April 28, 2010

Washington, D.C. – U.S. Senator Richard Shelby (R-Ala.), today made the following statement regarding financial regulatory reform negotiations.

“I thank Leader McConnell and my Republican colleagues for providing an opportunity for my negotiations with Chairman Dodd to run their course. I believe we owed the American people our best effort to make whatever changes we could to this incredibly complex piece of legislation because it will have wide ranging implications for our economy. Chairman Dodd has assured me that he will address a number of concerns I have expressed with respect to ending bailouts. We have been unable, however, to make any meaningful progress on other important components of the legislation. It is now my belief that further negotiations will not produce additional results.

“This bill still contains a sprawling new consumer protection bureau that will find and force its way into facets of our economy that had nothing to do with the housing crisis. This massive new bureaucracy would have unchecked authority to regulate whatever it wants, whenever it wants, however it wants. I am aware of no other arm of the federal government this powerful, yet so unaccountable. In my negotiations with Chairman Dodd, I have consistently supported strengthening consumer protections. I have also advocated for a sensible and meaningful role for safety and soundness regulators in this new agency’s operations. Unfortunately, despite my demonstrated willingness to propose compromise solutions, this sensible step has proved to be a bridge too far.

“Also included in this legislation are critical provisions relating to derivatives. These provisions, which Democrats developed on their own behind closed doors, were only very recently inserted into the bill. In fact, I was not provided the opportunity to share my views on a single aspect of the derivatives provision. While I firmly believe we must end the casino-like atmosphere on Wall Street, I also believe we must protect Main Street’s ability to create jobs and grow the economy. In my judgment, the provisions as currently drafted would have far-reaching and devastating effects on these businesses and our economy, increasing the cost of nearly every product we use and negatively impacting job growth.

“Although I am disappointed that we have been unable to reach an agreement on across-the-board improvements to this legislation, I appreciate Chairman Dodd’s assurance that my concerns relating to ending bailouts will be included in his bill. I take him at his word. While these changes are significant and meaningful, they are not sufficient to garner my support for moving this bill to the Senate floor. Now that my negotiations with Chairman Dodd have reached an impasse, I thank my Republican colleagues for their support and defer to their individual judgments on whether the Senate begins a floor debate on this bill.”

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By REP. MIKE PENCE

The American people are tired of the borrowing, spending and bailouts that have been advanced by the administrations of both political parties. It’s time to end the era of bailouts and reaffirm our belief that the freedom to succeed must include the freedom to fail.

Unfortunately, under the guise of financial services reform, congressional Democrats are trying to pass a permanent bailout bill for the financial services industry, ensuring that American taxpayers would be on the hook to bail out reckless Wall Street firms well into the future. Despite claims to the contrary, even some Democrats admit that it would be a permanent bailout.

Don’t just take my word for it. California Congressman Brad Sherman, a senior member of the House Financial Services Committee, told Politico recently that the financial reform bill proposed by Senate Democrat Chris Dodd “has unlimited executive bailout authority. . .. The bill contains permanent, bailout authority.”

Specifically, the Senate bill provides for a $50 billion resolution fund, created with taxes on financial institutions. Consumers, including families, small businesses and family farms, would pay that $50 billion through higher costs for credit products. Then, regulators would be able to use this fund to pay off the creditors of those failing firms, similar to the backdoor bailout of Goldman Sachs with money the Fed gave to AIG.

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By DAVID M. HERSZENHORN

WASHINGTON — Senate Republicans on Thursday blocked an effort by Democrats to start debate on legislation to tighten regulation of the nation’s financial system, and the two sides traded bitter accusations about who was standing in the way of a bipartisan agreement.

The majority leader, Harry Reid of Nevada, asked Republicans to agree to begin debating the measure, which would impose a sweeping regulatory framework on Wall Street and big financial institutions. But the Republican leader, Senator Mitch McConnell of Kentucky, objected, saying Democrats were pre-empting negotiations to reach a deal.

In response, Mr. Reid said he would call the first procedural vote on Monday in an effort to stop the Republican filibuster. That vote could test Republican resolve to oppose the measure in an election year, amid public dismay over big Wall Street profits and bonuses even as unemployment remains high.

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