Ark. Senator Lincoln, Derivatives Foe, Loses
NEW YORK (
) - Arkansas Senator Blanche Lincoln (D-Ark.) has lost in her bid for a third term, with Republican challenger John Boozman being called the winner by the major news networks shortly before 9 p.m.
Lincoln became a focal point for Wall Street criticism in the past year as architect of derivatives reform legislation that took a harder line than business interests, and even some Democratic colleagues in the Senate, were willing to support.
Lincoln's most powerful voice was as head of the Senate's agricultural committee, through which she came to her prominent role in derivatives reform. Lincoln took a hard line, forcing banks to spin off their trading desks for swaps and to capitalize them separately. The financial sector fought the provision tooth and nail, and in the days leading up to the vote, outgoing Senator Christopher Dodd (D- Conn.) attempted to weaken the derivatives reform -- some said gut the derivatives package -- but Lincoln's concept made it into the final bill in a somewhat altered form.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, in which the derivatives reform is housed, is expected to be one of the post-election targets for "tweaking" with any significant change in the Capitol Hill power structure.
While the Lincoln loss was being read on Tuesday night within the larger context of Republican attempts to take control of the Senate, the victory of Democratic candidate Joe Manchin in the West Virginia Senate race was being viewed as the more important election night 'tell' about the Senate potential makeup.
Even though Lincoln became a Street foe with her derivatives legislation in the past year, she was considered a centrist Democrat. Lincoln voted for, but not enthusiastically, President Obama's health care overhaul, and was one of the few Democrats to vote in favor of the Bush tax cuts.
Lincoln's Senate seat was considered one of the most vulnerable among Democratic Senate races.
-- Written by Eric Rosenbaum from New York.
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