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Obama’s Efforts to Foster Harmony on Wall St Reform Erupt into Warfare
America’s most powerful politicians met at the White House yesterday for the start of a six-week battle in which both main parties will fight for the right to claim that they are taming Wall Street’s wildest excesses and safeguarding a resurgent US economy.
House Minority Leader John Boehner criticizes the financial regulation reform bill after a meeting Wednesday with President Barack Obama and congressional leaders, including Senate Minority Leader Mitch McConnell, right. (Getty Images) Emboldened by continuing popular disgust over the big banks’ role
in the worst US recession since the 1930s, President Obama invited
Republican leaders to what was billed as a cordial bipartisan
discussion of financial regulatory reform.
It was anything but. In an hour-long meeting that appears to have deepened party divisions over the future of the economy, Mr Obama attacked his Republican guests for their closeness to Wall Street lobbyists, demanded a complete overhaul of the risky derivatives markets that led to the brink of a financial meltdown two years ago and accused Republicans of a “campaign of misinformation” about his reforms.
In open defiance of Mr Obama’s call for cross-party backing for the
Senate finance Bill, Mitch McConnell, the Republican Senate minority
leader, denounced the Bill minutes after the White House meeting as a
recipe for institutionalising the bank bailouts of 2008. The $85
billion (£50 billion) rescue of the AIG insurance giant in particular
has become a reviled symbol of taxpayer-funded indulgence of Wall
Street irresponsibility.
The stakes in the unfolding debate on the future of the US financial industry could hardly be higher.
Outside Congress, experts from across the political spectrum agree that tough new rules on derivatives trading and banks’ capital reserves are essential to prevent a repeat of the 2008 meltdown that cost America 11 million jobs and wiped out the savings of millions of middle-class Americans.
Mr Obama has set Congress a deadline of May 31 to approve a Bill that would give the Federal Reserve direct oversight of financial institutions with assets of more than $50 billion.
It would also create a “resolution authority” that would let the US Treasury guide failing firms into bankruptcy — and oblivion — at minimal or no cost to the taxpayer.
“I am confident that we can work out an effective bipartisan package that assures that we never have ‘too-big-to-fail again’,” he said before yesterday’s meeting, referring to the AIG bailout.
Senator McConnell had already launched a pre-emptive strike against the Democratic Bill on Tuesday, saying that it would make future bailouts more, rather than less, likely.
What surprised and angered the White House was his decision to stick to the same line of argument despite language in the Bill that explicitly rules out the use of taxpayers’ money to save failing banks in the future.
Austan Goolsbee, chief economist of the White House’s Economic Recovery Advisory Board, said that he was stunned by Mr McConnell’s stance. It was “totally disingenuous” to claim that the Senate Bill enshrined the “too-big-to-fail” concept, he said, when in fact it required that the management of failing financial firms be fired and their shareholders be wiped out.
Even before the passage of a $940 billion health reform Bill last month, there was no love lost between the White House and the congressional Republican leadership.
Sensing weakness in Mr Obama’s deliberative style in the healthcare debate and in the three months that he spent reaching a decision to send more troops to Afghanistan, it imposed tighter discipline on moderates who might have been tempted to back Democratic Bills on merit, in the hope of branding the Administration incapable of governing, and recapturing the White House in 2012.
One result was that the finance Bill approved by the Senate Banking Committee lacks the support of a single Republican despite months of negotiations aimed at winning over moderates, including Richard Shelby, of Alabama, and Bob Corker, of Tennessee.
In a shift that may have strengthened Mr Obama’s hand, Senator Shelby, the senior Republican on the banking committee, hinted that he might break ranks as pressure builds from Democrats for the 60 votes they need to pass the Bill. “It is a bad concept to bail out anybody,” he told CNBC, adding that he still held out hopes of a reform package passing by early June.
Since January the Democrats have needed at least one Republican vote to be sure of passing anything in the Senate except by the controversial reconciliation process used to make crucial amendments to the health reform Bill.
This is the first serious test of Mr Obama’s ability to sway Congress since senior Republicans, including Senator John McCain, vowed to block every item on his domestic agenda after their defeat on healthcare.
Democrats still fear that victory may cost them dearly at the midterm elections but they are confident that when it comes to reining in Wall Street they will have the public behind them.
“This ought to be a bipartisan Bill and I think in the end it will be,” Mr Goolsbee said.
The White House is calculating that Republicans who choose to remain opposed to the most sweeping Wall Street reforms in several generations will risk being punished by voters for appearing to support irresponsible bankers at the expense of Main Street.
Senator McConnell and others had a private meeting in New York this week with hedge fund managers and their lobbyists. Democrats have since gleefully accused him of parroting Wall Street’s talking points. On yesterday’s evidence, he may have to find some new ones.
35 Comments so far
Show AllBABYLON USA HAS FALLEN -- COME OUT OF HER MY CHILDREN
Our 51% voting majority knows full well, they being the 51% most intelligent and wealthy in our corrupt society, that if our high finance were honest -- Empire USA would not have 80% of the wealth we enjoy to day. For surely 80% of the wealth in the U.S. belongs to the nations we have plundered and swindled.
"I saw the best minds of my generation destroyed by madness, starving hysterical naked..."
When are the Democrats going to shape a strategy which might have some hope of passing critical legislation while positioning them to hold the White House and Congress? What is wrong with using the reconciliation process if we achieve desperately needed results? Combined with good PR and education efforts we might have a chance to salvage our country.
The reconciliation process can only be used for matters directly concerned with the federal budget. And the wording has to be approved by the Senate Parliamentarian, who does not roll over for either party.
Congress is owned by Wall Street. PR efforts manage public perceptions. The illusion is that some kind of "battle is being fought for your benefit" between dueling parties, which is a load of horsesh$t. Wall Street appoints regulators, controls agencies and funded Obummer's election in the first place. Man up seedysea! This is about salvaging the uber-wealthy from inconvenience.
Dims fear victory will cost them at midterm elections?
Please what does that mean? That the Repugs control the Media so much that true banking reform would be rejected by citizens?
Why does Obomber always do this bi partisan routine?
All he does is move right continuously without gaining any Bi partisanshipness.
Why not just push through the best policy to begin without this counterproductive bipatisan routine?
Possibly because he wants what he gets?
Since the Dims only mission is to glean more corporate "contributions" than the Repugs, they will definitely LOSE that source of funding between now and the mid-term elections if they deviate from the pro-corporate, anti-worker strategy they have pursued for the past two decades.
Judging from the Dims' record since they took control of Congress in 2006, and their many capitulations during the Dubya years, many of the Dims' base and many swing voters are likely to sit out the 2010 elections, many other swing voters will likely vote for real Repugs rather than the pseudo Repugs the Dims have become.
You misread it. "Democrats still fear 'that' victory may cost them dearly at the midterm elections ..." "That" refers to the health care bill referenced in the preceding paragraph.
Nat 5:52 you are correct and it also is correct that Dims eat it for their sick Health deform.
Clearly the bill is an industry bill. Obama is a corporatist as are members of Congress.
Solution: Vote out all incumbents, all of them. View Congress as a "team sport." If the interests of the people are not served then the entire Congress must be replaced. It's not a perfect solution but it's a step in the right direction. As the Congress is proud of saying, it can be improved as we go.
VOTE OUT ALL INCUMBENTS !
Whittell sez: "Mr Obama attacked his Republican guests for their closeness to Wall Street lobbyists (and) demanded a complete overhaul of the risky derivatives markets that led to the brink of a financial meltdown two years ago ..."
***
Obomber's firm, principled stance would be more impressive if he would start by closing down the Gold in Sacks branch office currently located in his Treasury Department.
I agree with closing down "Gold in Sacks" and we may include the other firms indentified in Captialism, A Love Story, by Michael Moore. If you have not seen this DVD, it is time you did. There is enough in there to activate millions in the shift of consciousness to a new way of thinking. We will not solve this in this political environment. We must fundamentally change ourselves and our communities to institue global change.
I am Committed to Oneness through Justice and Transformation
peace,
st john
I agree with those that suggest that is a mock battle, when both parties are bought and owned by special interests …
He is a quote by one our founding fathers, which pretty much lays out the priorities of our “mock” democracy:
In the words of the leading framer, James Madison. Political power, he explained, must be in the hands of “the wealth of the nation,” men who can be trusted to “secure the permanent interests of the country”—the rights of the propertied—and to defend these interests against the “leveling spirit” of the general public. If the public were allowed to participate freely in elections, Madison warned his colleagues, their “leveling spirit” might lead to measures to improve the conditions of those who “labor under all the hardships of life, and secretly sigh for a more equal distribution of its blessings.”
In short, “those that own it, should run it”. My words.
Madison was obviously an elitist oligarch. Just because he was around at that time doesn't mean he was right. The same goes for Alexander Hamilton: Another champion of the oligarchy. Time has shown that they were both of them dead wrong. The oligarchy cannot be trusted to do anything but steal from the public, exploit workers, (vis a vis the latest coal mine disaster) squander natural resources befouling air and water without conscience, and declare illegal wars.
I'm a Jeffersonian, myself.
Hamilton purposely bankrupted the trans Appalacian farmer with his wiskey Tax for the gain of Big Distillers. Thats what the Whiskey Rebellion was about.
-One result was that the finance Bill approved by the Senate Banking Committee lacks the support of a single Republican despite months of negotiations aimed at winning over moderates,
I'm with "glenn ford" on this one, "what does this mean"?
After winning the election, Obama's Democrats now feel that they must win over the losers? They want the Republicans to love them?
Do you really expect the Republicans to announce:" On second thought, the government is doing fine under the Democrats. Vote for them again, not us. We support Obama."
Do Americans actually think this is how politics works? Democrats have the votes, they have an absolute majority, they can legislate anything they want. They can appoint anyone they want to the high court. They can pursue any policy they want. It isn't the Republican's refusal to learn the error of their ways that is stopping your government from doing the right things.
absolutely right jlocke. Harry Reid could stop all this "filibuster-proof, 60-vote majority" BS with a stroke of his pen. Next time Reid gets one the Republicans endless stream of insipid and cynical "procedural filibuster" memos, all he has to do is send it back with a reply calling for the member to actually stage the threatened filibuster.
Let 'em stay up all night reading the phone book. Then when they poop out as they most certainly would, call everybody on their cell, march them back into the chamber and cast the votes. Bing, bang, boom, just like that. It's all right there in the ridiculous, undemocratic and byzantine "Senate Rules". He has the authority to do it.
Or they can use a simple majority in the reconciliation phase. The 60 vote thing is just a paper thin rationalization for the Dems chronically reactionary, pro-corporate, do-nothing stance.
They will have to do this with finance reform or they'll lose straight up. Let rabid dogs like Boehner and McConnell bark.
John, why don't you go soak your head in that bucket of walnut wood stain you keep in your garage?
Feeling kind of helpless reading about this and not being able to change a thing... as they fight over how to rob the taxpayer without them catching on.
I no longer trust the D's. I've never trusted the R's. Nothing LESS than a full word-for-word reinstating of FDR's glass-steagall act & 1935 P.U.H.C.A. act will begin to reform wallstreet, & THAT's a minimum. Then, who will follow through? Where's our Pecora to chair a Pecora commission?
Roger Lowenstein was interviewed by Tom Ashbrook and discussed the meltdown and reform some (no transcript but you can listen here: http://www.onpointradio.org/2010/04/focusing-on-wall-streets-future).
ON NUCLEAR SUMMIT
I've got to give credit where credit is due. Admittedly, I'm defecting to the Green Party for the 2012 election. However, on this nuclear summit, I gotta say, Obama's bringing together a number of nations on a very important issue that 99% of the sane world agrees with!!!!
(except Republicans and their talking heads who've lost their damn minds.)
You must have missed Obama's new policy that the U.S. may now use nuclear weapons—under the Bush Doctrine of preemptive war—against non-nuclear countries who have neither attacked us nor are an imminent threat.
And he has increased the nuke weapon budget and we are designing and virtually testing new nukes in violation of NPT and he did not invite the most important Iran Korea or Syria nor did he insist on israel being present.
And it just might be setting the stage and excuse to attack defenseless Iran.
I probably have missed some things (Easter-SAD had me out for a week). Thanks for updates.
The attempts to portray Obama's approaches at bipartisanship to woo Republicans are nothing more than a red herring. Unless the man is a fool he ought to know by now that the Republican Party wants to stick it to him at every turn. Obama's bipartisan gestures are nothing more than an attempt to win over the corporate Democrats which have taken over the Democratic Party.
If Mitch McConnell opens his mouth, he's lying.
If John Boehner opens his mouth it's so he can tan his tongue.
-30-
It sounds like the President is getting tough.
His message should be clear and concise.
It shouldn't be hard to figure out what to do.
Just reinstall the checks and balances that have been
loosened since the Reagan era.
The President needs the support of the American people on this one.
He could probably get international support if he plays his cards right.
What a huge mess we have gotten ourselves in to.
And so sad it is happening just as the baby boomers are retiring.
They worked hard and long only to have the rug pulled out from under them at the midnight hour.
"getting tough"?
LOL!
Theatre!
Watch videos of McConnell using Frank Luntz' instructions to link the 'bank reform' bill with 'bank bailouts'. When examined, the bank reform bill ensures that bank bailouts won't be able to happen again. The bill provides for establishing a bailout fund which the banksters create themselves and they don't get to tap into it until they close their doors permanently. Wall Street hates the idea that they can't keep going back to the well of taxpayer-free-money. So naturally they hate the reform bill. So both Boner and McConnell are tapping into public anger over the bailouts, so they are linking the bill to bailouts. Just baldfaced lies. The Party of NO is the Party of YES SIR! as far as Wall Street goes.
"Senator McConnell and others had a private meeting in New York this week with hedge fund managers and their lobbyists. Democrats have since gleefully accused him of parroting Wall Street’s talking points. On yesterday’s evidence, he may have to find some new ones."
Hey kids!......how about we all start talking about hedge fund managers paying good-old "income taxes" on their earnings (like the rest of us) instead of the meager 15% they've been paying as "unearned income"? Let's call bull$hit what it is.
Obomber is with this Bi-partisan thing again?
He is to young and to inexperienced to run the country.
Let's vote them all out in the next election. We have been doublecrossed by Bill Clinton and Nafta, now more by Obomber.
Even Scott Brown is reading the story, and he is scared of the next election.
"Mr Obama attacked his Republican guests for their closeness to Wall Street lobbyists, demanded a complete overhaul of the risky derivatives markets..."
This is high theater. Nothing in Washington is done in the open, except posturing.
And Obamageddon is one of the best posers.
"Mr Obama attacked his Republican guests for their closeness to Wall Street lobbyists"
Is that pot calling the kettle black? That's the kind of gall bush jr. likes to display. When you are the recipient of the largest campaign contributions from goldman sachs and appoint banksters like geithner and summers to prominent posts you've got little room to criticize others for their subservience to wall street.
" Mr Obama has set Congress a deadline of May 31 to approve a Bill that would give the Federal Reserve direct oversight of financial institutions with assets of more than $50 billion."
Nothing like a fascist democrat to expect the fox to guard the henhouse. Once again I'm a little surprised by obomber's gall.
"Senator McConnell had already launched a pre-emptive strike against the Democratic Bill on Tuesday, saying that it would make future bailouts more, rather than less, likely. "
This is a message that will be repeated endlessly. The republicans will rely once again on the Big Lie to get some of the population to fight for the oligarchy at their own expense. Hopefully these tactics are losing some of their effectiveness.
When my little brother was about four years old I took him to a live Punch and Judy puppet show. He had never seen puppets before and, in the first few minutes, wonder changed to disbelief. Then, right in front of God & everyone else, he walked up to the stage and clutched each of the puppets to find out what was under the costumes. He was not deterred when "Punch" began rapping his hands and squawking at him. He then turned to the audience with a sour face and let out a big Bronx cheer, soon joined by the other kids in the audience.
Question: Why are most adult Americans more gullible than my little four year old brother?