"Opposing reform will leave taxpayers on the hook if a crisis like this ever happens again," the president said.
Wall Street reform looks to be another partisan issue, with Republicans uniting against the legislation, believing safeguards still wont prevent future bailouts.
Here is a transcript of Obama's address:
There were many causes of the turmoil that ripped through our economy over the past two years. But above all, this crisis was caused by failures in the financial industry. What is clear is that this crisis could have been avoided if Wall Street firms were more accountable, if financial dealings were more transparent, and if consumers and shareholders were given more information and authority to make decisions.It is my opinion that this legislation needs to be highly considered by the GOP, and instead of obstructionist behavior, I would like to hear more thoughts on finding a solution then nay saying. If Republican congressmen plan to act in the same way towards this legislation as they had towards health care reform, then I foresee Americans losing out in the end. The GOP needs to present their ideas, and instead of criticizing one plan, they need to promote their own take.
But that did not happen. And that's because special interests have waged a relentless campaign to thwart even basic, common-sense rules - rules to prevent abuse and protect consumers. In fact, the financial industry and its powerful lobby have opposed modest safeguards against the kinds of reckless risks and bad practices that led to this very crisis.
The consequences of this failure of responsibility - from Wall Street to Washington - are all around us: 8 million jobs lost, trillions in savings erased, countless dreams diminished or denied. I believe we have to do everything we can to ensure that no crisis like this ever happens again. That's why I'm fighting so hard to pass a set of Wall Street reforms and consumer protections. A plan for reform is currently moving through Congress.
Here's what this plan would do. First, it would enact the strongest consumer financial protections ever. It would put consumers back in the driver's seat by forcing big banks and credit card companies to provide clear, understandable information so that Americans can make financial decisions that work best for them.
Next, these reforms would bring new transparency to financial dealings. Part of what led to this crisis was firms like AIG and others making huge and risky bets - using things like derivatives - without accountability. Warren Buffett himself once described derivatives bought and sold with little oversight as "financial weapons of mass destruction." That's why through reform we'd help ensure that these kinds of complicated financial transactions take place on an open market. Because, ultimately, it is a marketplace that is open, free, and fair that will allow our economy to flourish.
We would also close loopholes to stop the kind of recklessness and irresponsibility we've seen. It's these loopholes that allowed executives to take risks that not only endangered their companies, but also our entire economy. And we're going to put in place new rules so that big banks and financial institutions will pay for the bad decisions they make - not taxpayers. Simply put, this means no more taxpayer bailouts. Never again will taxpayers be on the hook because a financial company is deemed "too big to fail."
Finally, these reforms hold Wall Street accountable by giving shareholders new power in the financial system. They'll get a say on pay: a vote on the salaries and bonuses awarded to top executives. And the SEC will ensure that shareholders have more power in corporate elections, so that investors and pension holders have a stronger voice in determining what happens with their life savings.
Now, unsurprisingly, these reforms have not exactly been welcomed by the people who profit from the status quo - as well their allies in Washington. This is probably why the special interests have spent a lot of time and money lobbying to kill or weaken the bill. Just the other day, in fact, the Leader of the Senate Republicans and the Chair of the Republican Senate campaign committee met with two dozen top Wall Street executives to talk about how to block progress on this issue.
Lo and behold, when he returned to Washington, the Senate Republican Leader came out against the common-sense reforms we've proposed. In doing so, he made the cynical and deceptive assertion that reform would somehow enable future bailouts - when he knows that it would do just the opposite. Every day we don't act, the same system that led to bailouts remains in place - with the exact same loopholes and the exact same liabilities. And if we don't change what led to the crisis, we'll doom ourselves to repeat it. That's the truth. Opposing reform will leave taxpayers on the hook if a crisis like this ever happens again.
So my hope is that we can put this kind of politics aside. My hope is that Democrats and Republicans can find common ground and move forward together. But this is certain: one way or another, we will move forward. This issue is too important. The costs of inaction are too great. We will hold Wall Street accountable. We will protect and empower consumers in our financial system. That's what reform is all about. That's what we're fighting for. And that's exactly what we're going to achieve.
One thing is for certain, and Obama mentions this in his address - reform must take place or else the system that almost brought down our complete economy will remain intact.
The Republicans response, in my opinion, is wrong. "We simply cannot ask the American taxpayer to continue to subsidize this 'too big to fail' policy. We must ensure that Wall Street no longer believes or relies on Main Street to bail them out. Inaction is not an option" wrote Senate Minority Leader Mitch McConnell to Majority Leader Harry Reid. Reid's spokesman, Jim Manley, said it best:
"They've got 41 signatures on a weak, watered-down letter that simply calls for more negotiations. If they are at all serious, they will simply let us go to the bill next week and let the amendment process begin."Republicans should not filibuster the bill, but instead, allow it to proceed to the amendment process, where they can make the necessary changes or additions.