Next week the Senate will start final debate on a financial reform bill. This comes after the Republicans forced the Democrats to relent on some of the provisions that were plainly ridiculous and not well thought out. But that's not what most of the media is saying -- the narrative it has decided on is that Republicans caved in the face of fear over being called "the party of no." That's not how I see it.
In fact, with 41 votes, Republicans understood that the best opportunity for improving the bill would be through negotiations before it hit the Senate floor (something they tried to do with health care reform but could not do...though now they're getting to say "I told ya so!").
The time afforded to Senators McConnell and Shelby by all Senate Republicans and Sen. Nelson (D-Neb.) was pivotal in removing dangerous bailout loopholes that Democrats previously refused to admit existed.
Far from coming up short, the GOP got six key concessions from the Democrats:
- Taxpayers must be protected, not exposed.
- Bailout fund must be removed.
- Failing firms must be allowed to fail - shareholders must be wiped out.
-Creditors of failing firms must pay - anything that exceeds bankruptcy must be recouped.
-Congress must have an upfront say in any guarantee program.
-Emergency programs can only be used in real emergencies and only by healthy (solvent) firms.
Now Senate Republicans will focus on taking out misguided provisions that go beyond Wall Street to interfere with small businesses, community banks, and employers throughout the country that had nothing to do with the financial crisis. That's not caving -- that's legislating.
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