SENATOR RICHARD SHELBY: I think that-- tomorrow that-- nothing happens between now and tomorrow-- that the Democrats will not get cloture, but we'll continue to work. That's the first vote. We'll-- don't know when there'll be another vote and so forth. But if Senator Dodd and I can-- and our staff continue to work, we can get a bill…
I think if we keep working together, we'll get a bill. It might be later this week. It may be-- might-- might be next week. But the main thing is to get a good bill.
***
SENATOR DODD ON FINANCIAL REFORM: ‘WE’RE NOT THERE YET’
SENATOR CHRIS DODD: We're getting there. We're close. We've got some more work to do. We'll be meeting, I think later today, in fact, to talk about it. We're not there yet. But I would hope that-- that we could get the votes-- tomorrow. When we have this-- motion to proceed with the bill, to start the debate…
I think in the-- the next few days, weeks, we'll get it together. Maybe even-- maybe even by tomorrow, is a possibility to get this done. We need to get on with this.
***
SENATOR SHELBY: ‘I THINK WE WILL GET A BILL IF THE DEMOCRATS WANT A BILL’
SENATOR RICHARD SHELBY: We're closer than we've ever been. And-- will we get a bill by tomorrow? I-- I doubt it. I would always hope so. Because it's so-- so much involved. But-- I think we will get a bill if the Democrats want a bill and will give us some things that we think that are substantive in nature like-- like make the too big to fail-- send a message that nothing is too big to fail in this country. And tighten up the language, there's some flexibility in the language there that we're talking about.
***
‘WE’VE GOT TO END, ONCE AND FOR ALL, THE CASINO ATMOSPHERE OF WALL STREET,’ SAYS SENATOR SHELBY
SENATOR RICHARD SHELBY: From my perspective and-- and the perspective of a lot of people in America, we've got to end, once and for all, the casino atmosphere of Wall Street. Where they're gambling, basically, on-- synthetic-- ideas and so forth.
***
DODD SAYS NO DISAGREEMENT ON TOO BIG TO FAIL
SENATOR CHRIS DODD: There are some disagreements here. Not on too big to fail. We're gonna shut that down forever. We want consumers to get some protection. We'd like an early warning system, so we don't end up getting into trouble in the first place. And then making sure that no financial institution is gonna be unregulated in our country.
***
DODD SAYS SYSTEMIC RISK COUNCIL WILL MONITOR BANKS
DAVID GREGORY: Who is it in the government who is gonna call the head of a major multinational bank and say, "We've been watching. You're taking too much risk and this is potentially systemic risk. We just--" who-- who is gonna do that?
SENATOR CHRIS DODD: Well, what Rich-- Richard and I do in this bill, I think we agree on this point, the systemic risk council is made up of the prudential regulators, chaired by the Secretary of the Treasury. With-- with advice chair by-- out of the Federal Reserve. With a team of also collecting data in real time. This is something that Bob Corker and Mark Warner insisted in our bill.
***
SENATOR SHELBY DOES NOT FAVOR VOLCKER RULE
SENATOR RICHARD SHELBY: I'm not for it [Volker rule], per se, but I do believe that any regulator-- ought to have the power if they see a bank is getting so risky and into things and maybe so big. And if they don't have the capital and they don't have the management to make 'em do things. Whatever it is, shrink or whatever.
***
SENATOR SHELBY SAYS DODD BILL WILL NOT PASS AS IS
SENATOR RICHARD SHELBY: I don't believe the Dodd Bill as now constituted will pass. Now, it might be the Dodd Bill as we rework it in-- which we're-- we're doing.. I'd be a yes vote if it's a good bill.
DAVID GREGORY: And you think you'll get there?
SENATOR RICHARD SHELBY: I think we'll get there.
***
SENATOR DODD SAYS ARIZONA IMMIGRATION LAW IS ‘OUTRAGEOUS’
SENATOR CHRIS DODD: I think the Arizona law is outrageous. The idea that we go around asking people for documentation and put you in jail if you don't have it. The idea that state by state would start developing it's own immigration laws in the country, imagine what a patchwork that might look like.
***
SENATOR SHELBY SAYS U.S. MUST SECURE BORDERS BEFORE ADDRESSING
IMMIGRATION REFORM LEGISLATION
DAVID GREGORY: But it's the right time, is your view?
SENATOR RICHARD SHELBY: Well, timing is-- now, I think-- first thing we better do is enforce our-- our borders. And know who's here and who comes and who leaves. That's number one. And then go into the rest.
# # #
WEB LINKS FOR EXCERPTS FROM TODAY”S “MEET THE PRESS”
‘Not there yet’ on financial reform, says Dodd
‘Very close’ on financial reform, says Shelby
Dodd, Shelby on push to reform Wall St.
Should big banks be broken up?
Dodd: Immigration demands national answer
How will Ariz. law impact midterms?
Panel talks financial reform, Wall St.
Evan Thomas on America’s ‘rush’ to empire
David Gregory offers a sneak peek at the new “Meet the Press” set.
# # #
Below is a RUSH transcript of this morning’s broadcast, mandatory attribution to NBC News’ “Meet the Press with David Gregory.” A final transcript of the program is available at: .
MEET THE PRESS WITH DAVID GREGORY
April 25, 2010
April 25, 2010
DAVID GREGORY:
But first an exclusive interview with the two men at the center of the debate over financial reform. The Chairman and ranking member of the Senate Banking Committee, Senator Chris Dodd and Senator Richard Shelby. Welcome both of you back to Meet The Press.
But first an exclusive interview with the two men at the center of the debate over financial reform. The Chairman and ranking member of the Senate Banking Committee, Senator Chris Dodd and Senator Richard Shelby. Welcome both of you back to Meet The Press.
SENATOR CHRIS DODD:
Thank you, David.
Thank you, David.
DAVID GREGORY:
Good to have you here. This is high noon for financial reform. Senator Dodd, the big question is, "Do you have a deal?"
Good to have you here. This is high noon for financial reform. Senator Dodd, the big question is, "Do you have a deal?"
SENATOR CHRIS DODD:
Well, Richard and I have spent a lot of time together over the last year. And-- working on this bill. And we're getting there. We're close. We've got some more work to do. We'll be meeting, I think later today, in fact, to talk about it. We're not there yet. But I would hope that-- that we could get the votes-- tomorrow. When we have this-- motion to proceed with the bill, to start the debate.
Well, Richard and I have spent a lot of time together over the last year. And-- working on this bill. And we're getting there. We're close. We've got some more work to do. We'll be meeting, I think later today, in fact, to talk about it. We're not there yet. But I would hope that-- that we could get the votes-- tomorrow. When we have this-- motion to proceed with the bill, to start the debate.
And-- again, I think Richard and I have a pretty good understanding of where we are on these matters. We can't take care of everything in the bill. Obviously, our colleagues are gonna want to be heard. But we've been thrown off a lot now. We've lost almost $11 trillion of household wealth in the last 17 or 18 months. Seven million homes in foreclosure. Eight and a half million jobs have been lost. Retirement incomes have declined by 20 percent. Housing values decline by 30 percent. And this morning's news, obviously, about Goldman Sachs. Here we are 17 months after someone broke into our house, in effect, robbed us, and we still haven’t even changed the locks on the doors. And we need to get it done.
DAVID GREGORY:
Well, Senator Shelby, I mention this is high noon. You've got Democrats saying, "This is it. You're either with us or against us." Okay? You've got Senator Reid on-- talking-- on Capitol Hill on Thursday saying this.
Well, Senator Shelby, I mention this is high noon. You've got Democrats saying, "This is it. You're either with us or against us." Okay? You've got Senator Reid on-- talking-- on Capitol Hill on Thursday saying this.
SENATOR REID ON TAPE:
We have-- we worked for more than-- more than two months with Shelby trying to come up with something. We worked for over a month trying to come up with something with Corker. Now, this is very simple, if they're willing to go forward with reform, that's-- that's what we'll do. But I'm not going to waste any more time of the American People until they come up with some agreement.
We have-- we worked for more than-- more than two months with Shelby trying to come up with something. We worked for over a month trying to come up with something with Corker. Now, this is very simple, if they're willing to go forward with reform, that's-- that's what we'll do. But I'm not going to waste any more time of the American People until they come up with some agreement.
DAVID GREGORY:
So, is there something Republicans can vote for here?
So, is there something Republicans can vote for here?
SENATOR RICHARD SHELBY:
Well, not yet, but we're getting there. Like Senator Dodd said, we-- we're working closely together. I think we're conceptually very, very close. This is very complicated-- piece of legislation. Over 1,300 pages as the Dodd Bill-- now stands. But we're-- what we're trying to do is improve two or three things in it. It's just very-- very tedious. We're gonna continue to work today as Senator Dodd-- said.
Well, not yet, but we're getting there. Like Senator Dodd said, we-- we're working closely together. I think we're conceptually very, very close. This is very complicated-- piece of legislation. Over 1,300 pages as the Dodd Bill-- now stands. But we're-- what we're trying to do is improve two or three things in it. It's just very-- very tedious. We're gonna continue to work today as Senator Dodd-- said.
I think we're closer than we've ever been. And-- will we get a bill by tomorrow? I-- I doubt it. I would always hope so. Because it's so-- so much involved. But-- I think we will get a bill if the Democrats want a bill and will give us some things that we think that are substantive in nature like-- like make the too big to fail-- send a message that nothing is too big to fail in this country. And tighten up the language, there's some flexibility in the language there that we're talking about. And--
DAVID GREGORY:
But this is inches you're talking about?
But this is inches you're talking about?
SENATOR RICHARD SHELBY:
Well-- but inches sometimes are miles. But I'm hoping they’re half inches.
Well-- but inches sometimes are miles. But I'm hoping they’re half inches.
DAVID GREGORY:
All right. I want to go through some of the stuff that-- that are sticking points. But I just want to nail down this point. A vote goes down tomorrow to begin the debate. Will Republicans try to block that? Or will they vote for-- to let that go forward?
All right. I want to go through some of the stuff that-- that are sticking points. But I just want to nail down this point. A vote goes down tomorrow to begin the debate. Will Republicans try to block that? Or will they vote for-- to let that go forward?
SENATOR RICHARD SHELBY:
Well, I think that-- tomorrow that-- nothing happens between now and tomorrow-- that the Democrats will not get cloture, but we'll continue to work. That's the first vote. We'll-- don't know when there'll be another vote and so forth. But if Senator Dodd and I can-- and our staff continue to work, we can get a bill.
Well, I think that-- tomorrow that-- nothing happens between now and tomorrow-- that the Democrats will not get cloture, but we'll continue to work. That's the first vote. We'll-- don't know when there'll be another vote and so forth. But if Senator Dodd and I can-- and our staff continue to work, we can get a bill.
DAVID GREGORY:
But you-- you heard what Senator Reid said, are the politics just too difficult for Republicans to stand in the way and to oppose reform?
But you-- you heard what Senator Reid said, are the politics just too difficult for Republicans to stand in the way and to oppose reform?
SENATOR RICHARD SHELBY:
Oh, no. Not-- not the Dodd Bill. I think the Republican sent a letter out-- as-- what came out of the banking committee. That-- four to one said they were going to oppose-- the legislation as it now stands. Now, that doesn't mean that they're not-- encouraging me as the ranking Republican to continue to negotiate. Because most people believe we can get a bill.
Oh, no. Not-- not the Dodd Bill. I think the Republican sent a letter out-- as-- what came out of the banking committee. That-- four to one said they were going to oppose-- the legislation as it now stands. Now, that doesn't mean that they're not-- encouraging me as the ranking Republican to continue to negotiate. Because most people believe we can get a bill.
DAVID GREGORY:
Okay. I want to talk-- before we get to some of the issues, like too big to fail, bailouts-- you may be getting a call, somebody who can make a deal here. We don't want to stand in the way of that, Senator. But on the front page of the Washington Post today, more news about Goldman Sachs. They have denied wrongdoing, they're facing civil fraud charges.
Okay. I want to talk-- before we get to some of the issues, like too big to fail, bailouts-- you may be getting a call, somebody who can make a deal here. We don't want to stand in the way of that, Senator. But on the front page of the Washington Post today, more news about Goldman Sachs. They have denied wrongdoing, they're facing civil fraud charges.
But the headline had to do with some internal documents that were leaked from a Senate committee about internal discussions about the housing market. We'll put it up on the screen. Here's how the Washington Post reports it this morning. "As the U.S. housing market began its epic fall nearly three years ago, top executives at Goldman Sachs cheered the large financial gains the firm stood to make on certain debts that it placed.
"According to newly released documents. The documents show that the firm's executives were celebrating earlier investments calculated to benefit if housing prices fell. A Senate investigative committee found. Lawmakers said the internal emails released Saturday by the Senate Permanent Subcommittee on Investigation con-- contradict what they've said are Goldman's assertions that the bank was not trying to profit from the decline of the housing market in 2007 and was merely seeking to protect itself if prices collapse."
Isn't this what really fuels the anger at Wall Street? That in effect, you appear to have elements within a company betting against the market, betting against the economy to make money in a way that does not seem to create jobs or create commerce?
SENATOR CHRIS DODD:
Frank Rich in the-- the New York Times this morning-- and I may not quote him exactly. But I think he has it exactly right. This is-- there's something terribly wrong about a system in a country of ours where you make billions of dollars by making nothing or producing nothing, but merely taking advantage of an economic situation. Again, these-- investigations going on and the legal matters that involved Goldman Sachs. And I suspect others will come, as well. Just heighten the point.
Frank Rich in the-- the New York Times this morning-- and I may not quote him exactly. But I think he has it exactly right. This is-- there's something terribly wrong about a system in a country of ours where you make billions of dollars by making nothing or producing nothing, but merely taking advantage of an economic situation. Again, these-- investigations going on and the legal matters that involved Goldman Sachs. And I suspect others will come, as well. Just heighten the point.
And again, I-- Richard and I are working closely together. This doesn't end the debate tomorrow. It begins the debate. And Richard and I both know, as Richard is a former Chairman of the committee, as well. You don't get resolution of matters ultimately until you're at the table and have to do so.
So, I-- I hope tomorrow, we can get those votes. We may not, but I hope we do. Because we need to move forward. We only got about 40 or 50 legislative days left, David, in this session of Congress. Can you imagine if we left town, tomorrow if another crisis occurred in the country, we're no better off than we were in the fall of 2008. We have no cops on the beat, major sections of-- of our economy are unregulated entirely. You have all of this going on out there, it could happen again. Too big to fail could happen again if we don't change the law. Richard and I agree on this point.
DAVID GREGORY:
All right, but let's stick to Goldman Sachs here, Senator.
All right, but let's stick to Goldman Sachs here, Senator.
SENATOR RICHARD SHELBY:
Oh, you-- you're talking about Goldman Sachs. First of all-- from my perspective and-- and the perspective of a lot of people in America, we've got to end, once and for all, the casino atmosphere of Wall Street. Where they're gambling, basically, on-- synthetic-- ideas and so forth.
Oh, you-- you're talking about Goldman Sachs. First of all-- from my perspective and-- and the perspective of a lot of people in America, we've got to end, once and for all, the casino atmosphere of Wall Street. Where they're gambling, basically, on-- synthetic-- ideas and so forth.
SENATOR CHRIS DODD:
And with someone else’s money.
And with someone else’s money.
SENATOR RICHARD SHELBY:
With somebody else's money. Putting banks and our whole banking system at risk and producing nothing.
With somebody else's money. Putting banks and our whole banking system at risk and producing nothing.
DAVID GREGORY:
How-- a lot of people in the public, though, they hear that kind of rhetoric and then they also look at the record of contributions from a firm like Goldman Sachs and the securities-- industry and investment industry. Let's put it up on the screen for the two of you and for President Obama, as well, what some of the contributions were form employees and family members.
How-- a lot of people in the public, though, they hear that kind of rhetoric and then they also look at the record of contributions from a firm like Goldman Sachs and the securities-- industry and investment industry. Let's put it up on the screen for the two of you and for President Obama, as well, what some of the contributions were form employees and family members.
For the President, you see over a million dollars just from Goldman. Over-- nearly $16 million-- in securities and investment industry. And for both of you, as well. Significant amounts-- certainly from the industry as a whole. Senator Dodd-- how is that relevant? How do you separate all of that out when you've got firms that have significant-- making significant contributions to you?
SENATOR CHRIS DODD:
Well, again, look-- someone who's-- a strong supporter of public financing of federal elections-- I think the system is deeply troubling. But I also happen to believe that most Members of Congress that I know have-- don't sell their votes for contributions. What we do see going on, putting aside the contributions, the story this morning, literally millions and millions are being spent on lobbyists, particularly in the last few weeks, realizing this bill may actually get done to try and stop the legislation from happening.
Well, again, look-- someone who's-- a strong supporter of public financing of federal elections-- I think the system is deeply troubling. But I also happen to believe that most Members of Congress that I know have-- don't sell their votes for contributions. What we do see going on, putting aside the contributions, the story this morning, literally millions and millions are being spent on lobbyists, particularly in the last few weeks, realizing this bill may actually get done to try and stop the legislation from happening.
Want to kill this bill if they can. They like the status quo. Richard and I share the goal of getting a bill done here. We both understand the value and importance of it. We just would like to get the debate going. If we don't get the debate going--
DAVID GREGORY:
All right, but-- but there-- people I talk to on Wall Street say that kind of rhetoric is totally over the top. That they want stringent regulation, but that there are details that are very important that frankly a lot of Senators and Congressmen and women don't understand, because of their complexity. And yet, they're willing to just-- because of this political atmosphere pass sweeping regulation that could hurt competitiveness, that could send jobs over seas, and all the-- all the rest.
All right, but-- but there-- people I talk to on Wall Street say that kind of rhetoric is totally over the top. That they want stringent regulation, but that there are details that are very important that frankly a lot of Senators and Congressmen and women don't understand, because of their complexity. And yet, they're willing to just-- because of this political atmosphere pass sweeping regulation that could hurt competitiveness, that could send jobs over seas, and all the-- all the rest.
SENATOR CHRIS DODD:
David, I was born at night, but not last night. With all due respect to those arguments, those are red herrings. We understand the complexity of it. That's why we've spent so long at this. Richard and I have spent the last two years, basically, 39 months, going through hearings, working at this. Listening to people. Countless conversations with experts in the field. And there are some disagreements here.
David, I was born at night, but not last night. With all due respect to those arguments, those are red herrings. We understand the complexity of it. That's why we've spent so long at this. Richard and I have spent the last two years, basically, 39 months, going through hearings, working at this. Listening to people. Countless conversations with experts in the field. And there are some disagreements here.
Not on too big to fail. We're gonna shut that down forever. We want consumers to get some protection. We'd like an early warning system, so we don't end up getting into trouble in the first place. And then making sure that no financial institution is gonna be unregulated in our country--
DAVID GREGORY:
All right, Senator Shelby. Let's-- let's talk about the issue of bailouts, because this is really important. You've heard Senator Dodd say, "This will guarantee no more taxpayer-funded bailouts." The President speaking on Wall Street on Thursday made his case. This is what he said.
All right, Senator Shelby. Let's-- let's talk about the issue of bailouts, because this is really important. You've heard Senator Dodd say, "This will guarantee no more taxpayer-funded bailouts." The President speaking on Wall Street on Thursday made his case. This is what he said.
PRESIDENT OBAMA ON TAPE:
What's not legitimate is to suggest that somehow the legislation being proposed is gonna encourage future taxpayer bailouts, as some have claimed. That makes for a good sound bite, but it's not factually accurate. It is not true.
What's not legitimate is to suggest that somehow the legislation being proposed is gonna encourage future taxpayer bailouts, as some have claimed. That makes for a good sound bite, but it's not factually accurate. It is not true.
DAVID GREGORY:
Okay, so what's the substance behind that argument? Secretary Timothy Geithner was on the program last week. And I asked him specifically that question, how they could make that kind of-- guarantee. And he said what the bills would actually do substantively.
Okay, so what's the substance behind that argument? Secretary Timothy Geithner was on the program last week. And I asked him specifically that question, how they could make that kind of-- guarantee. And he said what the bills would actually do substantively.
SECRETARY GEITHNER ON TAPE:
They will make sure if a large institution ever again manages itself to the point where it can't survive on its own and has to come to the government to support it, then the government will put it's in-- put it into receivership. It will wipe out shareholders. It will replace management and board. And we'll make sure that we wind that firm down, we dismember it, we sell it off, so it cannot exist again to make those kind of mistakes in the future.
They will make sure if a large institution ever again manages itself to the point where it can't survive on its own and has to come to the government to support it, then the government will put it's in-- put it into receivership. It will wipe out shareholders. It will replace management and board. And we'll make sure that we wind that firm down, we dismember it, we sell it off, so it cannot exist again to make those kind of mistakes in the future.
DAVID GREGORY:
Senator Shelby?
Senator Shelby?
SENATOR RICHARD SHELBY:
That-- that would be our goal, too. To make sure that any failed institution is wound up. But this-- the language in the Dodd bill-- doesn't say that. It's not there yet. It's-- we're tightening it up. I believe that he will work with us.
That-- that would be our goal, too. To make sure that any failed institution is wound up. But this-- the language in the Dodd bill-- doesn't say that. It's not there yet. It's-- we're tightening it up. I believe that he will work with us.
DAVID GREGORY:
But let's get past some of the legislative speak. What-- what is it that is-- is not there, you think, that still has taxpayers on the hook?
But let's get past some of the legislative speak. What-- what is it that is-- is not there, you think, that still has taxpayers on the hook?
SENATOR RICHARD SHELBY:
Too-- too much flexibility with the Fed. And also with FDIC.
Too-- too much flexibility with the Fed. And also with FDIC.
DAVID GREGORY:
In other words, the FDIC can get access--
In other words, the FDIC can get access--
SENATOR RICHARD SHELBY:
Absolutely.
Absolutely.
DAVID GREGORY:
--to a lot more money. The Fed can issue loans.
--to a lot more money. The Fed can issue loans.
SENATOR RICHARD SHELBY:
Absolutely.
Absolutely.
DAVID GREGORY:
So, the taxpayer still could be on the hook.
So, the taxpayer still could be on the hook.
SENATOR RICHARD SHELBY:
We need to tighten that up-- to make sure that it doesn't happen. The message should be unambiguously that nothing's too big to fail. And if you fail, we're gonna put you-- put you to sleep.
We need to tighten that up-- to make sure that it doesn't happen. The message should be unambiguously that nothing's too big to fail. And if you fail, we're gonna put you-- put you to sleep.
DAVID GREGORY:
So, Senator Dodd, let me try to break that down a little bit. If the notion is that the government sees a firm taking excessive risks. They're looking through the window a little bit at how the business is being run. They may make comment-- regulators saying, "That's excessive risk. You shouldn't do that. That's systemic risk. We're gonna-- you know, we're gonna move in. You have-- brink of insolvency here." You-- you pre-funded a fund that can pay for that. That banks would pay for. But there's still a lot of access to government cash the taxpayers pay for, if they get in trouble. And if they need more cash.
So, Senator Dodd, let me try to break that down a little bit. If the notion is that the government sees a firm taking excessive risks. They're looking through the window a little bit at how the business is being run. They may make comment-- regulators saying, "That's excessive risk. You shouldn't do that. That's systemic risk. We're gonna-- you know, we're gonna move in. You have-- brink of insolvency here." You-- you pre-funded a fund that can pay for that. That banks would pay for. But there's still a lot of access to government cash the taxpayers pay for, if they get in trouble. And if they need more cash.
SENATOR CHRIS DODD:
Well, no-- first of all, even beginning before that, the systemic risk council doesn't give advisory rules. They instruct the Fed-- with institutions that are-- engaging in excessive risk. They can so far as to break them up. Now, that's-- an action of last resort. But that power exists in our bill. Regarding access to-- to-- to-- resources out of the Fed-- under that-- that 13-3 provisions-- here.
Well, no-- first of all, even beginning before that, the systemic risk council doesn't give advisory rules. They instruct the Fed-- with institutions that are-- engaging in excessive risk. They can so far as to break them up. Now, that's-- an action of last resort. But that power exists in our bill. Regarding access to-- to-- to-- resources out of the Fed-- under that-- that 13-3 provisions-- here.
That is so tight-- here, in fact we're down to the point of insisting that Congress be involved in determining whether or not it can go forward. We've never done that before. So, it-- it's very, very tight-- in our view. And whether or not you have approval or disapproval, that's really the argument. So, this is very, very tight.
DAVID GREGORY:
But here-- but isn't the bigger question about the role of government here? I mean, we had a lot of regulators on the job. Who missed what was going on. We had warnings to the likes of the head of the Fed, Alan Greenspan about the bubble in the housing market and impending collapse. You have bureaucrats who work in the government who-- who warn about really big things that could happen. There wasn't the political will or people didn't have the judgment to intervene the last time. How is that different now?
But here-- but isn't the bigger question about the role of government here? I mean, we had a lot of regulators on the job. Who missed what was going on. We had warnings to the likes of the head of the Fed, Alan Greenspan about the bubble in the housing market and impending collapse. You have bureaucrats who work in the government who-- who warn about really big things that could happen. There wasn't the political will or people didn't have the judgment to intervene the last time. How is that different now?
SENATOR CHRIS DODD:
Well, because-- a couple of things. First of all, we-- we don't have unregula - . A lot of the problems occurred in the unregulated part of our economy. Richard Shelby and I are not gonna allow that to happen again. There's every financial-- major financial service is gonna be potentially a regulated under this bill.
Well, because-- a couple of things. First of all, we-- we don't have unregula - . A lot of the problems occurred in the unregulated part of our economy. Richard Shelby and I are not gonna allow that to happen again. There's every financial-- major financial service is gonna be potentially a regulated under this bill.
Secondly, you-- you're gonna put resources to work here. Put cops on the beat-- watching all of this. Stopping too big to fail. Consumer protection is a major part of this bill. In the past, we didn't watch out for consumers. Safety and soundness is critically important, but what happens with credit cards and mortgages? People lured into arrangements they knew they could never afford.
DAVID GREGORY:
But-- but still the same question. Is the government up to this job of regulation when it hasn't proven--
But-- but still the same question. Is the government up to this job of regulation when it hasn't proven--
SENATOR RICHARD SHELBY:
That's an excellent question. They haven't been. The regulators failed us, the Fed, the-- all the regulators failed the American People. The question is will they-- what have they learned? We hope they've learned a lot. We should never go back to 18 months ago, when we were-- everything was at risk. Now, what we're trying to do is tighten this language to make sure that it is not so much flexibility for the regulators to go back again.
That's an excellent question. They haven't been. The regulators failed us, the Fed, the-- all the regulators failed the American People. The question is will they-- what have they learned? We hope they've learned a lot. We should never go back to 18 months ago, when we were-- everything was at risk. Now, what we're trying to do is tighten this language to make sure that it is not so much flexibility for the regulators to go back again.
DAVID GREGORY:
Well, let me challenge then you on a point then. If the-- if the-- if the complaint is government's not up to it. We had regulators before, can they do it this time? And we're so worried about bailouts. Look at the track record of bailouts so far. The President was boasting yesterday that GM and Chrysler paid off their debts, not completely. But-- but-- but-- way ahead of schedule. TARP is now $186-- billion back. The overall payment is supposed to be around $87 billion. The record's been pretty good that the government and the taxpayer have done okay so far in bailouts, have they not?
Well, let me challenge then you on a point then. If the-- if the-- if the complaint is government's not up to it. We had regulators before, can they do it this time? And we're so worried about bailouts. Look at the track record of bailouts so far. The President was boasting yesterday that GM and Chrysler paid off their debts, not completely. But-- but-- but-- way ahead of schedule. TARP is now $186-- billion back. The overall payment is supposed to be around $87 billion. The record's been pretty good that the government and the taxpayer have done okay so far in bailouts, have they not?
SENATOR RICHARD SHELBY:
First of all-- the paid back by General Motors and Chrysler will never happen. Not all of it. That's misleading. Even what the President said there. And they paid back some money that they were already given by the TARP money. They haven't paid back the other and they won't. Some of the banks have paid back the money. And that's good. But we should never go down that road again. If the regulators do their job, and if we tighten this legislation-- we won't have to go down that road again.
First of all-- the paid back by General Motors and Chrysler will never happen. Not all of it. That's misleading. Even what the President said there. And they paid back some money that they were already given by the TARP money. They haven't paid back the other and they won't. Some of the banks have paid back the money. And that's good. But we should never go down that road again. If the regulators do their job, and if we tighten this legislation-- we won't have to go down that road again.
SENATOR CHRIS DODD:
Let me-- I want to go back to your previous question, a second, David, because I think it's important. What we're trying to do is to put-- make sure what happened can never happen again. Provide the tools-- there'll be another economic crisis, it's silly for us to argue otherwise. The question was will we have the tools to respond to it before it gets so out of hand it pus our entire economic system at risk. With the job losses and all the other items I mentioned.
Let me-- I want to go back to your previous question, a second, David, because I think it's important. What we're trying to do is to put-- make sure what happened can never happen again. Provide the tools-- there'll be another economic crisis, it's silly for us to argue otherwise. The question was will we have the tools to respond to it before it gets so out of hand it pus our entire economic system at risk. With the job losses and all the other items I mentioned.
But thirdly, our goal here is we don't want to so strangle a system that we can't create jobs, have credit flow, and capital form to (UNINTEL) and to lead the world. What happened in Greece ought to remind us. It's not just locally-- domestically located where problems can occur. There was a failure in the Shanghai Exchange a few years ago that represented less than five percent of the volume of the New York Stock Exchange. It declined by 12 points. Around the world, within about 24 hours, markets reacted to this. We're in a global economy, the United States needs to lead on financial services. That's also part of our goal in this bill.
DAVID GREGORY:
But is-- but isn't this still the central question that you're trying to manage the downside instead of trying to prevent it beforehand? In other words, who-- who is it in the government who is gonna call the head of a major multinational bank and say, "We've been watching. You're taking too much risk and this is potentially systemic risk. We just--" who-- who is gonna do that?
But is-- but isn't this still the central question that you're trying to manage the downside instead of trying to prevent it beforehand? In other words, who-- who is it in the government who is gonna call the head of a major multinational bank and say, "We've been watching. You're taking too much risk and this is potentially systemic risk. We just--" who-- who is gonna do that?
SENATOR CHRIS DODD:
Well, what Rich-- Richard and I do in this bill, I think we agree on this point, the systemic risk council is made up of the prudential regulators, chaired by the Secretary of the Treasury. With-- with advice chair by-- out of the Federal Reserve. With a team of also collecting data in real time. This is something that Bob Corker and Mark Warner insisted in our bill.
Well, what Rich-- Richard and I do in this bill, I think we agree on this point, the systemic risk council is made up of the prudential regulators, chaired by the Secretary of the Treasury. With-- with advice chair by-- out of the Federal Reserve. With a team of also collecting data in real time. This is something that Bob Corker and Mark Warner insisted in our bill.
It's a very good provision. Real time data. So we know on a daily basis what's happening, rather than waiting for some good investigative reporter to point up something. So, you watch these either by product line or by institution getting so large, so interconnected it puts as at risk. That's a great advantage this bill has that we don't have today.
DAVID GREGORY:
And yet, Senator Shelby, there are Democrats who are saying, "If you want to prevent too big to fail, don't allow banks to get too big." Do some of the biggest banks, responsible for so much money in-- in-- in the country-- should they be broken up?
And yet, Senator Shelby, there are Democrats who are saying, "If you want to prevent too big to fail, don't allow banks to get too big." Do some of the biggest banks, responsible for so much money in-- in-- in the country-- should they be broken up?
SENATOR RICHARD SHELBY:
Well, that's-- a good question. And that's one that Dr. Volker's talked about for years. And he says, "If you're too big to regulate-- maybe you're too big to-- to exist." In other words-- because you will cause systemic risk. Being big in my judgment is not necessarily bad, but it's bad, bad when the perception is that the big is gonna be bailed out and the small are going to be gobbled up by the regulators.
Well, that's-- a good question. And that's one that Dr. Volker's talked about for years. And he says, "If you're too big to regulate-- maybe you're too big to-- to exist." In other words-- because you will cause systemic risk. Being big in my judgment is not necessarily bad, but it's bad, bad when the perception is that the big is gonna be bailed out and the small are going to be gobbled up by the regulators.
DAVID GREGORY:
So, you're-- so you're not for that?
So, you're-- so you're not for that?
SENATOR RICHARD SHELBY:
I'm not for it, per se, but I do believe that any regulator-- ought to have the power if they see a bank is getting so risky and into things and maybe so big. And if they don't have the capital and they don't have the management to make 'em do things. Whatever it is, shrink or whatever.
I'm not for it, per se, but I do believe that any regulator-- ought to have the power if they see a bank is getting so risky and into things and maybe so big. And if they don't have the capital and they don't have the management to make 'em do things. Whatever it is, shrink or whatever.
DAVID GREGORY:
You think banks should be broken up?
You think banks should be broken up?
SENATOR CHRIS DODD:
Well, I-- I-- Richard and I sort of agree on this point. I-- I-- it's the regulation of these institutions and what they're doing-- and whether or not they're able to conduct and engage in excessive risk at our expense. That's why the Volker rule is important.
Well, I-- I-- Richard and I sort of agree on this point. I-- I-- it's the regulation of these institutions and what they're doing-- and whether or not they're able to conduct and engage in excessive risk at our expense. That's why the Volker rule is important.
DAVID GREGORY:
Right, you-- so, the Volker rule would say to the banks, "There's certain things you can't do." What they call proprietary trading--
Right, you-- so, the Volker rule would say to the banks, "There's certain things you can't do." What they call proprietary trading--
SENATOR CHRIS DODD:
Gambling with my money. With low interest rates. Having-- having-- banks--
Gambling with my money. With low interest rates. Having-- having-- banks--
DAVID GREGORY:
But what would it actually mean, 'cause a lot of people on Wall Street say you guys can't even define exactly--
But what would it actually mean, 'cause a lot of people on Wall Street say you guys can't even define exactly--
SENATOR CHRIS DODD:
Well, I can tell you--
Well, I can tell you--
DAVID GREGORY:
--what it would mean.
--what it would mean.
SENATOR CHRIS DODD:
--they can't be engaged in hedge funds and-- and venture capital and these kind of-- risky-- overly risky things.
--they can't be engaged in hedge funds and-- and venture capital and these kind of-- risky-- overly risky things.
DAVID GREGORY:
I-- I-- some of my research, I read in 2007 that you-- you wanted to make sure that hedge funds could still prosper in the country.
I-- I-- some of my research, I read in 2007 that you-- you wanted to make sure that hedge funds could still prosper in the country.
SENATOR CHRIS DODD:
Oh, I'm not opposed to hedge funds prospering. I want 'em registered. I want to know what they're doing, so they're not putting us at risk. This is the point, striking this balance. You're gonna have David Brooks on, on your panel in a few minutes. David has written about trying to strike this balance, and he's right. We-- we do need to have good cops on the beat, doing a good job, so we don't allow this stuff to get out of hand. But simultaneously, not to stifle the innovation and creativity that have been the source of our great success--
Oh, I'm not opposed to hedge funds prospering. I want 'em registered. I want to know what they're doing, so they're not putting us at risk. This is the point, striking this balance. You're gonna have David Brooks on, on your panel in a few minutes. David has written about trying to strike this balance, and he's right. We-- we do need to have good cops on the beat, doing a good job, so we don't allow this stuff to get out of hand. But simultaneously, not to stifle the innovation and creativity that have been the source of our great success--
DAVID GREGORY:
Final point on this. Just quickly from both of you. What in the end, so people are really clear on this. What in the end is going to pass?
Final point on this. Just quickly from both of you. What in the end, so people are really clear on this. What in the end is going to pass?
SENATOR CHRIS DODD:
The Dodd Bill. (LAUGH)
The Dodd Bill. (LAUGH)
DAVID GREGORY:
Just-- the top three points are--
Just-- the top three points are--
SENATOR CHRIS DODD:
The Dodd Bill. Too big to fail, put an end to it. Good consumer protection. Early warning system. And shine the light on these exotic instruments. We didn't talk much about the derivatives. The-- the over the counter--
The Dodd Bill. Too big to fail, put an end to it. Good consumer protection. Early warning system. And shine the light on these exotic instruments. We didn't talk much about the derivatives. The-- the over the counter--
DAVID GREGORY:
Bets on a financial outcome--
Bets on a financial outcome--
SENATOR CHRIS DODD:
Go from $91 to $591 billion in ten years. It was-- it was the Wild West. We've gotta stop it. You gotta-- (UNINTEL PHRASE).
Go from $91 to $591 billion in ten years. It was-- it was the Wild West. We've gotta stop it. You gotta-- (UNINTEL PHRASE).
DAVID GREGORY:
Do you fundamentally agree-- those-- those several points? That that's what will pass?
Do you fundamentally agree-- those-- those several points? That that's what will pass?
SENATOR RICHARD SHELBY:
I don't believe the Dodd Bill as now constituted will pass. Now, it might be the Dodd Bill as we rework it in-- which we're-- we're doing.
I don't believe the Dodd Bill as now constituted will pass. Now, it might be the Dodd Bill as we rework it in-- which we're-- we're doing.
SENATOR RICHARD SHELBY:
As we're doing. Well, I hope will pass.
As we're doing. Well, I hope will pass.
DAVID GREGORY:
In the end, do you think you're a yes vote.
In the end, do you think you're a yes vote.
SENATOR RICHARD SHELBY:
Only for--
Only for--
DAVID GREGORY:
As you've said here today?
As you've said here today?
SENATOR RICHARD SHELBY:
--(UNINTEL) a good bill. Not for the bill as it exists. I'd be a yes vote if it's a good bill.
--(UNINTEL) a good bill. Not for the bill as it exists. I'd be a yes vote if it's a good bill.
DAVID GREGORY:
And you think you'll get there?
And you think you'll get there?
SENATOR RICHARD SHELBY:
I think we'll get there.
I think we'll get there.
DAVID GREGORY:
Okay. I want to just answer-- a cou-- couple of the-- this immigration debate is now really flaring a new because of this law in Arizona. The President said that the Justice Department will take a look at it. And now Senator Dodd, you see immigration reform by the Democrats is gonna be on the front burner. What is the-- the-- the impact then of the Arizona law on the debate that we'll see take place?
Okay. I want to just answer-- a cou-- couple of the-- this immigration debate is now really flaring a new because of this law in Arizona. The President said that the Justice Department will take a look at it. And now Senator Dodd, you see immigration reform by the Democrats is gonna be on the front burner. What is the-- the-- the impact then of the Arizona law on the debate that we'll see take place?
SENATOR CHRIS DODD:
Well, only this much, I think. And in putting this -- I mean, I think the Arizona law is outrageous. The idea that we go around asking people for documentation and put you in jail if you don't have it. The idea that state by state would start developing it's own immigration laws in the country, imagine what a patchwork that might look like. Last year, 48 states passed 222 resolutions and like 140-- 220 laws and 140 resolutions on the issue of immigration. This is-- it's demanding a national answer to immigration policy. So, before this even gets further out of hand, we've got to step up and do the job.
Well, only this much, I think. And in putting this -- I mean, I think the Arizona law is outrageous. The idea that we go around asking people for documentation and put you in jail if you don't have it. The idea that state by state would start developing it's own immigration laws in the country, imagine what a patchwork that might look like. Last year, 48 states passed 222 resolutions and like 140-- 220 laws and 140 resolutions on the issue of immigration. This is-- it's demanding a national answer to immigration policy. So, before this even gets further out of hand, we've got to step up and do the job.
SENATOR RICHARD SHELBY:
Well, I agree with that. States are frustrated, people are frustrated, because they believe that the Federal Government, the immigration people have not enforced the laws. We have 12-15 million illegal immigrants in this country. (UNINTEL PHRASE). So, I think that begets what's going on in Arizona.
Well, I agree with that. States are frustrated, people are frustrated, because they believe that the Federal Government, the immigration people have not enforced the laws. We have 12-15 million illegal immigrants in this country. (UNINTEL PHRASE). So, I think that begets what's going on in Arizona.
DAVID GREGORY:
You think you'd see comprehensive le-- immigration reform legislation pass this year?
You think you'd see comprehensive le-- immigration reform legislation pass this year?
SENATOR RICHARD SHELBY:
Maybe. We've seen it before, but it hasn't passed.
Maybe. We've seen it before, but it hasn't passed.
DAVID GREGORY:
You think it'd be a good idea?
You think it'd be a good idea?
SENATOR RICHARD SHELBY:
I think we have to look at the details. (LAUGH)
I think we have to look at the details. (LAUGH)
DAVID GREGORY:
But it's the right time, is your view?
But it's the right time, is your view?
SENATOR RICHARD SHELBY:
Well, timing is-- now, I think-- first thing we better do is enforce our-- our borders. And know who's here and who comes and who leaves. That's number one. And then go into the rest.
Well, timing is-- now, I think-- first thing we better do is enforce our-- our borders. And know who's here and who comes and who leaves. That's number one. And then go into the rest.
DAVID GREGORY:
Finally, Senator Dodd, the political outlook for your party in the fall. You're not running. Is President Obama an asset or a liability? And what do you-- what do you project for the Democratic--
Finally, Senator Dodd, the political outlook for your party in the fall. You're not running. Is President Obama an asset or a liability? And what do you-- what do you project for the Democratic--
SENATOR CHRIS DODD:
Well, I think he's an asset without any question. I think the-- getting the health care bill done, the arms control agreement-- with-- with Russia. The country's getting-- we're better off. We're obviously moving in the right direction economically. A lot has not happened yet on Main Street with high unemployment and the rest. But certainly the worst is behind us. He's showing real leadership. Richard and I are gonna get this bill on financial reform with our colleagues. That's gonna be a major achievement for our country. I-- I think having the President on your side is gonna be a great asset.
Well, I think he's an asset without any question. I think the-- getting the health care bill done, the arms control agreement-- with-- with Russia. The country's getting-- we're better off. We're obviously moving in the right direction economically. A lot has not happened yet on Main Street with high unemployment and the rest. But certainly the worst is behind us. He's showing real leadership. Richard and I are gonna get this bill on financial reform with our colleagues. That's gonna be a major achievement for our country. I-- I think having the President on your side is gonna be a great asset.
DAVID GREGORY:
Okay. When do you think you'll have a deal done on this, by the way?
Okay. When do you think you'll have a deal done on this, by the way?
SENATOR CHRIS DODD:
I think in the-- the next few days, weeks, we'll get it together. Maybe even-- maybe even by tomorrow, is a possibility to get this done. We need to get on with this. I-- I-- we spent a whole week last week on five nominations in the Senate. All of whom were confirmed almost unanimously.
I think in the-- the next few days, weeks, we'll get it together. Maybe even-- maybe even by tomorrow, is a possibility to get this done. We need to get on with this. I-- I-- we spent a whole week last week on five nominations in the Senate. All of whom were confirmed almost unanimously.
DAVID GREGORY:
All right, final word.
All right, final word.
SENATOR RICHARD SHELBY:
I think if we keep working together, we'll get a bill. It might be later this week. It may be-- might-- might be next week. But the main thing is to get a good bill.
I think if we keep working together, we'll get a bill. It might be later this week. It may be-- might-- might be next week. But the main thing is to get a good bill.
DAVID GREGORY:
All right. Senators, we'll leave it there. Thank you both very much.
All right. Senators, we'll leave it there. Thank you both very much.
SENATOR CHRIS DODD:
Thank you.
Thank you.
DAVID GREGORY:
Appreciate it. Coming up next, (MUSIC) an impending showdown on immigration. After President Obama criticizes Arizona's restrictive new law. Plus, across America, anger at Wall Street. And the distrust of Washington. How will voters react to it all in November? Our roundtable weighs in. The New York Times' David Brooks, CNBC's Erin Burnett, NPR's Michele Norris, and Newsweek's Evan Thomas (PH). Only here on Meet The Press.
Appreciate it. Coming up next, (MUSIC) an impending showdown on immigration. After President Obama criticizes Arizona's restrictive new law. Plus, across America, anger at Wall Street. And the distrust of Washington. How will voters react to it all in November? Our roundtable weighs in. The New York Times' David Brooks, CNBC's Erin Burnett, NPR's Michele Norris, and Newsweek's Evan Thomas (PH). Only here on Meet The Press.
* * *END OF TRANSCRIPT* * *