Snap Fact #321 - Comparing Platforms:  Financial Industry Reform

Republican: Protecting the Taxpayers: No More “Too Big to Fail” For more than a century, the U.S. was the world leader in financial services. The visionary management of capital was the lifeblood of the entire economy. By giving responsible access to credit, it helped small businesses grow, created jobs, and made Americans the best-housed people in history.  By funding innovation, financial services underwrote our future. Then came the financial collapse of 2008 and a critical reassessment of the role and condition of financial institutions—most of which, it must be said, were responsible and healthy, especially those closest to their investors and borrowers.

In cases of malfeasance or other criminal behavior, the full force of the law should be used. But in all cases, this rule must apply: No financial institution is too big to fail. The taxpayers must never again be on the hook for the losses of Fannie Mae and Freddie Mac. The public must never again be left holding the bag for Wall Street giants, which is why we decry the current Administration’s record of over-regulation and selective intervention, which has already frozen investment and job creation and threatens to make financial institutions the coddled wards of government.

A far better approach—protecting consumers and taxpayers alike—is institutional transparency. Banks need to know that they could be at risk, and investors need clear rules that are not subject to political meddling. The same holds true for the equity market regulated by the Securities and Exchange Commission. We propose reasonable federal oversight of financial institutions, practical safeguards for consumers, and – what is crucial for this country’s economic rebound – sound spending, tax, and regulatory policies that will allow those institutions to once again become the builders of the next American century.  We strongly support tax reform; in the event we do not achieve this, we must preserve the mortgage interest deduction.

Republican Members of Congress have repeatedly tried to reform the budget process to make it more transparent and accountable, in particular by voting for a Balanced Budget Amendment to the Constitution, following the lead of 33 States which have put that restraint into their own constitutions. We call for a Constitutional amendment requiring a super-majority for any tax increase, with exceptions for only war and national emergencies, and imposing a cap limiting spending to the historical average percentage of GDP so that future Congresses cannot balance the budget by raising taxes.

This Snap Fact is part of a major multi-part series that will compare the Democratic and Republican Platforms. These documents are the philosophical foundations that tell us how the winning candidate will govern.A lot of work went into this series researched by Allen Robbins. Outside of The Rational Majority’s SNAP-CAP heading, every word in the body of each SNAP-CAP is taken verbatim from 100s of pages comprising the two party platforms. Read and compare these CAPS so you will know which candidate is on YOUR side.

Democrat: Moving America Forward - The Republican Party has turned its back on the middle class Americans who built this country. Our opponents believe we should go back to the top-down economic policies of the last decade. They think that if we simply eliminate protections for families and consumers, let Wall Street write its own rules again, and cut taxes for the wealthiest, the market will solve all our problems on its own. They argue that if we help corporations and wealthy investors maximize their profits by whatever means necessary, whether through layoffs or outsourcing, it will automatically translate into jobs and prosperity that benefits us all. They would repeal health reform, turn Medicare into a voucher program, and follow the same path of fiscal irresponsibility of the past administration – giving trillions of dollars in tax cuts weighted towards millionaires and billionaires while sticking the middle class with the bill. But we’ve tried their policies – and we’ve all suffered when they failed.

It is not enough to go back to where the country was before the crisis. We must rebuild a strong foundation that ensures it never happens again.

Democrats know that America prospers when we’re all in it together. We see an America where everyone has a fair shot, does their fair share, and plays by the same rules. We see an America that out-educates, out-builds, and out-innovates the rest of the world.