Obama Makes Wall Street Reform Pitch in Illinois, Embraces Giannoulias

"It's good to be home," President Obama said Wednesday in Quincy, Ill. A town on the western edge of the state, Quincy sits across from Missouri on the Mississippi River. Obama's been here before, when he was the junior senator from Illinois. He told the crowd at the Oakley Lindsay Center -- no strangers to flooding -- what he did on that visit. "We were filling up sandbags, weren't we?"

Obama returned to Quincy to deliver a populist speech highlighting the need for Congress to pass his Wall Street reform package. The president, who had been bashing Senate Republicans for blocking the measure, had to tone the criticism down Wednesday. That's because even as Democrats failed to muster the 60 votes needed to break a GOP filibuster for three days, Republican senators decided to let debate on reform proceed.

"So I'm very pleased that after a few days of delay, it appears an agreement may be at hand to allow this debate to move forward on the Senate floor on this critical issue," Obama said. ". . . I want to work with anyone -- Republican or Democrat -- who wants to pursue these reforms in good faith."

Now there was a bit of a political intrigue to this homecoming, having to do with the Senate race in Illinois. The Democratic nominee, state treasurer Alexi Giannoulias, is in a very tough race with the GOP contender, Rep. Mark Kirk. On Friday, Giannoulias and his campaign had to deal with the feds closing his family-owned Broadway Bank, an issue that Kirk has been hitting Giannoulias hard on because Giannoulias is a former officer of the bank, located on Chicago's North Side.

Since Giannoulias is running for the Senate seat Obama once held -- and with White House Chief of Staff Rahm Emanuel and Senior Adviser David Axelrod (both Chicagoans) calling the White House shots -- everyone is waiting to see what assistance flows to Giannoulias from the Obama team.

Political chatter started Friday over whether the bank failure would mean that Giannoulias would not be invited to Quincy. On Monday, when the White House finally sent out invites, he was included -- as was every other statewide elected official. On Wednesday morning, Giannoulias stumped in Chicago on the Wall Street issue, speaking at a rally in the Loop, flanked by labor leaders. "On Wall Street, folks are getting richer and fatter," Giannoulias said into a bullhorn. After that, he flew to Quincy.

Earlier in the day, White House Deputy Press Secretary Bill Burton was asked by reporters about Giannoulias: "Do you think the president is going to acknowledge his presence and talk a little bit about his campaign, which is sort of having some trouble at the moment?"

Replied Burton, "I don't think it would be appropriate for the president to talk about anybody's campaign at what are all official events."

But he did.

It turned out that Obama did send a hug Giannoulias' way -- literally, the two men (basketball-playing buddies) embraced. When Obama was introducing the Quincy mayor and Illinois officials, he gave a shout-out, referring to Giannoulias as the "soon to be senator." Right before the speech, Giannoulias met briefly with Axelrod, Reggie Love, Obama's body man, and Marv Nicholson, White House trip director (the latter two are part of the basketball bunch).

In building the case for Wall Street reform Obama's speech talked about Goldman Sachs, though not by name. Goldman executives spent Tuesday in front of a Senate panel after being accused of mortgage securities fraud by the Securities and Exchange Commission.

"You had some people on Wall Street who took these unbelievable risks with other people's money," the president said.

An audience member shouted, "Damn!"

"They made bets," Obama continued. "They were making bets on what was going to happen in the housing market, and they would create these derivatives and all these instruments that nobody understood. But it was basically operating like a big casino.

"And it was producing big profits and big bonuses for them, but it was all built on shaky economics and some of these subprime loans that had been given out. And because we did not have common-sense rules in place, those irresponsible practices came awfully close to bringing down our entire economy and millions of dreams along with it.

"We had a system where some on Wall Street could take these risks without fear of failure, because they keep the profits when it was working, and as soon as it went south, they expected you to cover their losses. So it was one of those heads, they win -- tails, you lose.

"So they failed to consider that behind every dollar that they traded, all that leverage they were generating, acting like it was Monopoly money, there were real families out who were trying to finance a home, or pay for their child's college, or open a business, or save for retirement. So what's working fine for them wasn't working for ordinary Americans. And we've learned that clearly. It doesn't work out fine for the country. It's got to change."

That Main Street-Wall Street message was underscored by the Democratic National Committee and its Organizing for America wing (the Obama for President campaign organization absorbed into the DNC). On Wednesday morning, the DNC released an ad running in Washington and on some national cable outlets titled "Risky Business," slamming Republicans for "taking the side of big Wall Street banks over the Main Street families." OFA is starting a grassroots national drive on financial reform.

The Republican National Committee tried to shoot back. Since Quincy is represented by a Democrat, Rep. Phil Hare, the RNC lined up Rep. Aaron Schock from a neighboring district to slam Obama's economic stimulus and health care legislation in a conference call. But the man whom Schock replaced in the House, Transportation Secretary Ray LaHood, a Republican -- one of the best known central and southern Illinois political figures -- was on hand to stand with Obama.

"Instead of travelling halfway across the country on a 'Main Street' tour, maybe the president should have stayed home and thought about some new initiatives to get Americans back to work instead of the same old tax-and-spend policies that Americans reject," said RNC spokesman Ryan Tronovitch.

At the end of the day, on Air Force One en route to Washington, when it was certain that the GOP senators would allow the reform debate to go forward, Obama said: "I am very pleased that the United States Senate has decided to proceed to the financial regulatory bill by unanimous consent. It is the right thing to do. And I want to reiterate what I said earlier, that this shouldn't have to be a partisan issue.

"Republicans, Democrats, independents -- everybody was hurt by the crisis on Wall Street. It is something that we can prevent with some better rules of the road, and I hope that we can get this done quickly, reconcile it with the work that was done over on the House side, and that I can sign this bill into law very soon. But I want to congratulate the Senate on making progress on an issue that's vital to everybody in the country."

Asked specifically about Goldman Sachs, and how the executives said they did nothing wrong, Obama said, "I don't want to comment on a pending case that's been brought by an independent agency. I will say that I think most Americans would say that some of the behavior generally on Wall Street, even if it's legal, doesn't seem to serve much of an economic purpose and puts, as we've discovered, the entire economy at risk."

With reforms, he continued, "we'll end up having a safer, more secure financial system, and I think banks and other financial institutions can get back to making money the old-fashioned way, which is by lending it to companies to build businesses and create jobs and do all the things that we want our financial system to do."

So what will all this mean? Will any Senate Republicans vote for the financial reform package? On Thursday, the Senate starts debate on S. 3217, Restoring American Financial Stability Act of 2010.