Key Democrats working on a financial regulatory overhaul indicated Wednesday that they may not bow to President Barack Obamas call to put the Federal Reserve in charge of monitoring for systemic risk in the financial system.
Speaking at the White House after Obama publicly unveiled his plans for revamping financial system oversight, House Financial Service Chairman Barney Frank (D-Mass.) and Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) did not rule out the Fed option. But they suggested they will consider other methods of keeping tabs on how to safeguard the health of the overall system.
Theres not a lot of confidence in the Fed, Dodd said, apparently pointing to the failure of the Federal Reserve to foresee the current crisis.
Frank appeared to regard Obamas proposals as no more than an important starting point, saying Obamas plans would be embodied in his bill.
Dodd and Frank expressed confidence that they will finish the legislation this year. The bill, along with health, energy and education reforms, is one of the major pieces of legislation that Obama wants done this year.
With his new financial overhaul package, Obama sought to put himself in the middle of the road on federal intervention in the economy, characterizing the reforms as less a government intrusion than an effort to allow markets to thrive.
Obama, who spoke to lawmakers and industry representatives at the White House, is combating an image nurtured by Republicans that he is a quasi-socialist who wants the government to run the economy. Rebutting the characterization is key to his success on health care reform.
Opponents of his health proposals charge that Obama wants to socialize medicine by creating the option of a government insurer.
In these efforts, we seek a careful balance, Obama said of his financial overhaul package. I've always been a strong believer in the power of the free market. It has been and will remain the engine of Americas progress the source of prosperity thats unrivaled in history.
Obama added that jobs are best created not by government, but by businesses and entrepreneurs and that he does not seek to disparage wealth, but rather to expand its reach.
But GOP leaders charged Obama, with his financial system reform plans, had veered off the middle of the road and into a ditch on the left. We need smart regulation, not necessarily more regulation, House Minority Whip Eric Cantor (R-Va.) said. The administration has placed too much emphasis on government and too little on people.
Lois Lerner, director of exempt organizations for the IRS, arrives for a House Oversight and Government Reform Committee hearing on the investigation of the IRS' targeting of political groups. Lerner invoked her Fifth Amendment right to not testify and caused a protest from some committee members when she offered an opening statement and engaged in dialogue with members before invoking the right.
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