WASHINGTON — The White House and congressional Democrats are plotting the end game of their financial regulatory overhaul, with one Republican saying his party has lost leverage in negotiations and another predicting a "100% chance" the legislation will pass.
The developments come as the Obama administration has struck a more aggressive tone in its effort to finalize the banking rules, which White House officials have said are necessary to protect against a future financial crisis.
Republicans understand Wall Street is unpopular in the wake of the financial meltdown, and they are working to preserve their place at the negotiating table with congressional Democrats and the administration.
"There's not an American alive that doesn't want to end 'too big to fail,'" said Sen. Bob Corker (R., Tenn.), a Senate Banking Committee member.
The changes, which would create more consumer protection regulations, give the government more scrutiny over large companies, and tighten restrictions for exotic financial products, would create the biggest overhaul of financial rules since the 1930s.
President Barack Obama met Wednesday with House Financial Services Committee Chairman Barney Frank (D., Mass.) and Senate Banking Committee Chairman Christopher Dodd (D., Conn.), and Dodd said he would start working through differences between a bill that passed the House in December and his own version of the rules in the coming days. The bill first has to pass the Senate, however.
"I'm very hopeful in light of our conversations over the last couple of days that we can have a good, strong bill on the floor of the United States Senate within the next month," Dodd said after the White House meeting.
White House spokesman Robert Gibbs said Wednesday that the president expects to finish the financial reform legislation "in the next couple of months."
Dodd advanced his bill through his committee Monday with a 13-10 party line vote, but Democrats are confident they can win support from a handful of centrist Republicans on the Senate floor.
Several Republicans who had fought for a bipartisan compromise say their negotiating power has slipped. They also say the White House appears emboldened by its recent victory on a health care bill and is less willing to compromise.
"I believe it could be a very large strategic mistake" that Banking Committee Republicans allowed the financial rewrite bill to pass the panel without attempting to amend it, said Corker. "I think it's far more difficult to get us where we need to go."
Sen. Judd Gregg (R., N.H.), an influential fiscal conservative on committee, said he is confident a bill will pass, and he hopes more than a few Republicans will back it.
"A hundred percent chance it will pass, it won't be a hundred percent vote," Gregg told reporters after a speech at the U.S. Chamber of Commerce.
Senate Republicans and Democrats can work out the most critical parts of the measure — winding down or "resolving" institutions that are considered "too big to fail" and regulating over-the-counter derivatives, Gregg said.
"The real guts of this bill, derivatives, resolution authority, too big to fail, regulatory structure — those are not political issues. It's just a question of getting them right. I think both sides want to get them right," Gregg said.
Corker agreed. "Financial regulation is not like health care. Financial regulation is not like so many issues where there's this philosophical divide" among Republicans and Democrats, he told the chamber.
But Republicans worry that "political" issues, such as a proposed new consumer financial protection agency, could weigh down negotiations of the financial measure.
The White House is pushing for an independent consumer agency, making implied veto threats on any measure that doesn't create a consumer body that administration officials feel is strong enough.
On Wednesday, Treasury Deputy Secretary Neal Wolin lashed out at the chamber and other business lobbies that have fought the financial bill, saying the chamber's $3 million advertising campaign is designed to defeat the legislation. Wolin said big banks and Wall Street firms are spending $1.4 million a day on lobbying.
"We believe that the fight against financial reform is shortsighted and misguided," Wolin said.
Gregg said the administration's push could get in the way of agreement between Democrats and Republicans. "They're pushing for a partisan bill, it appears, which is unfortunate because this shouldn't be a partisan bill, but that's their style these days."
Senate Republicans say they are willing to discuss a consumer agency, but they want to make sure it doesn't have more power than banking regulators. The chamber, meanwhile, has launched an aggressive lobbying campaign against a new consumer agency.
"Opponents have painted a terrifying picture where every corner store is subject to the long arm of the consumer financial regulator," Wolin said. "That is not true."