The GOP is trying to beat back many of the changes that President Barack Obama and Democratic lawmakers seek for the financial industry. The legislation would give the government authority to split up big financial firms and force the industry to pay for its most spectacular failures.
Republicans have offered alternative legislation that calls for new bankruptcy proceedings to dismantle failing institutions. Rep. Kevin McCarthy of California, a member of the House Financial Services Committee, said that creating more federal agencies and putting taxpayers on the hook for more bailouts will not help revive the economy.
"It will only compound the pain for struggling small businesses and for families who played by the rules, lived within their means and acted responsibly," McCarthy said in the Republicans' weekly radio and Internet address.
The House passed a regulatory overhaul in December. The Senate has yet to vote on a similar measure.
Democratic senators sent a Wall Street regulation bill from the Senate Banking Committee to the full Senate on a party-line vote last month after a temporary retreat by Republicans that still left the bill's chances for bipartisan passage in doubt.
Despite a conciliatory tone struck by the committee's Democratic and Republican leaders, the development did nothing to mend the partisan divide over the legislation and adds even more uncertainty to Congress' ability to pass a sweeping rewrite of financial regulations this year.
Obama used a recent Saturday address to urge Congress to act, saying it's necessary to prevent firms from again taking on the kind of risks that led to the nation's recent economic woes.
But McCarthy attempted to frame the effort as one that would lead to more federal spending while the deficit is soaring.
"We have run out of money," he said. "And yet this administration and congressional Democrats want to spend even more."