Bipartisan financial reform deal uncertain: Dodd

With one of the Obama administration's top domestic policy priorities in the balance, Dodd sounded cautious in Senate floor remarks following weeks of discussions that have snagged on a proposal to create a new financial consumer watchdog.

He said senators were in a position to develop "a good, strong bill." But on prospects for whether the end-product of the talks with Republicans will be a bipartisan measure, he said, "I don't know if it will happen or not."

Embracing most of the recommendations for tighter bank and capital market regulations made in mid-2009 by President Barack Obama, the U.S. House of Representatives in December approved a bill proposing the biggest regulatory changes since the 1930s.

But the Senate has yet to act and almost a year-and-a-half since a severe banking crisis that tipped the U.S. economy into a deep recession, financial regulation has changed little.

Dodd said the top goal of the bill he is trying to hammer out in the Senate will be to end "too-big-to-fail bailouts," like the 2008 taxpayer rescues of distressed financial giants such as American International Group Inc and Citigroup Inc .

With a political backlash from the bailouts looming as a major issue in upcoming congressional elections in November, Dodd said the Senate bill would also create a new, more orderly process for dismantling troubled firms that avoids bailouts.

(Reporting by Kevin Drawbaugh; Editing by Padraic Cassidy)