Clinton’s Wall Street plan comes under attack

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Hillary Clinton’s primary opponents are attacking her new plan for tightened financial regulations, arguing it would not do enough to police Wall Street.

The front-runner for the Democratic nomination unveiled a plan Thursday that she said would strengthen Wall Street regulations, but her rivals for the Democratic nomination said it has one glaring omission: a failure to reinstate the Glass-Steagall law.

{mosads}Liberals such as Sen. Elizabeth Warren (D-Mass.) have pressed for lawmakers to re-impose Glass-Steagall, which former President Clinton repealed in the late 1990s. The law had required financial institutions to keep their commercial baking operations separate from investment banking.

Liberals, including Clinton’s top Democratic challenger, Sen. Bernie Sanders (I-Vt.), argue that Glass-Steagall’s repeal contributed to the 2008 financial crisis. Most economists — and the Clintons — reject that argument, saying the end of Glass-Steagall led to more economic growth.

“Given the image of big banks today, it is easy now to take on Wall Street. I was there when it was not so popular,” Sanders said in a statement, without mentioning Clinton by name. “I was proud to lead the fight in the House against repealing the Glass-Steagall Act.”

Martin O’Malley, another Democratic presidential candidate, was more blunt.

He said Clinton’s plan “falls short on what should be our ultimate goal: preventing reckless Wall Street speculators from backing up their bad bets with taxpayer money.”

“We need a defined firewall between Wall Street and taxpayers so that we are never again forced to bail out a bank’s reckless behavior,” said O’Malley, a former Maryland governor, in a statement.

Wall Street reform groups praised Clinton for putting forward a plan, but said they weren’t sure it went far enough.

“One key concern with the Clinton plan is the lack of a strong structural firewall and what appears to be an overreliance on regulators,” said Dennis Kelleher, president of the Wall Street reform group Better Markets, in a statement.

Robert Borosage, co-director of the liberal Campaign For America’s Future, commended Clinton for “seeking to strengthen Dodd-Frank.”

Still, while Clinton is “headed in the right direction,” Borosage said, her plan is still “a long way from breaking up the big banks.”

“The emphasis on holding individuals accountable is vital, and will be widely praised among progressives,” Borosage said. “She is signaling that she understands the need for more reform, and wants to respond to the public anger at Wall Street.”

He said that the plan is “far less bold than the agenda of Sanders … or Elizabeth Warren.”

Instead of re-implementing Glass-Steagall, Clinton’s plan would increase the fees on large financial institutions who engage in high-risk transactions. It would also tax high-frequency trading to “confront abusive trading strategies that make our markets less stable and less fair,” according to a Clinton campaign release.

Overall, she vowed to strengthen the 2010 Dodd-Frank Wall Street reform law, which some Republicans want to repeal.

Douglas Holtz-Eakin, founder of the conservative American Action Forum, said the plan would do little more than help Clinton with progressives.

“The proposals are disappointing and substantively surprising for a knowledgeable campaign loaded with ex-regulators, policy insiders, and ties to Wall Street,” Holtz-Eakin said.

“But politically, the heavy dose of new rules, repeated threats to fat cat targets, and promises of heavy government spending are just the right mix to allay progressive suspicions.” 

Tags Bernie Sanders Elizabeth Warren Hillary Clinton

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