In a blow to Senate Majority Leader Harry Reid, the Senate voted 57-42 to continue debating a sweeping overhaul of the U.S. financial sector. Reid had hoped to move the Senate toward a final vote but failed because of two Democratic holdouts: Maria Cantwell of Washington and Russ Feingold of Wisconsin. Republicans looked to block a vote on the bill, seeking to scale back some of its provisions. Cantwell and Feingold, however, wanted tougher restrictions including a firewall between commercial banking and investment banking, and closing a loophole in the derivatives trading language. What does this mean for financial reform?

  • All Bets Are Off, writes Alison Vekshin at Business Week: "The Senate fell short of the 60-vote threshold needed to proceed to final action on the measure, throwing into doubt the strategy of Senate Democrats to pass the bill this week and send it to be reconciled with House legislation passed in December." The NPR news team adds, "A successful vote to limit debate would have set up a timetable for a final Senate vote by the end of the week. It's unclear now when that vote might take place."
  • Failed Because of Democratic Infighting, writes David Herszenhorn at The New York Times: "The disagreement that mattered on Wednesday was among Democrats, and the failed effort to close debate was a jarring setback for Mr. Reid, who proved unable to address the concerns of all of his caucus members, including some with serious policy concerns about the legislation — even as he insisted that it was time to get to a final vote and said Republicans were trying to delay."
  • Why I Voted No  In a statement, Feingold explained himself: "After thirty years of giving in to the wishes of Wall Street lobbyists, Congress needs to finally enact tough reforms to prevent Wall Street from driving our economy into the ditch again. We need to eliminate the risk posed to our economy by 'too big to fail' financial firms and to reinstate the protective firewalls between Main Street banks and Wall Street firms. Unfortunately, these key reforms are not included in the bill. The test for this legislation is a simple one - whether it will prevent another financial crisis. As the bill stands, it fails that test. Ending debate on the bill is finishing before the job is done."
  • So What's Next?  The Atlantic's Dan Indiviglio peers into the future: "Another vote will almost certainly be held before the Memorial Day recess, though it's unclear precisely when. You can probably expect Democratic leadership will do whatever it can to satisfy Cantwell and Feingold, however, since those are the only votes they need get the bill through. And that also probably sheds some light on when the vote will take place -- once those two Senators are on board. Given the Republicans from Maine voting for cloture, the bill will almost certainly pass in the days to come."
  • This Will Probably Make for a Better Bill, writes an optimistic Ezra Klein: "Debate on financial regulation will continue. More amendments will be considered, at least if Democrats and Republicans can come to an agreement on whether to consider them. And another cloture vote will have to be called. That might be bad for the Senate schedule, but it's probably good for the bill. This is the rare process in which the amendments are making the legislation substantially better. If the Senate has to work over Memorial Day to accommodate that process, so be it."
  • Also To Be Decided  The AP notes, "Still left for the Senate to address are whether to exclude auto dealers from the oversight of a consumer financial protection bureau."