What to Expect When You’re Expecting a Financial Regulation Reform Conference Committee

You hear a lot about conference committees, but it’s actually been a while — 1999’s Graham-Leach-Bliley financial deregulation bill to be precise — since this mechanism was really used. The current practice has been to informally negotiate an agreement and then submit identical bills to the House and the Senate. But what seems to me to be an excessive desire to put something on C-SPAN (and perhaps other factors I don’t understand) has inspired the Congressional leadership to kick it old-school.

Tim Fernholz explains what will happen:

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When you tune into the conference, you’ll see a packed room — the committee is huge (members are listed after the jump) — with long tables seating members from the House on one side and the Senate on the opposite, in turn divided by party. Presuming all goes as planned, Barney Frank will chair the committee, since the Senate asked for this conference and also chaired the 1999 session. The committee will use the Senate bill, with a few House-bill substitutions, as the default working text, which gives an advantage to reformers, since the Senate bill — which includes the Volcker rule and tough derivatives-reform provisions — is stronger than the House bill. In broad strokes, you should expect the Senate to play defense while the House plays offense.

Conference works like this: Going title by title through the bill, House members will submit an offer to the Senate contingent. If any House member wants to change that offer, they can propose an amendment and it will be voted on — but only by the House members. When the offer is finalized, it goes across the table to the Senate’s conferees, who can elect to accept the offer, or amend it to make a counter-offer — again, voting just among Senate conferees. Conferees may leave the room to negotiate with their respective caucuses, and the offers go back and forth until there is consensus. At no time does the entire conference committee vote on one title or the whole bill; the final version — the conference report — is authorized with the signatures of a majority of conferees.

The upside of this is that there will potentially be some issues where members of the committee who might be otherwise disinclined to defy Wall Street feel pressed to do so on the record and in public. In a whole bunch of other respects this very rule-bound process seems to me to make less sense than less-formalized proceedings that could do things like take account of preference-intensity and so forth.