Warren Warns of Gutted Reform

[ProSense]

Warren Warns of Gutted Reform

<...>This week, House and Senate negotiators are coming into conference committee to begin working out a final reform bill.

Warren said the odds are “good” that substantial reform, including the creation of a new Consumer Financial Protection Agency, could still come out of the Congressional negotiations. But she also warned that the process could prove a “complete waste of time.”

“If you pick all of the worst parts from the House version and the Senate version, walk out, because it’s not worth it at that point,” she said.

<...>

[flpoljunkie]

1. For those who missed your post from Joseph Stiglitz on the finance reform bill

Reach Equals Grasp on Banking Bill

The future of improved financial regulations depends largely on how the differences between the House and Senate bills are resolved.

If the strongest provisions of each are preserved, there is the prospect of hallmark regulatory reform — marking the end of an era of mindless deregulation.

But if the final bill that emerges from conference reflects the lowest common denominator, then we can only pray to be spared another financial crisis in the near future. Our economy and our Treasury can ill afford another such episode.


http://www.politico.com/news/stories/0610/38214.html

[ProSense]

2. Thanks. n/t

[flpoljunkie]

3. Both are important posts.

:kick:

[ProSense]

4. Volcker weighs in

MONTREAL (Reuters) – There is a good chance that the sweeping U.S. financial reform bill will be passed in a "reasonable form," White House economic adviser Paul Volcker said on Wednesday, adding the bill could provide a basis for international coordination on coherent legislation.

"This is a battle. Make no mistake about it," the former Federal Reserve chairman said at a conference here.

"But I do think that if we can get this bill passed in a reasonable form, and the prospects to me look pretty good, I think that we'll provide a basis for the other major countries to get together in a way that wasn't possible before.

"With the United States showing some leadership here," Volcker added, "I hope that we will see progress among the other major financial markets anyway in adopting legislation that fits in coherently with the American approach."

link

Also:

A three-year battle over how the federal government taxes investment partnerships is coming to a head, after Senate Democrats unveiled a proposal that would more than double the taxes on private-equity, hedge-fund and certain real-estate managers.

The move is the strongest indication yet that financiers will pay higher taxes to help close an expanding U.S. budget gap. Congress is taking aim at the perceived excesses of the financial-services industry, but the proposed changes have implications well beyond Wall Street.

The proposed law would tax "carried-interest" income, or the share of profits that fund managers receive as part of their compensation. This income is currently taxed at a 15% rate, while the ordinary income by most wage earners is taxed at up to 35%. The new law would raise the tax rate for partnership income to an effective 30% in 2011 and 33% in 2013.

Those sponsoring the bill say the proposed measure rights a fundamental unfairness in the tax code. Lawmakers say that the people running partnerships have been paying capital-gains rates on what were basically wages.

link

[flpoljunkie]

5. IF the Dems can't tax 'carried-interest' income in this climate, it will be a damn shame!