WASHINGTON -- House Republicans tried Friday to derail the bank reform bill in protest of a perceived double-cross by the House Democratic leadership, but their move was thwarted as a nearly solid Democratic majority voted to continue debate on the bill.
The House today is scheduled to resume consideration of the legislation, which among other things would allow banks into the secutiries business. A final vote is possible by early this evening, but the outcome is uncertain.
Rep. Robert H. Michel of Illinois, the Republican leader, offered the motion to gut the banking bill because he said the legislation as currently drafted "invites a veto" from President Bush. Congress should not waste its time debating a bill that will not become law, he said.
His move was triggered by the House's vote yesterday to retain the so-called Gonzalez-Dingell compromise, an agreement on bank securities powers worked out by House Banking Committee Chairman Henry B. Gonzalez, D-Tex., and House Energy and Commerce Committee Chairman John D. Dingell, D-Mich.
The Bush administration has threatened to veto the bank bill because of the compromise provisions.
Under the compromise, the Glass-Steagall Act would be repealed, allowing bank affiliates to underwrite securities. But the plan would erect impermeable firewalls -- provisions that insulate banks from the risks of underwriting -- which opponents claim limit the ability of banks to compete in the securities business.
On Thursday night, Rep. Newt Gingrich, R-Ga., echoed what many Republicans were saying privately when he asserted that Rep. Michel had been given assurances by House Speaker Thomas S. Foley, D-Wash., that the Gonzalez-Dingell compromise would be defeated on the House floor -- if the House debated the legislation. But prior to the debate, the House first had to approve rules governing consideration of the bill. Without rules, the House will not consider legislation.
At the time, the rules appeared headed for defeat, which effectively would have killed the banking bill. But after discussing the matter with Speaker Foley, Rep. Michel and seven other Republicans voted to support the rules with the understanding that the Gonzalez-Dingell compromise would fall.
The final vote for the rules was 210-to-208. The Gonzalez-Dingell accord was retained in the bill on a 216-to-200 vote.
When asked about Rep. Gingrich's assertions Friday, Speaker Foley denied deliberately misleading the Republicans.
"I said that there was an opinion very widely shared on the Democratic side that the Dingell-Gonzalez bill might fail, that it was in some trouble," he said. "And suggestions that I was misleading somebody are, of course, totally inaccurate, suggestions that I was deliberately misleading people with some dishonorable intent I resent, and I don't think anybody who knows me believes that I would do that to any leader on either side."
He added, "If Mr. Gingrich is being quoted accurately, he owes me an apology."
Despite his assurances that he did not intentionally mislead Republicans, Speaker Foley left nothing to chance when it came to Rep. Michel's motion. He spread the word through the Democratic ranks that he would closely watch their votes, and in the end all but two Democrats voted to continue debate. The final tally on the Michel motion was 243-to-158.
It remains unclear whether Speaker Foley can muster the muscle necessary to get the bill approved by the House and sent to the Senate. A number of Democrats who voted against the Michel motion said they also intend to vote against the bill.
One factor working in favor of the legislation is the need to recapitalize the Bank Insurance Fund, House Majority Leader Richard Gephardt, D-Mo., said Friday, "Let's be clear. "We're not leaving here until we recapitalize the Bank Insurance Fund." His statement was widely interpreted to mean that the House may have to remain in session past Thanksgiving unless the banking bill, which would provide a $70 billion loan to the insurance fund, is approved.