April 25, 2010— -- A leading Republican involved in the Senate's regulatory reform legislation says that unless there is a bipartisan compromise before Monday's expected procedural vote, he expects his party will "very likely" hold its 41 votes together to block the measure.
Sen. Bob Corker, R-Tennessee, told "This Week" anchor Jake Tapper that "41 Republicans in my opinion would block it unless we reached this agreement."
As discussions between Senate Democrats and Republicans continue Sunday, Corker said he was hopeful that a compromise could be reached.
Corker also says he plans to introduce a provision that would punish officials of failed institutions that fall into the federal government's resolution authority by "clawing back," or taking earnings from those officials for the five years prior to the failure.
Corker said, "If a large entity like this has to go through this resolution where in essence they're liquidated in an orderly way, I think that everything that the executive team and the board members have earned through this company over the last five years needs to be clawed back.
"In other words, there needs to be some penalties assessed to the management that have caused the country to have to go through this orderly liquidation process," Corker said.
White House Economic Adviser Austan Goolsbee, who also appeared on "This Week," stopped short of endorsing the idea, but said the president supports provisions in the bill that would cost officials from failed institutions their jobs.
"There is a requirement that they're all fired," Goolsbee said. "If you get to that point, all the management is fired."
Ohio Sen. Sherrod Brown: 'Need to Do More' With Bank Regulation
Ohio Democratic Sen. Sherrod Brown told Tapper on "This Week" he thinks the Senate bill should do more to watch financial institutions.
Brown said, "I think we need to do more to prevent ... too-big-to-fail is too big, and my amendment that Sen. Kaufman from Delaware and I are offering next week or the week after will basically say that we'll put some limits on the size of these banks."
The Senate continues action on the bill this week as new e-mails surface which show officials from Goldman Sachs were making "some serious money" from short sales or bets against mortgage backed securities at the same time the company was heavily invested in mortgage backed securities.
White House Economic Adviser Austan Goolsbee said that Goldman Sachs CEO Lloyd Blankfein is "not going to win any popularity contests" after the release of company e-mails, which show how Goldman Sachs was profiting from the crash of the housing market.
Goolsbee added that "over a period that ordinary Americans' pensions, houses et cetera were collapsing in value, they were actually making significant money off of it. If that's true ... we've got to end the conflicts of interest and that the Volcker rule is really on point on that I think is also highly relevant."
The "Volcker rule," authored mostly by White House econmic adviser Paul Volcker during the reform debate, would limit banks from making certain kinds of speculative investments that do not benefit customers which would, in effect, separate commercial banking from investment banking.
Sen. Brown said, "These e-mails signify that there are all kinds of conflicts of interest on Wall Street ... That's why we need really strong reform that will separate the proprietary trading from banking functions. I think that says it more articulately and more forcefully, that example, than anything we've seen so far."
Republican Sen. Corker, of Tennessee, acknowledged that the e-mails "do not read well" but that he would "rather wait and see how this investigation unfolds before making any judgments."