GOP mulls pay-go challenge to Wall St. reform

The problem is the decision by Banking Committee Chairman Chris Dodd (D-Conn.) and ranking Republican Richard Shelby (Ala.) to eliminate a $50 billion fund to pay for the costs of winding down a failing firm. Industry would pay money into the fund.  

Republicans had pushed for the elimination of the fund, arguing that it could have left taxpayers having to cover any costs uncovered by the $50 billion fund. 

Under pay-go rules, spending increases in legislation must be at least offset by either tax increases or other spending cuts. 

A Conrad staffer said the bill may not violate paygo rules because previously adopted legislation has generated savings, which could fill the $17 billion hole created by the bill. 

It’s unclear how Dodd and Shelby will deal with the issue, but a number of lawmakers, including some Democrats, said it would have to be addressed. 

Sen. Ben Nelson (Neb.), the only Democrat to vote against opening a debate on the legislation, said it should meet pay-go rules. 

“It should be paygo-ed and not that this issue has come up I’ll be interested in how it is handled,” he said. 

“I hope we will look very hard to find a way to pay for it,” said. Sen. Blanche Lincoln (D-Ark.), a chief architect of the derivatives portion of the bill.

Sen. Bob Corker (R-Tenn.) said the issue of waiving the rule would likely be addressed. 

“I’m sure that will be a point of discussion down the road,” he said.  

Corker, who worked intensely with Dodd earlier this year on the legislation, also said he thought the change to the fund backed by Dodd and Shelby generally improved the bill.