Obama: Wall Street Reform Bill Not About Bailouts

By: Brian Montopoli
Topics: Economy ,; Domestic Issues

(Credit: AP)

Before meeting today with a bipartisan group of Congressional leaders to discuss efforts to pass a bill to reform the financial industry, President Obama was asked if the bill would be a "bailout bill."

Republicans claim a part of the legislation that would allow the government to dismantle large and troubled banking institutions constitutes "an endless taxpayer bailout of Wall Street banks," as Senate Republican leader Mitch McConnell put it Tuesday. McConnell was present for the White House meeting with the president today.

White House deputy communications director Jen Psaki suggested on the White House's Web site that the characterization is part of a strategy by Republicans to oppose the bill without paying a political price.

She pointed to advice from Republican pollster Frank Luntz, who said Republicans should cast financial reform efforts as "bailouts" and said McConnell simply "reads Luntz's line and follows Wall Street's orders."

"No matter what the bill actually does, they're going to call it a bailout because that's what the polls tell them to do," she wrote. "The Senate bill explicitly mandates that a large financial firm that faces failure will be allowed to fail, and it explicitly prohibits the use of any funds to 'bail out' a failing firm."

The chair of a panel overseeing the Wall Street bailout, Elizabeth Warren, told MSNBC that claims that regulatory reform legislation "perpetuates bailouts" is "just nuts."

Asked if the bill being crafted was a "bailout bill," as McConnell claimed, Mr. Obama said no.

"Well, I am absolutely confident that the bill that emerges is going to be a bill that prevents bailouts," he said. "That's the goal. "

In an e-mail to reporters following the meeting, Press Secretary Robert Gibbs said Mr. Obama "reaffirmed his belief that we must end taxpayer bailouts, end 'Too Big To Fail' and that he would not accept a bill that did not pass that test."

Brian Montopoli
Brian Montopoli is the senior political reporter at CBSNews.com.
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by thebob-bob April 14, 2010 6:02 PM EDT: Republicans just make stuff up. Then they get the right-wing echo machine to repeat it over and over. Remember it was Bush who pushed the (justified) bail-out bill. This bill makes sure the taxpayers aren't on the hook again. Distortion and Distraction is the name of the game. Just say NO to the Party of No!!!; Reply to this comment


by quietfireII April 14, 2010 5:28 PM EDT: Stupid Republicans!; Reply to this comment

by usdefender1 April 14, 2010 1:26 PM EDT

Be extremely wary of Obama and his people in power. Alway remember these people have an agenda, and you are watching how this agenda continues ro damage the United States and its citizens. Nothing the Obama administration tinkers with, or laws it enacts will add to your freedom or protection. Your national wealth is also being spend, you are continually saddled with more debt, so your future will be dimmer until Obama and his minions are removed from office. After that time, we can begin to repair, mend, and recover from a horrible fiscal and social mauling, and an assault on individual freedoms and protections as Americans.

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by stopandthink333 April 14, 2010 1:39 PM EDT: Comments of this type perpetuate ignorance. Remember McConnell and the Republicans are politicians too. Finding out who is telling the true and who is not. Don?t rely on people who tell scary stories and vilify others. In this case, this bill requires financial institutions to set up a $50 billion fund WITH THEIR OWN MONEY to prevent bail outs. But don?t believe me. Do a little research on your own. See if McConnell explains anywhere how this constitutes a bailout. Read it carefully and see if you agree. Remember, folks who tell you what others believe instead of explaining what they believe are usually the ones lying.


by ohiopolitico April 14, 2010 1:47 PM EDT: Absolutely. Look at what Obama did with "healthcare reform". Instead of reducing underlying costs, we got Government Takeover of Healthcare,
and Mandates, and Increasing Premiums and Taxes.
There are so many taxes hidden in the healthcare bill, they're saying its the largest tax increase in history.