The Bob Corker Bailout Sellout

by Capitol Confidential

While the media and most of the public are consumed by the health care death march, the Senate is deep in negotiations to pass a sweeping re-regulation of the financial sector. As the public knows, ObamaCare is an attempt to regulate 1/6th of the US economy. The financial ‘reform’ proposal, though, will impact the other 5/6ths of the economy. In many respects, the financial services ‘reform’ is much more damaging to the economy and our future competitiveness. Worse, its passage is being aided by Bob Corker.

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Sen. Bob Corker (R-TN) has snatched defeat from the jaws of victory with his complete capitulation and total surrender on the Financial Services bill.  The bill, passed by the House with a $4 trillion bailout provision, making bailouts the permanent policy of the United States government, was on it’s last legs until Corker came to the rescue.  Now the Washington Post and other are reporting that Corker and ethically-challenged, retiring Sen. Chris Dodd (D-CT) are on the verge of a deal to breathe life back into the regulatory and bailout scheme.

Let’s be clear – the President and the hard left want this bill. David Reilly of Bloomberg described the measure as Barney Frank’s $4 trillion gift to the banks. Reilly wrote:

Here are some of the nuggets I gleaned from days spent reading Frank’s handiwork:

– For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system. Admitting you have a problem, as any 12- stepper knows, is the crucial first step toward recovery.

– Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.

– Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.” Too bad the same models used to foresee the housing meltdown probably will be used to predict this likelihood as well.

– The bill also allows the government, in a crisis, to back financial firms’ debts. Bondholders can sleep easy — there are more bailouts to come.

– The legislation does create a council of regulators to spot risks to the financial system and big financial firms. Unfortunately this group is made up of folks who missed the problems that led to the current crisis.

– Don’t worry, this time regulators will have better tools. Six months after being created, the council will report to Congress on “whether setting up an electronic database” would be a help. Maybe they’ll even get to use that Internet thingy.

Sources in the Senate have made conservatives aware of a sleight of hand that Sen. Corker and Dodd may use to try to get this bill through the Senate. The discussion draft contained the infamous bailout provisions. But we have been warned that the “compromise” may take the bailouts out so they can be inserted back into the bill through the House Senate conference committee.

Does this sound like a bill a senior Republican Senator should be trying to revive? Since when do Republicans believe in more government, more bureaucrats and more Washington red tape?

Bob Corker’s Senate office number is 202-224-3344.


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Posted Mar 3rd 2010 at 8:01 am in Congress, Economics, Featured Story, Federal Spending, News, Politics | 99 Comments