Republicans: We're Still Seeking Wall Street Reform Compromise

By Benny Martinez - University of New Mexico / Talk Radio News Service

Republican Senators told reporters Wednesday that they are getting very close to drafting a bipartisan financial regulatory reform bill, despite receiving a letter from Senate Majority Leader Harry Reid (D-Nev.) announcing that negotiations were over.

Earlier this morning, the Senate Agriculture Committee approved legislation that would increase transparency in the derivatives market.

Sen. Richard Shelby (R-Ala.), who has been in negotiations with Sen. Chris Dodd (D- Conn.), said that the Senate Banking Committee has been meeting tirelessly and is making progress towards drafting a “good bill” that will be embraced by both sides of the aisle.

“I’m optimistic that we’re going to get a bill,” Shelby said. “It’s going to be a good bill. We’re not there yet, but I think we’re closer than ever.”

In an effort to protect taxpayers from another bailout, the Republican Senators agreed that financial reform should include provisions specifically targeting too-big-to-fail firms.

“We don’t represent Wall Street, nobody does,” Shelby said. “I can tell you, Wall Street is not going to be writing this bill.”

Wall Street Bill Will Receive Bipartisan Backing, Predict Democrats

By Laurel Brishel Prichard
University of New Mexico/Talk Radio News Service

Sens. Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del.) predicted on Wednesday that Republicans that are retiring or up for re-election later this year will soon be changing their stances on Wall Street reform.

"We would love to see some bipartisanship on this bill," said Brown. "I think we will see it."

Brown added that certain Republicans are already beginning to change their minds about the legislation. As evidence, he cited the decision by Sen. Chuck Grassley (R-Iowa), who faces re-election this fall, to vote with Democrats in the Senate Agriculture Committee on a derivatives regulation bill.

"If you look at a list of what Republicans are up for re-election in 2010 you might correspond to bet who ends up voting procedurally to get this bill moving," said Brown.

Dodd Confident Senate Will Make Progress On Financial Reform This Week

By Laurel Brishel Prichard University of New Mexico/ Talk Radio News Service

Senate Banking Committee Chairman Christopher Dodd (D-Conn.) expressed confidence Monday that the Senate will make headway on financial regulatory reform this week, despite mounting challenges from Republicans.

“I'm going to work on the assumption … that when we bring this bill up later this week that we'll have the votes across the board...to allow us to debate this legislation, consider amendments and move forward," said Dodd during a morning press conference.

Dodd added that if Republicans have suggestions for a better strategy toward reforming regulation of the financial industry, then they need to come forward soon. Otherwise, the effort to move forward with the legislation will continue.

“The door has been open … it’s never been closed. My Republican colleagues on the committee and leadership know that,” Dodd explained. “But I’m waiting for the knock on the door.”

The legislation would put a $50 billion fund in place that “too big to fail” banks would pay into in order to ensure that they would receive assistance if they ever came into hardship. According to Dodd, the idea for the program, similar to what smaller banks do with the Federal Deposit Insurance Corporation, came from the Republicans, so their recent opposition was not foreseen.

“This was a Republican suggestion to have a pre-payment in the bill,” said Dodd. “I’m willing to listen to some other ideas, provided we don’t expose the taxpayer [to risk.]”

According to the chairman, reform legislation would have prevented Goldman Sachs Group Inc. from committing fraud, as alleged recently by the Securities Exchange Commission.

“Our bill would have prevented those kinds of events from happening,” said Dodd.

New Bill Will Separate Commercial And Investment Banks

Travis Martinez, University of New Mexico/Talk Radio News Service

Senators Maria Cantwell (D-Wash.) and John McCain (R-Ariz.) introduced bipartisan legislation Wednesday that would prohibit commercial banks from affiliating themselves in any manner with investment banks or securities firms.

The Banking Integrity Act of 2009 would restore 1933 legislation, repealed in 1999 under legislation guided by former Sen. Phil Gramm (R-Texas), to establish a wall between commercial and investment banking to help protect depositors' money from being put at risk by Wall Street speculation.

"I'm sure that Senator Gramm probably does not agree with this legislation. It doesn't change our relationship, we just don't agree," said McCain.

“For nearly 60 years, a firewall maintained the integrity of banking systems; preventing self-dealing and other financial abuses; and limited stock market speculation,” said Cantwell during a press conference. “Our bill would return that firewall.”

Under Cantwell-McCain, major financial firms currently operating as both commercial banks and investment houses would have to make a decision on whether to focus on commercial or investment banking.

“I want to ensure that we never stick the American taxpayer with another $700 billion or even larger tab to bailout the financial industry. It is time to put a stop to the taxpayer financed excesses of Wall Street,” said McCain.

McCain brushed off concerns that Gramm, who served as a campaign adviser for the Arizona senator's 2008 presidential campaign, would be troubled by the move to sweep away his legislative accomplishments.

Chrysler Throws In The Towel

By Suzia van Swol, University of New Mexico-Talk Radio News Service
One-time giant Chrysler filed for bankruptcy protection today, but President Obama says he has every confidence it will emerge from this process stronger and more competitive.

After speaking with the President today, U.S. Rep. Marcy Kaptur (D-OH) said that the auto industry is important to the U.S. defense industrial base and the economic power of Northern Ohio. “Most important are the 30,000 jobs saved at Chrysler,” said Kaptur.

Kaptur said that the auto industry was brought down by Wall Street and it deserves to flourish. “The government will stand behind the working capital for Chrysler in the form of working capital and loans,” said Kaptur.

Striking comparison with other bailouts, Kaptur said that if you look at who got the big money, “the AIG gets 70 billion, one company?” She went on to say that TARP should have been opened up for vehicle sales
and for the financing of dealership showroom floors. Instead, there was a total credit strangle hold, which still is impacting this industry, and unemployment started to tick up all across the country.

The federal bankruptcy court will ultimately determine Chrysler’s immediate future, but Jeeps might still get a chance to four-wheel over mountains.