"We don't think the country can afford to wait, and the leadership in the Senate and the House has made it clear that we are going to be acting now on this. We're going to push forward with legislation, we'll be sending legislation up to the Hill shortly," a senior administration official said Tuesday, noting that "there are elements of this that can be done through regulation and international cooperation, and we're pushing forward on those fronts at the same time.
"Our goal is to get it done this year," the official added.
On whether the White House has done a cost analysis for the proposals, the official said, "We have not done a detailed cost estimate, [but] certainly the costs of inaction are rather apparent."
Even before the president formally introduced his plans for regulatory reform, Congress was fiercely debating them.
"If the administration gets the wrong diagnosis, they're going to get the wrong remedy," said Rep. Jeb Hensarling, R-Texas, a member of the Congressional Oversight Panel. "The administration got the wrong diagnosis. They blame everything on de-regulation. It's not a matter of de-regulation. It's a matter of dumb regulation.
"And so, what the administration has essentially done is left the regulatory infrastructure and most of the regulation in place and then they add on to it. It's kind of like taking rotted wood and putting a fresh coat of paint on it -- to some extent, it doesn't solve the problem and it can make it worse by hiding flaws that lie underneath."
Rep. Scott Garrett, R-N.J., a member of the House Financial Services committee, said the administration's rush to financial regulatory reform was "too much, too soon" and lacked a "coherent overall strategy.
"When the administration continues to meddle and continues to have new proposals and new solutions even before they have a consensus on what the problem was, there is a lack of confidence and trust on Wall Street and Main Street that the administration knows what the heck it's doing," Garrett said. "And in the meantime, both Wall Street and Main Street is going to sit on the sidelines and not invest, you're going to see unemployment go up just because they don't have confidence in the administration that they have the right plan."
"This additional responsibility on the Federal Reserve, I believe, is a step too far," said Sen. Mark Warner, D-Va. "My other concern is rooted in the philosophy of this country, which I think has quite honestly served us well. That philosophy is that too much economic power placed in one place puts our system of government at risk."
Sen. Mark Warner, D-Va., used an old African proverb to argue that more power for the Fed was not the solution to systemic risk problems.
"When elephants dance, the grass gets trampled," he said Tuesday. "Well ... we've got a trampled grass problem at this point. And I don't think we can solve it with bigger elephants, whether those bigger elephants are regulators or institutions."
On Thursday, Treasury Secretary Tim Geithner will make his case to lawmakers when he goes to Capitol Hill to testify before the Senate Banking Committee and the House Financial Services Committee.