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Senator Mitch McConnell (R-KY) on Democrats Wall St Bill

Speaking on the Senate floor this morning, Republican Leader Mitch McConnell said, “Two things have become increasingly clear over the past week in the debate about the need to protect taxpayers from the mistakes of Wall Street. One, both parties are united in the need to take action. And two, the bill our colleagues across the aisle are insisting on as the remedy is seriously flawed.”

A key flaw in the Democrats’ bill is that instead of eliminating taxpayer bailouts of Wall Street, the bill actually creates a fund that would perpetuate them. As the AP explains in a fact check piece today, “The GOP’s position was once raised by none other than Obama’s own treasury secretary, Timothy Geithner, and by some liberal critics of the Democrats’ proposed overhaul of Wall Street oversight — as well as by nonpartisan analysts. . . . In October, Geithner made a similar argument to House lawmakers, saying that instead of creating a fund in advance, the costs of liquidating a large firm should be assessed to other large financial institutions after the FDIC dismantles a company. ‘A standing fund would create expectations that the government would step in to protect shareholders and creditors from losses,’ he said then.”

Robert Reich, President Clinton’s former Secretary of Labor, wrote in The Huffington Post yesterday, “[Y]es, [the Dodd bill] preserves the possibility that the Fed could launch another bank bailout.”

And Bloomberg News reported yesterday, “Federal Reserve Bank of Richmond President Jeffrey Lacker said proposals in the House and Senate will not stop banks from becoming ‘too big to fail.’ The legislation ‘just perpetuates the dynamic that gave us “too big to fail” to begin with.’”

In addition, the AP story points out, “McConnell also maintains that the Democrats’ bill would sustain a cadre of financial behemoths considered ‘too big to fail’ by singling them out for special attention by a Financial Stability Oversight Council. ‘So a new government board based in Washington would determine which institutions would qualify for special treatment — giving unaccountable bureaucrats and self-appointed wise men in Washington even more power to protect, promote or punish companies at whim,’ he said. Simon Johnson, former chief economist for the International Monetary Fund and a professor at the Massachusetts Institute of Technology, and others have argued from the left that Obama and the Democrats have done nothing to get rid of ‘too big to fail’ firms.”

As Sen. McConnell said today, “Republicans and Democrats alike believe that the flaws in the Democrat bill, flaws that would allow taxpayer dollars to bailout Wall Street banks, can and should be corrected.” But this can’t happen if Democrats decide on a take-it-or-leave-it approach to the bill and choose to have a political issue instead of a solution that protects taxpayers.

About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog.Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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