A historic rewrite of financial regulations moved toward its final test in Congress on Tuesday even though Democrats have not yet nailed down the votes needed for passage in the Senate.

Senate Democratic Leader Harry Reid said he expected to bring up the bill later in the day, which would set the stage for a final vote by the end of the week.

But Reid appeared to be just short of the 60 votes he needs to clear an expected Republican procedural hurdle before the Senate can pass the measure and send it on to President Barack Obama to sign into law.

Reid picked up the support of three Republican moderates on Monday, but Democratic Senator Ben Nelson said he still had questions about the bill. In addition, the seat of the late Senator Robert Byrd is likely to remain vacant until next week, depriving Democrats of another vote.

Analysts expect the bill to ultimately pass the Senate, giving Obama and his fellow Democrats an important legislative victory ahead of the November congressional elections.

The Dodd-Frank bill, named for its chief authors, would impose tough new restrictions on the financial industry in an effort to avoid a repeat of the 2007-2009 financial crisis.

The House of Representatives has already approved the bill and Democrats are eager to send it to Obama's desk.

Passage would allow them to capitalize on public disgust with Wall Street, which sucked up hundreds of billions in bailout funds as the financial meltdown pushed the wider economy into a deep recession.

Reid and other congressional leaders were scheduled to meet with Obama later on Tuesday to discuss their legislative agenda. Further clarity could come after Republicans and Democrats in the Senate meet for their weekly policy luncheons.


If Reid brings up the bill later in the day, that would likely set up a procedural vote on Thursday. Final passage could come immediately after, or by Friday at the latest, if that hurdle is cleared.

Nelson, who voted for an earlier version of the bill, is one of the most conservative Democrats in the Senate and is frequently one of the final holdouts on high-profile legislation.

He told reporters on Monday that he was concerned with how regulators would put the law into effect, particularly its consumer-protection provisions.

If Nelson does not return to the fold, Reid could pick up a 60th vote from Republican Charles Grassley, who also backed an earlier version. However, Grassley is concerned with how the final bill is funded and has not yet decided how to vote, according to an aide.

If Reid cannot find 60 votes this week, he could wait until next week, when West Virginia Governor Joe Manchin is expected to appoint a Democrat who backs the bill to fill Byrd's seat.

Most Republicans have firmly opposed the bill, painting it as an intrusive overreach that fails to address problems in the housing market that spurred the crisis.

But former Treasury Secretary Henry Paulson, a Republican who struggled to contain the meltdown at its height in 2008, said his job would have been easier had the bill been in place, particularly a provision that would allow regulators to seize and dismantled troubled financial firms if they threaten the broader economy.

We would have loved to have something like this for Lehman Brothers, Paulson told the New York Times, referring to the investment bank that roiled markets when it declared bankruptcy.

(Additional reporting by Kevin Drawbaugh, Thomas Ferraro and Donna Smithl; Editing by Andrea Ricci)