Senate Financial Regulatory Bill
On Thursday, Senator Bob Corker (R-TN) announced that he had agreed to work with Senate Banking Chairman Chris Dodd (D-CT) to draft a bipartisan financial reform bill. Despite giving Senate Minority Leader Mitch McConnell notice prior to the announcement, Corker surprised many in his own party since Banking Committee Ranking Member Richard Shelby (R-AL) broke off negotiations with Dodd over disagreements about a new consumer protection agency. Sources indicate Dodd sees Corker as an “honest broker” because of his work with Senator Mark Warner on resolution authority issues.
On Friday, Corker released a statement saying that a new Consumer Financial Protection Agency was a “non-starter” and he was only committing to “working towards a bipartisan agreement.” Corker also stated that the effort to prohibit commercial banks from having proprietary trading businesses by White House Economic Advisor Paul Volcker would not be the focus of his talks with Dodd.
FirstEnergy to Buy Allegheny Energy
On Friday, FirstEnergy announced it would buy Allegheny Energy for $4.7 billion in stock. The deal would create a company with 10 utilities and six million customers stretching across seven states. The companies will still have to get approval from numerous state regulators before the deal can close. The companies said merger savings could top $530 million by the fifth year. As part of the deal, FirstEnergy also would assume $3.8 billion of Allegheny’s debt.
Senate “Jobs” Bill
On Thursday, Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) circulated a $85 billion draft “jobs” bill that included many bipartisan items such as the much sought-after extension and creation of business tax credits. However, within a few hours, Senate Majority Leader Harry Reid (D-NV) announced he would instead offer his own scaled down $15 billion bill “jobs” bill that includes Build America bonds, a small-business tax program that allows quick expense write-offs, a one-year extension of highway construction funds and a new hires tax-credit which would waive the 6.2 percent Social Security tax for any employer who hires a worker who has been unemployed for at least 60 days. Senate Republicans were initially skeptical of Reid’s proposal and are likely to withhold their support.