Although an effort to reach a bipartisan deal on regulatory reform failed Wednesday, Republicans and Democrats unanimously agreed to allow debate to move forward on the Senate floor.
The move is a tectonic shift from the past few days, when the bill appeared stuck in a version of "Groundhog Day," with Republicans voting three times to block debate from starting.
But citing pledges to address remaining issues during floor debate, both Sen. Richard Shelby and Minority Leader Mitch McConnell freed up fellow GOP lawmakers to allow the bill to move forward.
"Now that my negotiations with Chairman [Chris] Dodd have reached an impasse, I thank my Republican colleagues for their support and defer to their individual judgments on whether the Senate begins a floor debate on this bill," Shelby said in a press statement.
The lead Republican on the Banking Committee was backed by McConnell, who said he hoped further changes could be worked out on the floor.
"It is my hope that the majority's avowed interest in improving this legislation on the Senate floor is genuine and the partisan gamesmanship is over," McConnell said. "I remain deeply troubled by a number of provisions in this bill and will work aggressively in the days ahead to ensure that the majority does not use our mutual interest in regulating Wall Street to extend the federal government's unwanted hand into Main Street."
All Republicans eventually agreed to support moving forward with debate.
Although McConnell said the delay strengthened his hand, the move appeared to be a victory for Dodd, who has been arguing for days to move ahead with the bill and address issues during debate.
Leaders from both political parties pledged to allow an open process for amendments to the bill to be debated on the floor. Senate Majority Leader Harry Reid said he planned to offer the first amendment, an agreement reached between Dodd and Senate Agriculture Committee Chairman Blanche Lincoln on provisions to regulate derivatives.
Dodd said that he and Shelby had not "sealed anything but we've had great conversations as two people of good will can have" on "too big to fail."
"This is a good result. We are now on the Wall Street reform bill which the American people want us to be on and this is an important issue," Dodd said on the Senate floor. "We are going to have a very busy couple of weeks here and there are a lot of members who have very strong feelings about this bill and our job, my job, will be to see to it that people will have a chance to offer their amendments."
Sen. Bob Corker, R-Tenn., told reporters before the motion to proceed went through that he expected the Dodd-Lincoln derivatives provisions, which would force banks to spin off their swaps dealing desks, would be "toast" and eliminated during floor debate.
With each cloture vote, which requires 60 votes to pass, Democrats were turning up the pressure on Republicans, who risked being seen by the public as supporting politically unpopular banks. Democratic leaders vowed Wednesday to keep Congress in session all night unless Republicans agreed to move forward.
The bill's prospects for passage remain good, but there are still issues that need to be addressed and potential roadblocks that could pop up. For starters, Democrats still need at least one Republican to vote for the overall bill (not just to begin debate), and so far no GOP member has indicated they will do so.
During an interview on Wednesday, Shelby acknowledged that his biggest concern — ending "too big to fail" was largely resolved with Dodd. The Connecticut Democrat has pledged to include those changes, including tightening up resolution language and removing a proposed $50 billion fund to help dismantle a large bank.
"We made a lot of progress on the section dealing with 'too big to fail,' " Shelby said.
Still, Shelby said more changes are needed. He wants to expand an end-user exemption in the derivatives portion of the bill and clarify that a proposed consumer bureau could only focus on financial companies.
"On the derivatives, that's still fluid and dangerous," Shelby said. "And the consumer piece, the agency, we haven't been able to make any real progress there, not yet."
Republicans' primary concern over the proposed consumer bureau is that it would cover more than just financial companies. Republican leaders, likely worried about appearing to be defending banks, have argued that the bill language is sufficiently vague that it would allow the bureau to target dentists and auto dealers, among others.
"It will cover a heck of a lot," Shelby said. "It's going to cover more people than they ever dreamed."