Debate Heats Up On Financial Overhaul Bill

President Obama is expected to continue pushing hard the need for changes to the way financial institutions are regulated. Over the weekend, debate over the regulatory overhaul bill ratcheted up. On Saturday, Obama said every day we don't act on financial changes, the same system that required bailouts remains.

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STEVE INSKEEP, host:

President Obama will be in California today, and the president is expected to push for regulation of financial institutions. There is a bill with new regulations before the Senate.

Joining us now, as she does most Mondays, is NPR's Cokie Roberts. She is at member station KUT in Austin, Texas.

Hi, Cokie.

COKIE ROBERTS: Good morning, Steve.

INSKEEP: You know, in the past, the president has mocked Republican opposition, kind of had some humor at their expense. But in his radio address on Saturday, he struck a very different tone. He called his opponents cynical and deceptive. Whats happening here?

ROBERTS: Well, Republican leader Mitch McConnell has been saying, repeatedly, that the bill thats designed to better regulate financial institutions is a bailout bill. And Republicans all over the Hill have been saying that word, bailout, bailout, bailout. And, of course, thats a very charged word, since we have bailed out those big Wall Street firms, which are now making scads and scads of money.

So the White House feels like it's got to fight back and say it's not even vaguely true that this is a bailout. They sent Secretary of the Treasury, Tim Geithner, out yesterday, to make the case for the bill. Here he is on NBC's "Meet the Press."

(Soundbite of TV show, "Meet the Press")

Secretary TIMOTHY GEITHNER (Department of Treasury): I am very confident that we're going to have the votes for a strong package of financial reforms that will bring derivative markets out of the dark, help protect taxpayers from having to fund future bailouts and trying to make sure we're getting Americans some basic protections against fraud and abuse.

ROBERTS: Geithner says he's sure we will have a bill and have Republican support for it. That'll be interesting to see.

Over the weekend, the White House did suggest changing the legislation to take out a bank financed pool that is designed to help shut down failing institutions because that's the element of the bill the Republicans been calling the bailout.

INSKEEP: Okay. So, the Republicans are describing this as a bailout; Democrats are basically saying Republicans have been meeting with Wall Street executives and trying to block regulation here.

ROBERTS: Well, Mitch McConnell and Texas Senator John Cornyn, who's head of the Republican Campaign Committee for the Senate, did apparently meet with Wall Street leaders. But McConnell repeatedly said, yesterday on CNN, the Kentucky bankers - his home state - are against this bill too; the little guys, not just the big guys. And he pointed out that Wall Street supported Barack Obama in 2008, which is, in fact, true.

Look, Steve, if the Democrats can't make the case that the Republicans are the party of Wall Street and big business, then it shows that the Democrats really have lost one of their key arguments. I mean, that has been their argument since Herbert Hoover's time, and it's worked very well for them, particularly worked well for them in 2008.

So, the fact that the president is using this kind of rhetoric shows them that they're afraid that they might be losing the voters on their key issue.

INSKEEP: Does it affect the debate over this financial regulation, that even as the Senate prepares to take it up, Goldman Sachs is accused of wrongdoing?

ROBERTS: Well, yeah. The Democrats think it does help, the fact that Goldman has been charged with defrauding its investors and now European countries are apparently taking a look at it to see whether they want to bring charges against Goldman, as well, and maybe some other firms, as well.

People start to remember why this bill is important, why you have to regulate these financial institutions and their complicated maneuverings. And McConnell was very clear, yesterday, in saying everybody wants a bill. There's not one member of the Senate that doesn't want a bill, he kept saying. He just kept saying he wants to go back to the table and start again with a bipartisan bill. Does that sound familiar to you, Steve?

INSKEEP: Sounds like almost word-to-word the health care bill.

ROBERTS: Yeah.

INSKEEP: Same thing.

ROBERTS: Exactly. But it also is polling pretty well with the voters, that idea of a bipartisan bill.

INSKEEP: Well, since you mentioned polls, that leads to the question of elections. We've got one coming up. And what do you think it means, Cokie Roberts, that the president needs to go to California and campaign for Senator Barbara Boxer?

ROBERTS: Well, if Democrats are having trouble in California, they're having trouble everywhere; and they're particularly having trouble with independent voters. So, I think that that is going to be trouble for the president on a campaign trail, now that he's hitting it, because, of course, he does need to hit a bipartisan tone for those independents. But once you're out on the trail, it's the base you need to rev up and you stop talking in a bipartisan way, and I think that that's likely to happen now.

Now, perhaps the president has decided that he's not going to get any Republican support anyway, and he might as well get Democrats excited. That's what George Bush found after he tried to do things in a bipartisan manner. Barack Obama seems to be finding the same thing.

INSKEEP: Okay. Thanks very much. That's analysis, on this Monday morning, from NPR's Cokie Roberts. You hear from her every Monday, and we'll continue covering the financial regulation and other stories on NPR News.

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