WASHINGTON — Republicans and Democrats are furiously casting each other as Wall Street’s handmaiden, playing to election-year anger surging on Main Street. But neither party has clean hands when it comes to the financial industry.

Both parties have accepted huge amounts of campaign cash from companies such as Goldman Sachs, the investment bank facing fraud charges from the U.S. Securities and Exchange Commission. Both parties welcomed big business’ chief executives to the White House when in power. Both share the blame for deregulating the industry in the 1990s and bailing out Wall Street when the financial sector was on the brink of collapse.

Not that either side will acknowledge it.

Instead, Republicans and Democrats are using President Obama’s push for tighter controls on the industry to try to gain political advantage with voters ahead of November’s congressional elections, when the balance of power in Washington is at stake.

“We need to enact a set of updated, commonsense rules to ensure accountability on Wall Street and to protect consumers in our financial system,” Obama said Thursday in New York, tapping into public outrage over excesses that led to the economic meltdown.

With polls showing more voters favoring tighter controls on Wall Street than not, everyone wants to be seen as siding with the little guy.

“Far from protecting consumers from Wall Street excess, this bill would provide endless protection for the biggest banks on Wall Street,” said Senate Majority Leader Mitch McConnell of Kentucky.

Looking to energize their voters and boost fundraising, the national parties are trading charges.

“For years, Republicans stood by while Wall Street ran wild,” says a Democratic National Committee television spot. “Risky bets. Lax regulation. When the economy collapsed, Republicans looked the other way. … Now Republicans are working with Wall Street lobbyists to block reform” that would “protect consumers and prevent a future bailout.”

Countering, the Republican National Committee rolled out a video claiming the legislation rewards Wall Street with a “permanent bailout fund. … Propping up Wall Street is what Obama does, and Obama does it well.”

The Center for Responsive Politics found that both sides raked in cash from the industry they’re vilifying.

In the current election cycle, the DNC collected $6.2 million from the financial services, real estate and insurance sectors and $3.7 million from other business interests. The RNC has raised $2.5 million from the industry and $2.7 million from other business interests.

During the 2008 presidential campaign, Obama raised $40 million from the industry and $37 million from other business interests while Republican John McCain collected $29 million and $16 million.

Deregulation is faulted for the financial industry’s crisis – and both parties played a role:

The Depression-era Glass-Steagall Act separated commercial from investment banking, but in 1999 most of its restrictions were repealed by a Republican Congress and Democratic President Bill Clinton.

In the fall of 2008, President George W. Bush and the Democratic Congress backed a massive bailout of the financial industry amid signs of impending economic collapse. Obama signed off on the second infusion of cash shortly after taking office.

Such coziness with Wall Street and politicians’ lack of candor about it are likely factors in low job approval ratings for Congress and an overall cynicism about politics.

A recent Pew Research Center poll showed trust in government at one of the lowest points in a half-century, with nearly 80 percent having little confidence in Washington. Just a quarter of people say the federal government and Congress have a positive effect on the country’s direction. The ratings are similarly low for large corporations, banks and other financial institutions.

Still, the public is conflicted.

More than half – 58 percent – say that “the government has gone too far in regulating business and interfering with the free enterprise system,” and roughly half oppose government exerting more control over the economy.

But, perhaps because their own pocketbooks are at stake, people make an exception for regulating the financial industry: Sixty-one percent say it’s a good idea for the government to more strictly limit the way major financial companies do business.

A recent Gallup poll showed that voters’ ire was directed toward Wall Street on the issue of giving Washington new powers over the industry. In the survey, 50 percent favored more regulation of Wall Street banks while 36 percent opposed. When the question was asked more broadly – regulating large banks and major financial institutions – 46 percent favored and 43 percent opposed.

All that – combined with the fact that about two-thirds of likely voters own stock, many of whom invest in tax-deferred retirement accounts – underscores why the White House as well as Republicans and Democrats are competing to be the most populist. It also helps explain why Democrats and Republicans are trying to agree on a bipartisan bill even as they publicly castigate each other.

“On one side are consumers and investors, families and businesses and the vast majority of Americans who want us to make sure the financial crisis they just lived through can never happen again,” said Senate Majority Leader Harry Reid of Nevada. “Democrats are on their side, and we’re ready to act.”

House Republican leader John Boehner of Ohio offered a different take.

“The president says that he wants to clean up Wall Street, but when you look at this bill, what he actually does is protect them from ever having a financial problem,” he said. “This is a bad bill and Republicans are going to stand with the American people, who are standing on their tiptoes yelling, ‘Stop.’ “

The voters will have the last word – in November.


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