04.26.10

Whitehouse: Republican Obstruction Causes Wall Street to Win and Main Street to Loose

Mr. WHITEHOUSE. Mr. President, we are now, for those who are tuning in, in a situation in which the Republicans who filibustered probably about 100 times in this session, are now filibustering not a piece of legislation, they are filibustering the ordinary procedural technical motion on the Senate floor to move to that piece of legislation. There will probably be a whole second filibuster when we actually get to the Wall Street reform bill. For now, what they are filibustering is moving to proceed under the Senate rules, to take up the bill and begin the debate.

In obstructing us from even debating the Wall Street reform bill, the Republican minority has once again shown the American people whose business it is they serve. Make no mistake about it, Wall Street bankers are chortling tonight about this, Champagne corks are flying across Wall Street, all in celebration of the Republican success in once again obstructing reform. Each day the Republicans delay us, high-powered investment banks make more money on highly leveraged gambles. Each day the Republicans delay us, mortgage brokers, unregulated by a consumer protection agency, push people into poor quality mortgages with confusing terms. Each day the Republicans delay us, CEOs continue to get rainy day bonuses, unchecked by proper corporate governance and oversight. Each day these Republicans delay us, credit card companies trick and trap American consumers with exorbitant rates and fees and no consequences. Each day the Republican minority delays us, Wall Street wins and Main Street loses.

The ties between the Republican party and Wall Street CEOs are pretty well documented. News outlets, for instance, reported earlier this month that the leaders of the Senate minority sat down with two dozen top Wall Street executives to discuss Wall Street's concerns with these proposed reforms. Nobody is talking about what was said, what deals were made, what winks and handshakes were exchanged. The meeting was behind closed doors. But the very people who brought about the housing bubble and the financial meltdown and profited handsomely through both have been strategizing with the Republicans on how to prevent us from cleaning up their industry.

They have good reason to do so. By continuing to operate too-big-to-fail firms, these executives make millions in the good times and get taxpayer bailouts in the bad times. It is win-win for Wall Street and lose-lose for the American people. The American people have about had it with that deal. They want Wall Street cleaned up.

An ABC News/Washington Post poll conducted yesterday found that an overwhelming majority, 63 percent, of Americans support ``stricter Federal regulations on the way Wall Street firms conduct their business.'' Every one of us can vouch for that from what we are hearing from our constituents at home. The Republican minority can delay reform but they cannot defeat it. Remember Joshua; he walked around the city of Jericho blazing his horn. The first time the walls did not come down. The second time the walls did not come down. He had to go seven times around the city of Jericho before those walls came down, but the walls of obstruction of the Republican minority are going to come down on this issue because the American people will not have it any other way.

Let's look at the provisions of the bill as it passed Senator Dodd's Banking Committee that they are so upset about, the bill that the Republicans are so upset about, they are obstructing us from even debating it and beginning the process of legislating.

The bill would end government bailouts by establishing an industry-financed wind-down mechanism to put banks that are failing out of their misery. That is how we would deal with future meltdowns--no more taxpayer bailouts, no more AIG.

The Republicans, amazingly, assert that this industry-financed resolution fund to put an orderly end to banks that have gotten in trouble will actually perpetuate government bailouts. That does not even make sense. So why are they saying it? Well, they are saying it because a Republican pollster named Frank Luntz determined that if you call a bill a bailout bill, the public will be alarmed and confused and upset and against it. So they are saying it because the polling shows that is what will concern Americans.

We have gotten to the point where it is no longer important in American debate for words to be true; it only matters that they have the requisite effect. Well, words that are used for their effect without regard for whether they are true have a name; it is called propaganda. Frankly, it is beneath proper debate in this forum.

The bill would also create a strong consumer products regulator to make sure Americans are never again fooled into subprime mortgages and other tricky, ``gotcha'' financial products with little hooks and tricks and traps in there to catch the unsuspecting consumer. We need a regulator in place who can monitor the market and act quickly when there is a consumer hazard. We need this new agency to do for credit cards and mortgages what the Consumer Product Safety Commission does for toasters and toys. A tough, independent consumer protection agency is a plain-old good idea to give consumers a fair shake.

The bill would also consolidate existing bank regulators so that banks cannot shop around for the most lenient regulator. Under the bill the Republicans won't even let us debate, regulations would be strengthened over all financial firms. No more changing your charter just to avoid the rules you don't like and picking your favorite regulator.

Again, these are commonsense protections against Wall Street trickery. But they are being blockaded.
Perhaps the provisions that have the CEOs most distressed are the ones that would crack down on runaway executive compensation. It is really remarkable that even in the worst of times, Wall Street bankers pay themselves multimillion-dollar bonuses. There really are no lean years, it appears, on Wall Street, just good times and really, really, really good times.

The bill the Republicans will not let us debate would give shareholders a stronger say on management compensation and would ensure that the compensation committees of boards of directors, the ones who are figuring out what the CEOs should be paid, are composed of directors who are independent, who are not tied to the management: No more having your pals and golfing buddies decide how much you should be paid. It would also require companies to develop policies that would permit them to rescind compensation--to take it back--if the executive is found to have engaged in fraud.

Again, these are commonsense provisions to prevent unfairness and to give the American people a chance. Yet the Republicans will not even let us debate them.

The American people have grown sick and tired of delay and obstruction, and they want their Congress to move forward with the people's business. This is something on which we should agree. The American people also overwhelmingly favor stronger regulation over Wall Street banks. So let's get to it.

I implore my Republican colleagues to cut the delay tactics and let us debate a bill that will help prevent future financial crises. If they have a better idea and they want to offer it on the Senate floor, that is what we are here for. But let's get to the bill. Let's begin the process of serving the American people. Let's end the endless filibuster and obstruction and delay.

I yield the floor.