David Herszenhorn reports that Republicans not only plan to block debate on Wall Street reform today, but they plan to introduce their own plan:

Senate Republicans are working to finalize their own version of legislation to tighten regulation of the nation’s financial system, and aides said their version could be put forward as a rival to the Democrats’ proposal if a bipartisan deal is not reached before an important procedural vote on Monday afternoon.

The development of a Republican alternative suggests that party leaders are determined to draw contrasts between their preferred approach to policing Wall Street and that of the Democrats. The Republicans also seemed set on combating assertions that they are siding with banks and big financial companies in opposing the Democrats’ regulatory bill.

It looks like the Republicans will take aim at the GSEs, which are left out of the Dodd bill. He has said that he wants to tackle restructuring Fannie Mae and Freddie Mac in a separate piece of legislation, but given the conservative folk tale about the entire financial crisis being caused by the Community Reinvestment Act and the GSEs, it’s not surprising they would go there.

This made me chuckle:

Aides to Republicans on the banking committee said on Monday morning that there were still significant loopholes in the legislation that could yield future taxpayer-financed bailouts of big banks. But they acknowledged that they were using a broad definition of “bailout” to include assistance not just for the banks but also for their creditors. “There are multiple ways to conduct a bailout,” one aide said.

Emphasis mine. In other words, the word “bailout” could mean absolutely anything Republicans want it to mean, as long as it sounds big and scary like a bailout.

Despite this, there could be a virtuous circle happening here. If both sides of the aisle want to prove that they can get tougher on Wall Street than their opponents, we could actually get some beneficial legislation here.

UPDATE: Robert Gibbs responded to this by saying “I can’t imagine that anybody believes that will be a stronger reform product.”

David Dayen

David Dayen