Unified GOP To Block Senate From Debating Wall Street Reform

Mitch McConnell has rounded up the necessary votes to block Democrats from bringing Wall Street reform to the Senate floor, a spokesman for the Senate Minority Leader said on Friday afternoon.

Senate Majority Leader Harry Reid (D-Nev.) said on Thursday he planned to bring the bill to the floor next week where it would be debated and amendments added. McConnell has now persuaded 41 Republicans to vote against debating reform.

'We simply cannot ask the American taxpayer to continue to subsidize this 'too big to fail' policy. We must ensure that Wall Street no longer believes or relies on Main Street to bail them out. Inaction is not an option," McConnell writes in a letter to Reid that was provided to HuffPost.

Democrats have been battering McConnell all week for his firm opposition to the Democratic reform effort.

Reid spokesman Jim Manley told HuffPost that Reid will be moving ahead regardless.

"Congratulations. I hope they feel good," said Manley. "They've got 41 signatures on a weak, watered-down letter that simply calls for more negotiations. If they are at all serious, they will simply let us go to the bill next week and let the amendment process begin."

Manley said the bill will be brought up for a vote on a motion to proceed to debate later this coming week.

Read the full letter:

Dear Leader Reid:

We encourage you to take a bipartisan and inclusive approach, rather than the partisan path you chose on health care.

A bipartisan bill should address the damaging financial practices of big Wall Street firms and government-sponsored entities that led to unprecedented taxpayer bailouts and caused our government to take on enormous amounts of debt. We simply cannot ask the American taxpayer to continue to subsidize this "too big to fail" policy. We must ensure that Wall Street no longer believes or relies on Main Street to bail them out. Inaction is not an option. However, it is imperative that what we do does not worsen the current economic climate or codify the circumstances that led to the last financial crisis.

We are united in our opposition to the partisan legislation reported by the Senate Banking Committee. As currently constructed, this bill allows for endless taxpayer bailouts of Wall Street and establishes new and unlimited regulatory powers that will stifle small businesses and community banks.

This is a complex issue that could have unintended consequences on job growth, the ability of Americans and business owners to access credit, and the United States' role as a worldwide leader in innovation and capital formation. The consequences of this bill will reverberate across our economy for years to come.

We urge you to support the bipartisan negotiations by the Banking and Agriculture Committees. We are confident that the Senate can overcome political tensions and provide a bipartisan approach to financial reform this year.

UPDATE: McConnell's office sends along a statement from Sen. Susan Collins (R-Maine), who had been the holdout, that she will indeed vote to filibuster a motion to proceed: "If the Majority Leader brings the partisan Senate Banking Committee bill to the floor next week, Senator Collins will vote against a motion to proceed."

UPDATE II: Reid spokesman Manley says that Democrats aren't backing down. "Bring it on," he says of the GOP filibuster threat.

Comments

[reasonedapproach]

01:45 PM on 04/20/2010

(...continued from prior post)

The insurance company function played by the federal government prevents creative destruction among large financial institutions. Those would be bankruptcies considered too big for the FDIC to swallow will continue to be “too big to fail”. The proposed legislation provides for a second federal insurance policy paid for by the banks. Unfortunately as we have recently witnessed $50b is not enough. We as taxpayers need to get off the hook. Stop insuring banks.

As to debate relates to Fannie and Freddie I am in agreement with the GOP. How can we engage in comprehensive financial reform without including these organizations? They are the consummate “too big to fail” and the largest purveyors of socialized losses and privatized gains. Let’s get taxpayers off the hook!

[Ricardo4Liberty]

02:30 PM on 04/20/2010

Still love how Fannie and Freddie avoid scrutiny.

And last I checked, people voluntarily give money to Lehman and Goldman.

There's only one institution that takes your by force, and will lock you up if you don't pay.

[reasonedapproach]

01:44 PM on 04/20/2010

I believe that “too big to fail” is largely created by a network of insurance policies issued by the federal government to financial institutions. These insurance policies include the FDIC but would also include a $50 billion bailout fund under the new legislation. Like most insurance policies issued in the private sector the premiums taken in will likely by a good source of cash flow for the issuer (in this case the federal government) during good times. But unlike most insurance policies issued in the private sector they are being issued to a small group of enterprises with a proven interdependence. For property insurers most natural disasters are regional and insurance company losses are offset by premiums paid by those insured in unaffected regions. For auto and life insurers, car accidents and deaths are offset by safe drivers and those that go on living. Unfortunately for the American taxpayer in their role as insurers of deposits at large financial institutions, adverse effects tend to come in waves. When financial crisis strikes the premiums paid are never sufficient.
The truth of the 2008 bank bailouts is that the federal government was already on the hook through the FDIC. Had a major depository institution failed the federal government was contractually obligated to pick up the tab. So the path of least resistance was a preemptive bailout, and federal endorsement of mergers among large financial institutions to avoid dreaded bankruptcies. (continued…)

[nuffsaid wink]

12:21 PM on 04/20/2010

If the cameras weren't rolling, would the GOP do business or continue to have their temper tantrums in the corner without anyone watching?

[429freckles]

08:42 PM on 04/19/2010

If the Republicans want to continue their obstructionism, blocking this legislation -- they will get what they deserve.... to be out of a job. VOTE IN THE MID TERMS. Our President needs & deserves more support in Congress.

[IndependentMeans]

08:23 PM on 04/19/2010

Bold face lie about taxpayers bailing out institutions. This is a great commercial come election time.

[UteGirl]

06:01 PM on 04/19/2010

"McConnell has now persuaded 41 Republicans to vote against debating reform."
When I read this, I was astounded at the cynical nature of Mitch McConnell's attempt not to propose
an alternative option, not to offer a considered plan of reform, but to completely stop debate.
This is yet another political ploy to put his incumbency above his duty as a U.S. Senator.

[senorlou]

06:13 PM on 04/19/2010

Hey, somebody has to protect poor, poor little Wall Street against those mean old Democrats who want to reform it. Republicans always seem to have a soft spot for corporate criminals.

[reasonedapproach]

05:24 PM on 04/19/2010

All I read in these comments is a bunch of partisan bashing. I have not read anything good about the proposed reform bill. Many of us complain about the power of the large banks and their abuses, all on the taxpayer dime. Why not do something about it? It seems this country has the perfect opportunity for meaningful reform. Maybe it is time to address the underlying causes of too big to fail. Maybe it is time to stop socializing losses while privatizing gains. Why not create meaningful legislation and a financial system overhaul.

[UteGirl]

05:57 PM on 04/19/2010

Thank you for such a reasoned reaction to financial reform proposals.

[senorlou]

06:12 PM on 04/19/2010

Sounds good to me, what you're talking about. Somebody has to reign in Wall Street because they are out of control and crushing all of us financially. Bottom line, on Wall Street, they have legalized an "industry" of robbery. I don't see what benefit the system really is to this country anymore. It's much more of a curse. So, it will have to be reformed if this nation is going to survive. The reason why it's so partisan is because only one party is interested in reforming Wall Street and saving the country: the Democrats. The Republicans would like to continue to give away whatever is left of our treasury to the big banks and Wall Street CEOs. Somebody needs to go in there and turn Wall Street off tomorrow. The sooner things are changed, the more money we as a nation will save.

[InnocentBystander]

03:27 PM on 04/19/2010

Your lede is misleading. The letter does not mention filibuster and that's because there are republicans who will vote to debate the bill. Assuming the debate occurs (and it will), then there will be a closure vote that will pass and then there will be a vote. At which time, I fully expect that lots of Republicans will sign on to it. There's no way they can oppose this without having it boomerang on them in November. Of course, the Democrats will again show the American people which Party is looking out for their best interests by getting this reform done.

[pattyg77]

02:34 PM on 04/19/2010

...It's amazing to me how Mitch McConnell must think that the American People are as un-informed as he is (or he pretends to be) he is not looking out for the interests of the average American, this is self-serving-interest only & GREED in favor of the Big Banks! He is trying to protect the BIG BANKS & the thievery of Wall Street, all the while he is saying...'We simply cannot ask the American taxpayer to continue to subsidize this 'too big to fail policy' ---YEAH RIGHT!! I say to you, Mitch McConnell, 'If you truly mean what you say on this 'overly repeated talking point', then vote in favor of re-enacting the reforms that will surely make the Big Banks & Wall Street held accountable for their mis-management & GREED"

[HGS111]

01:37 PM on 04/19/2010

These behemoths are actually to big to manage. It's always going to be crisis management, fraud and deceit will loom large in these board rooms. Remember Ken Lay's defense ( I was not a part of the decision making process on this or that ) Yeah Right!

[jtek1]

12:35 PM on 04/19/2010

This bill does not provide for "bailouts". The 50 mill fund is provided for "Orderly shut down of distressed organizations", and is funded by the banks.

[coach-1640280]

09:53 AM on 04/19/2010

Too Big to Succeed

Wallstreet is the oligarchy capital of the world. Today’s corporate management structure is a classic oligarchy bureaucratic pyramid management flowchart. Hundreds of thousands of American jobs depend on the success of this business model.

Hypothesis:

Wallstreet corporate industries will be back for more government assistance precisely because these industries are in reality “too big to succeed”. Like a huge dinosaur with a walnut sized brain, these entities roam without consciousness of direction and the trampling under their feet.

There is limit to the oligarchy bureaucratic pyramid management flowchart business model that guarantees breakdown when business size gets “too big to succeed”.

It is not possible to prove this hypothesis until too late. Recent occurrence of large corporate failures, however, suggests a pattern. (Citibank, AIG, Chrysler, Enron, Massey…) Large corporate failure is not limited to any particular industry.

It is only prudent our federal government plan carefully for re-occurrence of massive corporate “bailout”. The American taxpayer wants readiness when another starving brontosaurus corporation comes foraging for food. A thoughtful dismantling may be just what these business systems need.

How much “bailout” denial is required before this hypothesis is accepted and we face the problem squarely?

Citizen is coach to team democracy. Coach is responsible for success. It’s your call, coach.
http://coach-1640280.newsvine.com/

[Lisapearlblack]

02:12 AM on 04/19/2010

The world is changing for the better.Thanks to President Barack Obama. Congress and the senators will get to keep their healthcare if they wish. Why are the tea partiers and the Republpicans "Crying" so
much? I have never heard such big babies. If they WANT to really look silly,go home and get your pacifiers,diapers,and bottles(of couse). WHAA-WHAA-WHAA.

[flabingo]

01:43 AM on 04/19/2010

Buffett called the complex derivative instruments "weapons of mass destruction" And then he bought preferred stock in Goldman. Greed without regulation is nuclear in today's financial world.

[flabingo]

01:32 AM on 04/19/2010

let them vote against financial reform