President Obama's Permanent Bailout Bill Rewards Wall Street, Hurts Local Banks And Ohio Families

Statement

Congressman John Boehner (R-West Chester) today released the following weekly column highlighting the President's financial reform legislation that offers permanent bailouts to the "too big to fail" companies on Wall Street, while imposing devastating new regulations and mandates on local small banks in Ohio :

"In order to restore confidence in our economy and help get Ohioans back to work, we must fully address the root causes of the financial crisis and take definitive steps to ensure that taxpayers are never again forced to pick up the tab for bad bets on Wall Street.

"President Obama says the financial reform legislation he supports will do just that, but when you sit down and look at the text, it's clear his plan fails to fix the current crisis, and won't prevent problems in the future.

"It will however, impose new burdensome regulations and job-killing fees on local small banks, and give new controls to government bureaucrats, just like the President's government takeover of health care.

"That's because among other things, President Obama's permanent bailout bill creates a brand new government agency, dubbed the Consumer Financial Protection Agency, that will impose new rules on banks of all sizes, and have a wide array of powers to shut down any financial product it chooses and send examiners into any local bank at their own discretion.

"As they brace for all these new regulations and mandates, many local community banks are feeling too small to survive. Recently I had an opportunity to talk with local small bankers from across Ohio, and they told me that the new fees and special deals for the giant banks on Wall Street will decimate them, and in turn, hurt the families and small businesses who rely on local small banks every day for credit to buy a new home, or just make next month's payroll.

"Meanwhile, President Obama's bill does nothing to reform the root causes of our financial crisis: Fannie Mae and Freddie Mac, the government companies that sparked the financial meltdown by giving too many high-risk loans to people who couldn't afford it.

"Instead the bill promises to reward future bad behavior on Wall Street by offering permanent, unending bailouts to the giant firms considered "too big to fail.'

"Under the President's proposal, the largest Wall Street firms would become eligible for special treatment, including taxpayer-funded resources unavailable to smaller financial firms. These include exclusive access to a pre-existing bailout fund, a Treasury-backed line of credit and a government guarantee for any debt.

"Such perks will benefit the likes of Goldman Sachs, President Obama's top financial contributor during the 2008 campaign and a firm that just happens to be under investigation by the SEC for defrauding investors.

"Americans are right to be concerned by the prospect of more open-ended bailouts for Wall Street. Already, 43 cents of every dollar that the federal government spends this year it will borrow, and our kids and grandkids are going to be the ones who have to pay it back. This is not sustainable. As of today, our $12.7 trillion national debt is on track to exceed the size of our entire economy (about $15 trillion) in just two years.

"But perhaps most importantly, what do we have to show for the trillions of dollars in new debt?

"Washington Democrats' massive "stimulus' hasn't created the jobs we were promised. And the Obama Administration's Center for Medicare and Medicaid Services now says that the President's trillion-dollar government takeover of health care will actually increase health care costs and kick seven million seniors off Medicare.

"Instead of trying to sell the American people on permanent, unending bailouts for President Obama's Wall Street allies and more job-killing mandates for Main Street, Congress should be taking serious steps to address the root causes of our financial crisis, and help restore in our economy.

"All year long House Republicans have been listening to the American people and offering better solutions to lower health care costs for middle-class families, and a jobs plan to help small businesses create jobs. Now we are offering a responsible plan to end the bailouts and reform the root causes of the financial meltdown, without imposing devastating fees and burdensome regulations on small local banks. Learn more about our better solutions at johnboehner.house.gov."

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