By Andrew Feinberg - 05/19/12 03:28 PM EDT
Any progress the country has made in recovering from the economic downturn is threatened by Congress' threat to undo financial reform, President Obama warned Saturday.
"For the past three and a half years, we’ve been fighting our way back from an historic economic crisis," Obama said in his weekly address.
"And yet," he warned, "for the past two years, too many Republicans in Congress and an army of financial industry lobbyists have actually been waging an all-out battle to delay, defund, and dismantle Wall Street reform."
Congress needs to "stand on the side of reform," Obama said. "We can't afford to go back to an era of weak regulation and little oversight," he said.
Obama explained the rules in question require more banks to hold onto more capital as to not risk a taxpayer bailout if they make a mistake, as J.P. Morgan did recently. And if they fail, banks would be required by new regulations to have a "living will" to determine the way its assets would be distributed.
The new regulations also reign in excessive executive compensation, "giving shareholders a say," he said.
And Obama touted the new Consumer Financial Protection Bureau as a "consumer watchdog whose sold job is to look out for working families by protecting them from deceptive and unfair practices."
"Unless you run a financial institution whose business model is built on cheating consumers, or making risky bets that could damage the whole economy, you have nothing to fear from Wall Street reform," Obama said.
House Republicans voted to cut all funding from the new consumer protection bureau in a bill to override steep cuts to the Pentagon’s budget mandated by last summer's debt deal.
While the new regulations discourage banks from making "risky bets with taxpayer-insured money," the president maintained they encourage banks to do things that help the economy, such as extending loans to small businesses with good ideas and comfortably middle class families who want to purchase a home.
"That’s what Wall Street reform is all about – making this economy stronger for you," he said.
"And we’re going to keep working – to recover every job lost to the recession; to build an economy where hard work and responsibility are once again rewarded; to restore an America where everyone has a fair shot, everyone does their fair share, and everyone plays by the same rules."
Obama made clear that he has a strong belief in the free market of capitalism. But he warned that he also believes the free market "has never been a license to take whatever you want, however you can get it. "
"Alongside our entrepreneurial spirit and rugged individualism, America only prospers when we meet our obligations to one another; and to future generations," he said.