Warner said Sunday on CNN’s State of the Union, that the disputed fund was the last in a series of measures designed to revamp how Washington oversees Wall Street and to prevent taxpayers from again being called on to provide massive infusions of cash to financial institutions that are the pillars of the economy.
Despite Republican protests that Democrats are trying to pass the reform legislation in a partisan way and with next to no Republican input or support, Warner said the process of crafting the bill “has been very bipartisan.” He said he has been working for more than a year with Sen. Bob Corker, R-Tennessee, on crafting the package of reforms.
The crafting of the legislation, the former Virginia governor said, has been driven by three goals: (1) “end ‘too big to fail,’” the notion that some financial institutions are so important to the economy that they should not be allowed to collapse under any circumstances because of the wider damage their demise would do to the economy; (2) “never have taxpayer exposure [for bailouts] again,” and (3) “make sure that we set up financial rules of the road for the 21st century.”
These considerations, he said, led to the inclusion of a number of provisions in the bill that are designed to act as “trip wires, speed bumps to make sure we don’t get to a crisis.” Warner said the bill sets up a systemic risk council to act as “an early warning system.” The bill also sets additional capital requirements for large financial institutions, limits the ability of firms to leverage their assets relative to their liabilities, and creates a new class of contingent capital in the form of debt that would convert to equity if a firm fell on tough financial times.
Warner said the bill requires “large, systemically important firms” to “write their own funeral plan,” a plan developed beforehand “so that if they get in trouble there’s an orderly process through bankruptcy that can unwind them appropriately.”
The $50 billion fund that has been the focus of partisan barbs in the past week is only a fall-back measure if all other components of the bill fail to forestall another financial crisis like the one that occurred in late 2007 and early 2008, Warner said. In that situation, a firm that fails would be subject to a resolution process through bankruptcy under the bill. “It’s set up in such a way that no rational management team would ever want it,” Warner told CNN Chief Political Correspondent Candy Crowley.
The $50 billion fund “would be funded by industry,” Warner said, and was conceived of as a way “to keep the lights on [at a collapsing firm] until you could actually borrow enough money through the FDIC process to orderly resolve and get rid of the firm.”
Warner said he was open to alternatives to the fund, which many Republicans view as opening the door to perpetual, taxpayer-funded Wall Street bailouts. “I’d love to hear from Senator McConnell and some of the others, specifics not just general attacks,” Warner told Crowley. He said Republicans were being “a bit hypocritical” in attacking the $50 billion fund because without it, taxpayers might have to pay to begin the process of winding down a large financial institution.
Sounding a common refrain during this week’s partisan wrangling over the financial reform bill, Warner said he would like to see Democrats and Republicans set their differences aside.
“This should not be a partisan issue,” he said. “I think it’s time to get on with it,” he added, pointing out that new regulatory measures are still not in place 18 months after the greatest financial crisis since The Great Depression.
It's interesting how President Obama and the Democrats come up with ideas and solutions, work with Republicans across the isle (the few who are able to put Country Ahead of Party), and then create legislation to be debated and voted upon. Details of the plan are provided and when asked by the media and the people for further explanation, it is provided.
Contrast this to the Republican leadership automatically rejecting everything proposed, coming up with a sound-bites like "Death panels" saying such nonsense as this financial reform bill contains a "bailout fund" and in general, lying to the American public and trying to scare them.
Gee, not too hard to see who really has our nation's best interest at heart ...
GOP = Party Before Country
GOP has no ideas and no alternatives.... what a pack of losers...
The party of no, start over, and stall is at it again, that should tell you that they don't work for the people, they only work for big buisness.
The bank lobby says jump and the GOP say how high.
I just saw a re-run of interview with Mitch McConnell and I must say this guy is one of the biggest liars that I have ever seen. I think the provision that the big banks should put the money up front to bail themselves out should stay in the bill. The money is coming from them not us. I also want these people who say they are talking for the american people are not talking for me. Myself and the majority of american people will speak for themselves in november.
“I’d love to hear from Senator McConnell and some of the others, specifics not just general attacks,”
Let's give the guy a break. After all, he HAS been spending a great deal of time colloborating with those Kentucky bankers and Wall Street executives he mentioned meeting with during his interview with Candy. Perhaps McConnell just hasn't had a chance to read the bill yet.
No doubt once all the banking industry needs are addressed, Mitch will be more specific in his opposition to regulatory reform.
No surprise here. This is how the GOP has operated since Obama was sworn in. They sit on the committees that draft these bills. Their input is part and parcel of the whole package. Then when it comes time to vote, they just say no.
The media is doing a terrible job of getting this fact out to the public at large, and it's very frustrating. It's a well thought out plan to do their best to make the Democrats in general, and Obama specifically, fail so they can regain control. They're destroying us in the name of power and party and most people don't even know it.
turtle face is devoid of any and all ideas, just repeat a Frank Luntz talking point line over and over knowing the tea baggers will believe it if repeated enough.
Tea partiers = GOP + White Supremists + Racists + Red necks + Illiterates + and some independants (not enough to tip the house and senate back to the Party of No)
Sane Americans, please go to the polls and vote in November!
This is another example that the Republicans are the "party of NO" President Obama is working hard to get this country back on track... ..The Republicans are lying in bed with the wingnuts "Tea Partiers" Those Tea partiers do not represent the majority of Americans so I hope they don't get their hopes up for November.. Democrats we are alive and well..and you will hear from us very soon.. We will come roaring like a lion!!! My advice to the Republicans..The American people are not stupid.. We just come out from of 8yrs of mess ...The American people will not send the Republicans back in power!!! I support the Pres. Obama in all his efforts!!! I voted for CHANGE.. and that is taking place!!!
The complete stupidity and vapid thought processes of GOP leaders and their loser party supporters is mind numbing. They repeat the same rhetoric day after day
– WE ARE NOT RACISTS. WE ARE NOT AGAINST OBAMA BECAUSE OF HIS SKIN COLOR, BUT ITS HIS POLICIES WE DISAGREE WITH!
blah blah blah. Nobody believes that in the least.
You are frightened racists because the policies of the past administration nearly destroyed this country. Were you in support of those dumb ideas?
No REAL american wanted this country on the brink of a depression. But we can thank the Bush administration for that. You can disagree with how the current president has done things, but he has done the best he could with zero help from you hateful, ignorant, sore loser GOP/tea party buffons
Vote Mitch McConnell out!!! VOTE HIM OUT!!
He cares more for Kentucky banks than for taxpayers.
McConnell and the GOP always voted YES 100% with George W. Bush and vote NO 100% against everything President Obama and the Democrats put in place to cleanup the 8 year mess they created. This isn't politics, it's much deeper than that.
Mark Warner made his fortune in the cell phone industry.Said he wasn't going to be a career politician .Now, he's got religion and says he just wants the light to be shown on the banking system. yak,yak,yak !!! Political double speak.
Warner continued his reasoning on the 50 billion dollar bailout provision....and reason #4..."we can create another slush fund to rob from to pay our welfare nation. More hand outs means more votes for the dumbocraps !!!"
The only thing the GOP wants is no Medicare, no Medicaid, and no SSA. No government regulation on banks. Financial institutions can make as much money as they can anyway they can.
Its time America woke up the are a bunch of thieves and liars. Its time they get jail time. For war crimes, financial crimes and aiding and abetting.
First of all this so called "bailout" is not a bailout at all for banks. The TARP funds aka TRAP funds forces the banks to pay 5% interest for the first 5 years then it jumps up to 9%. Go research it for yourself. Banks had this shoved down their throats and these banks didn't even need the funds to begin with! I'd say 5% is a hell of a return than most shareholders are earning! Those who support this and call the bank an enemy aren't alarmed a 50 Billion dollar fund??!!!! Is this guy nuts?? Let's put our country further into debt. Hope the folks of Virginia are smart enough to boot Warner out of office. That's an insane amount of money!
I've got an idea! And I'm not even a GOPer! How about this one. It's this inconsequential little law that no one pays attention to anymore called SHERMAN ANTI-TRUST.
This isn't a solution.
Let the company be broken down and its assest sold off. We have been doing it for years. There is no such thing as too big to fail. ANd if there is such a corporate beast out there, it is only because the government allowed it to exist.
McConnell for President 2012. You got wonderful ideas Bob! Pliz run.
The Republican leadership have managed to manufacture controversy out of a common sense provision. Basically it's death panels all over again.
I'm just frustrated that one year after Obama - the nation overall ecomically IS turned around. O bama HAS stopped the bleeding and we are seeing economic revival. Our world status also revived. But when you have Hate Groups teamed up with Palin Cheney Gingrich Bauchmann ect....these Right wing GOP extremist spread enough continuous Venom that many of the general population are indeed Fooled. Its sad. Obama should be 10-15% higher easily in approval. But there are too many citizens with minds and eyes closed.
McConnell seems to have missed the fact that the FDIC has been seizing failing banks and liquidating them since the Great Depression, much to the benefit of their depositors. This program of insurance is funded by the banking industry. The legislation just voted out of committee did exactly the same thing in creating an insurance fund for non-traditional banks such as AIG, hedge funds etc. The student loan program changes will save students and parents billions. He does not seem to care about depositors or other groups who do not invite him to NYC and give him tyalking points. And oh yes, money.
this is what the Democrats need to do much more loudly. Since the GOP automatically says no to whatever Obama suggests (even before it's brought out), they can be (and should be) exposed as the frauds that they are. Keep up with the "what is YOUR suggestion" and people will finally see that they have no ideas. The only thing they do is say no with nothing to back it up excpet partisan obstruction
No Mitch you were wrong again and the Kentucky newspaper calling your words, lies, lies lies is the truth. The party of No has got to go. They walk in give their ideas and many accepted, then they go back and say. "Hey we have to stop working with this president as he might get something done." Hypocrites and morons! No wonder so many of them are teabuggers!
Leave the fund in. The financial institutions pay for it, not all of us. Mitch McConnel is an out and out liar, even by the people in his own state. The GOP "must" stop their non-stop objections to anything and everything that this administration proposes. Propose, not oppose, must be their standard if they harbor any hopes of being more than just a small, regional party.
All incumbent politicians simply fail to see reality when it stares them in the face. Come November we need to vote all incumbents out of office and bring in a new crop. And if they fail to do the will of the people, if they fail to do what is right for the country as a whole, instead of their myriad special interest groups, then we will continue to vote them out, until we can finally get in politicians who "do" get the point.
Serve we, the people, or get ready to retire in November.