Obama team pushes its reform plan for financial regulation

The second wave of the Obama administration’s pre-selling of its plan for reforming financial regulation is hitting the airwaves this afternoon.

When the stock market closed today, both Bloomberg TV and CNBC aired interviews with President Obama pitching the administration’s efforts to improve financial regulation. It is the administration’s view that regulatory weakness contributed to the most severe financial crisis since the Great Depression. The president has taped interviews with Bloomberg TV’s Al Hunt and with John Harwood of CNBC and the New York Times.

A three day roll out

The TV interviews are part of an elaborate rollout of new rules of the road for the financial industry which will be formally unveiled in a speech President Obama will give Wednesday. Among the proposals, contained in a lengthy Treasury Department white paper, is the creation of a Consumer Financial Protection Agency that would protect individuals in their roles as credit card users and investors.

The pre-selling of the plan began Monday when The Washington Post ran an op-ed column carrying the bylines of Treasury Secretary Timothy Geithner and Lawrence Summers, director of the National Economic Council. Arguing for action now, the duo said, “Like all financial crises, the current crisis is a crisis of confidence and trust. Reassuring the American people that our financial system will be better controlled is critical to our economic recovery.”

A heavy lift in Congress

One reason for the Obama administration’s aggressive sales program is the hurdles the legislation will face in Congress. At a Rose Garden press conference Tuesday Obama said, “It’s going to be, as usual, a heavy lift because there are going to be people who want to keep on taking these risks, counting on US taxpayers to bail them out if their bets go bad.”

One area of concern for Congress is the Obama team’s plan to strengthen the role of the Federal Reserve in supervising big financial institutions whose failure could hurt the economy. Some critics say the plan relies too heavily on the Fed.