Tags: gop | economic | plan

GOP Aims to Rein In Fed, Counter Democrats on Economy

Tuesday, 09 Jun 2009 07:55 AM

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

WASHINGTON -- Congressional Republicans are close to offering financial regulation reforms that would rein in the Federal Reserve and expand the bankruptcy code, according to a draft staff document obtained by Reuters.

The five-page document, still subject to change, could give political cover to lawmakers from both parties who are skeptical about some of the Obama administration's own reform proposals.

Democrats, in control of the White House and Congress, are setting the reform agenda, with a comprehensive package of reforms expected next week from the Treasury Department in response to the worst financial crisis in generations, according to sources familiar with discussions.

But the Republican package, likely to be unveiled on Thursday, according to congressional aides, may steal some of the Democrats' spotlight and undercut congressional support for the White House program.

For instance, the administration wants to establish a "systemic risk regulator" that would monitor and intervene to address potential financial dangers in the economy.

The Republican draft package opposes giving systemic risk authority to the Federal Reserve, an idea that sources have said the administration favors, but many lawmakers distrust.

Instead, the Republicans call for creating a board of regulators and outside experts, chaired by the Treasury secretary, to study systemic risk and report quarterly. The board would have no enforcement or supervisory powers.

Another high priority of the Obama administration is empowering an agency, probably the Federal Deposit Insurance Corp (FDIC), to seize and unwind troubled non-bank financial institutions. The idea is to avoid on-the-fly bailouts in the future like that of American International Group.

But Republicans, in a sharp repudiation of the bailout policies begun under former President George W. Bush, say in the draft document that they oppose such "resolution authority" and, instead, favor adding a new chapter to bankruptcy law.

The new chapter would specifically address dealing with troubled, large non-bank financial institutions.

On bank regulation, the Republicans call for merging the Office of Thrift Supervision, which regulates mortgage lenders, and the Office of the Comptroller of the Currency, which regulates many of the nation's largest banks.

The resulting single bank regulator would also take on bank supervision duties now held by the Fed and the FDIC, both of which would be refocused on their core jobs -- monetary policy in the Fed's case, and deposit insurance in the FDIC's.

On Fannie Mae and Freddie Mac, Republicans call for phasing out government support for the housing finance giants and converting them to private entities if they are still viable after the housing market stabilizes. If they are not, then the draft calls for putting Fannie and Freddie in receivership.

© Thomson Reuters 2009 All rights reserved

-

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Obama Executive Order Gives Pay Raise to Federal Workers

Friday, 19 Dec 2014 22:36 PM

Federal workers and uniformed military service members are getting a 1 percent pay boost. . . .

Mental Illness History Ruled on Appeal to Not Bar Gun Ownership

Friday, 19 Dec 2014 22:14 PM

A federal appeals court concluded that a history of mental illness shouldn't bar citizens from owning a weapon in a firs . . .

China Arrests US Aid Worker on North Korean Border

Friday, 19 Dec 2014 21:56 PM

China has arrested an American Christian aid worker based near its border with North Korea, his lawyer said Saturday, as . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved