Parties fight over Financial Reform

Here's the battle: the White House says it'll fight any Republican attempts to water down Democrats' proposed Wall Street reforms.  Republicans, meanwhile, are gunning for the proposal calling it "fatally flawed."

Now throw both sides in a room and see what come out.  That's what happened at the White House Wednesday morning as the President sat down with Republican and Democratic Congressional leaders.  At the start of the meeting, the President stressed unity.  "All of us recognize that we cannot have a circumstance in which a meltdown in the financial sector once again puts the entire economy in peril. And that if there’s one lesson that we’ve learned, it's that an unfettered market where people are taking huge risks and expecting taxpayers to bail them out when things to sour is simply not acceptable.’’

But on Capitol Hill, the view wasn't so rosy.  Sen. Chris Dodd (D-CT), head of the Banking Committee and author of the Democrats' legislation, spoke about the division between the two parties on the Senate floor: "I wonder if we've been on the same planet on a bipartisan effort to reach financial reform?"

Rep. Mike Pence (R-IN) summed up the Republican stance: "This so-called financial services bill is nothing more than a permanent bailout creating a massive, multi-billion dollar fund that will take the bad idea of TARP 1 and turn them into the permanent ideas of TARP 2."

Rep. Jeb Hensarling (R-TX) was the most succinct of all: "If financial institutions fail, they fail. They should not be propped up."

The bill under review would give the Federal Reserve oversight of financial institutions with more than $50 billion in assets and allow the Treasury Department to take over any company deemed to pose a risk to the entire system.  The Senate is set to take up the measure within the next two weeks.