Far from the high-pitched partisan rhetoric so prevalent during the health care debate, President Obama's financial regulatory reform address at Cooper Union in lower Manhattan was significantly toned down.
The president opened his address to a crowd estimated to be 700 by reminding the audience that it was his second time speaking at Cooper Union; the first was in 2008 as a presidential candidate. He said it's good to back at Cooper Union, "where generations of leaders and citizens have come to defend their ideas and contest their differences. It's also good being back in Lower Manhattan, a few blocks from Wall Street, the heart of our nation's financial sector."
He went on to deliver a fairly straight address intended less for Wall Street -- or to throw stones at bankers for their reckless behavior -- than for the millions on Main Street who are bearing the brunt of the Great Recession, including the eight million people who have lost their jobs. Making sure not to get too nuanced with Wall Street argot, the president mentioned the word "derivatives" by name only three times. The partisan jabbing was also missing; Republicans were only mentioned two times, neither of which carried negative undertones.
Mr. Obama's speech, in fact, seemed more like a Power Point presentation without the Power Point screen.
The president ticked off in a professorial manner the four main points of the financial reform bill, presenting its components in clear concise layman's terms: a) consumer protection in the event a financial institution fails; b) bringing transparency to the financial markets, c) the enactment of strong consumer financial protections, and d) Wall Street reforms giving shareholders more power in the financial system.
Financial regulatory reform, unlike the contentious health care debate throughout last summer and continuing into the blustery winter, doesn't really have many cynics. Other than a few sound bites, when Sen. Dodd brings S. 3217 to the floor of the Senate next week, the bill is more than likely to be embraced by a few Republicans and pass without much partisan bickering.
If there is any room for debate, it is whether the regulation reforms go far enough, not whether the bill will pass.
With the political winds favoring financial reform, there is no question the bill will pass. But others, like David Brady, professor of political economy at Stanford Graduate School of Business, worries that "Congress will overdo the regulation, making the country worse off."
Ever since the Securities and Exchange Commission charged Goldman Sachs with allegedly defrauding investors, voter outrage at Wall Street recklessness has grown more critical. This on top of news that some of the biggest financial firms turned in record profits, including Citigroup which announced this week a $4.4 billion first-quarter profit, while Goldman announced a $3.46 billion profit. A recent Pew poll, moreover, shows that 61 percent of Americans want financial reform.
If the Republicans block the financial reform bill, they will most certainly be tagged as the party of Wall Street. In an election year, it will be political suicide, a fight not worth fighting, even if it means giving the president another historic legislative victory.
In his speech, Mr. Obama, gave the impression the bill isn't headed to an ugly floor fight like health car reform, by mentioning that he "was encouraged to see a Republican senator join with Democrats this week in moving forward on this issue."
At this stage of the debate, the main disagreement between the two parties centers on the proposal for a $50 billion fund, paid for by the banks, to keep troubled banks from causing havoc to the entire financial system. Republicans charge such a stipulation would only encourage future bailouts.
Another sticking point is the bill's requirement that most derivatives trading be moved from dealer markets to regulated exchanges. A derivative is a financial agreement between two entities.
All indications are that these remaining sticking points are open for horse trading and shouldn't interfere with a bipartisan agreement.
The banking committee's ranking Republican, Sen. Richard C. Shelby, was recently quoted as saying, "I think we're going to get there. I'm optimistic because I think we've got a few days to negotiate, and the spirit is good."
Most, in fact, are expecting the president's signature on this bill by Memorial Day, which allows for two weeks of healthy debate.
While Thursday's speech might not have brought down the house with thunderous applause, he still got his point across: the president encouraged Congress to finish the job by restoring responsibility - "from Wall Street to Washington."
Much like the health care debate, President Obama has restored his image as the closer.
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