GOP vs Obama On Wall Street Reform, "I Dare You!"

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Obama Dares GOP To Fight Wall Street Reform Bill


For weeks, the White House strategy on Financial Regulatory Reform remained an open question: Would President Barack Obama water down his bill just to get something passed — the way he did on health care?

A Palinesque “Hell no!” was the answer coming from the White House on Wednesday as the president, his senior aides and his allies on Capitol Hill issued an ultimatum to Republicans fighting Democrats’ plans to overhaul financial oversight.

“For the president, you have to be willing to accept a strong bill,” said White House press secretary Robert Gibbs, after Obama emerged from a contentious meeting with GOP congressional leaders.

“If the effort to get this close is simply to take steps to weaken that legislation, that’s not what the president is interested in.”

Democrats are so emboldened that Senate Majority Leader Harry Reid (D-Nev.) is prepared to bring the Banking Committee bill to the floor with no major concessions to Republicans and essentially dare them to vote against the measure, senior leadership aides said.

At a time when Wall Street is as reviled as government, Democrats are willing to gamble that at least one Republican — and maybe as many as a half-dozen — will break ranks. At the same time, Senate Republican leader Mitch McConnell is betting he can hold his caucus together to deny Democrats even a single vote.

“It’s been two and a half years since this crisis started, more than a year since we first laid out a comprehensive set of reforms,” Treasury Secretary Timothy Geithner said during a rare appearance at the White House daily briefing alongside Gibbs.

“I think we know what we need to know. ... It’s just time to decide and time to move,” he added.

The hard-line, limited-compromise approach reflects a belief among Democrats, buoyed by recent polls, that they enjoy huge advantages on regulatory reform that eluded them on health care.

Unless the GOP can succeed in painting the reform effort as a path to new bailouts — and Senate Republicans are trying to do just that — the politics of the issue seem to be almost entirely on the Democrats’ side.

But before they take on the minority, Senate Democrats are trying to smooth over internal conflicts. For weeks, White House officials have been quietly working with Senate leaders, including Majority Whip Dick Durbin (D-Ill.), on the list of amendments liberals plan to introduce when the measure comes to the floor.

The goal, according to several people close to the situation, is to green-light those amendments that force Republicans to take tough votes, while minimizing votes that divide the Democrats’ left and right wings.

In the meantime, McConnell has settled into his accustomed role as spoiler, trying to persuade the 41 members of the Republican conference to stick together in opposition to Banking Committee Chairman Chris Dodd’s bill as it is currently written.

McConnell circulated a letter Wednesday that he hoped every Republican would sign, sending the message — as they did during the health care debate — that Republicans are united in opposition. Sen. Scott Brown (R-Mass.), a potential swing vote, said he signed the letter, which asked Democrats to reopen negotiations.

“It appears the bipartisan talks have broken down,” McConnell said, after meeting for less than an hour with Obama, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.).

“The strings were kind of pulled by the Democratic leaders,” said McConnell, who added that Democrats “are trying to jam us” for political gain.

A seething Reid, squinting in the bright sunlight of the West Wing driveway, called McConnell’s claim that Democrats had abandoned talks a “figment of his imagination” and vowed to pass the overhaul quickly.

The standoff defined the parameters for what has turned into a sharply partisan debate as Obama pushes the Senate to deliver another major legislative achievement before Memorial Day. Democrats believe they can make Republicans fold, and Republicans expect to hold firm or risk losing any leverage they have left to change the bill.

“If we can get 41 votes, they’ll have to deal with us,” said Alabama Sen. Richard Shelby, the ranking Republican on the Banking Committee.

Three Republicans who have been targeted as potential swing votes — Brown, New Hampshire Sen. Judd Gregg and Maine Sen. Susan Collins — suggested they have no plans, at this point, to provide Democrats the crucial 60th vote.

“Why would we do that when we are not in the room?” Gregg asked.

Shelby and Dodd resumed their negotiations Wednesday night, but both faced increasing pressure from their respective parties to go only so far in compromising.

Earlier in the day, Dodd threatened to end the talks with Republicans if they continued to lead what he called a misinformation campaign based on Wall Street talking points.

“My patience is running out,” Dodd said. “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.”

Dodd lashed out on the Senate floor as Obama led the tense meeting at the White House with congressional leaders.

Some Democratic senators say the template should be the legislative strategy that led to passage earlier this year of a $15 billion jobs bill. Reid infuriated Republicans by scuttling a bi-partisan compromise, betting that most wouldn’t have voted for it anyway. He pushed forward a narrowly tailored bill that at least a few Republicans decided they couldn’t vote against.





“We have to, on one hand, keep opening ourselves and keep offering our hands to Republicans,” said Sen. Sheldon Whitehouse (D-R.I.).

“But as a prudential matter we also have to be prepared, once again, to have that hand knocked away and to be able to go to a well-crafted Democratic bill — which will frankly be a stronger and better bill than if it is watered down with Republican amendments — and then let the chips fall where they may. I think that has to remain a backup strategy.”

With the public relations damage wrought by GOP talk of “death panels” fresh in Democratic memory, Team Obama launched a coordinated counteroffensive to rebut McConnell’s claim that the bank-financed “risk” fund included in the bill would pave the way for bottomless bank bailouts.

Geithner dismissed the idea that such a fund would lead to a bailout, saying, “Any risks the government takes are going to be borne by large financial institutions.”

Later, an administration official said Geithner has expressed willingness to negotiate with Republicans about the mechanics — but not the basic structure — of such a fund.

While Geithner and White House officials tried to project confidence that a strong, undiluted bill could be passed in weeks, they also cautioned that the toughest and most arcane work remained ahead of them.

Before leaving Wednesday’s briefing, Geithner delivered what he described as an “exhortation,” an unusual request for the press to guard the administration — and the American people — against GOP, lobbyists and banking interests.

“The stuff ahead of us now is derivatives, it’s ‘too big to fail,’ it’s complicated stuff — OK?” he said. “Make sure that you bring the same level of exposure and the spotlight on the choices ahead, because we — I think we all have an interest in resisting the efforts that are going to be made — and they’re going to come still, to weaken, to exempt, to carve people out of those basic protections.”


Sources: C-Span, MSNBC, Whitehouse.gov, Politico, Youtube