GOP, Dems compete for populist title
Both parties have accepted huge amounts of campaign cash from companies like Goldman Sachs. Both welcomed big business' chief executives to the White House when in power. Both share the blame for deregulating the industry in the 1990s and bailing out Wall Street when the financial sector was on the brink of collapse.
Not that either side will acknowledge it.
Instead, Republicans and Democrats are using President Barack Obama's push for tighter controls on the industry to try to gain the political advantage with the proverbial Joe Six-Pack — the voters — ahead of critical midterm congressional elections, when the balance of power in Washington is at stake.
"We need to enact a set of updated, commonsense rules to ensure accountability on Wall Street and to protect consumers in our financial system," Obama said Thursday in New York, tapping into public outrage over excesses that led to the economic meltdown.
With polls showing voters favoring tighter controls on Wall Street, everyone wants to be seen as siding with the little guy.
"Far from protecting consumers from Wall Street excess, this bill would provide endless protection for the biggest banks on Wall Street," said Senate Majority Leader Mitch McConnell of Kentucky.
Looking to energize their voters and boost fundraising, the national parties are trading charges.
"For years, Republicans stood by while Wall Street ran wild," says a Democratic National Committee television spot. "Risky bets. Lax regulation. When the economy collapsed, Republicans looked the other way. ... Now Republicans are working with Wall Street lobbyists to block reform" that would "protect consumers and prevent a future bailout."
Countering, the Republican National Committee rolled out a video claiming the legislation rewards Wall Street with a "permanent bailout fund. ... Propping up Wall Street is what Obama does, and Obama does it well."
Yet, the Center for Responsive Politics found that both sides raked in cash from the very industry they're vilifying.
In the current election cycle, the DNC collected $6.2 million from the financial services, real estate and insurance sectors and $3.7 million from other business interests. The RNC has raised $2.5 million from the industry and $2.7 million from other business interests.
During the 2008 presidential campaign, Obama raised $40 million from the industry and $37 million from other business interests while Republican John McCain collected $29 million and $16 million.
Deregulation is faulted for the financial industry's crisis — and both parties played a role.
The Depression-era Glass-Steagall Act separated commercial from investment banking, but in 1999 most of its restrictions were repealed by a Republican Congress and President Bill Clinton. In the fall of 2008, President George W. Bush and the Democratic Congress backed a massive bailout of the financial industry amid signs of impending economic collapse. Obama signed off on the second infusion of cash shortly after taking office.
Such coziness with Wall Street and politicians' lack of candor about it are likely factors in low job approval ratings for Congress and an overall cynicism about politics.
A recent Pew Research Center poll showed trust in government at one of the lowest points in a half-century, with nearly 80 percent having little confidence in Washington. Just a quarter of people say the federal government and Congress have a positive effect on the country's direction. The ratings are similarly low for large corporations, banks and other financial institutions.
Still, the public is conflicted.
More than half — 58 percent — say that "the government has gone too far in regulating business and interfering with the free enterprise system," and roughly half oppose government exerting more control over the economy. But, perhaps because their own pocketbooks are at stake, people make an exception for regulating the financial industry: Sixty-one percent say it's a good idea for the government to more strictly limit the way major financial companies do business.
All that — combined with the fact that two-thirds of Americans own stock — underscores why the White House as well as Republicans and Democrats are competing to be the most populist. It also explains why Democrats and Republicans are trying to agree on a bipartisan bill even as they publicly castigate each other.
"On one side are consumers and investors, families and businesses and the vast majority of Americans who want us to make sure the financial crisis they just lived through can never happen again," said Senate Majority Leader Harry Reid of Nevada. "Democrats are on their side, and we're ready to act."
House Republican leader John Boehner of Ohio offered a different take.
"The president says that he wants to clean up Wall Street, but when you look at this bill, what he actually does is protect them from ever having a financial problem," he said. "This is a bad bill and Republicans are going to stand with the American people, who are standing on their tiptoes yelling, 'Stop.'"
The voters will have the last word — in November.
EDITOR'S NOTE — Liz Sidoti has covered national politics for The Associated Press since 2003.