Thaddeus Explains It All

American Journalism Center ^ | April 28, 2010 | Melissa Barnhart

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Thaddeus Explains It All

Melissa Barnhart, April 28, 2010

Congressman Thaddeus McCotter (R-Mich.), Chairman of the House Republican Policy Committee and member of the House Financial Services Committee, was among the invited speakers at Tuesday’s Bloggers Briefing held weekly at the Heritage Foundation in Washington, D.C.

Instead of discussing his efforts in his Congressional District, Rep. McCotter asked bloggers to share the opinions and concerns of Americans they talk to, and thus kicked off a 30-minute Q and A at the briefing.

Q: In terms of what’s coming up on the Hill, what do you anticipate happening in the Senate with the financial regulatory reform legislation? Are Republicans going to hold firm or are they going to cave in?

McCotter: Sen. Mitch McConnell (R-Ken.) (pdf) was able to get all 41 members of the Republican Senate Conference to agree to oppose Sen. Chris Dodd’s (D-Conn.) proposed financial regulatory reform bill that includes a $50 billion bailout fund for Wall Street firms. You’ve seen Sen. Harry Reid (D-Nev.) say he’s going to defy the administration and keep the $50 billion in and use it to barter to try to get Republican votes.

I agree with economist Larry Lindsey’s (pdf) analysis of the bill in that it’s not just about the $50 billion bank tax for a revolving fund for bailouts. There’s also empowerment of the Federal Deposit Insurance Corp. (FDIC) and the Treasury Department to keep these entities afloat, and there’s a chance for the Fed to come in and deem whatever it wants as appropriate collateral to keep these institutions afloat.

The Republican position is that if there’s nothing too big to fail, then it should wind up in bankruptcy, and American taxpayers should not be on the hook for it....