There are many issues in the financial reform debate that are hard. For example, breaking up the "too big to fail" banks, as proposed in the Brown-Kaufman amendment to the Senate bill, is really hard. This would have meant taking away implicit government subsidies worth tens of billions of dollars annually to the nation's biggest banks. They kill in Washington to prevent things like this.

But Senator Franken had one that in principle was very easy. One big piece of the financial mess was the fact the bond rating agencies blessed every piece of garbage coming out of Wall Street as investment grade. This blessing allowed packages of extremely questionable subprime mortgages to be sold all over the world at top prices.

The bond rating agencies either had no clue of what they were rating, or worse, knew that they were giving investment grade ratings to junk. The reason that they were not doing their job was that they were being paid by the issuer.

This meant that their paycheck depended on keeping Goldman Sachs, Citigroup and other big issuers happy. If Moody's or Standard and Poor's rated their junk as "junk," they would likely lose their Wall Street business to their competitors.

This is a problem that is painfully easy to solve. You still have the issuer (Citigroup, Goldman Sachs, etc.) pay for the rating, but you have some independent body pick the agency. This would take away the obvious conflict of interest. Giving bogus ratings will not improve your probability of being picked next time. (In fact, it could reduce the probability of getting work if the selection of a rating agency was made conditional on the past track record.)

Some of us had been floating this idea for a long time as Congress genuflected over various convoluted ways to address the conflict of interest in the current system. Finally, Senator Al Franken (a man who knows a joke when he sees one) proposed the obvious fix: have the Securities and Exchange Commission (SEC) pick the rating agency.

Remarkably, this piece of common sense sailed through the Senate with broad bi-partisan support. But, nothing is easy in this town.

When the financial reform bill got to the conference committee, Barney Frank, the chairman of the House Financial Services Committee, decided that Franken's solution was too radical. He wanted it stripped from the bill. How could anyone want to tamper with our perfect system?

Fortunately, Franken held his ground. The conference committee agreed on a two-year long study by the SEC. Studying a proposal is usually a way to kill it in Washington. (A two-year study of the invasion of Iraq would have been a great idea.) However, the wording requires that at the end of this two-year period the SEC implement the Franken proposal unless they've come up with a better solution. No one can take for granted that the SEC will be straight in its study, but at this point the odds are probably better than even that the Franken amendment will be put in place two years from now.

This should provide some comfort. There are many things to complain about with the financial reform bill - it does not fundamentally change the way that Wall Street does business - but this is a step forward. In this case, the fire department has shown up at the scene. They have discovered the source of the smoke. They have hooked up their hoses and they have decided that in two years they will start spraying the water. In Washington, that counts as success.