Issa: GOP's "No" Is a "Yes" for Better Reform
Democrats are pressing ahead for a possible test vote on financial reform, even though they may not have enough votes. Both parties say they are for financial reform, and they are deep in negotiations over it, but they're not there yet, reports CBS News Congressional correspondent Nancy Cordes — which means this vote that Senate Democrats have called for today could very well fail.
But without concessions to what conservatives say are necessary, many, if not all, Senate Republicans plan to vote "no" today, blocking floor debate.
Finance Committee Chairman Sen. Chris Dodd, D-Conn., was frustrated by the prospects of delay: "Here we are 17 months after someone broke into our house in effect, robbed us, and we still haven't even changed the locks."
Senate Minority Leader Mitch McConnell, R-Ky., denied that reform itself was being blocked — just the specific legislation at hand.
The GOP is holding out for big changes, including dropping a multi-billion dollar bailout fund (to be financed by banks rather than taxpayers, but which Republicans believe will encourage failing firms to be bailed out). Conservatives also object to a new consumer protection agency for financial instruments, and call new regulations on derivatives too onerous.
Appearing on CBS' "The Early Show" this morning, Rep. Darrell Issa, R-Calif., said there are some elements of the current reform bill that would prevent big banks from taking risks that might deal the economy a devastating blow (as happened a year and a half ago), but that the definition of "banks" needs to be adjusted.
"What Republicans are asking for, when you say big banks, you have to realize the biggest bank-like entities involved in this were Freddie and Fannie, and we're still sitting there with trillions of dollars of underwater loans," said Issa, the Ranking Member of the House Committee on Oversight and Government Reform. (video at left)"So, yes, we want to have reform, but it's clear that a 'no' vote today by 41 Republicans is a 'yes' vote to do more comprehensive reform, more balanced reform, including the other entities that had something to do with, basically, a meltdown that began with too many mortgages, many of them bought and encouraged by the federal government."
"In the end, though, those things were turned into derivatives that were traded all over the place, which gave impetus to the marker that said this can go on forever," said "Early Show" anchor Harry Smith.
But when asked whether he thought the bailout fund for banks was a good idea, Issa replied, "What I think we have to remember is there already is a fund for banks. What we're talking about here is 'bank-like entities.' And the last thing we need to do is to further confuse what is a bank and what isn't a bank. After all, AIG was an insurance company, but AIG-FP in England that did most of the guarantees that went bad, in fact, wasn't even an insurance company by real U.S. standards.
"So I think what we have to do in financial reform is say what is a bank and it gets one set of rules; financial institutions get another; and insurance companies quite frankly have to be a big part of the new regulation, along with raising agencies that told us things were Triple-AAA when they weren't even Triple-B."
More on Financial Reform:
Democrats Try to Split GOP on Banking Reform
FTN: Will Change Really Come to Wall Street?
Ben Stein: Obama Is So Right on Bank Reform
Dodd and Shelby: No Deal Yet on Financial Rules
Obama Links Auto Woes to Financial Crisis
Obama to Wall Street: I Told You So