Obama: Wall Street Reform Bill Not About Bailouts

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."