President Obama Is Proposing Rules to Limit the Size of Banks
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This is the VOA Special English Economics Report.
President Obama is proposing rules to limit the size of banks and the risks they can take. He wants to prevent banks from using government-insured deposits to make risky investments. He also wants to keep them from owning hedge funds or private equity funds.
Banks took big losses as they traded mortgage-related securities that went bad. That helped create the financial crisis.
Bank shares fell after the president's announcement Thursday. His earlier efforts at financial reform have faced strong opposition from financial companies and some members of Congress.
In the Senate, sixty votes are needed to prevent unlimited debate on a bill. But the Democrats have lost their sixtieth vote. On Tuesday voters in Massachusetts elected a Republican to finish the term of Ted Kennedy who died in August.
Scott Brown opposes the health care legislation in Congress. His election could also affect other areas, like climate change legislation and reforms in the financial system.
And at the same time a separate development could affect future elections. The United States Supreme Court has cleared the way for independent spending by businesses and labor unions in political campaigns. The court decided, five to four, on Thursday to overturn its own ruling from nineteen ninety.
That case let the government bar corporations from using their own money to pay for campaign ads for or against candidates. Now the court says the restriction on political speech violates free speech rights guaranteed by the Constitution.
But President Obama says the decision will reduce the influence of average Americans. He called it a "major victory" for powerful interests like big oil companies, Wall Street banks and health insurance companies. He directed his administration to talk with congressional leaders from both parties to develop a "forceful response."
Elections for Congress are this November. The next presidential election is in two thousand twelve.
Wednesday marked Barack Obama's first anniversary in office. But the Republican victory in liberal Massachusetts was seen in large part as a sign of voter anger across the country about the economy.
Unemployment has doubled in two years to ten percent. Many people are angry that they struggle while the government rescued big banks. Some banks took losses last year but others earned record profits.
And that's the VOA Special English Economics Report. I'm Mario Ritter.