All 41 GOP Senators United in Opposition to Financial Reform Bill

Senators Joe Lieberman (I-CT), Mitch McConnell (R-KY), Ben Nelson (D-NE), Jay Rockefeller (D-WV) appear on the CBS talk show "Face the Nation" Sunday December 13, 2009 in Washington, DC Karin Cooper

McConnell

All 41 Republican senators have signed a letter to Senate Majority Leader Harry Reid saying they are opposed to the financial regulation bill put forward by Democratic Sen. Chris Dodd, Senate Republican Leader Mitch McConnell's office announced today.

The letter calls for further negotiations, but it does not go as far as to say all 41 senators would support a filibuster of the legislation.

"Inaction is not an option. However, it is imperative that what we do does not worsen the current economic climate or codify the circumstances that led to the last financial crisis," the letter says. "As currently constructed, this bill allows for endless taxpayer bailouts of Wall Street and establishes new and unlimited regulatory powers that will stifle small businesses and community banks."

The letter calls for a "bipartisan and inclusive approach" and asks Reid to support bipartisan negotiations in the Banking and Agriculture Committees.

The GOP's contention that the reforms amount to a "bailout bill" seem to follow the advice of a GOP pollster and focused on a provision in the legislation to create a $50 billion bank liquidation fund. The charge was sharply rebuked by the White House, but the administration is now conceding on the issue of the bank liquidation fund.

A senior Treasury official said Friday the administration is urging Senate Democrats to drop the fund because it is unnecessary, the Associated Press reports.

The provision in question would compel large financial institutions to provide the $50 billion, which the Federal Deposit Insurance Corp. would use to pay for dismantling giant failing firms. Instead, the administration wants the costs of liquidation to be paid by the financial industry after a firm has failed and been dismantled, according to AP.

President Obama today did, however, draw a line in the sand and promised to veto any financial regulatory reform bill that doesn't bring "the derivatives market under control."

"This is reform that will force banks and financial institutions to pay for bad decisions that they make - and not have taxpayers pay for those bad decisions," Mr. Obama said at the start of a meeting with his Economic Recovery team. "And that means no more bailouts."

Republicans had sought to send Democrats a letter threatening a filibuster of the financial reform bill, but Sen. Susan Collins of Maine would not sign onto the letter, the Hill reports.

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