April 17th, 2010
10:31 AM ET
11 years ago

White House signals shift on Wall Street reform

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2010/images/04/17/art.bull.wallstreet.file.gi.jpg caption="The Obama administration moved late Friday night to jump-start negotiations on Wall Street reform."]Washington (CNN) - In a move aimed at jump-starting bipartisan negotiations on Wall Street reform, Obama administration officials have signaled that they want Democratic Sen. Chris Dodd to remove a $50 billion bank liquidation fund from his financial regulation bill.

Republicans have pounced on the $50 billion provision, saying the legislation will lead to more government bailouts of large banks, effectively
stalling progress on the reform bill.

"The ex-ante fund was not in our original proposal we announced almost a year ago and we don't feel it is an essential part of final legislation," said one administration official late Friday. "The president will only sign a bill if it passes the test of putting an end to bailouts."

White House aides have vehemently denied for days the provision will spark more bailouts. Republican aides asserted the shift is a sign the White House fears the criticism is having an impact.

But Democratic officials suggested the move is really an attempt to call the Republicans' bluff to see if they still oppose the reform bill even after the controversial provision is removed. That would play into the White House's efforts to portray the GOP as defenders of the status quo on Wall Street.

Still, White House aides said the President is more focused on the larger issue of reform instead of any one provision.

"What is important is that we have a mechanism that allows us to wind down failing firms at no cost to the taxpayer," said White House spokeswoman Amy Brundage. "The Dodd bill does that, and we will work with Congress to make sure we achieve that objective."

Filed under: GOP • President Obama • Wall Street
soundoff (130 Responses)
  1. Papasan in Az


    Wall Street got the Bail Out!
    Main Street USA got nothing, and continues to be left hanging while Wall Street is raking in record [Dow over 11,000] PROFITS!

    Wake up America! Main Street will never see any real form of HELP.
    Time to help yourselves and look after your own interests, we can no longer wait for Washington to toss a couple of dollars our way
    [where is the Unemployment Extension Bill], make the Banks stop foreclosing [where is the HELP], and Big Business sending JOBS over seas [Big Business as usual].

    If you already tightened your belts, grab the end and tug it tighter, we are in for a long haul. That's how Mom & Dad, Grand Pa & Granny made it through the last Depression, so quit crying, whining and moaning, WE ARE ON OUR OWN!

    Papasan in AZ

    April 17, 2010 10:33 am at 10:33 am |
  2. Marty, FL

    Good to hear. The administration is once again extending respectful efforts to work with Republicans in a bipartisan manner.

    Call out the GOP on their bluff to see if Republicans still side with corporate, banker greed instead of the American people.

    April 17, 2010 10:36 am at 10:36 am |
  3. phoenix86

    "...the President is more focused on the larger issue of reform instead of any one provision".

    Kind of like he was with Obama/Pelosi Care? God help us all.

    April 17, 2010 10:51 am at 10:51 am |
  4. Ray Fisher

    Republicants can't help but say no to everything as they continue to operate witho8ut a plan or a clue!!!

    April 17, 2010 10:55 am at 10:55 am |
  5. wally

    Let the Republicans fillibuster the bill...then the Tea Party followers, who are nothing but pawns to lobbyists) will finally get that their party only backs the rich.

    April 17, 2010 10:55 am at 10:55 am |
  6. MaryJo

    You are removing the most stabilizing aspect of the bill, and because the Republicans are so strongly opposed to it shows you that it is important to include in order to achieve reform. Democrats, do not lose your credibility in an effort to make it look like you're "bipartisan." Represent the American people, and if the Republicans want to continue to say no to that representation, educate the American people about what they are doing so that you can increase your base. This is a brilliant concept which has worked terrifically for FDIC. Don't abandon it because of the Republicans. That is just ridiculous, and spineless!

    April 17, 2010 10:58 am at 10:58 am |
  7. Craig from LA

    Once again we see our President incorporating Republican policy points in his legislation – there were over 200 in his health care reform bill. It will be most interesting to see if Republicans again run like pigs to the trough of corporate money to defend rich fat cat bankers as they did with rich fat cat insurance company execs. Independents and main stream America should take note that on every issue that favors the middle class, Republicans defend the interests of the corporate elite. We are watching, and we will remember in November!

    April 17, 2010 10:59 am at 10:59 am |
  8. LG

    Uh... isn't the fund essentially what the Fed has had for traditional banks ever since the Depression. Why have the Republicans decided that it's now a massive evil.

    Sounds like politics trumping common sense yet again!

    April 17, 2010 11:02 am at 11:02 am |
  9. Rob

    This sounds like a good start for Democrats;Republicans.

    April 17, 2010 11:06 am at 11:06 am |
  10. Charles W. Skinner

    It's NOT just the one provision for the $50 Billion fund. The bill is riddled with small signs, loopholes and direction to create future "regulation" that could LEAD to bailouts and "too big to fail" breakups (which would have to be PAID for by the government under the 5th amendment "takings" clause). There is ALWAYS a cost to the taxpayer. Amy Brundage is LYING to the American people with a straight face.

    If the White House wants this reform, they need to request that a provision be inserted saying that there will be NO more bailouts, and the Bankruptcy process will be respected, instead of ignored.

    April 17, 2010 11:06 am at 11:06 am |
  11. Joe

    All I know is that this "too big to fail" mantra is a bunch of crap. 10% unemployment and these bankers are still walking away with hundreds of millions of dollars. Republicans and Democrats better do a good job on this issue, the Tea Party and other independents are watching!

    April 17, 2010 11:06 am at 11:06 am |
  12. rdepontb

    Good move-let's hear how McConnell spins it now. I think he bit on the bait too soon-we'll see!

    April 17, 2010 11:08 am at 11:08 am |
  13. Rudy

    Enact the legislation but make sure that we have a "clearing house" for SWAPS and derivatives. The $50 Bl fund is a red hearing. The reason that the stock market works is because the efforts of searches of different people for any one stock creates a chain of information so that investors are not ambushed by the likes of Goldman Sacks and Paulson.

    April 17, 2010 11:09 am at 11:09 am |
  14. oxbobend

    "GOP Senators united in opposition". Kinda says it all.

    April 17, 2010 11:10 am at 11:10 am |
  15. jim atmadison

    Sounds like a good move. If it isn't necessary, take it out and call the GOP bluff. If they keep saying 'no', they'll demonstrate that they don't give a rat's tail about the U.S. economy or the American people. If the GOP keeps this up, November is looking great for the Dems.

    April 17, 2010 11:11 am at 11:11 am |
  16. bvilleyellowdog

    McConnell is a shill for the banks period. He is on the take. Ignore him and run him down.

    April 17, 2010 11:12 am at 11:12 am |
  17. Brandon

    Go right ahead GOP, fight against financial reform.

    Fight against any progress the people so willingly deserve. Especially after the mess Bush and his lazy SEC put us in.

    Don't anyone forget, the stack of cards was built by the GOP, and it came tumbling down under the GOP's watch.

    Are you listening Teaparty?!

    April 17, 2010 11:17 am at 11:17 am |
  18. John

    Just fet it done. The GOP is OPPOSED TO EVERYTHING. Stop trying to be barpartisan and just get things done. All this compromise, in the effort to be bipartisan, does nothing more than water down the final product. Of course the GOP will still be opposed to the reform. They are out to protect Wall St, not Main St.

    April 17, 2010 11:25 am at 11:25 am |
  19. Frank

    This compromise to appease the Republicans is hopefully the last one. Having the banks create a fund to support their mutual capital positions in case of failures is common sense (hardly an encouragement to be bailed out) except for the Republicans, for whom common sense and reality are missing traits. I just hope Senator Dodd keeps up his anger and energy to get Wall Street under some minimum level of control compared to the free-for-all greed permitted under the Bush Administration (and under Clinton after repeal of Glass-Steagel).

    April 17, 2010 11:27 am at 11:27 am |
  20. Anonymous

    Washington (I mean as a whole, not Dems and Reps) should really take this matter seriously. The large banks playing with peoples retirement funds and home mortgages in unethical and I believe illegal ways should not be tolerated. I don't care which side of the aisle you're on, Goldman Sachs is already facing a class action civil suit, and I hope criminal charges are on the way, for not only the company, but the board members that allowed companies like AIG, Behr Sterns, and Citi to play "Monopoly" with small investors financial future. All this while lying to investors, manipulating balance sheets, and diverting liabilities to look like assets come quarterly report time. Finally resulting in a world-wide economic collapse....... that both political parties are blaming on each other????? Is there anyone out there, regardless of political party that doesn't think this needs to change?

    April 17, 2010 11:29 am at 11:29 am |
  21. Bert in UT

    This "bail out" kept us from continuing a plunge into the worst economic collapse in 60 years. It worked, and the estimated cost is now a small fraction of original estimates because companies survived and are paying back the borrowed money with interest. Maybe a few people we don't like benefited from it, but it was successful economic policy, promoted by both conservative and liberal economists. We voters have to be smarter than to just "hate Wall Street."

    April 17, 2010 11:29 am at 11:29 am |
  22. monquee

    We all fail at sometime or another MCI Enron to name a few. Most of their own doing. Why bail out big business when they fail cause of shady practice's. If a taxpayer failed like the banks did, he would not get bailed out. He would be jailed out. If you help out business then help out the taxpayers its only fair. Cut our taxes and cut the deficit create good paying jobs.

    April 17, 2010 11:30 am at 11:30 am |
  23. Ron

    The GOP, the party of we are getting payed for nothing. The party of do nothing, no, obstruction and anything that will help America.

    April 17, 2010 11:31 am at 11:31 am |
  24. GMan

    The Republicans want to stop bank bailouts? You have got top be kidding me. These guys gave 100's of billions to AIG and others, and now are concerned about $50 billion in proposed reform legislation?

    WOW, thank goodness the Republican party is systematically removing all of the elements taht are not "pure" enough. So far, there are few gays, atheists, agnostics and moderates left. In the end, the Republican party will be made up of old white guys whose vocabulary is limited to one word. NO.

    April 17, 2010 11:35 am at 11:35 am |
  25. Bill from GA

    Like the health care bill without the public option, our country is again short changed by gutless Democrats.

    They should do the right thing and stand up to the Repugs.

    The Repugs could put us into an unjust war, cut taxes to the point of ruination, torture, lie to our allies, destroy the environment; basically ruin America; and Dems like Hillory Clinton just say "OK".

    The Repugs are evil, but they are strong.

    April 17, 2010 11:42 am at 11:42 am |
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