The Senate is scheduled to have another vote on a motion to proceed on the Dodd financial regulatory reform bill shortly. Thus, it appears that the efforts to ram through a bill continue.

Several Senators, have called for the bi-partisan negotiations to be broken off and the bill brought to the floor. They have stated that the amendment process will correct any problems in the bill. That’s akin to asking a shipbuilder to ignore a leaky hull and go forward with building the rest of the ship, rather than fixing the core problem.

As I mentioned yesterday, 90% of the legislation that passes through the Banking Committee is bi-partisan.

Furthermore, using a flawed base bill to move forward leaves open the possibility that unintended consequences are not fixed and that our capital markets will be left at risk, harming the economic growth and job creation in the process.

As I wrote last week, these are the 5 flaws that should be fixed:

1. Consumer Protection: The current bill still allows for a bureau that has overly broad powers to regulate Main Street, with an unaccountable director. Increased consumer protections are needed and the Chamber has proposed a plan to get there. But ask yourself, do we really need an economic J. Edgar Hoover regulating the orthodontist?
2. Derivatives: More clearing and transparency, no argument. However, corporate end-users need flexibility to use derivatives to bring low-cost products to market for consumers. Check out this article about how derivatives are used to bring Beer to the market.
3. Ending “Too Big to Fail”: The Federal Government needs authority to unwind interconnected firms that pose a risk to the financial system during a crisis. However, implied government back-stops, pre-paid bailout funds and pre-emptive break-up authorities will increase risk and perpetuate moral hazard.
4. Corporate Governance: Federalizing state corporate law to benefit a few large union pension funds and activist investor’s smacks of pay-back rather than a sound regulatory response to the crisis. Bogging down management with annual shareholder fights and disenfranchising retail shareholders just isn’t the way to go.
5. Volcker Rule: Imposing the Volcker Rule will place the American financial services at a competitive disadvantage. Who says so? Our international competitors. There are other pro-growth tools such as capital and liquidity requirements to achieve the intent of the rule.

While the Senate has been busy holding cloture votes, it is unclear what progress if any is being made to fix these flaws.

What do the American people think?

In polls released last week, clear majorities of likely voters in Arkansas, Massachusetts, Montana Nebraska, Ohio and Tennessee were concerned that Congress will try and rush through a bill rather than reach a bipartisan agreement and fix the problems.

The American people understand that the stakes are high and that it is more important to get a good bill rather than ram through any bill. Hopefully, in the haze of cloture votes, that plain common sense can also filter its way into the Capitol.