Posted on 04 Apr 2011
The Senate GOP leadership has endorsed a measure authored by Sen. Jim DeMint (R-SC) to repeal the Dodd-Frank financial-overhaul bill passed last year.
Mr. DeMint, a tea party favorite, is calling his measure “the Financial Takeover Repeal Act" and says it's designed to stop “burdensome regulations, spur job growth and ensure that ‘too big to fail’ bailout policies are not permanent.”
Eighteen of his GOP colleagues signed on as co-sponsors, including all the party’s major figures in the Senate: Minority Leader Mitch McConnell of Kentucky, Minority Whip Jon Kyl of Arizona, Republican Conference Chairman Lamar Alexander of Tennessee, Republican Policy Committee Chairman John Thune of South Dakota and National Republican Senatorial Committee John Cornyn of Texas. The Dodd-Frank financial overhaul, of course, got little Republican support to begin with.
The bill has little chance of passage since Democrats, who strongly supported the Dodd-Frank financial-overhaul bill last year, still control the Senate, and President Barack Obama would surely veto any repeal that reached his desk. But the symbolism is noteworthy, signaling Republican leaders believe the bill has been a political failure for the Democrats and that there are points to be scored with voters in criticizing it.
Republicans in both the Senate and the House have played to the country’s continued economic anxiety, arguing that the scores of new regulations will destroy jobs and send the financial industry fleeing for friendlier shores. “We must repeal the Democrats’ takeover of the financial markets that favors
Wall Street corporations, over-regulates small businesses with massive new bureaucracy and hurts consumers,” Mr. DeMint said in a statement. “This financial takeover will strangle our economy and move jobs overseas unless it is repealed.”
He said consumers would be hurt by the law because it is “forcing banks to charge consumers higher fees.”
Mr. DeMint pointed to recent analyses that show the nation’s biggest banks have only grown larger and more interconnected since the 2008 financial crisis. He also said the bill institutionalized federal bailouts of the largest banks, though didn’t detail exactly how the law does that. Republicans made similar arguments throughout last year’s legislative debate. Neil Barofsky, the departing special inspector general for TARP, said this week that the
Dodd-Frank law “clearly failed” to damp market expectations that the government will bail out systemically important firms.
Democrats and the Obama administration contend that the law ends the existence of too-big-to-fail institutions by giving regulators tools they lacked during the 2008 financial crisis to seize and dismantle large, complex financial firms that are failing while imposing the costs of the wind down on creditors, shareholders and ultimately other large financial institutions.