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. Vanessa

    We have framed this debate as Main Street vs. Wall Street. Main Street didn't get a bailout so why should Wall Street?? This is our problem. This US against THEM mentality. Look at Greece. Look at Iceland whose banks failed. People have to move out of their country to find work. Their unemployment is higher than ours. They're worse off than us because they're banks went belly up with our bad derivatives.

    We need to stop whining about the bank bailout and what we didn't get and pressure EVERY member of Congress to reform these banks so that they can no longer get too big to fail. We need to revitalize the Sherman Act.

    TARP has made 8.5% in interest for the American taxpayer. There is no way we could've gotten such returns from Joe the Plumber and the rest of Main Street Central Casting. We have unemployment benefits extended and mortgage programs, so stop acting as though the gov't has done nothing for Main Street. FOCUS people on regulating Wall Street!!

    April 17, 2010 11:43 am at 11:43 am |
  2. Greg Gilbert

    Having Democrats make changes to Wall Street is like having Republicans make changes to Hollywood. Wall Street is full of Republicans! I don't see Obama ever having enough trust on this issue to be able to pass anything. And should they?!! All this is just so they don't have to do a bailout?!! How about grow a spine and just don't do a bailout next time!!! There were many economists that stated the sky wouldn't fall if the bailout didn't happen. Next time side with the other guys.

    April 17, 2010 11:43 am at 11:43 am |
  3. Michael

    Mr President, I would shift nothing! I know you are still trying for bipartisanship from repuglicans, but do you realize that dog is dead! Pulling out th 50 billion fund just because the repuglicans are distorting its purpose reminds me, of when you dropped the "public option" from the healthcare bill, and the repuglicans still did not support it! Mr President, It is time to go at it alone on all your goals and future legislative initiatives! ALL REPUGLICANS WILL DO IS MAKE AMENDMENTS AND CHANGES, THEN STILL VOTE AGAINST THEIR OWN CONSCIENCES!

    April 17, 2010 11:43 am at 11:43 am |
  4. Bert in UT

    It is amazing that ordinary citizens of the Tea Party have bought into the idea that it is a "government takeover" to regulate gigantic health care companies and gigantic financial institutions so they are less able to take advantage of individuals. You would think that is exactly what freedom-loving people would want their government to do.

    April 17, 2010 11:44 am at 11:44 am |
  5. Angie in PA

    Republicans will be against their own proposals they will put them in the President and the Democrats will endorse them and the Republicans will bash their own proposals WAKE UP SILLY PEOPLE TO THE REPUBLICANS GAMES!!

    April 17, 2010 11:44 am at 11:44 am |
  6. Terry Edger

    I thought that 50 million pool was going to be seeded by the banks?Those funds were to be used if a bank was in trouble. Doesn't eliminating that provision make it more likely the government would have to participate in a "bail Out?"

    How does it work if that pool isn't there?

    April 17, 2010 11:47 am at 11:47 am |
  7. MVickland

    Go, Pres, Go!

    April 17, 2010 11:47 am at 11:47 am |
  8. bob

    This is a test for the Tea Party. They should be putting the pressure on the GOP to pass regulation that will prevent Wall Street from destroying our economy again. If they don't, we know they are just puppets. If they do, they may have a chance to be something more than a joke.

    April 17, 2010 11:51 am at 11:51 am |
  9. Eugene Frank MD

    The bill to regulate banking and exploitive trading by an 'in-group' of extraordinary wealthy, greedy and corrupt individuals, financially supporting the re-election of a Republican majority, is a crucial element in the present and future stabilization of the American economy. Make no mistake, if Obama does not rally the Democratic party and use every bit of his power, prestige and bully pulpit to pass an un-compromised bill that does everything we Americans need it to do, that failure will be the demise of the Democratic Party and prevent the return of success to this country. I voted for Obama to pass this bill: Michelle is not Jackie, lets see if Obama can be J. Kennedy.

    April 17, 2010 11:51 am at 11:51 am |
  10. D. Bunker

    Only in their deluded world of lies and hypocrisy could the GOP claim a fund to "wind down" (ie, shut down) failing companies be called a "bailout".

    Oh wait, it's just a bunch of good GOP soldiers doing the bidding of their corporate masters to gut any and all regulation of business.

    April 17, 2010 11:51 am at 11:51 am |
  11. Ron Kelly

    Watch last night's Bill Moyer's Journal (two parts) interview with Simon Johnson and James Kwak, co-authors of "13 Banks" and the website Baselinescenario. It is probably the most clear, enlightening explanation of the issues facing us that I have ever seen.

    April 17, 2010 11:52 am at 11:52 am |
  12. Brandon

    I've been asking for weeks, "where are your better ideas, republicans?" I don't mind dissent, but dissent w/o alternatives is pointless stonewalling. If you don't like what the president is doing or how he is doing it, come up with your own proposals that accomplish the same goals and let the debate begin...

    April 17, 2010 11:52 am at 11:52 am |
  13. Lynda/Minnestoa

    How refreshing that for once the GOPers are being entirely honest in admitting that they are snuggling up to the best interests of coporate greed!

    The 50 billion dollar bank fund referenced in this article, WOULD have been collected from the banks, NOT the taxpayers or government.

    April 17, 2010 11:53 am at 11:53 am |
  14. Randall in Torrance, CA

    Republicans are the result of a genetic defect in the DNA of humans.

    April 17, 2010 11:53 am at 11:53 am |
  15. Zac

    The fund is a great common sense idea. Like the FDIC, it would force banks to pay for their own failures, and assume their own darn risk.

    How does removing it shield tax payers from that risk?

    April 17, 2010 11:54 am at 11:54 am |
  16. Gil

    It is a shift, but the Party of No won't turn its back on the banking interests that they let screw up America or the lobbyists that give them their $. The Party of No is a broken record of nonstop support for the rich. Americans will see that at they get a steady diet of NO, NO, NO!

    April 17, 2010 11:56 am at 11:56 am |
  17. Bosko

    The problem is the 50 billion will come from the users of the banks in the form of fees. This still requires the little guys to pay for the big guys poor investing habits. The right way to put an end to bank bailouts is to not bail them out. Seems simple but this would require investors to take risk and unfortunately that seems to be off the table. Let them fail and let the bottom feeder pick up the peices!!

    April 17, 2010 11:56 am at 11:56 am |
  18. Joel Miller

    Like the performers in the lesbian-bondage clubs that they frequent, Republicans let them selves be hog tied into submission by Wall Street just as they were by the insurance industry. These folks will grind in anyone's lap who'll pay.

    April 17, 2010 11:58 am at 11:58 am |
  19. Brandon

    I'm glad to see so many people recognize the fact that the GOP hasn't actually done anything but get the most fearful and paranoid American worked up into a frenzy. What amazes me is that so many people just take what Rush and Glenn say and treat is as gospel truth (oxymoron). I just wish that Obama would stop giving in to it, like spoiled children, if you keep giving in they will keep throwing tantrums.

    April 17, 2010 11:59 am at 11:59 am |
  20. Laurie

    Of all the ludicrous stands for this band of liars to take, this is definately the wrong one. The 41 senators that have signed this letter, apparently do not have any constituents who were affected by the the financial meltdown, caused by Wall Street banks. This group of "senators?" elected to serve the people are serving themselves and the slimey ciminals at the Wall Street banks who have put this country in the terrible economic state that it is in. Tell me Republican senators do you have to worry about making a mortgage payment, getting a job, paying credit card bills, and on and on???? Nope you don't. Just like we pay for a government run health care program for you worthy recipients. You don't pay for that either. The taxpayer does. Your constituents, the American people. Your opposition to financial reform is immoral, unethical, and thankfully shines a light on the reason you are in the Senate. You are in the Senate to serve yourselves.

    April 17, 2010 11:59 am at 11:59 am |
  21. H. Lauritsen

    One more Repulican lie trying to protect their crooked friends on Wall St. & Bankers!

    April 17, 2010 12:00 pm at 12:00 pm |
  22. kennywest

    I don't think there's any debate on this one, this is clearly a GOP political ploy. By the way while I'm here., I watch Fox News all the time. They are constantly lying, using sound bites, spinning statements to support their political agenda. They should be brought up on charges. You should not be able to call yourself a News station and do what they're doing. They're doing more to harm this country then the terrorist.

    April 17, 2010 12:01 pm at 12:01 pm |
  23. Joe Williams

    How so many unaware citizens are eager to blame Wall Street, but say nothing about the main culprit, the Federal Government, specifically, many current Democrats, who create CRA and forced banks to make loans to poor people who should have been renting rather than moving into houses they could ill afford, and then encouraging Fannie Mae and Freddie Mac to buy these bad loans and repackaging and reselling these bad loans back into the market. For the uninformed, with Democrats aiding in the cover-up, it is easy to blame banks to get the heat off. Democrats are a pox on this country and progressives are un-American! This is the simple truth!

    April 17, 2010 12:01 pm at 12:01 pm |
  24. walter

    There is not one republican I can say I stand behind. They are ALL corporate puppets. These recent movement groups seem to be more inline with independent party values, it is my hope that the elections in November reflect this shift in ideology. Give the republicans back to the corporations and out of the way of significant social progress.

    April 17, 2010 12:02 pm at 12:02 pm |
  25. Chris S

    Democrats are their own worst enemy, until they take control of the power like Bush did, without the killing millions of civilians and starting an illegal war part of course, they will continue to compromise everything and water it down until it's acceptable to the republicans and in the process make themselves look weak and confused like they're unable to run government. We all know this 50 billion fund is not the only thing the republicans want out, so maybe this strategy will work for the dems but I being the republicans are scratching to stay alive I have a feeling they've planned this out a little better than the dems. It's funny how the republicans think we are so stupid but to believe it was Obama and the dems that started this bailout madness, it's like 2000-2008 never happened in their minds.

    April 17, 2010 12:08 pm at 12:08 pm |
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