By Scott Wilson
Washington Post staff writer
Wednesday, April 14, 2010; 7:34 PM
President Obama urged congressional leaders Wednesday to work together over the next several weeks on a financial regulation package, expressing confidence that a bipartisan bill remained possible even as Republicans said the Democrats' proposal would make government bailouts more likely.
Speaking before a meeting with House and Senate leaders of both parties, Obama rejected that charge. "I'm absolutely confident that the bill that emerges is going to be a bill that prevents bailouts," he said. "That's the goal."
Obama said he is "confident that we can work out an effective bipartisan package" to prevent individual financial institutions from growing so big their collapse would imperil the economy, plus regulate the derivatives markets and put in place other reforms.
Congressional Republican leaders left the meeting highly critical of the financial regulatory reform bill now before Congress. Senate Minority Leader Mitch McConnell (Ky.), echoing comments he made Tuesday, said the bill amounts to an "endless taxpayer bailout for Wall Street banks."
He called on Sen. Christopher Dodd (D-Conn.), chairman of the banking committee and the architect of the bill, to restart talks with Republicans over the terms of the legislation. "My message to the president is let's get back to the table and see if we can't get this done," McConnell told reporters at the White House after the roughly half-hour meeting.
Dodd worked first with Sen. Richard C. Shelby (R-ala.) and then with Sen. Robert Corker (R-Tenn.) for months on the legislation, but those talks broke down. Corker said last month Republicans on the committee had made a "very, very large mistake" and a "major strategic error" by withdrawing hundreds of amendments they originally had offered to Dodd's bill and instead opposing it without debate. The measure passed along party lines.
On the Senate floor Wednesday, Dodd accused the Republicans of "political chicanery," saying opponents were deliberately distorting the contents of the bill as part of a "naked political strategy."
"The bill as drafted ends bailouts," he said.
Senate Democrats would need the support of at least one Republican to pass a financial regulation package. Corker has said he expects the bill to pass.
In seeking to recast the rules that have long governed the financial sector, the legislation would establish a bureau inside the Federal Reserve to protect consumers and set up a council of regulators to survey threats to the financial system. The legislation would also empower officials to seize the biggest financial firms if they face collapse.
Administration officials say the bill represents an essential step in preventing another financial crisis and the subsequent bank bailouts that have proved deeply unpopular with the electorate.
Administration officials and congressional Democrats believe the issue is politically beneficial for them in this midterm election year. The fall campaign season will come during the second anniversary of the financial system's near collapse, and some Democrats have effectively dared Republicans to oppose the legislation at a time of halting economic recovery.
But the meeting laid bare the remaining differences over the bill in sharply partisan terms.
"It's obvious that Republicans are saying no again to what's best for America," Senate Majority Leader Harry Reid (Nev.) said after the meeting. "We're going to move forward as rapidly as possible on the bill Senator Dodd has brought forward."
House Majority Leader Steny Hoyer (D-Md.) said, "There are some people who would like to forget that the Bush administration ever existed," noting that the financial crisis and bailout began under the previous president.
Asked to comment on McConnell's assertion that the bill guarantees future bailouts for Wall Street banks, House Speaker Nancy Pelosi (D-Calif.) said, "It's such a diversion from the facts that it's almost laughable."