Lawmakers are rewriting the financial regulatory overhaul bill -- on the cusp of passage just last week -- after bipartisan opposition and the death of Sen. Robert Byrd
The bill, a compromise between the House and Senate, would likely pass the House, but the Senate lacks the 60 votes needed to prevent a filibuster by Republicans, who mostly oppose the measure.
Democrats lost one vote when West Virginia's Byrd died on Monday and then another two votes when Sens. Scott Brown, R-Mass., and Russ Feingold, D-Wis., announced their opposition.
Brown said he was opposed to a last-minute $19 billion fee that would be levied on banks, while Feingold said the bill does not go far enough to prevent a financial meltdown like the one that occurred in 2007 and 2008 when several large financial institutions collapsed.
The bill would create a consumer protection agency and give the federal government more power to regulate the banking industry, including the authority to wind down troubled banks.
Senators are rewriting the legislation to appease Brown and will strike the bank fee, replacing the funds by dipping into what remains of the $700 billion federal bailout fund.
Such a move will help Democrats woo Brown as well as Sen. Susan Collins, R-Maine., who also had problems with the bank fee.
Democrats had hoped to clear the bill for President Obama's signature by the July 4 recess, but that may not be possible. The Senate chamber will be mostly shut down on Thursday to accommodate Byrd, who will lie in repose there for six hours.
The House has postponed action on the bill while it waits to determine whether the new deal will garner 60 Senate votes.