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. Guy from MN

    It' s sad this country still does not recognize the GOP strategy of say NO! NO ! NO! and the American people will buy it if nothing gets done. Sadly, it sometimes works. Obama is one of the hardworking leaders this nation ever have and if we all work with him, this nation will emerge quickly from it's economic problems brought upon us by BUSH.

    America, let's wake come and say no to the pathetic GOP tactics !!

    April 18, 2010 10:20 am at 10:20 am |
  2. Karl from New York

    Shame on CNN for not also reporting that the "bailout fund" is provided 100% by Wall Street.

    April 18, 2010 10:20 am at 10:20 am |
  3. Sparky

    This guy looks like he just let a rehab center for old gin fizzies.... Seriously Mitch – DO YOU HAVE A PLAN ??? ANYTHING ?? Or, are you just part of a party of right wing wing nuts who are part racist, part incoherent and part sore losers?? Get a glove man.... Get in the game !!!!

    April 18, 2010 10:21 am at 10:21 am |
  4. Someone with a functioning brain

    BANKS WILL BE REQUIRED TO KEEP A FUND OF THEIR OWN PROFITS (NOT EVEN INVESTOR CAPITAL!) TO BAIL THEMSELVES OUT IN THE EVENT OF ANOTHER FINANCIAL CRISIS.

    ...That's hardly even considered a bail-out. That's called prudent planning and accountability, something our financial system has lacked for far too long. Do you think banks are going to want to use this fund repeatedly, or keep a HUGE asset on their balance sheets? Mitch McConnell, shut up.

    April 18, 2010 10:23 am at 10:23 am |
  5. Middle of the road

    The bailout fund that is "funded" by the banks does not come from the banks profits. Do you think the banks are just going to take these costs and not pass them on? Heck no, they will pass them on to the rest of us, the consumers. You and I will pay higher fees and interest rates to cover this new expense. Either way, we pay.

    Why not just let the banks fail and let FDIC cover individual losses? Come on....

    April 18, 2010 10:24 am at 10:24 am |
  6. annie s

    What part of the bailout fund BEING FUNDED BY THE BANKS doesn't Mr. McConnell understand? I am so sick and tired of Republican lies.

    April 18, 2010 10:24 am at 10:24 am |
  7. Karl from New York

    I withdraw my last comment about "shame on CNN." Crowley did point out that the "bailout fund" would be funded 100% by Wall Street. Sorry.

    April 18, 2010 10:24 am at 10:24 am |
  8. Ed, Santa Fe, NM

    Yes that's right. regardless of the TRUTH, just keep yapping and saying the same thing over and over again.

    McConnell is an idiot and the Republicans are nothing but OBSTRUCTIONISTS.... DISGUSTING

    April 18, 2010 10:25 am at 10:25 am |
  9. Larry

    Shame on many of you for your rasict comments against the people of the Republican Party (the party of KNOW). It would seem many of you are following into the Progressive movement with your lies and hatrid.

    April 18, 2010 10:26 am at 10:26 am |
  10. Sane Animals

    I'm a little surprised that the threat of a filibuster still carries any weight. Didn't work out so well for Republicans on healthcare reform, did it?
    And you're seeing a major difference between Democrats and Republicans. Republicans were under a death sentence in 2006, so they started doing everything they could to get rid of the evidence of their corruption and scandals–their plans to "remake America" died. No Amendment to ban abortion. No Amendment to ban gay marriage. Nothing to ensure a gun in every home. What they did force through were laws making it easier for the government to spy on citizens and making torture legal.
    Democrats are pushing their wishlist through on the philosophy that there's nothing to stop a man with nothing to lose.
    And when you think about it, the Senates GOP coalition isn't nearly as tight as it thinks it is. Scott Brown, in whom the Tea Party put so much faith and money, is little more than a fifth column voting with Dems more often than most of the Democrats.
    Aligning with the Republican party is going to kill the Tea Party. Let the 2010 elections go and focus on 2016. Even if the Republicans take a decisive majority in 2010, Obama will still be able to put a stop on anything they want to do, and, like Clinton, will have a major resurgence in popularity leading to a landslide 2012 victory. Let the liberals go full out socialism and let the Republican party that let this happen die. Long term plans are what it's all about. You have to look past November.

    April 18, 2010 10:26 am at 10:26 am |
  11. The Limerical Cynictst

    I heard Mitch this morning.
    At the time I first wrote the following Meat packers were claiming "We use everything but the squeal". Now we are hearing the squeal.

    HIGH J(O)INKS

    "The time has come",the Congress said,"to speak of many things
    Such as the lovely benefits Conservatism brings"
    "And surely wealth will trickle down" (as surely pigs have wings)
    So the public did as it was bid, took bait and hook and line
    And earned itself the "trickle down" from all those airborne swine

    To you who hear the Walrus' songs in this poor allegory
    Put credit where credit belongs, in Lewis Carroll's story

    Wee,Wee,Weee

    April 18, 2010 10:26 am at 10:26 am |
  12. Lynda/Minnesota

    As Greenspan has recently stated: "It wasn't the derivatives that failed, it was that the people got greedy". Ironic, then, that Greenspan himself has offered the best reasoning of the need for comprehensive derivative regulatory reform. Never again should our capital markets be trusted to regulate themselves.

    The ball is in your court, McConnell. Is the GOP for or against Wall Street greed?

    April 18, 2010 10:26 am at 10:26 am |
  13. ESM

    The Republicans are simply going to argue with, and try to block, anything Obama and the Democrats try to do to help the American public, they've already publicy said that. Even when they are proven wrong about their lies to the public over and over, they still continue with their childish ways. Remember, the Republicans and Bush had a $700 billion taxpayer bailout, and now when Obama even suggested a little backup money, which was not even provided by the taxpayers, they try to lie to the people and say it's a big bailout fund taken from the people. The Republicans are the party of "No", the party of fear, the party of uncertainty, and the party that believes "the ends justify the means" so it's ok to lie to the people (for their own good) if it stops everything Obama promised during his election. Oh yeah, then they'll claim he didn't do anything he promised the people! What a way to play the American people. And we should trust these people? Especially after their 8 years of complete failure under Bush put us in every bad situation we're in now from poor education for our children, to high unemployment, to huge debts from pouring all of our tax dollars into their wars, de-regulation of every company so they can take advantage of the people without oversight, and the list goes on. How could anybody be uneducated enough to not realize this? Stop blaming Obama for what Bush and the Republicans did to our wonderful country.

    April 18, 2010 10:26 am at 10:26 am |
  14. Me

    Banks pay their bills with money they get from you. If the banks are paying 100% of the cost of this bailout, YOU are paying 100% of this bailout.

    April 18, 2010 10:27 am at 10:27 am |
  15. annie s

    @Independent too, you lived through 8 years of George W. Bush and NOW you want to bring dignity back to the Presidency???

    April 18, 2010 10:28 am at 10:28 am |
  16. L

    RIGHT.... And the FDIC has facilitated irresponsible banking by providing a bail out for failing banks!

    In truth, the FDIC has provided an orderly means to wind down banks that fail without great cost to the public or the loss of deposits.

    McConnell's words are such a distortion of truth.

    April 18, 2010 10:28 am at 10:28 am |
  17. Robert

    Read the bill. Banks would pay $50B into a fund that would be considered a "bailout" fund. This fund would be paid for by large banks. However, let's say Wells Fargo goes kaput...$50B is nothing. It would take around $$250B to even come close for them to survive. Where would the extra $200B come from.....you and me. If this smooth talking President had any smarts...he'd promote a $1Trillion "bailout" fund with caps on CEO salaries....then there would be some teeth. McConnell is right. $50B is nothing. Look at AIG...it took $181B to save them and they're a stinking Insurance Company.

    April 18, 2010 10:28 am at 10:28 am |
  18. John Irvine

    C'mon Jim. The bailout fund would be funded by the banks through user fees and other means. Not directly through my taxes as did the last bailout. And, Obama got elected because of eight years of narrow minded and self-serving policies of the previous administration which allowed these banks to do business as usual as they buried themselves in unscrupulous fiscal practices.

    April 18, 2010 10:28 am at 10:28 am |
  19. Joseph

    Senator Mitch McConnell is a liar!!

    April 18, 2010 10:29 am at 10:29 am |
  20. Charles W. Skinner

    Anybody who thinks that the $50 billion would be sufficient as a bailout fund is either uninformed or being actively deceptive. The $50 billion is a SEED fund, so that the government can point to it NOW and say "well the banks will fund future bailouts and our regulatory actions." But when it comes time to USE it, the Government will come to the American people, just like it did last time, and say "We didn't know it could be THIS bad, so we'll have to bail out the banks with taxpayer money."

    To all those people who think we made money on TARP, CHECK THE NUMBERS. The BIG banks have repaid. The SMALLER companies that got TARP funds have largely GONE OUT OF BUSINESS, Gone into bankruptcy, or have been SOLD to other companies. TARP was a HUGE money-pit.

    April 18, 2010 10:29 am at 10:29 am |
  21. shakespeare

    Re: Me's comment

    Impose a fine on a business, the business passes it on to the consumer, it prices itself out of the market, it's law abiding competitor cleans up. Conclusion: a business gets rewarded (or at least not punished) by obeying the rules. Rules–remember them? I thought conservatives were all about personal and ethical responsibility. You are right about one thing though, some people will never get it.

    April 18, 2010 10:30 am at 10:30 am |
  22. EF

    Utterly shameful framing of this story by CNN, with a front page headline falsely allowing this may have been an unprovoked "personal attack" by the President.

    According to CNN's own reporting, the President was 100% accurate in calling McConnell's assertion cynical and deceptive, since the bank bailout fund comes from the banks themselves, not the taxpayers.

    CNN: No longer the most trusted name in news.

    April 18, 2010 10:32 am at 10:32 am |
  23. Michabo

    Did this guy forget that it was his party that bailed out Wall Street in the first place. If the GOP is so against bailouts, why wouldn't they welcome this reform? Stupid!

    April 18, 2010 10:33 am at 10:33 am |
  24. LindaNC

    When asked if the part of the bill he objected to was taken out would he then let it go forward he quickly said there are other parts of the bill we object to...The Repubs will object to anything the President offers..

    April 18, 2010 10:33 am at 10:33 am |
  25. Jan

    The FACTS are clear.

    President Obama did not cause the deficit in ONE year.

    The Republicans know that.

    Yet the kept talking about the DEBT.

    They know that the majority of working people DO NOT follow politics they are two busy trying to make ends meet.

    Now that they are unemployed they have more time to listen to the untruths and poisonous rhetoric of those spreading hate . It seems their only goal of the Republicans is to occupy the white house rather than look after the health and welfare of the citizens.

    It is sad that after all this great country has achieved the REPBULICANS want to turn the clock back on progress.

    The President is not a SOCIALIST he is a HUMANIST. That is why he has focused on veterans and their families and all who do the heavy lifting to keep American strong and Free.

    April 18, 2010 10:33 am at 10:33 am |
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