This time, GOP is picking wrong fight

Republicans may be able to score political points by digging in against health care reform legislation. Only time will tell. But they are making a big mistake if they come to the defense of Wall Street and block legislation intended to repair abuses in the financial markets that almost pitched the nation into a depression.

It was disappointing to hear Sen. Christopher J. Dodd, chairman of the banking committee, announce last week that he was giving up on efforts to reach a compromise on a financial regulation overhaul bill with the committee's Republican leadership. The Connecticut Democrat said he may unveil his own plan as soon as today.

This newspaper applauded when Sen. Dodd and the committee's ranking Republican, Richard Shelby of Alabama, announced late last year that they were "committed to working together on legislation to create a sound regulatory structure."

But though the two sides reportedly reached agreement on about 75 percent of a regulatory package, the Republican leadership would not sign off on a bill. The minority party cannot expect to get 100 percent of what it wants, yet that is the position Republicans appear to be taking.

In discussing the breakdown, Sen. Bob Corker of Tennessee, who was leading negotiations for Republicans, said the "elephant in the room is reconciliation" and described Sen. Dodd as "a victim of health care policy."

It appears that if Democrats dare push forward on health care, the GOP won't compromise on anything significant.

Sen. Corker said Republicans could not agree with Sen. Dodd's push to make the trading of all derivatives transparent. Banks are pushing to keep some of the most complex derivatives shielded from public view, including the credit-default swaps that played a major role in the financial crisis.

Republicans also appear concerned about giving shareholders too much control over executive compensation and about requiring banks that bundle and sell mortgages to retain a significant amount of the risk.

If Republicans think such pro-banking positions will prove popular with voters still suffering under the damage caused by reckless financiers, good luck to them. In the meantime, Sen. Dodd and the Democrats should move a reform bill forward in the Senate and hope some Republicans come to their senses.