The parallels to 1994 are all around us.  A Democrat president is elected.  He pushes big government agenda items like health care.  His presidency gets mired by scandal and circumstances.  His poll numbers begin to drop quickly.   In 1994 Republicans rallied around a set of principles and won a congressional majority.  Today, unfortunately, those principles often appear to be missing.

The Contract with America was a critical piece of the Republican victory in 1994 because it let voters know there was an alternative to the big spending ways of the Democrat Party.  Today, not so much.

Republicans appear to be all over the map and the clear principled default lines are missing.

Nowhere does that appear more evident than on the Financial Reform legislation.  The bill passed the Senate after the Democrats broke the Republican dam.  Sen. Scott Brown joined others in moving the bill to a House Senate Conference where things are going from bad to worse.  Republicans didn’t help make the bill “better” by voting for amendment’s like the Durbin price control amendment.

The time has come to for Republicans to begin to draft distinctions between Democrats and their big government policies.  The Financial Reform legislation is a good place to start.  The bill contains bailouts, takeovers, and price control schemes — via the Durbin Amendment — that is corporate welfare at it’s worse.

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It’s hard to imagine that the Senate Financial Reform legislation could get worse, but thanks to an amendment offered by Sen. Dick Durbin (D-IL), not only did the legislation get worse, it now adds insult to injury.

It’s no secret that the Financial Reform bill will end privacy for financial transactions, create a regulatory bureaucracy like we have never seen before and make bailouts of big banks and Wall Street the permanent policy of the US government.  What most people don’t realize is the latest Durbin amendment extends what amounts to a bailout to major retailers and big oil companies.

At the same time when oil companies are shattering profit records and British Petroleum (BP) is spewing hundreds of thousands of gallons of oil into the Gulf Coast polluting the environment the Senate decided to hand them a massive check — paid for by consumers.

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Senator Chris Dodd’s (D-CT) approach to overhaul financial industry regulations is scheduled to be debated next week in the Senate Banking Committee with a mark-up of the bill starting in early December.  This bill is sold as an effort by the federal government to seize control of financial institutions with the potential to cause a financial market meltdown.  Sources in the Senate tell me that the true effect of this bill will be to lock in the Troubled Assets Relief Program (TARP), give special treatment for the trading partners of financial institutions facing bankruptcy, and grant more power to the Federal Reserve Board in Washington over monetary policy.  This financial regulatory reform effort will create a massive new bureaucracy that will oversee financial institutions that will effectively serve as a Big Brother for Big Business.

From a Senate Banking Committee press release

“It is the job of this Congress to restore responsibility and accountability in our financial system to give Americans confidence that there is a system in place that works for and protects them,” Dodd said at the press conference.  “We must create a sound foundation to grow the economy and create jobs.”

The problem is that the big government approach to the financial regulatory reform effort may harm economic growth and grants sweeping new political powers to the Federal Reserve over monetary policy.  The big ticket item for the legislation is the creation of a new federal bureacracy called the “Consumer Financial Protection Agency.”   The discussion draft of the legislation describes the new agency as “an independent watchdog to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, while prohibiting hidden fees, abusive terms, and deceptive practices.”    The fact of the matter is that this new government entity distracts freedom loving Americans from many other disturbing aspects of this bill that will grow government and harm economic prosperity.

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