The battle lines are drawn. Troops of bank lobbyists surround Capitol Hill. They have their marching orders from Wall Street: No retreat until financial reform is dead.
Lloyd Blankfein and the rest of the Wall Street CEOs like the world the way it is. They get rich and the rest of us foot the bill when big bank gambles go sour.
They spent thirty years building this world. And they're not going to let it go without a fight.
Senator Dodd put out a strong foundation for real Wall Street reform this week. His bill:
- Includes a strong consumer protection provision to police harmful and predatory banking products;
- Strengthens our ability to target systemic risk;
- Protects bank workers who step forward to blow the whistle on harmful products and policies;
- Asks regulators to find ways to prevent banks from using consumer deposits to place risky bets;
- Subjects large, interconnected financial companies to tougher rules;
- Ends the oversized influence of bank CEOs in decisions by the Federal Reserve;
- Reforms rating standards that currently force states and cities to spend millions in the risky derivatives market; and
- Takes steps to ensure Wall Street pays when big banks gamble recklessly with taxpayer money.
Senator Dodd deserves great credit for standing up to corporate pressure and putting such a strong marker in the ground. He rejected the failed ideas of Republican colleagues who continue to put Wall Street ahead of the American people. And his work follows an equally strong bill passed in the House last year.
But let's be clear -- the Dodd bill must be the floor and not the ceiling. And we must continue to strengthen it.
It's going to take some real guts to fight the Wall Street banks and lobbyists and win the reform the American people demand.
And when we get this job done, it's going to take a sustained and determined effort to ensure these new rules are being used and enforced. We can't wait for another crisis to find out regulators were doing Wall Street's bidding or were asleep at the switch.
We know what to expect from Wall Street. They'll use scare tactics to defeat the bill, they'll write huge campaign checks, they'll make promises behind closed doors -- and if that doesn't work they'll turn those promises into threats.
But let's remember the havoc Wall Street caused to our families and our communities.
Wall Street had their chance to step up and take responsibility for the economic disaster they created. But they haven't stopped foreclosing on families, they haven't expanded lending to small businesses to jumpstart job creation, they haven't helped states and cities that continue to send billions to Wall Street at the same time they cut first responders and teachers.
Big banks have done nothing to help people like Al Marshall, a city employee in Oakland, California who lost his house after the market crashed. He and the rest of the city workers in Oakland continue to take furlough days, layoffs and pay cuts to keep their city afloat.
They've done nothing to help people like Maria Guerra, a janitor from Chicago, whose brother lost the home she helped him buy after he lost his job last year.
Instead, Wall Street used trillions in taxpayer bailouts to place more risky bets and pay out more than $140 billion in pay and bonuses last year.
That money could have plugged nearly every budget hole in the country, extended unemployment benefits to every out of work American, or created millions of new jobs.
The American people are tired of seeing one set of rules benefit the Wall Street CEOs who crashed the economy and another set of rules that continue to punish taxpayers and families.
It's time for the Senate to stand up for the American people and fight back. It's time to send the lobbyists and the CEOs retreating back to their boardrooms.
It's time to put every lawmaker on notice -- pass strong Wall Street reform or pay the consequences on Election Day.