The Washington Post reported this morning on GOP efforts to portray financial regulatory reform as a bailout without giving any indication as to whether this criticism was based in reality. In so doing, the Post helped the GOP push a talking point formulated by Frank Luntz, who advised that linking the bill to bank bailouts is the best possible way to derail reform.
Reporting that Republicans were “portraying Democrats' overhaul attempt as a 'bailout' that could cost taxpayers billions,” the Post explained:
Dodd's 1,400-page bill would create an independent regulator, housed at the Federal Reserve, that would be charged with protecting consumers of mortgages, credit cards and other loans against lending abuse and other deceptive practices. The measure would also create oversight of the vast derivatives market, curtail the regulatory powers of the Federal Reserve and give the government authority to wind down large financial institutions in an orderly way.
Republicans have argued that the measure contains loopholes that could lead to government bailouts of such firms.
This might have been a good time for the Post to test the veracity of this GOP “argument.” What's the basis for the claim? Does the evidence supporting it stand up to scrutiny? These are important questions: Recall that Republicans once “argued” that health care reform legislation contained “loopholes” that would allow the federal government to establish “death panels” to kill off old people -- the 2009 Lie of the Year that was aggressively and uncritically pushed by the media.
Now in the case of financial regulatory reform, the suggestion that the bill itself is a “bailout” adopts a talking point widely known to have been pushed by GOP language hack Frank Luntz. In a January memo, Luntz advised that “the single best way to kill any legislation is to link it to the Big Bank Bailout.”
Which brings us back to the Post and the GOP's argument that reform is a “bailout” :
Democratic and Republican negotiators explored potential areas of compromise, including changes to a $50 billion fund that the financial industry would set up to liquidate bankrupt firms. Some Republicans say the firm could encourage the high-risk investments that led to the current crisis.
Now the suggestion that a $50 billion fund -- paid for by the financial services industry and not taxpayers -- that would finance the complete liquidation of failing financial firms -- not bail them out -- in any way supports the claim that reform is a taxpayer bailout is patently absurd. Yet the Post presents it as honest criticism of reform legislation. After all, “some Republicans” said it. You be the judge.
Confronted with a similar opportunity to asses GOP claims that the bill would function as a permanent bailout, Time's Mark Halperin stated that GOP critics were “willfully misreading the bill or they are engaged in a cynical attempt to keep the president from achieving something,” as Greg Sargent notes:
It isn't every day that a consumate inside-game reporter/pundit type like Mark Halperin aggressively calls out one party for lying, but that's exactly what Halperin did early this morning on MSNBC, talking about the GOP claim that the Dem financial reg reform bill will lead to a permanent bailout. Per the transcript:
JOE SCARBOROUGH: Just this once, defend the Republican position.
MARK HALPERIN: I cannot defend what they're doing.
MIKA BRZEZINSKI: Oh, please.
SCARBOROUGH: Look at you! Look at you!
HALPERIN: They are willfully misreading the bill or they are engaged in a cynical attempt to keep the president from achieving something.