enough on Wall Street.

“My test for the financial regulatory reform bill is whether it will prevent another crisis. The conference committee’s proposal fails that test and for that reason I will not vote to advance it,” Feingold said in a statement.

Democrat Maria Cantwell of Washington state has not said how she will vote on the bill, but she did not support it in May.

With Byrd’s death and Brown’s about-face, Democrats now do not have enough votes for the measure to pass, when as recently as last week the bill appeared a sure thing.

-Jonathan Karl & Matthew Jaffe

UPDATE:

With Democrats suddenly short of the votes needed to pass the Wall Street reform bill after the death of Sen. Robert Byrd and the opposition of Sen. Scott Brown, House and Senate lawmakers are seriously considering going back into conference to address a controversial $19 billion bank tax, a Senate aide told ABC News today.

The bank tax was added when the conference committee finished its work early last Friday morning, but Brown today said he would not support the bill if the tax was included in it.

Now, in an effort to address concerns about the tax and win the votes needed for passage, lawmakers are currently mulling a plan to raise FDIC premiums and use untapped funds from the $700 billion TARP to offset the bill’s cost, instead of using the $19 billion bank levy, the Senate aide said.

Such a move could also win Democrats the votes of the two Republican Senators from Maine Susan Collins and Olympia Snowe, a move that would push the majority over the 60-vote threshold needed to bring a bill to a final vote in the Senate.

UPDATE #2:

Democrats scrambled to plan a 5pm meeting of the conference committee that hashed out the agreement on the bill last week.Their plan: offer an amendment to end the TARP program and use the proceeds to help fund the Wall Street reform bill.