GOP reform fight should kill political careers

In the twisted logic of Washington, whatever President Barack Obama wants, Republicans in Congress are determined to oppose -- even if it means siding with the investment banks that nearly destroyed the nation's economy. It's a heck of a campaign slogan: Vote for us, we're the party protecting the fat cats who cost you your house and your job.

The attack by the Senate minority leader, Mitch McConnell, R-Ky., on pending financial reform legislation is an insult to the public's intelligence and the integrity of his Democratic colleagues. McConnell has called the bill partisan legislation that guarantees future bailouts of companies "too big to fail."

In fact, Sen. Christopher J. Dodd, D-Conn., chairman of the Senate Banking Committee, has spent months negotiating with Republicans on the committee. The legislation incorporates Republican suggestions.

It would give the government the authority to take over a company considered too big to fail and wind down its business. It would do this with the help of a fund of between $50 billion and $150 billion -- the amount differs between Senate and House legislation -- that would be contributed by the largest financial institutions.

This isn't a bailout. The provision forces the big investment banks to shoulder responsibility when their riskiest and most irresponsible actions cause a financial crisis.

The government lacked this authority after AIG's huge bets on credit default swaps went bad. Taxpayers were forced into a $180 billion bailout of AIG because the government had no authority to take over and shut down the financial giant.

McConnell also is hewing to the big banks' line that government regulation of derivatives, including credit default swaps, would hurt economic growth. Warren Buffett, chairman of Berkshire Hathaway, has described derivatives as "financial weapons of mass destruction." Collapse of the $600 trillion global derivative market would set off a financial catastrophe.

McConnell and the Republicans' opposition to financial reform is madness. It should result in their political suicide.

Editorial courtesy of the New Haven Register, a Journal Register Company newspaper.