April 18th, 2010
02:29 PM ET
10 years ago

McConnell: There's a bailout fund in current Wall St. reform bill

ALT TEXT

Sen. Mitch McConnell responded Sunday to a personal attack directed at him by President Obama. (Photo Credit: CNN)

Washington (CNN) – A day after President Obama singled him out for personal criticism, the top Republican in the Senate defended his party’s claim that the current version of a financial regulatory reform bill contains a mechanism to initiate a bailout of faltering Wall Street giants.

Obama used his weekly Internet and radio address to take a rare personal shot at Senate Minority Leader Mitch McConnell, R-Kentucky. McConnell “made the cynical and deceptive assertion that reform would somehow enable future bailouts – when he knows that it would do just the opposite,” the president said.

Related: Obama touts financial reform, says GOP stance 'deceptive'

Appearing on CNN’s State of the Union Sunday, McConnell defended the position Senate Republicans have taken on the bill.

“There is a bailout fund in the bill that was reported out of the [Senate] Banking Committee,” McConnell said, “the partisan bill that came out of committee on a party line vote. I don’t think that’s in dispute.”

Watch: McConnell responds to Obama

When reminded by CNN Chief Political Correspondent Candy Crowley that the money in the disputed fund would be provided by banks themselves rather than taxpayers, McConnell responded, “Regardless of where the – how the money is produced, it is a bailout fund that sort of guarantees in perpetuity that we’ll be intervening once again to bail out these big firms.”

McConnell also noted that the administration itself has signaled its willingness late last week to remove the $50 billion from the final version of the legislation. On Friday, all 41 Republican senators sent a letter to Senate Majority Leader Harry Reid, D-Nevada, asking that the current version of the legislation be set aside and that Democrats again initiate bipartisan negotiations with the Republicans. The letter did not threaten a Republican filibuster but suggested that one could be in the offing.

Related: WH scrutinizes liquidation fund in Senate bill

McConnell said his party wants financial regulatory reform.

“I don’t know anybody in the Senate who thinks we ought not to pass a bill. The question is: What’s it going to look like? We want to make sure that we don’t set up a system where whereby we empower the government to continue to do what it’s been doing – running banks, car companies . . .The American people are saying we don’t want another bailout but they also don’t want a kind of perpetual, government massive interventions across the board running private businesses.”


Filed under: GOP • Mitch McConnell • Popular Posts • State of the Union • Wall Street
soundoff (298 Responses)
  1. plainfact

    He says it does not matter from where the money comes ....Typical GOP argument. We are talking about the "Tax Payers money" not about the bailout provision that banks make for bad time. McConnell
    you can say no to anything and give stupid reasons in defence.
    Who do you want to believe, those that say no for the sake of saying no, or those that tell the truth as it is??
    Do these guys ever think that they are talking to over 300 millions of people most of them educated? I don't know what they think about the American people. May be a bunch of fools who will buy anything the politicians put out there.

    April 18, 2010 12:51 pm at 12:51 pm |
  2. Dave

    Please people... In Nov, vote all corporatists like McConnell out of office. Their record of being against the avg people of ths country is clear. The GOP needs to be replaced by a different party and the corporatists in the Democratic party also need to go. Vote 3rd party!

    April 18, 2010 12:51 pm at 12:51 pm |
  3. Tom

    "The American people are saying we don’t want another bailout"

    The American people are saying that we don't need to have you abusing your rhetoric to dictate -to the American people – what it is we are saying,

    April 18, 2010 12:53 pm at 12:53 pm |
  4. Ray

    The only way to ensure that Americans don't foot the bill is the following:

    An Act/bill that ensures that:

    1.) The federal gov't cannot buy up defaulted home loans made by banks.

    2.) All banks will operate independently of all GSE's and will decide totally and completely whom they will and will not make loans to.

    3.) Banks, not the taxpayer, will therefore be on the hook then for all loans that the banks make.

    This will stop predatory lending, stop loans made to risky borrowers, and stop any future subprime loans.

    April 18, 2010 12:53 pm at 12:53 pm |
  5. Robin in Tampa, FL

    Only a Republican can re-define private insurance as a bailout fund.

    April 18, 2010 12:54 pm at 12:54 pm |
  6. Ray

    In addition to what i already said, when the federal gov't bought up over a trillion dollars worth of defaulted home loans, the taxpayer got stuck with the bill. Never again.

    April 18, 2010 12:56 pm at 12:56 pm |
  7. Tina Cole

    What happened to the GOP, it's become the do nothing but complain party with its (want-to-be), the sky is falling Palin, as its sippie straw leader. The party without vision.....not really an alternative to the Dems who are at least resolving some the Country's problems. Show some initiative or shut up and let those in charge of the Country do their job.

    April 18, 2010 12:56 pm at 12:56 pm |
  8. jbakaregit

    I think the $50 billion fund is a good thing, which the money comes from the bank themselves. If the banks can't manage themselves right, let them bail themselves out w/o any taxpayers assistance. And for those who say, "They will pass the cost to the tax payers," remove your money from the banks and go to a credit union or small community bank. The era of "too big to fail banks" needs to come to an end.

    As for McConnell, nothing he does surprise me anymore. Even his own hometown newspaper called him a "liar" and exposed him for the Wall Street lapdog that he is.

    April 18, 2010 12:56 pm at 12:56 pm |
  9. D

    @pc – "the American people are now wise to the republican party"

    Now how about becoming wise to the dem party also?

    April 18, 2010 12:56 pm at 12:56 pm |
  10. Debby

    Mfhpr those are alot of bets. LOL What I want to know is where is the progress, and what future since this administration is making us broke from all the bailouts. The only thing we are progressing in is debt!

    April 18, 2010 12:57 pm at 12:57 pm |
  11. John Mark

    McConnell got caught lying (thanks Candy) and can't have it both ways, either he backing the banks or he's backing the taxpayers which is it? From the looks of things he's in a fix for sure. Passing a banking reform bill is big success for President Obama and McConnell would scoop to any level to prevent that from happening, and McConnell is one of the banking strongest advocates. But those who voted him into office will be outraged if he dare to block banking reform after the 2008 banking crash.

    April 18, 2010 01:01 pm at 1:01 pm |
  12. Roy

    Senator, answer these two questions TRUTHFULLY please (which means reading the bill first). 1. Who pays for this? 2. Whom is it to protect? (Answers, since he'll lie or hedge or weasel out. 1. The firms. 2. The public.)

    April 18, 2010 01:02 pm at 1:02 pm |
  13. GaryB

    That's exactly why McConnell and Senate Republicans are against the bill. Wall Street helps to get a lot of Senate Republicans elected. Why would Wall Street want to put their own money in a fund to help pay for their mistakes when they know the Senate Republicans are more than happy to soak the taxpayers for the bill (after, of course, securing a certain percentage of the bill as pork for Republican districts, as they did last time). It's the same as the healthcare debate. Follow the money if you want to know where the GOP's loyalty truly lies.

    April 18, 2010 01:03 pm at 1:03 pm |
  14. Jacksonville Bill

    The Republicans think they have November 2010 and 2012 all tied up. I wouldn't be so sure about that.

    April 18, 2010 01:03 pm at 1:03 pm |
  15. Matty P

    Republican strategy 101:
    Forget about truth, just keep saying what you want over and over and over.
    Now, reasonably, McConnell could make the argument that if the banks pour $50B into a fund they will recoup that from the tax payers in higher fees, etc.
    But as proposed, they set up a fund and if they need to be bailed out, it comes from their own reserves.
    I'll tell you, I'd be a partisan but all these clowns, D and R, make me sick.
    We need term limits.

    April 18, 2010 01:05 pm at 1:05 pm |
  16. Kelly

    Go Candy!!! Keep it up!

    April 18, 2010 01:05 pm at 1:05 pm |
  17. drew

    Giant investment/banking firms bundled up these risky sub-prime mortgages into complex securities and sold them to investors as quickly as they could to get them off their books. Then these same guys sold derivative insurance policies on the SAME securities.

    In effect, they were counting on the fact that the products they sold and recommended would fail - didn't matter to them it would bring the economy down.

    Now McConnell want to protect them. We have two options in protecting our livelihoods from these people: do not not allow them to get so large they take down the economy when they fail, or, like insurance companies are required to do, make them kick in to a self-insurance fund that covers their losses. Expecting the market to "right itself" is foolish in regards to these monoliths.

    April 18, 2010 01:08 pm at 1:08 pm |
  18. Darrell

    When reminded by CNN Chief Political Correspondent Candy Crowley that the money in the disputed fund would be provided by banks themselves rather than taxpayers, McConnell responded, “Regardless of where the – how the money is produced, it is a bailout fund that sort of guarantees in perpetuity that we’ll be intervening once again to bail out these big firms.”

    Wow! Is this guy for real! Mitch, the banks under the FDIC use a fund that they pay into if and when banks fail...the tax payers don't bail these banks out...man, please get a clue about what you are saying and stop listening the Frank Luntz.

    April 18, 2010 01:15 pm at 1:15 pm |
  19. Dave

    Mitch McConnell does not want financial reform... he wants the status quo. The banks and wall street have a good scam going on this country and Mitch McConnell does not want to upset his personal gravy train. McConnell is a liar and a traitor to this country.

    April 18, 2010 01:16 pm at 1:16 pm |
  20. JMikey54

    The Republicans are not going to work with the Democrats. They want the Democrats to work with them like they are the majority. The Republicans want to be the boss and call the shots. If they dont get what they want they are going to filibuster. They want to continue to run things the way Bush did and further destroy our country and make the rich richer. We need to put an end to the Republican party and vote in so many Democrats that they will not be able to stop us with tricks and gimmicks.

    April 18, 2010 01:16 pm at 1:16 pm |
  21. Frank

    Amazing. The federal government has been taking over and liquidating banks since the Great depression, and certainly the TARP program (begun under George W. Bush) saved many major banks and created some semblance of order to the credit markets. So far the US taxpayers have earned about 16% return on its TARP funds. Not so bad, really, Senator McConnell. As for the government's share in Citigroup and GM, again the taxpayers look to come out way ahead. How is this not in the public interest, Senator?

    April 18, 2010 01:18 pm at 1:18 pm |
  22. Ray E. (Georgia)

    Well I wonder what happened. It seems that there were people complaining that they couldn't get a loan to buy a house. So the rules were relaxed so these people could (Qualify) for a loan. I think the Bush Adminstration tred to tighten the rules because of the possibility of the problem of these people not being able to pay for the loans.

    So what happened? People couldn't pay the loans so they gave back the houses. The result, as indicated by knowlegeable people came to pass. Now the banks failed because people, yes people, that should have never got a loan for a house went under. Why anyone wants to blame the banks is beyond me. People knew they couldn't afford the payments. I put the blame where it belongs, on people that had no business getting a loan for a house.

    April 18, 2010 01:19 pm at 1:19 pm |
  23. Ray in Nashville

    The Gee-nO-teaParty still has no new ideas for America. This strategy that they agree that we need reform but we need to scrap the current bill and start over is the same strategy they used on Health Care, rehashed for financial reform. What I want from a financial reform bill is for it to reenact Glass-Stegal and separate the investment banks from regular banks. I also want to make sure that no one segment of our GDP can ever bring down the whole economy the way the financial sector almost did in this crisis. Of course, since I am not a rich member of the corporate world who donates to Republicans (or Democrats, either), Senator McConnell doesn't care what I think.

    April 18, 2010 01:26 pm at 1:26 pm |
  24. Bob Ramos

    McConnel has no respect for the intelligence of the American public:

    1. Recently, the Republican leadership met with the top banks. The top banks are opposed to the "$50 billion" insurance fund. The GOP did not come out with its opposition until after the meeting.

    2. The fund will be funded by the banks themselves and not the American public. Who does he want to put up the money? The banks or the taxpayers? Since he is the one sqwaking, he must want us to put up the money.

    3. If we ever go through this debacle again, then who does he want to bear the cost of cleaning it up a second time? The banks or the taxpayers?

    Republicans have a very big problem. Until they hit the reset button, their reaction(s) to any administration proposal is an automatic no even if the reasons they give are as stupid as the one they list here. You think someone with the GOP would vet these reactions before they become public.

    April 18, 2010 01:29 pm at 1:29 pm |
  25. John (KY)

    The only reason this man is still in office is because of his stature (Minority Speaker) Minority is key word here.

    April 18, 2010 01:31 pm at 1:31 pm |
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