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. David Santana

    Did anybody catch the reporter asking McConnell about his "meeting" with the Banks on Thursday? Uncle Mitch's first response: "Well, the community banks of Kentucky that I spoke with..." before the reporter cut him off with: "I'm not talking about those banks" Apparently he wasn't buying the "Aw shucks, I'm just trying to help the little guy" routine that Mitch was spewing. I mean, this guy's a Republican US Senator, and head of his party in the Senate, and he tries to act like every big investment bank and hedge fund doesn't have their hands in his pockets, and his nuts in a vise over Wall Street regulation. "Community banks of Kentucky" my arse! They could never pump the kind of money he'll need to get re-elected. Forget the water fountain, he's going straight to the trough!!

    April 18, 2010 12:26 pm at 12:26 pm |
  2. Tori in Texas

    Hey Mitch, most of us have a emergency fund for our own homes/business in the event of an emergency, which includes an economic downturn caused by Greedy Politicians and Wall Street Bakers/Investors. Why shouldn't Wall Street plan for their next rainy day if it's THEIR cash they're putting away? I'm glad your not my accountant.

    April 18, 2010 12:26 pm at 12:26 pm |
  3. PedPink

    ""Alisa April 18th, 2010 11:41 am ET

    I know since the bailouts some banks are no longer participating in FDIC. Bank of America is one of them.""

    Where are you getting this information? I just cut and pasted this from Bank of America's website:

    Bank of America, N.A. Member FDIC. Equal Housing Lender
    ©2010 Bank of America Corporation. All rights reserved.

    I don't think there is a bank that does not participate in the FDIC membership, if there was such a banking institution, no one would open a savings or checking account. Annuities and stocks are a completely different product.

    April 18, 2010 12:26 pm at 12:26 pm |
  4. Forky Tongue!!!

    @MAKOM April 18th, 2010 11:17 am ET
    The world has come together and has seen what evil looks like. World leaders of all religions now have this common knowledge. Obama is the Anti-Christ, Devil on Earth, or what ever else you want to call this Demonic Figure*****So a Man Think It So Is HE.....You Betcha!!!****

    April 18, 2010 12:27 pm at 12:27 pm |
  5. Jay T.

    Are people really listening to this guy? Yes, there is a bailout fund- paid by the BANKS! That way, when they collapse, WE don't have to bail them out, they bail themselves out. People are stupid and that creep on the monitor is the pied-piper of stupid people.

    April 18, 2010 12:28 pm at 12:28 pm |
  6. Look at the facts, not the rhetoric.

    It's a fund that PROTECTS THE TAXPAYER.

    It's a fund that is PAID FOR DIRECTLY BY THE BANKS.

    duh.

    April 18, 2010 12:29 pm at 12:29 pm |
  7. MikeH

    McConnel has been shown to be lying through his teeth (what teeth he still has) by his own state's major newspaper. Republicans lie and America pays the price.

    While I think `Mike' is a Republican putz, his points on how well is the $50 billion is protected against opportunistic raiding, is valid. So Mike, write your Republican masters with a suggestion on how to protect that Insurance fund from being misused.

    Hey Johnny DC, Obama will get four more years, with Democratic control of both houses of congress, Obama has a brain, and a an education. Your slobbering hero Bush is a moron and a war criminal.

    April 18, 2010 12:29 pm at 12:29 pm |
  8. Jonny

    This Clown is a LIAR!
    Period! End of Story. All the Repubs lie constantly to the American Public about the truths of these Bills, counting on the FACT that most Americans will not research it to find out the truth on their own!
    So wake up people and research it yourselves.
    The Banks will be forced to foot the 50 billion dollars to cover their own asses in the future, NOT the taxpayers.
    Also in the Bill is Full Disclosure of the Banks and Wallstreets antics, since the Bush Admin and Republican run congress of 2002 gave them full secrecy.

    April 18, 2010 12:30 pm at 12:30 pm |
  9. Mary

    Candy, you let Sen McConnell off the hook when he kept repeating that the "Kentucky Bankers" aren't happy with the bill as is. Of course they're not and neither is Wall Street! They are not the constituents here. We need to make sure this bill helps protect Main Street from unscrupulous financial institutions and not create regulations that the small and big banks endorse.

    April 18, 2010 12:31 pm at 12:31 pm |
  10. Cecil Herring

    Mitch McConnell: Why don't you get off camera and let Democrats take care of America? You are trying to block President Barack OBama's every move to fix the messes George Bush made, stop the wars, stop wall street greed, set up education programs that go beyond slogans (No Chlld left behind), block our new health care program. Now you want a bi-partisan approaches? Please. We out here have seen what you've been doing. You Republicans have tried to block everything we as a nation need to bring us out of the mess George Bush and all Republicans made for the past 8 years. Note to Candy Crowley: You are definitely covering the Republican viewpoint.

    April 18, 2010 12:32 pm at 12:32 pm |
  11. Berry Laws

    Thanks Cindy Crowley by trying to show the ridicule expresserd by Mitch McConnell inre financial reform. the republicans have been against social security, medicare, embryonic stem cells,healthcare reform and now financial reform. You can not reason with a fool. You just can't fix stupid. How they are still around after another 4 years is beyond me.

    April 18, 2010 12:34 pm at 12:34 pm |
  12. Chuck

    The Republicans are simply engaged in the game of obstructionism. They will simply say NO to anything and everything that the President of the United States, namely, PRESIDENT BARACK OBAMA has to offer that benefits the general population of this country.

    Let the Democrats and Independents and fair-minded Republicans merge their voices and rule out or ignore those obstructionist Republicans who can only say NO to anything and everything. (NOTE: If only the obtructionist Republicans could offer solutions, maybe, just maybe, the situation would improve.)

    April 18, 2010 12:35 pm at 12:35 pm |
  13. vette gal

    Way to go Candy for calling out this politician on his lie. It's about time journalists began pointing out when these guys aren't telling the truth. If it's the banks own money bailing themselves out, who cares! The republicans just don't want any regulations on big busines/Wall Street period and they'll say anything to scare people into agreeing with them.

    April 18, 2010 12:36 pm at 12:36 pm |
  14. frank in valparaiso indiana

    The only financial reform the GOP wants is the status quo. they don't want their buds to have to pay anything, get all the money they can at the expense of the middle class. They want to bankrupt the government so that we cannot afford to pay for any social programs. This has been their strategy for years. We fell for it hook line and sinker, Bush really started doing it. They don't want state funded colleges, their kids go to Yale. They don't need health care, retirement, they have their millions in wall street and overseas. God forbid we actually start collecting their billions that is stashed in Switzerland. We need to pass this bill, break up the banks if they fail, there is no longer 'too big to fail – you're toast'. THAT is what is scaring the GOP and the Street. We can't gamble with other people's money and rig it to win nomatter what???

    April 18, 2010 12:36 pm at 12:36 pm |
  15. Ky Voter

    Mitch hasn't met a Big Bank, Corporate CEO, Mining Co. he doesn't love. If they got the cash, Mitch will bend over and get his. He could care less about the people of Ky.

    April 18, 2010 12:40 pm at 12:40 pm |
  16. WP

    Set the partisan rhetoric aside for a minute and let's understand one thing upfront: No government in its right mind would let a giant financial institution or series of smaller institutions fail in an uncontrolled way. We just lived through the disaster of 2008, but remember the S&L and Continental Illinois bailout/liquidations from the Reagan/Bush administrations? Government won't let them fail in an uncontrolled way because the banking system (and financial services in general) is the grease that keeps the economy moving – it is uniquely positioned to bring the country to its economic knees or worse if it collapses.

    What you need to do is have strong and enforced regulations, transparency, high capital requirements, and a means to unwind failing institutions without creating chaos in the market. And you have to put shareholders, bondholders and directors of such institutions at great risk of personal failure if they make overly risky bad bets. In other words, you have to do your best to regulate/protect the system, but also be prepared to save the system by liquidating failing institutions and allowing the individuals who caused the problem to personally fail.

    You can argue about the details of what's in the current Senate bill, but what you can't argue is that it would create endless bailouts. Regulators would collect a fee from large banks to fund a pool that is held in reserve and used to close and liquidate failing banks, sell off the assets, and protect depositors. That is what the Dodd bill does by creating an industry-funded $50B liquidation pool. That pool is coupled with "resolution authority" – the ability of regulators to seize and dismantle a failing institution before it collapses and threatens the overall system/market, much like the FDIC does with smaller banks.

    April 18, 2010 12:40 pm at 12:40 pm |
  17. Mike

    First nobama says the 50 billion could not be used for bail outs and now he wants the demorats to remove the 50 billion from the bill because it could be used for bail outs. Seems this current White House occupany cannot make up his mind. The deceptions are catching up with him so he has to change his stance at every turn.

    April 18, 2010 12:40 pm at 12:40 pm |
  18. Amunaka

    I don't kow why ..but I don't like that guy ...wait a minute yes I do know why..

    April 18, 2010 12:41 pm at 12:41 pm |
  19. Claudia, Houston, Tx

    McConnell and the GOP voted YES 100% with GWB while they created this mess and now votes NO 100% against President Obama to stop the same mess. One can clearly see McConnell and GOP are not poliicians, they are clothed in America's sam old ugly history and decided among themselves they would never support our President whether he is right or wrong. When our President is right they vote NO and if he's wrong they vote NO, it doesn't take a genius to get the picture.

    April 18, 2010 12:42 pm at 12:42 pm |
  20. GMA

    Same old GOP, the party of NO!! I hope the American public is smart enough to remember this in November and put an end to this kind of politics.

    April 18, 2010 12:42 pm at 12:42 pm |
  21. docallen001

    If the money is from the banks, is it a bailout fund, or is it an insurance fund? This would be no different than the Feds using bank fund to close down banks on Fridays. Those are bailout funds based on McConnell’s definition. Why has he not taken on that banking fund? McConnell is so obvious, it is pathetic. He likes the bank contributions

    April 18, 2010 12:44 pm at 12:44 pm |
  22. moosehead

    Mitch McConnell is a dead skunk ,.. politically speaking,.. reminds me of a song from the 70's.

    You got yer
    Dead skunk in the middle of the road
    Dead skunk in the middle of the road
    You got yer dead skunk in the middle of the road
    Stinkin' to high Heaven!

    Take a whiff on me, that ain't no rose!
    Roll up yer window and hold yer nose
    You don't have to look and you don't have to see
    'Cause you can feel it in your olfactory

    April 18, 2010 12:45 pm at 12:45 pm |
  23. Marie

    Candy,

    You are amazing!!!! I love your reporting. John King is too stiff for this job. He tries to be too pretty all the time; I used to think he might break on this show.

    Anyway what a great show today! Although I think if you lose Ms. insular Freeland it would have been better!!! Did you really think that Mitch McConnell would agree to again? talking with him is like talking with a wall. It is apparent that the Republicans are still sore about Healthcare so they are going to fight it all and that is too bad for them. I am concerned about the tea partiers they are dangerous adn the republicans might get what they are looking for, but will they want it?

    April 18, 2010 12:45 pm at 12:45 pm |
  24. Chuck

    Hey, everybody;

    Just take a little time and go read the major Kentucky newspaper who took issue with Senator McConnell's comment about this bill. They said that he was lying, lying, lying and in cahoots with the big banks.

    Lying and misinformation can only bring you defeat, Senator McConnell, in your next election, unless, the majority of Kentucky's voters choose to believe anything and everything you say.

    April 18, 2010 12:45 pm at 12:45 pm |
  25. Marty, FL

    Since McConnell lacks substance, he resorts to the same old gimmicks of outright lies, which his own hometown paper called him out with this nonsense. Truly sad for a so-called "leader."

    McConnell and his corporatist GOP would shamelessly rather side with hedge fund managers than provide protections for the American taxpayers. Our country needs finance reform.

    April 18, 2010 12:50 pm at 12:50 pm |
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