Senate digs into finance overhaul

WASHINGTON — Days of high-decibel partisanship yielded to slightly more subdued accusations as the Senate lurched into action Thursday on legislation reining in Wall Street and risky investments.

Within moments of the opening of debate, Sen. Richard Shelby of Alabama said he and other Republicans hoped to rewrite the White House-backed bill "so that it actually ends bailouts, protects consumers without jeopardizing our small community banks, and brings transparency to the world of derivatives without sacrificing economic growth and job creation."

It was a none-too-subtle accusation that Democrats favor taxpayer bailouts of failing banks, and Sen. Barbara Boxer of California volleyed back a few moments later.

"I knew it was false" when Republicans said it, she said. Holding up a mug of water, she added, "It is like saying this glass of water is a cup of coffee. ... And if you say it seven, eight, nine times that it is coffee someone might believe it."

No votes were taken, and none was likely before Tuesday on the legislation, expected to take two weeks or more to complete.

The House has already passed its version of the bill, and it could be months before a compromise goes to President Obama for his signature.

Despite the rhetoric, Sen. Christopher Dodd, D-Conn., said there was a chance for bipartisan agreement on three major issues in dispute: setting rules covering the future failures of large financial institutions, establishing new protections for consumers and regulating risky investments known as derivatives.

"Simply put, we have no other choice but to do so. The status quo is unacceptable. We cannot leave the American people vulnerable to the present construct of our financial regulators system," he said.

While some of the differences are partisan, others are driven by ideological concerns, pressure from banks or other industries, proximity to Wall Street or concerns raised by the Obama administration or the Federal Reserve.