US Senate bans bailouts
May 6, 2010
WASHINGTON - SPURRED by deep election-year voter anger, the US Senate voted on Wednesday to forbid government-funded bailouts of big banks those like those blamed for the global economic meltdown of 2008.
In their first substantive vote on the most sweeping finance industry overhaul since the Great Depression of the 1930s, the lawmakers agreed by a 96-1 margin to an amendment banning future taxpayer rescues.
The measure, crafted by Democratic Senator Barbara Boxer, aimed to prohibit vastly unpopular bailouts of so-called 'too big to fail' firms that might have won government help because their collapse would cripple the economy. Senators, who were expected to take at least two weeks to pass the overall legislation, were also to vote on a compromise plan for 'orderly liquidation' to take apart failing financial giants.
Democratic Senator Chris Dodd, chairman of the senate banking committee, announced earlier that he and the panel's top Republican, Senator Richard Shelby, had reached a deal on that provision after months of talks. Mr Dodd said he had agreed to drop plans to create a US$50 billion (S$69.5 billion) fund, drawn from Wall Street, to cover possible liquidation expenses - a proposal opposed by President Barack Obama's administration.
The fund, which some Republicans had wrongly painted as a 'bailout' fund, would be replaced by liquidating the troubled company or assessing a fee on other major financial firms. 'Because whether they pay in advance or after the fact, these costs will be paid by Wall Street and not taxpayers, I have no objection to dropping that provision,' Dodd said in a statement.
The accord between Mr Dodd and Mr Shelby removed some obstacles to the legislation, Mr Obama's top domestic priority, but the two parties were expected to feud on other key provisions. Both sides have said they want to end government bailouts to such banks - like the US$700 billion Troubled Asset Relief Program approved when the financial industry seemed poised to collapse in late 2008. -- AFP
May 6, 2010
WASHINGTON - SPURRED by deep election-year voter anger, the US Senate voted on Wednesday to forbid government-funded bailouts of big banks those like those blamed for the global economic meltdown of 2008.
In their first substantive vote on the most sweeping finance industry overhaul since the Great Depression of the 1930s, the lawmakers agreed by a 96-1 margin to an amendment banning future taxpayer rescues.
The measure, crafted by Democratic Senator Barbara Boxer, aimed to prohibit vastly unpopular bailouts of so-called 'too big to fail' firms that might have won government help because their collapse would cripple the economy. Senators, who were expected to take at least two weeks to pass the overall legislation, were also to vote on a compromise plan for 'orderly liquidation' to take apart failing financial giants.
Democratic Senator Chris Dodd, chairman of the senate banking committee, announced earlier that he and the panel's top Republican, Senator Richard Shelby, had reached a deal on that provision after months of talks. Mr Dodd said he had agreed to drop plans to create a US$50 billion (S$69.5 billion) fund, drawn from Wall Street, to cover possible liquidation expenses - a proposal opposed by President Barack Obama's administration.
The fund, which some Republicans had wrongly painted as a 'bailout' fund, would be replaced by liquidating the troubled company or assessing a fee on other major financial firms. 'Because whether they pay in advance or after the fact, these costs will be paid by Wall Street and not taxpayers, I have no objection to dropping that provision,' Dodd said in a statement.
The accord between Mr Dodd and Mr Shelby removed some obstacles to the legislation, Mr Obama's top domestic priority, but the two parties were expected to feud on other key provisions. Both sides have said they want to end government bailouts to such banks - like the US$700 billion Troubled Asset Relief Program approved when the financial industry seemed poised to collapse in late 2008. -- AFP
