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The White House on Monday sought to tar Republicans with Wall Street excess, as President Barack Obama cranked up his campaign to quickly pass the most sweeping regulatory reform law in decades.
Aides said Obama will venture into the heart of the US financial capital in New York to make a major speech on Thursday on measures designed to purge high-risk and bloated corporate practices blamed for unleashing a meltdown.
Treasury Secretary Timothy Geithner was meeting two key Republican senators as the administration searched for one or more extra votes needed to pass a Senate bill, over the complaints of the opposition party’s leaders.
Fraud charges leveled against Goldman Sachs meanwhile underscored the alleged finance industry excess the White House is targeting, though officials said they had no prior notice the Wall Street titan was under investigation.
Obama will Thursday make a speech at Cooper Union, a college a few miles from the epicenter of the US finance industry, stepping up a campaign to enact what is billed as the most important regulatory reform law since the 1930s.
“Almost two years after the crisis hit and almost one year after the administration first laid out a detailed plan for holding Wall Street accountable and protecting consumers, (Obama) will call for swift Senate action,” White House spokesman Robert Gibbs said.
“The crisis has already wiped out trillions of dollars in family wealth and cost over eight million jobs.
“The president will also remind Americans what is at stake if we do not move forward with changing the rules of the road as a part of a strong Wall Street reform package.”
Political debate over Obama’s financial reform drive is being colored by looming mid-term congressional elections in November.
Republicans face the tricky political task of opposing this next chunk of Obama’s domestic reform drive while avoiding being portrayed by Democrats as in the pocket of Wall Street finance barons blamed for sparking the crisis.
Democrats last week accused Republican Senate minority leader Mitch McConnell of grossly misrepresenting the bill, but he took to the Senate floor Monday to accuse his foes of scuppering efforts for a bipartisan compromise.
“It seems to me that a far more efficient way of proceeding is to just skip the character attacks on anyone who dares to point out flaws with the bill,” McConnell said.
“Forget the theatrics, and get to work.”
But Gibbs sought to frame McConnell as a friend of Wall Street bankers, rather than American voters struggling after the worst recession in decades.
“I don’t know whether Senator McConnell is interested in putting Wall Street in charge or putting the American people back in charge, but… he’ll have a chance to register whose side he’s on later on this month.”
In a bid to attract some Republican support, the administration has offered to jettison the idea of a liquidation fund, that would be paid for by top banks themselves to actually protect taxpayers.
Republicans have argued that the fund would effectively encourage more taxpayer bailouts — a claim denounced by Democrats as deliberate misinformation.
Geithner met Maine senator Susan Collins, a centrist Republican who could represent a swing vote. Collins called for more negotiations on a bipartisan compromise bill.
“I expressed to the secretary my opposition to the partisan (Democratic) bill,” Collins told reporters.
“But I also told him of my belief that we can work work out a truly bipartisan bill that will strengthen our financial system.”
All 41 Senate Republicans signed a letter last week pledging to oppose the bill in its current form.
The first formal public clash on the bill is likely come later this week with a Senate test vote on financial reform.
Powerful Democratic Banking Committee Chairman Chris Dodd suggested fraud charges leveled against Goldman showed the need for new industry rules.
Without naming Goldman, Dodd cited “a legal matter” affecting “a major investment firm in New York” and stressed: “Our bill would have prevented that kind of event from happening, in my view.”
Gibbs meanwhile said that the White House had no idea last week that the Securities and Exchange Commission, an independent agency, was preparing the charges.
Obama first laid out a version of Wall Street reform at Cooper Union during his presidential election campaign in 2008.
Last September, Obama traveled to within a few blocks of the US Stock Exchange to warn Wall Street bosses were ignoring lessons of the financial crisis, and demanded a new age of prudence after years of unchecked excess.
Obama gave a preview of the tone of this week’s remarks on Saturday, in his weekly radio and online address.
“We will hold Wall Street accountable. We will protect and empower consumers in our financial system. That’s what reform is all about,” he said.
“If we don’t change what led to the crisis, we’ll doom ourselves to repeat it. That’s the truth,” the president warned. “Opposing reform will leave taxpayers on the hook if a crisis like this ever happens again.”