Report: Dodd to Stay Put on Banking, Closing Off Rise for Reed

Connecticut Senator Christopher Dodd has elected to stay put on the Senate Banking Committee, passing up a chance to take over the Senate's health committee amid a major push for health care reform.

That closes off the possibility that Senator Jack Reed might take the chairmanship of the Banking Committee as Congress weighs a major overhaul of financial regulation in the wake of the economic crash.

Had Dodd left the Banking Committee, Reed was second in line for the top job on the panel. But there was speculation in Washington that Democrats might skip over Senator Tim Johnson, because of the lingering effects of a brain hemorrhage, and tap Reed for the post.

Too bad Rhode Island's senior senator won't get the gavel. Many observers believed Reed would be tough on Wall Street, while Johnson and Dodd both face accusations of undue coziness with financial interests. Dodd has taken heat for legislation that allowed employees at failed insurer AIG to collect over $160 million in bonuses.

All hope is not lost, though. The AIG story has Dodd facing the toughest re-election fight of his lengthy career. So he may be eager to crack down on Wall Street in order to help his electoral chances.