WASHINGTON — Prodded by President Obama, the Senate rejected a Republican consumer protection plan yesterday that would have diluted a central element of the administration’s financial regulation package.
Democrats and the president argued that the GOP proposal would have gutted consumer protections. The vote was 61 to 38, with two Republicans — Senators Olympia Snowe of Maine and Charles Grassley of Iowa — joining Democrats to defeat the GOP measure.
Democrats have proposed an independent bureau within the Federal Reserve to write and enforce regulations that would police lending. The Republican proposal would create an agency within the Federal Deposit Insurance Corp. The FDIC would have to approve regulations, and enforcement would be left to bank regulators.
Republicans said the Democratic bill overreached and would give a powerful consumer agency too big a voice in banking affairs.
The Democratic version of the legislation already contained some concessions to Republicans, and Democrats showed no willingness to cede any more ground
“Alternatives that gut consumer protections and do nothing to empower the American people by cracking down on unfair and predatory practices are unacceptable,’’ Obama said in a statement before the vote.
That singular power is playing havoc with crucial nominations, say Democrats, who complain that the Republican minority is using the practice of holds to obstruct the Obama administration’s agenda. Holds are also used to indefinitely block legislation to fund agencies or projects.
The Senate’s number two Democrat, Dick Durbin of Illinois, said yesterday that there are currently 96 nominees waiting for a confirmation vote.
Many of President Obama’s stalled nominees are in line for what appear to be noncontroversial jobs in agencies such as the Peace Corps, Amtrak, and the Marine Mammal Commission. Some confirmation delays, however, are clearly disruptive.
Durbin said Larry Robinson, waiting six weeks to become assistant secretary of commerce for oceans and atmosphere, got a confirmation vote yesterday only because of the Gulf oil spill. “The embarrassment level for the hold became overwhelming,’’ he said.
The National Transportation Safety Board met Tuesday to discuss findings from last year’s splashdown of an airliner in New York’s Hudson River.
But only three board members — instead of five — were there, because the Senate hasn’t acted on two nominees, one a Democrat and one a Republican. The Democrat has been on the Senate’s docket since December.
Freshman Senator Claire McCaskill, Democrat from Missouri, tried unsuccessfully last week to get a Senate vote on the two NTSB nominees and is leading a campaign against secret holds and hoping to expose those engaged in the practice.