White House signals shift 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."
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I advise everyone to read the billl before jumping at any conclusions on both sides of the debate. This is true of any political opinion or belief because it's too serious not to be educated about. The bail outs were both republicans and democrats and I dislike that everyone spins it their way or no way. The fact is that we need another safety net for the stock market because this will occur again and the next time it could be much worse. So, I'd rather pay more for protection because self-responsability is overrated and overused because so much is outside of reality like genetics, accidents, nuiance/technical jargon or in latin, infrastructure limitations and things like that. Personallly everyone getting healthy is a good way like reading more, eating less, exercising more, thinking more and not being complacent with current standards anymore!
Has anyone read 13 Bankers ... and still questions the need for reform !
I believe also that some fun d is required as a safety net , until refrom is progressing . It will take time to turn the ship around !
"Republicans are the result of a genetic defect in the DNA of humans."
Yes, I get the impression they are evolving backwards. Soon they will be swinging through the trees.
You know I am getting sick and tired of some of you people expecting the Government to pick up after you everytime you screw up. It is time you Booked your own life and took responsibilty for you failures. All the reforms in the world won't help if you don't learn from your experences.
Wall Street only works if Main Street works. It seems the Pogo Rule has been ignored lately. Pogo says, we have found the enemy, and it is us. For the last hundred years people have been voting for this, but nothing is any better and may get worse. But it's like talking to a Brick Wall. I think about 14, 000 more jobs dissaperard this week. You will learn the hard way, one way or the other.
Why isn't there a Tea Party protest in front of the headquarters of Goldman Sachs? We already know that crowd only gets outraged when the media tells them to.
In 2005, When Bush added the trillion dollar drug entitlement program to Medicare, there wasn't a whisper of protest (because drug companies benefitted). But when corporate America opposes Obama care, suddenly there is "populist outrage."
There is no doubt that the Tea Partiers will fight tooth and nail against financial reform. Why? because their media thought masters will tell them to.
Have the Democrats lost their minds. This $50 billion bank liquidation fund should be increased to 150 billion. I agree with 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?
Again, another worthless reform bill. If the Democrats continue doing stupid things like caving into Wall Street , Republicans -support the idea of no regulations let the market run free, and not concern with making sure We the People are protected agaist corporate bailouts fraud, big business scams, swaps and what every else these crooks come up with to make them more money while the middle class is becoming the no class then they should be voted the hell out of office. The big banks are not going to helping the many middle class people who are loosing their homes or jobs. There for I hope that Democratic Sen. Chris Dodd keep or in fact increase the amount to a $150 billion bank liquidation fund should be included in his financial regulation bill.
I am so sick of Obama's misguided attempts to get bipartisan cooperation from Republicans. They are the minority party for a reason– screw them and their failed ideas. I want to believe in the change I voted for, not water it down.
The removal of the bank liquidation fund DOES NOT constitute a shift in WH wall Street reform. Of course, I understand at least one reason why the title of this article suggests that it does constitite a shift – to make the proposed reform package appear as if it did support future bailouts and shaky. But, for intelligent people, ploys like this do not work. Theives and robbers are theives and robbers no matter what words and language you use to protect them from prosecution.
Dear GOP,
Kill this bill or the kickbacks stop!!!
Sincerely,
Multi-Conglomerate Corp "X"
The fund should not be 50 billion but closer to 2.5 triliion. That is what this bailout has cost the American taxpayer so far and that does not include the interest we will have to pay on it as the years go on. Every cent of the 2.5 trillion should come from the banks so that they are self insured and indemnify the American taxpayer.
If only McCain and Palin were running our country.
We'd all be SO much better off right now.
the change could be 1 page saying bad boys and the rebublicans would say no they want thier fat cat rich buddies to make billions more so they will get more money to lie and cheat thier way to stay in power
What so few of you understand is how this Fund was supposed to be set-up. Sure, banks would put money into it, to start. The problem was what happens if the fund lacks the needed money for a liquidation. The way the legislation was set-up, the government (IE, all of us) would step up to plug the hole. Look, they loaned out $700+ billion to keep the banks going, and this fund was set for only $50 Billion. So if another crisis DID hit, who was going to foot the bill??? All of us.
Besides, this fund is NOT needed. Instead of creating a separate and distinct fund (and of course a whole new government group to manage – surprise, surprise) for liquidations, the FDIC already collects fees to cover deposits of failing banks. The legislation could be set-up so the FDIC collects more money into the insurance fund to also cover potential liquidations to better protect the consumer. This would also avoid having fights in the government over who is handling a failing bank, the FDIC or the Liquidation fund. And best of all, the FDIC can already ramp up the amount banks place in their fund as banks get stronger (IE, collect more money in good times). This new fund was fixed in the law with set donations meaning any changes would require new legislation.
Nope, the fund was a bad idea. Tweak the FDIC so it can do this job, and everything will run way smoother, with less risk to tax payers. I'm glad Obama sees this.
The President is really too quick to yield. The fund is paid for by the banks themselves, and would be used to cover the costs associated with bankruptcies, not bailouts. It's expensive to unwind a huge financial institution when it goes belly-up and since, by definition, a bankrupt bank has no money, without the $50B fund, taxpayers would end up paying.
It's idiotic that the Repubs objected to this, and it's idiotic that Obama caved.
Re-regulation of the banks should not be aimed at "putting an end to bailouts." It should be aimed at eliminating the cause of the bailouts – which is – the crooks who run the banks buying off politicians to de-regulate so they can gamble with the depositor's money. The Republicans will never agree to regulate the banks because they are owned by the banks. Anyone who thinks the Republicans are looking out for the interests of the average citizen is living in an alternate reality.
Ditto, Ron Kelly!
Bill Moyers interview, and the referenced investigations by NPR and ProPublica, are extremely enlightening. Although the GOP is obviously most responsible for the rise of the oligarchy which currently controls much of Washington and Wall Street, the mainstream portion of the Democratic party has shifted in an identical direction, led by the likes of Rubin and Summers.........who haven't been exactly shunned by the current administration.
In any event, cutting out the "bailout fund" will hopefully expose some of the hypocracy...
It's like a chess game, and The Party of No has just been put in checkmate.
If they don't support the bill with the liquidation fund provision removed, it's Game Over for the GOP in November.
if the U.S. government has to bail out the financial sector again, it will do so
why write a bill to pretend otherwise?
best case scenario, create a system whereby the financial sector (and not the American taxpayer) pays for it
instead, Congress will gut this bill under the false pretense of bipartisanship until it is as meaningless as the final health care bill was for every American
at least Congress doesn't get paid for doing such lousy, ineffectual legislation
Until government gets its hand out of the free market system, and lets failures fail, none of this matters. More regulation does nothing but waste capital. Corporatism, not capitalism, is at fault. Get government out of business – all business.
this is the reason many people are loosing faith in our President.....primarily from the Left. here he is again, making concessions without any reason only for "bipartisanship". Bispartisanship like a unicorn – fabled creature and impossible to capture. stop thinking you need to be like Jackie Robinson. This is a new era. be more like George Bush
Eugene Frank MD...................What the heck does Michelle Obama not being a Jackie Kennedy (which she isn't. I like her as Michelle Obama) have anything to do with this report?!?!?!?!?
NOTE To Republicans: Never, ever trust the NObama administration more than you have to. You already know that he's known as the Bully-in-Chief as well as the Liar-in-Chief (among others). Just make sure he's not using you like he did with the healthcare bill. Trust, but definitely VERIFY!
Yes, I am a life-long Democrat.
Why waste a good $50 billion dollars on a fund for the public trust when you could use that money to support Republican candidates in the upcoming election?
Republicans have been caught with their pants down again with the recent Goldman Sacks charges of fraud due to no financial reform and Republicans don't want our president to protect the American people from this type of crime. Why, because Republicans are in bed with lobbyist to protect their interest and not ours.
For the love of God, where's the bipartisan cooperation here? The economy is hurting, people are trying to get by, and the Dems and GOPs are still playing chess with the future of this country. We don't have time to screw around anymore! It's time for the old politics to die or we risk paying for partisan indulgence with the life blood of this country.