By Robert Romano –
Rescinding government control of the nation’s financial sector — along with repealing ObamaCare and restoring fiscal sanity to the nation’s budget — all may have to be put off for some time after elections have taken place. And put onto the American people’s “to-do” list in 2011 and beyond. If ever. Why?
Sadly, instead of rolling back another government takeover, this time of the financial system, enough Senate Republicans have apparently rolled over and are letting it through.
Consider Republican Senator Bob Corker’s admission that efforts to defeat the Dodd financial takeover bill have apparently always been doomed to failure, as reported by the Washington Post. Although indicating he opposed the legislation, Corker said, “I realize this bill is going to pass.” He described the legislation as “an out-of-the-park home run” achievement for the Obama Administration.
That can only mean one thing: that while critical negotiations were taking place, Republicans took the credible threat of a filibuster off the table. Which, in turn, would explain why they have failed to achieve any concessions that might have addressed some of the root, government causes of the financial crisis.
For example, Senator John McCain’s amendment to end the ongoing taxpayer bailout of Fannie Mae and Freddie Mac could have been dubbed a deal-breaker for the Senate GOP. That without it, there would be a filibuster. So too could have Senator David Vitter’s amendment to audit the Federal Reserve. Or demands could have been made that the Department of Housing and Urban Development’s “affordable housing goals” imposed on Fannie and Freddie be ended, its loose-lending Community Reinvestment Act regulations be repealed, and the Federal Housing Administration’s weakening of down payments on home mortgages eliminated.
None of these very reasonable concessions were achieved. And the only explanation is that all 41 Senate Republicans proved incapable of sticking together to fight for the American people.
Even the concessions that were reportedly achieved were not really. Take the alleged removal of an unlimited bailout fund in the Dodd-Shelby amendment.
Under the Dodd-Shelby amendment, any monies “necessary to initiate and continue operations essential to the implementation of the receivership or any bridge financial company” would be pulled out of an unlimited “orderly liquidation fund” without necessarily being recouped. As Americans for Limited Government (ALG) reported in an updated bill summary on the issue, that’s a bailout.
So, despite the political catastrophe of the Troubled Asset Relief Program, and the bailouts of Fannie, Freddie, AIG, GM, and Chrysler all under a Republican administration, the Senate — with the help of a “handful of GOP members” reported by the Post — is now poised to institutionalize that authority for all time.
How could this happen? In part, claims made by the Senate about the Dodd-Shelby “compromise” were not properly vetted, which then provided political cover to moderates looking for a reason to vote for the bill.
According to the preamble of the Dodd-Shelby amendment, it would “end ‘too big to fail’ [and] protect the American taxpayer by ending bailouts.” It does neither. When it passed 93 to 5, even though no language was yet available for public perusal, media outlets across the nation uncritically reported that the Dodd-Shelby amendment eliminated bailouts. Even the National Review reported that the bailout fund was removed — when it was not.
So, why go on pretending that it is?
ALG President Bill Wilson has been a voice in the wilderness on this issue. Last week, speaking of the amended bill, he said, “Nothing has substantively changed. Despite the efforts of Senate Republicans, the orderly liquidation fund still has not been removed. After all the amendments voted on, the government can still seize any institution it wants, and then keep it, reorganize it, or redistribute it without any Congressional approval.”
What remains to be seen is if Senate Republicans will do anything about it. Or, if they’ll just roll over and pretend that they’ve solved “too big to fail” and eliminated bailouts. The American people deserve better than this.
Robert Romano is the Senior Editor of ALG News Bureau.
