Senate Banking Committee leaders want to win as much support as possible for their housing finance reform legislation before a panel vote on Tuesday, but it's possible that a failure to win over certain members could ultimately assist their cause.
Two high-profile progressives on the panel, Sens. Elizabeth Warren, D-Mass., and Sherrod Brown, D-Ohio, have publicly expressed significant concerns about the legislation in recent weeks, suggesting both are likely to vote against the legislation.
Sens. Tim Johnson, D-S.D, chairman of the committee, and Mike Crapo, R-Idaho, the ranking member, are under pressure to curry strong support for the bill if it is to have any chance of making it to the Senate floor this year. While the vote count is what matters, it's possible that a failure to attract backing from some of the more liberal committee members, particularly Warren, could actually give the bill more of a fighting chance.
"If you have a bill that the progressive darling of the Democratic Party is enthusiastically behind, it's going to cause conservatives to question whether this is really the moderate middle ground that its sponsors assert," said Jaret Seiberg, a policy analyst with Guggenheim Securities. "There can be real political upside if Elizabeth Warren is objecting to the bill."
The banking panel signaled on Thursday that it will forge ahead with its scheduled April 29 markup of the plan to unwind Fannie Mae and Freddie Mac and establish a new secondary market backed by a government guarantee in the case of catastrophic losses. The Johnson-Crapo bill draws on earlier work by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., to overhaul the mortgage finance market, which gained the support of 8 additional committee co-sponsors last summer.
Assuming the original coalition stays in place, the bill already has enough support to pass out of committee. But Johnson and Crapo will need to build on that number any way they can, though attracting additional votes is reportedly proving difficult.
"You've got the centrists on board already. The problem the bill always had was that it started in the middle based on politics, and it's had trouble extending much beyond that," said Mark Calabria, director of financial regulation studies at the Cato Institute. "When you start out in a completely compromised position, you don't give yourself much room to compromise from that."