Senate Banking Committee Chairman Chris Dodd is weighing whether to keep negotiating with Republicans on a regulatory reform bill or shift gears and take a partisan path, according to sources on and off Capitol Hill.
Dodd is meeting with Democratic members of his panel this week to gauge how to proceed, given the shifting political dynamics of reform.
Though Dodd, Sen. Richard Shelby, R-Ala., and a bipartisan group of lawmakers have negotiated during the past month on crafting a reform bill that could be supported by both political parties, the White House is pushing populist proposals that have disrupted that effort. President Obama called for a tax on big banks and a ban on proprietary trading, among other ideas, and adopted a harsher tone against large banks. This has alienated many Republicans, however, who see the new proposals as punitive and counterproductive.
Last week, Senate Republican leader Mitch McConnell met with Republican members of the banking panel, telling them not to support a bill unless they were sure it was a good deal.
Dodd is trying to gauge support among his own committee members, sources said. Several said he wants to hear what they would need in order to move forward on a bill and to figure out whether they still want to work with Republicans.
Some Democrats are privately arguing that Dodd should proceed with a partisan bill, though doing so would probably doom its chances of enactment. It could turn into an election issue, they said, on which the GOP would have to justify opposing a reform bill.
A spokeswoman for Dodd gave no update on the Connecticut Democrat's strategy.
An aide to Shelby, the GOP's ranking panel member, said that he "is actively engaged with Chairman Dodd on all facets of regulatory reform. He remains hopeful that we can reach a meaningful bipartisan agreement."