Tentative Senate Deal On Future Big Bank Failures

[The Northerner]

Source: Associated Press

Senate Democrats agreed on Tuesday to jettison a $50 billion fund that Republicans attacked repeatedly as a perpetual Wall Street bailout-in-waiting, according to officials in both parties, clearing one of the key obstacles to approval of tougher federal controls over the financial industry.

While a formal announcement was held up pending a review by key lawmakers and the Obama administration, the emerging agreement was designed to assure that any future taxpayer costs arising from the liquidation of big firms would be temporary and on a case-by-case basis.

The agreement marked a retreat by Democrats, who had protested bitterly in recent days that Republicans were inaccurate with claims that the multibillion-dollar fund would serve as a source for future bailouts.

President Obama has made an election-year priority of congressional passage of legislation to prevent future economic calamities like the one that plunged the country into a deep recession 18 months ago. Opinion polls suggest strong support for additional federal regulations, though numerous surveys also report high levels of public distrust of government's abilities to solve problems.

Obama, speaking to a business organization, said there would be "legitimate differences on the details of what is a complicated piece of legislation" in the coming days.

At the same time, he said, "We cannot allow these reforms to be watered down. And for those of you in the financial industry whose companies may be employing lobbyists seeking to weaken this bill, I want to urge you, as I said on Wall Street a couple of weeks ago, to join us rather than to fight us."

Read more: http://www.npr.org/templates/story/story.php?storyId=126513503&ft=1&f=1001

[Beavker]

1. So am I reading this right?

The $50 Billion fund, built up by fees to the banks (insurance if you will) to cover the costs of a banks liquidation is axed in place of a case by case basis loan (which means every time it's a bank that's lobbied enough or made enough of it's now unlimited contributions to the right congressman's campaign) funded by...wait for it...taxpayers? What the fuck? We get paid back if the liquidation yields enough cash? Otherwise we end up...wait for it...taxing the other banks that didn't fuck up? Which is basically what the fund was going to do anyway? THIS is why the American people have no faith in the Government's ability to solve problems. And how the hell do they not see the GOP being a major reason for this? How?

Obama should just veto the shit out of that. Go on TV, tell them that the GOP has railroaded a fund that the Democrats wanted to initiate that would help cover liquidation costs when a Too Big To Fail bank is taken down, and replaced it with a 'case by case' basis taxpayer fronted loan that may or may not get paid back. If it doesn't get paid back, we will tax the other banks anyway. Either way, the taxpayer is still on the hook, and that is what we were trying to avoid.

I could have read the whole thing wrong...but I guess I'm one of those people that EXPECT the Government to get it wrong, especially when the Dems are pussies and the GOP and their minions of sheep undermine the majority.

This country is doomed. Unless your rich. So those 1% are fine.

[CreekDog]

2. Why do they make deals like this?

:banghead:

[billymayshere]

3. YES!

Capitulation you can believe in!:puke:

[JDPriestly]

4. Another double-cross by Obama. Why can't he stand up for his good ideas?

Those in Congress who oppose the special fund will never have to answer for this huge mistake. They will be completely forgotten when the mess that takes place in the next crisis is blamed on the Obama administration. How weak can a person be?

He gave up much too soon.

[ShockediSay]

6. He doesn't have the 60 votes in the Senate

and all they can do is parrot the propaganda talking point "bailout"

which just isn't there; no more than when the FDIC closes a bank and

supports the cost with the bank FDIC fee.

[JDPriestly]

7. So, this is a point that he could take into the election.

People want to see the banks create a fund like this. It's a great idea, an idea that would sell if it were presented to the people for what it is.

Now he has simply given this idea up. It makes no sense to me.

Now the election will be about why he hasn't done enough and the fingers will point at him. Had he held out the election would still be about why he hasn't done enough, but he could point the fingers at the Republicans. It is ridiculous to give up when you are ahead.

Obama will lose votes over this. He would have gained votes in my view, had he held out.

[neverforget]

5. Those who don't study the past are condemned to repeat it.

Get Wall Street out of Congress.