A prominent Republican senator said Thursday that President Obama is seeking to spark “class warfare” with increasingly populist rhetoric and a series of regulatory measures aimed at Wall Street.
“I think they think if they can create enough animosity toward Wall Street and corporate America, they get into this traditional sort of Democrat rhetoric and tap into the populist anger out there,” Sen. John Thune, South Dakota Republican, told The Daily Caller. “For Democrats to be successful they’ve got to create a sense of class warfare and an us versus them mindset.”
Obama on Thursday proposed new limits on banks’ ability to use certain types of capital for investment trading, arguing that the concentration of too much risk at individual financial institutions was what created the systemic “too big to fail” risk that almost torpedoed the economy in the fall of 2008.
The president has moved quickly in the last week — as voter discontent became clear in the Massachusetts special election — to position himself as a populist crusader on the side of the working class. He unveiled a “bank fee” last week to tax some of the largest financial institutions for as much as $117 billion over the next 10 years, to repay funds from the $700 billion bailout that have not been paid back by U.S. automakers, along with Fannie Mae and Freddie Mac.
Obama on Friday will make a trip to a hard-hit Ohio country to talk to residents about job creation and how to improve the economy.
Thune said that the White House is “misinterpreting” grassroots anger, which he said has been provoked by “Washington’s wasteful spending and borrowing.”
The Obama administration, Thune said, has “embarked on a path of massive increase in the size of the federal government, massive spending increases, new taxes, all the things that I think right now make Americans very uncomfortable in the middle of a recession.”
The White House did not respond to Thune’s comments when offered the opportunity on Thursday evening.
Thune offered an amendment Thursday that would have ended the $700 billion bailout program, called the Troubled Asset Relief Program, which was supposed to have been ended at the end of 2009. The TARP was created late in 2008 to keep “too big to fail” institutions from collapsing.
The amendment received 53 votes in favor — 13 of them Democrats — and 45 votes opposed, but did not reach the 60-vote threshold needed to attach it to legislation in the works to increase the country’s debt ceiling.
Treasury Secretary Timothy Geithner extended the program through October 3, 2010, arguing that the money was still needed to stem home foreclosures, provide capital to small banks and spark lending to small businesses and consumers.
Thune and others have raised concerns that the Obama administration will extend the program again in October and that the massive bucket of money will inevitably become a slush fund instead of going toward reducing the nation’s $12.3 trillion debt.
There is currently $319 billion in the TARP that has not been spent or committed, or has been repaid.
Thune’s amendment would have ensured that that money went toward reducing the national debt, and that all money still outstanding would also go toward that purpose. In other words, the amendment would have eliminated Treasury’s ability to disburse any more TARP funds.
A White House official said TARP will end this year and that “repayments already go towards paying down debt.”
Thune spokesman Kyle Downey, however, said that because TARP funds committed before Oct. 3 can be spent after that date, government officials will be tempted to obligate billions of dollars for later use, “committing funds that will eventually have to be borrowed and added to our national debt, perhaps years down the road.”
“Unobligated funds in Washington means new found money for political projects,” Downey said.
Thune said that the vote on his amendment, coming days after the Massachusetts special election, was “the first test of whether or not Congress is listening to the people of the country.”
He said he will likely attempt to bring it back up for a vote later this year.