- The Washington Times - Thursday, April 15, 2010

Lawmakers appeared to be headed for a sequel to the battle over health care as President Obama and Democratic leaders on Wednesday demanded swift action on a financial overhaul bill that Republicans argue would perpetuate Wall Street bailouts.

Mr. Obama has been making a full-court press on the issue, urging the Senate to vote as soon as possible on a plan to revamp the nation’s financial regulatory system by giving the government more power to break up troubled firms, creating an independent consumer-protection agency and imposing new requirements on monetary instruments known as “derivatives.”

Negotiations between Senate Banking Committee Chairman Christopher J. Dodd and the panel’s Republicans have not been fruitful, as the two parties are clashing over several key elements, including a $50 billion fund, paid for by a new fee on the nation’s largest banks, that backers say would be used to help wind down failing institutions.

While Mr. Obama expressed a desire for bipartisan support ahead of a meeting with Republican and Democratic leaders Wednesday morning, his lieutenants on Capitol Hill made clear - just as they did during the health care fight - that they are prepared to move forward with or without the Republicans, whom they accused of spreading misinformation about the bill.

“I am confident that if we work together diligently over the next several weeks that we can come up with a package that serves the American people well and does not put Americans ever again in a position where they’re having to choose between a terrible economic situation or rewarding people for failed policies and bad risk-taking,” Mr. Obama said.

But both sides later ratcheted up the rhetoric, casting doubt on Mr. Obama’s prediction.

Responding to Democrats’ claim that they are on the side of Wall Street, the Republican leaders accused their counterparts of seeking to perpetuate taxpayer bailouts of big banks.

“The financial regulatory bill the Democrat majority plans to introduce in the coming days is fatally flawed. It not only allows endless bailouts for Wall Street, it institutionalizes them, making them official government policy,” said Senate Minority Leader Mitch McConnell on Wednesday, referring to Mr. Dodd’s $50 billion liquidation fund proposal.

Senate Majority Leader Harry Reid said he intends to “move the bill very quickly” while Mr. Dodd, a Connecticut Democrat who is not running for re-election later this year, suggested he may give up on further bipartisan talks.

“I’m not going to continue doing this if all I’m getting from the other side is the suggestions somehow that this is a partisan effort,” Mr. Dodd said in a speech on the Senate floor.

White House press secretary Robert Gibbs stressed that the administration is “not going to make bad policy decisions through the artificial lens of hoping something is bipartisan.”

Republicans also say the bill fails to address problems facing Fannie Mae and Freddie Mac, housing finance giants whose practices contributed to the mortgage crisis. But Treasury Secretary Timothy F. Geithner said the administration intends to deal with the government-backed firms at a later date.

Mr. Geithner, speaking to reporters, dismissed Republican characterizations of the bill.

“The central part of this is to make sure that in future financial crises, that banks bear the cost of any risk the government has to take to protect the economy,” he said.

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