WASHINGTON — Republicans continued Tuesday to block Senate efforts to begin formal debate on the most sweeping overhaul of the nation's financial regulatory system since the Great Depression, as political sniping turned uglier and more partisan.
Democratic leaders were happy to cast Republicans as allies of Wall Street because of their obstruction of the measure, while Republicans insisted that they were delaying the bill to ensure that taxpayers won't have to finance any more bailouts. Both sides were posturing with an eye on November's congressional elections.
At the same time, Senate negotiators continued cordial private talks aimed at reaching a bipartisan deal.
"We have made considerable progress in the last several days," said Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee. He and Banking Committee Chairman Christopher Dodd, D-Conn., continued to meet privately.
Publicly, Democrats spent a second day futilely trying to crack Republican solidarity in opposition to beginning formal debate on the bill, written largely by Democrats. In a replay of Monday, the 57-41 vote fell three votes short of allowing the Senate to proceed to formal debate, which would include considering amendments.
However, the Senate has been debating the bill informally all week and will continue to, though amendments won't be considered until the Republican blockade is overcome. Test votes to break the blockade could take a toll on the private talks, though, because they spotlight partisan division and could make compromise more difficult.
Shelby said the two sides had found some common ground on how to deal with troubled financial institutions, though he wouldn't provide details.
The bill would allow the government to move quickly to dissolve ailing companies that pose a risk to the broader economy. Republicans remain concerned that the legislation would make taxpayers liable for breaking up doomed institutions, even though the bill has no bailout provisions. Shelby signaled that he's getting assurances that won't happen.
The Democrats' legislation would require big banks to spin off divisions that trade in derivatives and would bar them from proprietary trading of them for their own accounts if they also trade on behalf of clients. Republicans — and some Democrats — think that the bill goes too far.