A day after the Senate's top Republican, Mitch McConnell of Kentucky, blasted the Senate's current draft of financial reform legislation, saying it would lead to "endless taxpayer-funded bailouts," three Senate Democrats fired back at McConnell today by painting GOPers as too cozy with Wall Street. The senators—Jack Reed of Rhode Island, Jeff Merkley of Oregon, and Sheldon Whitehouse of Rhode Island—stressed that the bill would force big banks and other financial institutions to fund their own future bailouts, through a $50 billion resolution fund, and that Republicans like McConnell were merely playing political games. "This is one of many recent cases in which Republican rhetoric has become completely unhinged from reality," Whitehouse said at a press conference today, "in which words are used for their effects and are totally disconnected from the truth."
The Democratic senators used the press conference mainly to highlight a recent meeting between top GOPers and Wall Street leaders, and to accuse the other party of caring more about Big Finance than not American families. Whitehouse pointed to a private meeting in New York between 25 Wall Street executives, including hedge fund managers, and McConnell and Sen. John Cornyn (D-Tex.), the head of the National Republican Senatorial Committee, as evidence that Republicans have aligned themselves with the interests of Wall Street. "If you look at the spectacle of Republicans running up to Wall Street to offer their services, in return for financial support, at blunting the effects of financial reform legislation...I think you can see that these charges are ill-founded" and intended to distract from the real debate around financial reform, Whitehouse said.
This partisan infighting offers a preview of what's to come as the Senate tries to pass a financial reform bill in the coming weeks. While rewriting our financial system's regulations should be an issue on which there's bipartisan support, this week's blow-by-blow suggests the debate around new financial regulation could end up looking like the ugly health care wars, with a bitter debate dividing the Senate. If this kind of blow-by-blow continues in the Senate, it will dim hopes of sending a bill to the president by Memorial Day.