Dino Rossi announced Wednesday his opposition to a massive overhaul of Wall Street rules awaiting Congress' final approval, even as his opponent, Sen. Patty Murray, prepared to vote for the regulations.
Rossi joined his two most prominent Republican rivals in opposing the bill, which Senate Democrats appear to have the votes to send to President Barack Obama this week with help from at least three Republicans.
Murray’s and Rossi’s campaigns traded barbs over who’s taking Wall Street’s side. Their major point of contention: whether the bill will prevent the use of taxpayer money for future bailouts of banks.
Rossi said it avoids reform by leaving the door open for more bailouts.
“If you know you’ve got this safety net and know you’re going to get bailed out, why would you change your ways?” Rossi said in an interview.
The bill would set up a process for liquidating troubled banks, containing an amendment Murray supported that bars the use of taxpayer money.
“This bill contains explicit language guaranteeing that taxpayers will never again be responsible for bailing out Wall Street,” Murray said on the Senate floor.
Rossi pointed to reports of loopholes in that procedure and in new regulations that would prohibit the Federal Reserve from lending to failing banks.
Some lawmakers wanted to prevent Wall Street firms from becoming “too big to fail” in the first place, whether by capping the size of banks or restoring a wall between investment banking and traditional commercial banking, as Democratic Sen. Maria Cantwell sought to do.
Rossi declined to say whether he would support either of those restrictions.
He says he would have opposed the so-called Troubled Asset Relief Program that Congress and the Bush administration passed at the height of the 2008 financial crisis, dismissing fears that letting big institutions fail would bring down the financial system. Murray says she supported it reluctantly and with a vow to make sure regulations go into place to prevent a future crisis. The bill will do that, she said.
The overhaul puts new restrictions on bank borrowing and makes it harder for them to trade in exotic financial instruments, sets up new rules for agencies that rate investments, and creates a new agency to watch over consumer products including mortgages and credit cards.
Democrats have cast opponents, including Rossi, as allies of the Wall Street firms that deployed lobbyists to weaken or kill the bill.
“If you are opposed to the bill, you’re standing on the same side as those Wall Street interests,” said Julie Edwards, a Murray spokeswoman.
No, Rossi said: He’s on the side of small bankers and business owners he has met with in campaigning around the state this week.
Big banks can absorb some of the increased cost of doing business that will come with the bill, but not smaller banks that provide credit to their communities, he said.
“When she casts her vote, she’s casting a vote to kill jobs in Washington state,” Rossi said.
Two other Republican challengers to Murray, Bellingham inventor Paul Akers and Eastern Washington farmer Clint Didier, also oppose the bill.
Akers said he supports tougher standards for banks to maintain more capital to back up their transactions, but the rest of the regulation micromanages the financial system while failing to curb the lax lending standards that helped lead to the collapse.
“We have to go back to historical lending practices that are sustainable,” Akers said, “the same practices that I bought my home under when I bought my first house in the inner city of La Puente, (Calif.,) for $49,000 and had to put 10 percent down, and had to verify my income.”
Tea party-backed candidate Didier echoed Rossi’s worries about bailouts, saying in a statement that the bill “just furthers the unholy alliance between Washington, D.C., and Wall Street – and leaves consumers out in the cold and doesn’t begin to address the real causes of the problems.”
Jordan Schrader: 360-786-1826 jordan.schrader @thenewstribune.com blog.thenewstribune.com/politics