President Barack Obama said the passage of stronger financial regulations was one of his administration’s “most important victories” and warned that Republicans seeking control of Congress would repeal the rules.
In his weekly radio and Internet address, Obama said the legislation, which he signed into law July 21, would help prevent the kind of financial crisis that plunged the nation into its worst recession in more than 70 years.
“Despite the importance of this law, and despite the terrible economic dislocation caused by the failures in our financial system under the old rules, top Republicans in Congress are now beating the drum to repeal all of these reforms and consumer protections,” the president said.
Campaigning across the country before the Nov. 2 elections, Obama is accusing Republicans of threatening to roll back his policies. Nonpartisan political analysts, including Charlie Cook of the Cook Political Report in Washington, project that Democrats will likely lose several seats in the Senate and cede to Republicans control of the House of Representatives.
Obama said it would be a “terrible mistake” if Republicans succeeded in repealing the financial regulatory overhaul.
“Our economy depends on a financial system in which everyone competes on a level playing field, and everyone is held to the same rules,” he said. “And as we saw, without sound oversight and common-sense protections for consumers, the whole economy is put in jeopardy.”
The new law aims to curb risks, boost surveillance of emerging threats to markets and give regulators additional emergency powers to avoid future taxpayer-funded bailouts of too-big-to-fail financial institutions. It also creates an agency to oversee consumer financial products.
Obama said the Consumer Financial Protection Bureau would help prevent situations such as the current turmoil over faulty paperwork filed as part of mortgage foreclosure proceedings.
“This is only one more piece of evidence as to why Wall Street reform is so necessary,” he said. “This watchdog will have the authority to guard against unfair practices in mortgage transactions and foreclosures.”
Michael Steel, a spokesman for Representative John Boehner of Ohio, the House Republican leader, responded to the president’s address with an e-mailed statement saying “‘everyone wants to hold Wall Street accountable and make sure that the irresponsibility that led to the terrifying crisis of 2008 never, ever happens again.”
“But the law that Washington Democrats passed doesn’t do that,” the statement said. “It hurts Main Street, costs jobs, guarantees that the taxpayers remain on the hook for endless bailouts, and does nothing to reform Fannie Mae and Freddie Mac, the government mortgage companies that caused the meltdown by giving high-risk loans to people who couldn’t afford them.”
In the Republican address, South Dakota Senator John Thune said Democrats, who have controlled Congress and the White House for two years, are taking the country “in the wrong direction.”
Thune said Democrats failed to help restore economic growth and lower unemployment and said the nation is worse off today than when Obama was elected in 2008.
“A new direction is needed,” Thune said.
Thune said the $814 billion stimulus passed last year didn’t deliver on the administration’s promise to spur job growth and hold unemployment under 8 percent. The national jobless rate was at 9.6 percent last month and has been at 9.5 percent or higher for the past year.
“Rather than create jobs, the Democrats expanded government, and now the American people are stuck with another bill for nearly $1 trillion,” he said. “Republicans want to reverse the dangerous course the Democrats have us on.”