WASHINGTON — End the public lifeline for large financial institutions, Republicans demanded yesterday, as they pushed back against Democratic efforts to set new rules for the financial industry.
The GOP is trying to fight many of the changes that President Obama and Democrats want. Legislation would give the government authority to split up big financial companies and force the industry to pay for its most massive failures.
Republicans have offered alternative legislation that calls for new bankruptcy proceedings to dismantle failing institutions. Representative Kevin McCarthy of California, a member of the Financial Services Committee, said that creating more federal agencies and putting taxpayers on the hook for more bailouts will not help revive the economy.
“It will only compound the pain for struggling small businesses and for families who played by the rules, lived within their means and acted responsibly,’’ McCarthy said in the Republicans’ weekly radio and Internet address yesterday.
The House passed a regulatory overhaul in December. The Senate has yet to vote on a similar measure.
Democratic senators sent a Wall Street regulation bill from the Senate Banking Committee to the full Senate on a party-line vote last month after a temporary retreat by Republicans that left the bill’s chances for bipartisan passage in doubt.
Despite a conciliatory tone struck by the committee’s Democratic and Republican leaders, the development did nothing to mend the partisan divide over the legislation and adds even more uncertainty to Congress’ ability to pass a sweeping rewrite of financial regulations this year.
Obama used a recent Saturday address to urge Congress to act, saying it’s necessary to prevent firms from again taking on the kind of risks that led to the nation’s recent economic woes.
But McCarthy attempted to frame the effort as one that would lead to more federal spending while the deficit is soaring. “We have run out of money,’’ he said. “And yet this administration and congressional Democrats want to spend even more.’’
Democrats have defended the spending on federal economic stimulus, which the nonpartisan Congressional Budget Office estimates has added more than 1 million jobs last year.
Work is important to people’s security and dignity, Obama said yesterday in his weekly radio and Internet message. “That is why it was heartening news that last month, for the first time in more than two years, our economy created a substantial number of jobs,’’ he said.
While stimulus money is now running out, the once-a-decade hiring of census workers is now giving a timely boost to employment figures.
Census workers accounted for nearly a third of the jobs added in March, when hiring occurred at the fastest pace in three years. Over the next two months, another 600,000 to 700,000 census jobs will be added, putting $10 to $25 an hour into the pockets of some desperate job seekers.
Although these jobs will only last through mid-July, economists say they will provide a fortuitous stream of income to families and act as an employment bridge until summer, when more private employers are expected to step up hiring.
“It comes at a good time because you’re transitioning from an economy that’s slowly recovering to sustainable growth,’’ said John Canally, an economist at LPL Financial in Boston. “This is a good patchwork until then.’’