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Obama attacks bank reform critics

President Barack Obama has chastised Wall Street for rampant greed, but urged finance barons not to block his regulatory reforms, warning of new economic meltdowns if his overhaul fails.

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With top corporate CEOs in his audience, just a few miles from the financial jungle of Wall Street, Obama bemoaned that a “few companies made out like bandits” putting the entire economy at risk in the worst crisis in decades.

But he also asked Wall Street for help, as “battalions” of anti-reform lobbyists descend on Congress at a pivotal moment for a bill Obama has termed the most sweeping financial overhaul since the 1930s Great Depression.

“I’m here today specifically, when I speak to the titans of industry here, because I want to urge you to join us instead of fighting us in this effort,” Obama said, in the ornate Great Hall of the Cooper Union college in Manhattan.

“We will not always see eye to eye. We will not always agree. But that does not mean we have to choose between two extremes,” he said, calling for new, “common sense” rules to quell abuses but retain the “power of the free market.”

Stage set for debate

In Washington meanwhile, the debate accelerated when Senate Majority leader Harry Reid set the stage for a critical first test vote on the finance bill, most likely on Monday, despite fierce Republican objections.

Democrats and their two independent allies control 59 Senate seats but need at least one Republican vote to overcome delaying tactics the opposition party could use to kill the legislation.

White House spokesman Robert Gibbs said on Air Force One that the administration was cheered by signs on Capitol Hill that blanket Republican opposition might be fraying.

“I think you have seen statements from Republicans… I think there are some that want to get something done.”

President rebukes Republicans

But the president also rebuked Republicans who have argued that the legislation, with a 50 billion dollar fund to wind down failing firms, would lead to endless bailouts.

“We’ve seen misleading arguments and attacks designed not to improve the bill but to weaken or kill it.”

Obama also recalled how he had visited Cooper Union, during his election campaign to warn of corporate excess, months before the finance bubble burst.

“I take no satisfaction in noting that my comments then have largely been borne out by the events that followed,” he told an audience which included Lloyd Blankfein, CEO of Goldman Sachs which is facing civil fraud charges.

“But I repeat what I said then, because it is essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat them. Make no mistake, that is exactly what will happen if we allow this moment to pass.”

“A free market was never meant to be a free license to take whatever you can get, however you can get it.

Obama speaks to Main St

Making his case to ordinary Americans, he said, “some on Wall Street forgot that behind every dollar traded or leveraged, there is a family looking to buy a house, to pay for an education, open a business, save for retirement.”

The president’s plan includes protections for taxpayers should one financial institution pose a systemic risk to the whole economy if it failed, and limits on the size of corporate entities.

Obama also called for stronger protections for consumers and greater transparency by bringing risky financial instruments such as derivatives out into the open.

Republicans face the tricky political task of opposing this next chunk of Obama’s domestic reform drive while avoiding being portrayed by Democrats as in the pocket of Wall Street finance barons blamed for sparking the crisis.

John Boehner, the top Republican lawmaker in the House of Representatives, which passed similar legislation back in December, kept up the attack Thursday against the reforms.

“President Obama talks a big game when it comes to Wall Street, but his newest job-killing initiative would provide the nation’s largest financial firms with permanent bailouts ordered and overseen by unelected federal bureaucrats.”

Americans suspicious of Government

Polls show Americans, though highly suspicious of government, support efforts to rein in Wall Street.

Obama’s financial reform effort is reaching a climax after federal regulators slapped civil fraud charges on Goldman.

The president on Wednesday “categorically” rejected claims that the White House had prior knowledge of the charges.

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