Washington ? A new Democratic Senate bill to tame the financial markets would give the government new powers to break up firms that threaten the economy, force the industry to pay for its failures and create an independent consumer watchdog within the Federal Reserve.

Legislation unveiled Monday by Senate Banking Committee Chairman Chris Dodd falls shy of the ambitious restructuring of federal financial regulations envisioned by President Barack Obama or contained in legislation already passed in the House.

But the 1,336-page bill, which includes provisions negotiated with Republicans, would still be the biggest overhaul of regulations since the New Deal. It comes 18 months after Wall Street’s failures helped plunge the nation into a deep recession.

In its sweep, the bill would touch all corners of the financial sector, from small-town mortgage brokers to the highest penthouse office suites on Wall Street. Lobbyists were already mobilizing to change several of its features.