Dems Threaten To Cut Republicans Out Of So-Called Financial Reform Talks

Politico:

Senate Banking Committee Chairman Chris Dodd threatened Wednesday to end negotiations with Republicans on a financial regulatory reform bill if they continue to lead what he called a misinformation campaign based on Wall Street talking points.

“My patience is running out,” Dodd said on the Senate floor. “I’ve extended the hand. I’ve written provisions in this bill to accommodate various interests. But I’m not going to continue doing this if all I’m getting the other side is a suggestion somehow that this is a partisan effort.”

As President Barack Obama hosted a bipartisan meeting at the White House on the legislation, Dodd lashed out at Republicans for characterizing the bill as perpetuating endless taxpayer bailouts of failing financial firms. He said critics of the bill are spreading “outright falsehoods” that are “now being repeated by people who should know better and frankly do know better.”

Dodd and Alabama Sen. Richard Shelby, the ranking Republican on the Banking Committee, have been in talks to reach a bipartisan deal – and Dodd said they would continue – but both sides have raised the stakes considerably in the last day.

Congressional Republicans, led by Senate Minority Leader Mitch McConnell, began an effort Tuesday to paint the bill as doing little to curb future taxpayer bailouts of large financial firms. The White House responded sharply pushing back on the claims all day Tuesday.

The GOP points to the inclusion in the bill of a $50 billion fund, which is paid for by the firms and would be used to wind down a failing institution. But Republicans say it will act as a safety net for Wall Street to continue to push their businesses to the brink of collapse.

Dodd said the funds could be used only to liquidate a failed firm, not to prop it up. “The bill imposes tougher standards on large, risky Wall Street firms,” Dodd said. “It eliminates the federal government’s ability to bail out financial companies and it requires that the financial firms write their own shut down plans and even pay for the liquidation process if it’s needed.”

Dodd’s bill would provide the Federal Reserve with oversight of the country’s largest financial firms, and would allow the Treasury Secretary to initiate a takeover of companies that posed a systemic risk to the economy.

McConnell delivered his second consecutive floor speech Wednesday in opposition to the Democratic bill.

“The American taxpayer has suffered enough as a result of the financial crisis and the recession it triggered,” McConnell said. “They’ve asked us for one thing: whatever you do, they said, don’t leave open the door to endless bailouts of Wall Street banks. This bill fails at this one fundamental test.”