Democratic leaders clearly anticipated that at least one Republican would be unwilling to stand with his party and Wall Street in filibustering regulatory reform. That guess now looks wrong, and it’s not 100 percent obvious what “Plan B” is. Paul Krugman comments:
I have a theory about the problem here. My understanding is that Obama officials have looked at the polls, which show that the public overwhelmingly favors cracking down on Wall Street; so they assumed that the GOP wouldn’t dare stand in the way. But they seem not to have learned, even now, that the right has an awesome ability to create its own reality: that Mitch McConnell et al would stand in the way of reform while claiming to be taking a stand against Wall Street. [...] To break through that, you need hard-hitting campaigns and simple slogans. And I have a sinking feeling that once again, the Obama team is going straight for the capillaries. Let’s hope they prove me wrong.
I think we’re going to see all the hard-hitting rhetoric Krugman could dream of. But I continue to think that people overestimate the good that kind of thing will do. The fundamental problem Democrats keep running up against is that there are zero incumbent Senate Republicans facing tough re-election battles. Jeff Sessions isn’t afraid of Barack Obama’s hard-hitting campaigns. If George Voinovich and Judd Gregg weren’t retiring, they’d have to worry about being painted as tools of Wall Street in their re-election bids. Or if Tom Vilsack were running against Chuck Grassley instead of running the Agriculture Department. If Obama’s approval ratings were high, then I bet Richard Burr would be afraid of being targeted by the White House. Or if Olympia Snowe hadn’t just proven that she can cruise to re-election even in a Democratic wave year, she might be afraid.
Under the circumstances, what’s really needed as “Plan B” is stuff you don’t need 60 votes for. You obviously can’t just “do” bank regulation through reconciliation. But there’s a lot executive agencies can do, and you could pass a bank tax via reconciliation. Someone could probably dream up more stuff. Then beyond that, of course you need to hit the opposition. But realistically even the toughest hits in the world won’t necessarily bend incumbents who don’t feel vulnerable in a general sense.