A sweeping Republican measure to overhaul financial regulation was attached to a spending bill advanced by a Senate subcommittee Wednesday, tying the controversial measures to government spending.
The Senate Appropriations financial services subcommittee passed the Financial Regulatory Improvement Act of 2015 as part of the $20.6 billion fiscal 2016 funding bill. The appropriations bill is set to be taken up by the full committee Thursday.
Subcommittee chairman John Boozman, R-Ark., said passing the appropriations bill was an "important step in protecting taxpayer dollars, reining in government overreach and investing in the ideals of a free market while promoting financial security for future generations of Americans."
The financial regulatory overhaul bill was authored by Banking Committee Chairman Richard Shelby, R-Ala., and passed his committee in May on a party-line vote.
Democrats on his panel and the corresponding panel in the House united against the measure, however, saying they would oppose its deregulatory provisions.
Shelby's bill would provide regulatory relief to community banks, which face new new burdens under the five-year-old Dodd-Frank law.
That effort is supported by most Democrats. But Shelby also sought major changes to the operations of the Federal Reserve, new rules on mortgages, the government's management of the bailed-out mortgage companies Fannie Mae and Freddie Mac, regulators' ability to single out large non-banks for added supervision and a number of other features of the financial regulatory architecture.
Attaching the package to a must-pass government funding bill could provide a path toward overcoming Democratic resistance. But the prospects of the appropriations bills for keeping the government open are also mixed, with Republicans and the White House at odds regarding spending levels and the inclusion of policy changes.
Shelby said in a statement provided to the Washington Examiner that inclusion of his regulatory relief package in the appropriations bill "is another step in the process of moving a sensible proposal forward in the Senate."
"It remains my strong preference that we find a way to come together on a bipartisan basis," he said. "I believe that there is a growing consensus that the community and regional financial institutions that fuel economic growth in our communities must get relief from unnecessary regulation. We must also take steps to improve accountability and transparency in the post Dodd-Frank world."
The inclusion of the bill comes just one day after the five-year anniversary of Dodd-Frank being signed into law.
President Obama has said he will veto efforts to roll back the provisions of the law, which along with Obamacare is one of the most consequential laws he has signed.
Obama did, however, sign a repeal of one of the law's derivatives rules in December, when Congress included it as part of a spending bill to prevent a government shutdown.