President Obama today applauded the Senate for passing a sweeping overhaul of Wall Street regulations, and said he looks forward to signing it next week.
"Because of this reform, the American people will never again be asked to foot the bill for Wall Street's mistakes," said Mr. Obama in remarks at the White House late Thursday afternoon. "There will be no more taxpayer-funded bailouts – period."
The bill,which includes the most far-reaching changes in the way Wall Street operates since the Great Depression passed the Senate by a vote of 60 to 39.
There is evidence that Wall Street has lost many of its fears of the bill during the months of negotiations that led to its final form.
Despite some industry sentiment that regulatory reform would cramp Wall Street's ability to thrive, executive recruiters were reporting that investment bankers and traders are back in demand. Hedge funds are getting more margin as banks loosen lending standards, a Fed survey showed. And the Wall Street Journal reported today that the world's banks appear to be winning a reprieve from tough new capital requirements.
The bill's passage is a giant victory for Democrats in the White House and Congress. Now that the legislation has cleared the Senate, Congress has passed three major pieces of legislation – including health care reform and the economic stimulus package – in President Obama's first 18 months in office.
Three Republicans today crossed party lines to support the financial overhaul, with Massachusetts Sen. Scott Brown and Maine Sens. Susan Collins and Olympia Snowe all backing the measure. Every Democrat except for Wisconsin Sen. Russ Feingold voted for the bill.
In a statement, Feingold said, "I made clear that my test for this bill would be whether it prevents another economic crisis. Unfortunately, this bill falls short. The reckless practices of Wall Street sent our economy reeling, triggered the worst recession since the Great Depression, and left millions of Americans to foot the bill. Despite these cataclysmic events, Washington once again caved to Wall Street on key issues and produced a bill that fails to protect the American people from the pain of another economic disaster."
The sweeping reform bill will create a consumer financial protection agency, let the government dismantle large failing firms, bring transparency to the murky derivatives market, and cap the fees that debit card companies can charge retailers.
But Republican critics have argued that the bill will only give the same government regulators who failed in the build-up to the crisis even more power. Rather than improving the financial system and protecting taxpayers they contend, the reform will only harm the industry, stifle economic growth and lead to future bailouts.
"The bill does very little to make our financial system safer," Alabama Republican Richard Shelby, the ranking member on the Banking Committee, said on the Senate floor today.
"The White House will call this a victory," said Senate Minority Leader Mitch McConnell, "but as credit tightens, regulations multiply, and job creation slows even further as a result of this bill, they'll have a hard time convincing the American people that this is a victory for them."
Top Senate Democrats today attempted to do just that.