You might recall that it happened with the jobs bill as well. Republicans negotiate in good faith, an agreement is reached, and the President pulls the rug out from under the GOP's feet:

Robert Kuttner writing at Huffpo:

Although Senate Banking Committee Chair Chris Dodd and his sometime Republican ally Richard Shelby continued to make noises on the Sunday talk shows about a possible bipartisan deal, both President Obama and House Financial Services Chairman Barney Frank have personally urged Dodd not to cut a deal with Republicans. I asked Frank point blank why Dodd would want such a deal, and he said--on the record--"I have no idea, but both President Obama and I have urged him not to."

This is a welcome sign that Obama realizes that public opinion is moving in the direction of tougher banking reform, and that he learned from the health debate that bipartisan compromise on key reform issues is a snare and a delusion. Kudos to Chairman Frank and to the President.

Ummm...no, not exactly, You see, it's the Republicans who want a tougher bill, making it impossible for banks to claim they are "too big to fail":

Sen. Richard Shelby, Alabama Republican, said that the bill in its current form does not bar the Federal Deposit Insurance Corporation - which would have authority to take over and wind down large banks or investment firms on the edge of failure - from going to the Federal Reserve for large amounts of money to distribute to creditors.

"We need to tighten that up to make sure that it doesn't happen. The message should be, unambiguously, that nothing's too big to fail," Shelby said on NBC's "Meet the Press." "And if you fail, we're going to put you, put you to sleep."

Shelby's point goes to the heart of Republican reservations about the bill written by Senate Banking Committee Chairman Chris Dodd, Connecticut Democrat. Republicans say the bill does not do enough to end the problem of "too big to fail," while Dodd and the White House say it does.

Another contentious issue relates to how much regulation should be directed toward derivatives trading. Anything would be an improvement since there is virtually none at the moment, although the Democrats seem determined to ruin the market rather than reform it.

The issue comes to a head today as all 41 GOP senators are expected to vote against cloture. So the president will have a choice; keep negotiating or see the bill die.

If there must be financial regulatory reform - and given that the big banks are doing exactly the same things that got us in this mess in the first place, some reform is in order - it needs to be much more targeted than the draconian approach of the Democrats. But as long as Obama wants to play his partisan games, reform will not become a reality.