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By Sarah Foster
Posted 1:00 AM Eastern
December 16, 2009

WASHINGTON: A Republican congresswoman, who has been in the forefront of the fight against the healthcare bill, the climate control bill and other contentious measures, warned in an impromptu interview on Thursday evening, that a fast-tracked, under-the-radar mega-bill by Rep. Barney Frank, D-Mass., designed to overhaul the regulation of the entire financial services industry – and headed at the time for passage by the House -- is “even worse.”

“I know that’s hard to believe, but it is worse in the sense that every American makes financial transactions,” said Michele Bachmann, who represents the people of Minnesota’s Sixth Congressional District. “We all use credit cards, we all write checks. This will all now be controlled by government, and government will ration credit. You can’t have capitalism without capital, and government will decide who gets capital and who doesn’t.”

“The entirety of this bill -- all pinned together like this -- hasn’t even gone through committees,” Bachmann said. “It just went on the floor for three hours of debate. It’s a complete government control of the financial services industry and no one knows about it!”

They do now. Late Friday, despite a surprisingly unanimous Republican opposition, the House approved H.R. 4173: The Wall Street Reform and Consumer Protection Act of 2009. The vote was 223-202, with not a single Republican voting in favor and 27 Democrats voting No. Two Republicans who were present did not vote.

The super-size measure of 1,279 pages (1,500 with amendments), is actually a package of several bills, which when “pinned together”, as Bachmann puts it, exponentially extends the power of the federal government over banks, credit unions, and other financial institutions.

Frank, who heads the House Financial Services Committee, “created the package to serve as a vehicle for getting many major financial services bills, including a systemic risk regulation overhaul, an overhaul of derivatives market regulation, consumer protection measures, a measure restricting executive compensation, and a measure that would create a Federal Insurance Office, through the House quickly,” National Underwriter, a trade publication for the insurance industry, reported.

“Quickly” is the operative word here. As a hedge against possible derailment, Frank did not introduce his bill until Dec. 2, then kept it under wraps until Dec. 8 to ensure the least amount of time for review and debate by House members.

Now H.R. 4173 is in the Senate, and if passed there and signed into law would usher in what CNN describes as “the most sweeping set of changes to the banking regulatory system since the New Deal.”

The changes include creation of a Consumer Financial Protection Agency (CFPA) to (Title IV), with authority to make decisions for consumers about the kinds of mortgages, small business loans and other financial products they may access. Another innovation is a new bureaucracy called the Financial Services Oversight Council (FSOC) tasked with determining which companies are supposedly at risk and could undermine financial market stability (Title I, Subtitle G).

“We are sending a clear message to Wall Street, the party is over. Never again will reckless behavior on the part of the few threaten the fiscal stability of our people," said House Speaker Nancy Pelosi at a press conference following the bill’s passage. "The legislation will finally protect Main Street from the worst of Wall Street."

But Rep. Jeb Hensarling from Dallas, the top Republican on the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee and an outspoken critic of government super-spending, blasted the measure as “an assault on the fundamental economic liberties of the American citizen.”

“You want a home mortgage -- now you have to get the approval of the federal government,” Hensarling exclaimed. “You want to offer a credit product? The federal government again. You build a successful business -- it can be torn down unless you go to the federal government on bended knee."

A $150 Billion Slush Fund

Although H.R. 4173 was kept out-of-sight, once unveiled critics quickly analyzed its provisions and sent letters to House members urging rejection, which may account for the universal thumbs-down by Republican lawmakers and some Democrats.


Andrew Moylan, Director of Government Affairs for the National Taxpayers Union, in an open letter dated Dec. 10, called on the House to “reject bailouts, taxes, and onerous regulations in H.R. 4173.”

Moylan writes: “Perhaps most disturbingly, the bill raises taxes in order to provide a permanent, $150 billion slush fund to the newly created Financial Services Oversight Council, whose bureaucrats could bail out private institutions at their whims. The American people have been outraged by the failures of the Troubled Asset Relief Program (TARP), and yet H.R. 4173 would establish a ‘mini-TARP’ which could potentially have even less accountability and greater moral hazard. Investors will gain no certainty from such an arrangement.”

And Matt Kibbe, President and CEO of FreedomWorks, deplored the “new fees, regulations, and reporting requirements,” the legislation requires, and warned it would threaten jobs, global competitiveness, and economic growth.

“At the same time, the legislation creates sweeping new powers for the federal government.” Kibbe said. “Ultimately, consumers may bear the brunt of the legislation. For example, regulations released by a new consumer protection agency may have unintended consequences that reduce access to credit while raising the price of credit.”

Bachmann on

On Thursday, Bachman, a member of the House Financial Services Committee, took a few minutes from the fight on the House floor to talk by telephone with Scott Baker, co-host of the B-Cast on, about H.R. 4173. It was during this interview that she described the measure as being worse than the healthcare bill.

According to Bachmann the bill makes bailout permanent and gives the president the authority to make future bailouts at his own discretion.

“He never again has to come back to Congress to get money,” she said. “He can just go straight to the Treasury, pull out all the money he wants for a favored industry. ... His [credit] czar could place a private business on the systemic risk list – doesn’t have to be a failing business, could be a healthy business -- and the president can bail out anyone that he wants to.”

Bachmann noted that the financial services sector represents 15 percent of the nation’s economy, and some analysts have estimated that since Obama took office, 30 percent of the economy has been brought under federal control and essentially nationalized.

Said Bachmann: “If President Obama gets his way and has government take over healthcare, that’s another 18 percent – 48 percent of the economy the government will have been taken over. The financial services sector is another 15 percent of the economy. If they succeed in [passing H.R. 4173], and if they succeed in taking over the energy sector with the national energy tax, that’s 69 to 70 percent of the economy they will have taken over in less than 18 months.

“So it isn’t that socialism has occurred in our lifetime, it’s in the last 18 months!” she exclaimed.

“Melt the Phone Lines”

As she has been doing in her ongoing fight against the healthcare bill, the congresswoman reached out beyond her district and asked Americans for help – this time to “melt the phone lines” in the offices of their representative and U.S. senators and urge them to vote against H.R. 4173.

“We need people to melt the phone lines of their House members before Friday,” she said. “So here it is Thursday. We need people to be melting the phone lines in the House saying ‘do not vote for Barney Frank’s bill.’ But after that people will have to focus on their senators and tell them “do not vote to have the government take over financial services.”

Baker asked Bachmann if she thought phone calls to members of Congress are effective.

“Absolutely,” she answered. A barrage of phone calls ties up the staff in the offices, which makes them “extremely nervous” but gets the legislator’s attention.

Bachmann said she believes bills like H.R. 4173 can be defeated – though it will take a huge effort.

“I don’t think it’s inevitable that any of this legislation passes,” she said. “It’s not inevitable. Can we fight? Yes. Can we win? Yes. But we have to fight with everything that’s in us. I won’t shade this in a pretty shade. This is going to be a difficult fight, but it’s worth it. It’s worth pouring everything else that we have into it.”

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“We're the beacons. We're it. If the U.S. goes down, where do we go? What other nation do we go to?” she asked her listeners.

Earlier Stories:

1 - Jim Kouri: Obama, Congress Strive to Bankrupt America: Dec. 13, 2007
2 - Sarah Foster: GOP Congresswoman Warns About AmeriCorps: Apr. 13, 2009

Related Resources:

1 - H.R. 4173: The Wall Street Reform and Consumer Protection Act of 2009, introduced by Barney Frank, D-Mass, with no co-sponsors.
2 - Michele Bachmann on the B-Cast: A Conservative Call to Action: with Scott Baker and Liz Stephans, (audio), Dec. 10, 2009
3 - Andrew Moylan, Nat’l Taxpayers Union: Open Letter to House of Representatives to Reject the Bailouts, Taxes, and Onerous Regulations in H.R. 4173, Dec. 10, 2009
4 - Matt Kibbe, FreedomWorks: Key Vote "No": Wall Street Act H.R. 4173, Dec. 11, 2009
5 - Jennifer Liberto: Sweeping Bank Reform Bill Clears the House., Dec. 11, 2009

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Sarah Foster is a researcher and freelance writer:











This will all now be controlled by government, and government will ration credit. You can’t have capitalism without capital, and government will decide who gets capital and who doesn’t.”