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| Financial overhaul bill gets wary reception |
| AP/PTI / Washington Oct 30, 2009, 09:47 IST |
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An Obama administration plan to dissolve large, struggling financial firms rather than bail them out is encountering Republican resistance, Democratic doubts and only qualified support from regulators.
At a Financial Services Committee hearing in the House of Representatives yesterday, lawmakers from both parties worried that the proposal would give regulators and the executive branch unprecedented power.
"I'm not a man that fears this administration or you," Democratic Rep Paul Kanjorski told Treasury Secretary Timothy Geithner. "But I do fear the accumulation of power exercised by someone in the future that can be extraordinary."
Others argue that by singling out financial firms important to the economy, the government could inevitably set itself up to bail them out, and that even dismantling rather than rescuing them would require taxpayer money.
"Apparently, the 'too big to fail' model is too hard to kill," quipped Republican Rep Ed Royce.
Rep Brad Sherman, another Democrat, called the bill "TARP on steroids," referring to the government's USD 700 billion Wall Street rescue fund from the administration of Republican President George W Bush.
"You've got permanent, unlimited bailout authority," he told Geithner.Geithner disagreed."The only authority we would have would be to manage their failure," he told the committee.
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