(Reuters) - Senate Republicans' alternative financial regulation package includes reforms for mortgage finance giants Fannie Mae and Freddie Mac, according to a document obtained by Reuters on Tuesday.
The Republican proposal establishes an inspector general within the Treasury Department to look at the decisions made on the conservatorships of Fannie and Freddie.
Further bailouts of the mortgage finance companies would be limited under the Republican proposal.
The Democrats' bill does not include reform of the government sponsored enterprises.
Dems should take the opportunity to make the financial reform package even stronger.
by mcjoan
As entirely expected, the Republicans continued their crusade for a backroom deal on Wall Street reform, and voted again to block debate on it. The motion failed 57-41, and Ben Nelson voted with the Republicans, again. In light of this tactic from the Republicans, Simon Johnson has a
very good proposal for Senate Dems.
If the Democratic leadership becomes fed up with Republican stalling – or otherwise sees an opportunity to paint the Republicans as completely obstructionist, they could actually strengthen the bill.
For example, including something like the Brown-Kaufman amendment (or otherwise addressing the issues posed by our six megabanks) would make it easier for people to understand what is at stake. To win on this issue in November, the Democrats may need to simplify their message and make it more powerful. Some relatively pro-Wall Street Democrats are reluctant to do this, but if the Republicans stand united, nothing will pass – so why not propose something stronger that will go down to clear and memorable defeat, particularly after a searing debate?
The Republicans are not the only ones who can maneuver here. By delaying any progress, they are creating an opportunity within the Democratic side to find ways forward that are not entirely designed by Senator Dodd....
Republican stalling tactics have, in effect, introduced a greater element of randomness into the process.
The Republicans obviously want to slow reform or make it change direction. They should be careful what they wish for.
It's turning the thumb screws on Republicans, and it makes sense. It's good politics, and even better policy to make this as tough a bill as possible. But it doesn't absolutely have to follow that that would make the bill fall in "clear and memorable defeat." The questioning by GOP Senators in today's Goldman Sachs hearing shows that they very much recognize the political value of being tough on Wall Street. Dems are in a position to take advantage of that on this bill. Dems can negotiate from a position of strength on this one, and have a number of negotiating chips. TWI's Anne Lowery has a
good run down on these basic issues, a handful of which Republicans are supporting.
moreThe list:
- Audit the Fed.
- End too big to fail by capping bank size.
- Reinstitute Glass-Steagall provisions.
- Fix the ratings agencies.
- Keep the Fed the regulator of little banks.
- Make the Consumer Financial Protection Agency truly independent.
- Improve hedge fund reporting.
Any more to add, maybe tougher derivative regulations?
Edited to fix format.
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