Ted Kaufman - United States Senator for Delaware

May 27, 2010

As Democrats pushed to pass a financial regulatory reform bill in recent weeks, Senate Majority Whip Durbin and Senate Democratic Caucus Vice Chairman Charles Schumer of New York took contrasting approaches in their quiet contest for support among Democrats.

Durbin was ubiquitous on the floor and aligned with a liberal bloc working to strengthen the bill. Schumer, caught between national and local interests, was conspicuously quiet.

With Senate Majority Leader Reid facing a tough re-election fight in Nevada, Durbin and Schumer are widely seen as vying for colleagues' support in case Reid loses and Democrats need a new leader.

The financial reform bill fight was the latest front in the contest, and it illuminated the approach taken by the two senators as they navigate the sensitive task of courting colleagues while staying loyal to Reid. Spokesmen for both men declined to comment.

Durbin, who colleagues call hard-charging, more principled than calculating and rhetorically gifted, was hard to miss. He spoke on the floor about the regulatory reform bill 20 times since debate began in April, according to Senate records.

Durbin won a fight with community banks and credit unions by forcing and winning a vote on an amendment to let the Federal Reserve cut fees banks charge merchants for debit card transactions.

Durbin organized a block of about 10 liberal senators working to win votes on amendments intended to strengthen the bill, lending them rhetorical help and negotiating for them with Reid and Senate Banking Chairman Christopher Dodd, who managed the bill, senators and aides said.

"He was very helpful. He organized," said Sen. Ted KAUFMAN, D-Del. "He made sure everyone had a say."

While known for seeking publicity, Schumer rarely speaks on the floor and does his serious politicking behind the scenes.

That was the pattern on the financial bill, which caught the New York senator between national political plans of Democrats, who used the measure to tie Republicans to big banks, and home state interests, particularly Wall Street banks that remain a key constituency and funding source for Schumer and Democrats he backs.

Schumer won inclusion in the bill of proxy access rules helping shareholders of public companies nominate directors, despite opposition from groups like the Business Roundtable. Schumer also co-sponsored several amendments and was named a conferee on the bill.

But overall, Schumer addressed the conflict between his party and state by keeping his head down, Senate aides said. He spoke about the bill on the Senate floor just three times.

Democratic sources said Schumer sought a balance by quietly supporting Democrats on the bill without publicly blasting local institutions.

"Senators understood," said one senior Democratic aide. "That was how he could help."

The approach still drew attacks from New York tabloids, and Wall Street banks and their allies saw it as populist legislating. Senate Agriculture Chairwoman Blanche Lincoln, in a move she trumpets in her campaign, won inclusion in the bill of a measure that would force banks to spin off swaps trading desks.

Critics noted Schumer had little to say on the issue, despite commissioning a 2007 report with New York Mayor Michael Bloomberg warning that excessive regulation of securities could drive much of that business overseas, an argument echoed by Republicans during the financial reform debate.

Sen. Mike Enzi, R-Wyo., cited the report in attacking an amendment by Sen. Arlen Specter, D-Pa. Schumer did not respond.

Schumer also let freshman Sen. Al Franken, D-Minn., take the lead on an amendment creating an SEC-overseen investors' board that would decide how some securities are rated, to reduce "rating shopping."

Schumer was a leading critic of rating agencies for years, but in deferring, handed Franken a policy win. Democratic aides said Schumer worked with Franken on the issue.

Their roles on the financial bill marked a shift from those they filled as Democrats worked to pass a healthcare overhaul bill in December. Schumer worked with Reid behind closed doors to nail down Democratic votes for passage, staying late during a Friday night snowstorm to cut the final deal that clinched the vote of Sen. Ben Nelson, D-Neb. Durbin was not directly involved in that discussion.

But on the regulatory bill, Durbin mediated between Reid and Dodd and Sens. Sherrod Brown, D-Ohio, Jeff Merkley, D-Ore., Carl Levin, D-Mich., Bernie Sanders, I-Vt., Sheldon Whitehouse, D-R.I., Jack Reed, D-R.I., KAUFMAN and others, helping the senators collectively push for votes on their amendments.

Aides said Durbin urged those lawmakers to seek votes on just one amendment each, but represented their position to top Democrats.

"He helped with Chris and Harry," KAUFMAN explained.

But Democratic aides working for senators not ideologically close to Durbin on the issue said Durbin forced Democratic moderates -- seen as more likely to back Schumer in a leadership contest -- into an unnecessary tough vote.

The aides said that by "egging on" liberals, Durbin complicated passage of the bill by encouraging them to oppose the measure if they did not get votes on amendments.

Spokesmen for Reid and Durbin rejected that claim. A Reid spokesman called it "ridiculous," saying negotiations in the caucus helped pass the bill.

On the floor, Reid said Durbin's work to rein in amendments was "an example for all of us to follow."