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Clinton criticizes proposed Fed overhaul
2008-03-31
Democrat Hillary Rodham Clinton on Monday criticized the Bush administration's plan to overhaul regulation of U.S. financial institutions, saying the proposal "comes late and falls short." The New York senator said the government must move more assertively to contain the mortgage and credit crisis rattling financial markets, especially in finding ways to ease soaring rates of home foreclosures. "No amount of rearranging the deck chairs can hide the fact that our housing and credit markets are in crisis, and they're sinking deeper every day," Clinton said at a campaign appearance. "Every day we fail to take aggressive action is a day lost." Clinton has focused on the nation's economic woes in appearances in Pennsylvania and other states holding primaries in coming weeks, trying to persuade voters that she is better prepared to tackle economic challenges than rival Barack Obama and Republican nominee-in-waiting John McCain. The former first lady pledged as president to offer $100 billion in tax cuts for middle class families to pay for health care, education and other costs. Among other things, she proposed a $3,000 tax credit to help pay for the care of an elderly parent or a disabled child, and said she would expand the Earned Income Tax Credit to make it available to a broader range of low-income workers. She saved her toughest talk for what she described as a lackadaisical effort by Republicans to halt the crisis gripping the financial industry. She criticized President Bush for accelerating the situation through excessive borrowing and by favoring tax cuts for corporate interests and the wealthy. She also had unkind words for McCain's speech last week in which he resisted federal intervention to quell the financial unrest. "Best I could determine his plan was not to have a plan," Clinton said. Earlier Monday, Treasury Secretary Henry Paulson announced an ambitious plan to give the Federal Reserve more oversight of the nation's financial regulatory system and to merge regulatory agencies with overlapping jurisdictions. The proposal also would create a new commission to set minimum licensing standards for mortgage brokers and move toward federal regulation of the insurance industry. Clinton said the government should take additional steps, including: • Requiring all institutions eligible for the Federal Reserve's credit to follow the same regulations required of commercial banks. • Establishing federal oversight of newer financial arrangements like complex derivatives. • Making rating agencies more independent and reducing potential conflicts of interest. • Boosting consumer protections for credit cards and student loans and capping credit card interest at 30 percent. • Easing home foreclosures by pushing for legislation to expand the Federal Housing Authority's jurisdiction to guarantee mortgages and allow the agency to buy at-risk mortgages. Obama laid out a similar set of proposals at a speech in New York last week, but has not endorsed a freeze on home foreclosures as Clinton has.
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