In it, but not of it. TPM DC

GOPers So Opposed To Wall Street Regulation That They Voted For Bailout Continuation

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Newscom / Tom Williams

The dispute is budgetary. Republicans want reclaimed TARP funds to be used to pay down deficits. Democrats don't object, but, with the help of congressional actuaries, figured out a way to save money on the books by ending TARP early. According to CBO, if unspent TARP funds are recalled now, the government would end up with about $11 billion more than they would if they lent the money out and reclaimed it down the line. That $11 billion covers more than half the cost of the financial regulation bill.

Familiarly, Republicans were willing to support an alternative plan, pushed by Gregg, to pay for Wall Street reform with unspent stimulus money. Democrats objected to that.

The Democrats' unwillingness to keep the bailouts going and use stimulus money to regulate the banks does not, however, seemed to be based on a political calculus that they could tar Republicans with the vote. Most Democrats just preferred the original plan: pay for regulating Wall Street by imposing a fee on the big banks that were the main target of the legislation. And unless they're biding their time, Democrats have been entirely mum about last night's vote, the new, TARP-ending provision in the bill and the Republican opposition to it.

But they do now have a new political weapon, if they choose to wield it. Given the choice between ending the bailouts, thereby allowing Wall Street reform to pass, and sustaining TARP in an effort to keep the banks from further regulation, Republicans chose the latter. And soon, most other Republicans will vote down legislation that both imposes stricter rules on Wall Street and lowers the much-loathed TARP legislation into an early grave.