WASHINGTON -- Sen. Bernie Sanders (I-Vt.) said Wednesday that Congress probably lacks the will to challenge Wall Street, but nevertheless vowed to try again to pass legislation aimed at breaking up America's too-big-to-fail banks.
Unveiling that bill with Rep. Brad Sherman (D-Calif.), Sanders made his case in the context of the nation's growing income inequality and the continuing expansion of financial institutions that were already deemed to be so big in 2008 that they threatened the entire economy.
Sanders rattled off a string of statistics, noting that even as the country has recovered from the economic meltdown and bailouts of 2008 and 2009, 99 percent of new income is going to the richest 1 percent. The 14 wealthiest individuals in the U.S. gained $157 billion for themselves, he said, "which is more wealth than is owned by the bottom 130 million Americans."
"In the midst of this grotesque level of income and wealth inequality is Wall Street," said Sanders, who recently announced his candidacy for president.
He pointed out that since the economic meltdown, three of the four largest banks have grown by 80 percent. "Incredibly, during that time, JPMorgan Chase has increased its assets by more than $1.1 trillion; Bank of America has seen its assets grow by more than $500 billion; and after Wells Fargo acquired Wachovia, it has more than tripled in size," Sanders said.
"If any of these financial institutions were to fail again, the taxpayers of this country would be on the hook for another bailout, perhaps even larger than the last one. We cannot let that happen again," Sanders said.
His bill would require the breakup of JPMorgan Chase, Citigroup, Goldman Sachs, Bank of America and Morgan Stanley within a year. It would also empower regulators to identify a list of other banks that should be broken up. Such banks would be barred from accessing favorable Federal Reserve discount rates and prohibited from essentially gambling with federally insured deposits.
Sanders admitted his measure faces long odds.
"We recognize that Wall Street is extraordinarily powerful, and when Wall Street tells the members of Congress not to do anything that will damage their interests, most members of Congress adhere to that," he said.
"My own view is that what Brad and I are talking about today makes eminent sense to tens of millions of Americans who absolutely do not want to go through what we went through in 2008 and 2009, who want to see a more competitive financial system," Sanders said. "We’re going to reach out to the grassroots and have support I think from a lot of grassroots organizations to put pressure on Congress."
"Can we pass legislation in the United States Congress that Wall Street opposes?" Sanders asked. "And at this particular time ... It’s going to be a tough fight."
He declined to say if he would try to link Hillary Clinton, whom he will face in next year's Democratic primary contests, to any of the deregulatory efforts of the Bill Clinton administration that he blames, in part, for America's financial woes. He told reporters they should ask her.
Hillary Clinton's representatives did not immediately answer an email asking whether she would support the Sanders-Sherman bill. But the move by Sanders -- including his intentions to tap grassroots activists to promote it -- will likely raise pressure on the former secretary of state and senator to add details her own economic pitch and potentially upset the delicate balance she is trying to keep in championing the middle class while not offending the wealthy.
Michael McAuliff covers Congress and politics for The Huffington Post. Talk to him on Facebook.
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