CBO says Dodd reform bill would reduce U.S. deficit
Republican plan for hidden assets
The Democrat’s Senate financial reform bill would cut the U.S. budget deficit by $21 billion over the next 10 years, according to a cost estimate by the Congressional Budget Office obtained by Reuters.
The estimated reduction in the budget deficit over the 2011-2020 period stems largely from charging the financial industry assessments for a fund to liquidate large, troubled financial firms, the office said.
The bill authored by Senate Banking Committee Chairman Christopher Dodd is designed to ensure no financial firm is too big to fail and the senate may start debating it next week.
However, the idea of creating a $50 billion liquidation fund has been criticized by banks and Republicans [quelle surprise?] and is not favored by the Obama administration…
Dodd’s bill would also create a bureau to regulate consumer financial products such as mortgages, as well as new rules to regulate derivatives and hedge funds. The bill aims to rein in banks’ risky activities and revamp financial regulation in wake of the worst economic crisis in decades.
This is the bill the Republicans said contained a bailout provision – when the truth is exactly the opposite: the fund “pays for the funeral” of failures – and insures investors.
