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Legislative Updates: February 2010


Capitol Call

It is doubtful that former Majority Leader Tip O’Neill (D-MA) expected his famous quip, "all politics is local," to become so overused and relied upon by political pundits when he said it back in the 1980's. He was simply explaining how the issues affecting local residents in towns and cities around the country affected the actions of their representatives and senators in Washington, D.C. and, in turn, the country.

The January 19 special election in Massachusetts is a perfect example of local politics becomes national. On the surface, Republican Scott Brown's election to the Senate from Democratic-leaning Massachusetts, while surprising, would not seem to affect voters beyond his state.

But these days, with voter discontent reaching every corner of the country, every race has broad implications. After the result of the Massachusetts Senate race, the Democrats no longer have a filibuster-proof super-majority in the Senate and therefore completing action on major legislation will be more difficult to achieve.

As a result they have temporarily shelved their ambitious plans for health care reform to focus on legislation that will improve the economy and reduce unemployment, preferably before the November elections. Now, new solutions will need to be negotiated before initiatives such as comprehensive financial reform can be passed by the Senate.

Senate Banking Committee Chairman Dodd recently announced that a revised financial reform bill will be released in mid March.  This unexpected announcement came after negotiations broke down between the Chairman and Senator Bob Corker (R-TN). It is unclear whether the proposal will attract bipartisan support. The bill is expected to be voted by the Senate Banking Committee by the end of March.

In non-Congressional news, early in January, The Options Industry Council held educational events at both the Securities and Exchange Commission as well as the U.S. Congress. Both events were well-attended and included a presentation about clearing and panels of industry experts discussing regulatory and legislative issues affecting the options industry.

2010 is shaping up to be one of the most interesting political years in recent memory. After taking so many politically difficult votes in 2009, it remains to be seen how much legislation Congress will be willing to pass this year. All indications are, however, that any legislation passed by Congress in 2010 will have to benefit the economy in some way and help put people back to work.

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