Dodd defends process, content of financial regulation bill

Senate Banking Chairman Chris Dodd insisted today he is seeking bipartisan consensus on proposed financial reform legislation and the bill won't lead to more bailouts as attacks on the bill grew sharper.

The bill imposes tougher standards on large, risk-taking Wall Street firms, eliminates the federal government's capacity to bail out individual companies and requires financial firms write their own shutdown plans and then pay for the liquidation process if it's needed, Dodd said Wednesday on the Senate floor. 

Dodd blamed Wall Street lobbyists and political rhetoric for creating a divide on the measure by employing a strategy that calls the bill another financial bailout and argues that Democrats have written the measure without Republican input. 

"No matter what is proposed, no matter what's in the bill, no matter what protections it includes, call it a bailout," Dodd said of the strategy behind killing the measure. "It's a naked political strategy and if it succeeds, and this legislation goes down, and another crisis sinks the American economy, then the next recession and all of the damage it will bring to middle class families will have happened for the sake of that false talking point."

Senate Minority Leader Mitch McConnell said today that the bill creates bailout accounts, authorizes bailouts and allows for "back door" bailouts from the FDIC, Treasury and the Federal Reserve and "even expands the scope of future bailouts." 

"Getting this policy right should be our first priority," McConnell said. "This bill gets it very wrong."

Dodd challenged Wall Street to contribute to the debate. 

"Here's what I say to Wall Street, if you have a better idea let's hear it. If you have other ideas, let's debate them" Dodd said. "But if all you have are up-is-down and black-is-white talking points that bear no relation to reality, then get out of the way and let the serious legislators do the work."

Dodd said he has spent the past year working with his Republican colleagues and, "cannot for the life of me understand how anyone could claim with a straight face that this is a partisan effort."   

While he said there is room for debate and disagreement he said discussions "should not be sullied with misinformation, or derailed by those who would try and make it just another partisan game."

He targeted Wall Street lobbyists who want to "protect a status quo that leaves my constituents and all Americans vulnerable to another economic crisis."

"Those arguments are littered with falsehoods, outright falsehoods that I regret to say are now being repeated by people who should know better."

Dodd said he has been working with Senate Banking ranking member Richard Shelby and that the two panel leaders had 70 percent agreement on a draft in November and they created four bipartisan working groups to iron out differences. 

"My friends on the other side of the aisle may not like every line in this bill," Dodd said. "But, at the very least, let's not pretend that the bipartisan work that produced this legislation didn't happen. That's a disservice to yourselves and your staff who have worked very hard with the Democratic staff." 

But in his statement, McConnell said he believes the White House has been clear that they don't intend to compromise on the measure and pass a partisan bill.