With the Senate planning to begin debate this week on the largest regulatory overhaul of the financial industry since the Great Depression, Democrats are demanding that GOP divulge details of “backroom negotiations” with Wall Street executives.
Advocates of reform, both inside and outside the Senate, are pushing the chamber to adopt the strongest possible measures to regulate banks and financial institutions so as to give consumers the most protection possible.
“With the announcement that the Senate is now scheduled to begin floor debate on a comprehensive financial regulatory reform package this week, we urge Senators to enact real reform to protect Americans and our financial system,” says John Morton, managing director of the Pew Economic Policy Group, a division of The Pew Charitable Trusts that promotes policies and practices that strengthen the U.S. economy. “Senators from both sides of the aisle can and should work together to pass a final bill that: creates an early warning system; ends ‘Too Big To Fail’ and bailouts; increases transparency in markets; and provides meaningful consumer protections. Financial reform must significantly reduce the likelihood of future crises and ensure that, should a crisis occur, the American taxpayer is not left covering the tab.”
Sen. Bernie Sanders of Vermont, a left-leaning independent who led an unsuccessful campaign to deny Ben Bernanke a second term at the head of the Federal Reserve, outlined the four provisions that he thinks are needed provisions in a final financial reform bill.
Financial reform is another high priority for President Obama, and the legislation that the Senate will vote on is a package put together by Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee.
“Disgust at Wall Street is profound. The American people want us to change in a very profound way how Wall Street functions, and Congress must deliver,” Sanders says, adding that he would offer amendments to the Dodd bill.
Although Dodd had worked with key GOP senators in crafting his reform bill, including Sen. Richard Shelby of Alabama, the ranking Republican on Banking, no Republicans have thus far been willing to support the Senate bill.
Senate Majority Leader Harry Reid, however, cited public comments by Shelby who has indicated that Republicans could agree on 70 to 80 percent of the Dodd proposal.
“Holding big banks accountable for the enormous economic crisis of recent years is about more than dollars and cents. It is about fairness and justice. It’s also about learning lessons from the mistakes of the past so we are not bound to repeat them,” Reid says in remarks Monday on the Senate floor.
The Senate majority leader also notes that federal regulators last week began legal action against the firm Goldman Sachs for allegedly illegal, fraudulent dealings that contributed to the 2008 financial meltdown.
Reid and his spokesman each called out Senate Republican Leader Mitch McConnell and Sen. John Cornyn (R-Texas) for “secret” meetings with Wall Street executives eager to derail the new reforms. Cornyn is chairman of the Senate GOP campaign operation. Republicans reportedly for months have been seeking campaign contributions from the financial industry in exchange for working to kill the reform legislation.
“Republicans also refuse to admit whose side they’re on,” Reid says. “Earlier this month, the Republican Leader and the head of the Republicans’ Senate campaign committee went to Wall Street. They met with the bankers and hedge-fund managers who benefited more than anyone from the broken system and are trying harder than anyone to stop us from fixing it.”
In a separate statement and citing television news interviews (video), Reid spokesman Jim Manley says McConnell and Cornyn refuse to disclose just what they have said in their talks with bankers behind closed doors. Prior to dissatisfaction due to financial reform, Wall Street executives generally gave more in recent years to Democrats.
“Senators McConnell and Cornyn should immediately reveal what they discussed earlier this month during secret, closed-door meeting with Wall Street executives in New York City,” Manley says. “Years of greed and excess on Wall Street cost 8 million jobs and trillions in wealth for middle-class families and small businesses. Since Republicans appear to be conducting backroom negotiations with these same people who took our economy to the brink of collapse, the public deserves to know what secret deals and carve-outs Republicans are offering Wall Street executives in exchange for their support.”
Publisher of the news site On The Hill, Scott Nance has covered Congress and the federal government for more than a decade.