Updated 2:55 p.m. ET
President Barack Obama proposed a major overhaul of the U.S. financial system Wednesday, unveiling measures he hopes would restore confidence and prevent a repeat of the worst crisis to hit Wall Street in seven decades.
The Obama plan would give new powers to the Federal Reserve - the U.S. central bank - to oversee the entire financial system and create a new consumer protection agency to guard against the types of abuses that played a big role in the current crisis. (Click here for Guy Campanile's analysis of the new regulations: What Obama's Plan Can And Cannot Do)
The plan the president is proposing, if enacted, would be the biggest changes since the 1930s - changes the president says might have prevented the current financial crisis, reports CBS News senior White House correspondent Bill Plante. Mr. Obama says he knows passing this will be - as he put it - "a heavy lift."
The president said his plan was "a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression." (Click here for text of Mr. Obama full remarks.)
Mr. Obama attributed much of the country's current problem to "a cascade of mistakes and missed opportunities" which happened over several decades.
He again blamed that "a culture of irresponsibility took root from Wall Street to Washington to Main Street."
The 88-page white paper put forward by the administration will spark intense debate in Congress, with opponents already charging that it imposes too many restrictions that will harm the ability of U.S. financial companies to compete in the global economy.
The administration's plan details an effort to change a regulatory regime that Mr. Obama's economic team says was unable to cope with burgeoning new credit products and the increasing complexities of the marketplace.
Mr. Obama wants Congress to make the plan law by the end of the year, an ambitious goal given that he also is pushing lawmakers to overhaul the nation's health care system by October.
Both measures face a blizzard of opposition from special interest groups, who fear the changes envisioned will cut into profits or impose undue complexities on their industries.
In a Tuesday television interview, Mr. Obama said the plan was "a very strong set of regulatory measures that we think can prevent this kind of crisis from happening again."
"We are not bulldozing the whole system. We're very much starting with the regulatory structure we have and improving it," Christine Romer, the chair of the White House Counsel of Economic Advisers, said on CBS' The Early Show.
Rep. John Boehner, the Republican leader in the House of Representatives, countered by predicting "we'll have the federal government deciding what interest ought to be charged on credit cards, having the government decide what kind of financial products are available."
The financial sector and lawmakers from both parties agree that significant changes are need in rules that govern the intricate and interconnected world of banking and investment. But the details of Mr. Obama's proposal already are facing resistance.
Under Mr. Obama's plan, the Federal Reserve would gain power to supervise holding companies and large financial institutions considered so big that their failure could undermine the nation's financial system. But even as it gains new powers, the central bank would cede some banking authority to a new Consumer Financial Protection Agency.
Mr. Obama's proposal would require the Federal Reserve, which now can independently use emergency powers to bail out failing banks, to first obtain Treasury Department approval.
The expanded role of the central bank and the new consumer regulator were likely to be the two main areas of the political fight in Congress. Many bankers oppose a new consumer protection regulator and many lawmakers worry the Federal Reserve could become too powerful.
Working along side the Federal Reserve, but without power to overrule the central bank, would be a new council of regulators that would monitor the overall financial system with an eye to preventing the unexpected collapse of huge institutions as happened last fall with AIG, the insurance company, and the Lehman Brothers brokerage.
Mr. Obama's plan does not attempt major consolidation of regulatory agencies and does not inject itself into an ongoing debate over whether to bring some insurance companies under federal oversight.
"We don't want to tilt at windmills," Mr. Obama said on CNBC.
Mr. Obama's decision to create a consumer agency is in response to criticism that mortgage lenders and credit card companies have taken advantage of unsuspecting customers and saddled them with too much debt.
The new regulator would have the power to demand that customers have the option of simple financial products, to impose fines and to allow states to pass laws that are stricter than the federal standards.
Consumer protections are now spread among various state and federal authorities, including the Federal Reserve, the Securities and Exchange Commission, the Federal Trade Commission and a variety of banking regulators.