The U.S. is destined to endure a new economic crisis that sticks taxpayers with the bill unless Congress tightens oversight of the financial industry, President Barack Obama said Saturday.
The overhaul is the next major piece of legislation that Obama wants to sign into law this year, but solid GOP opposition in the Senate is jeopardizing that goal.
"Every day we don't act, the same system that led to bailouts remains in place, with the exact same loopholes and the exact same liabilities," Obama said in his weekly radio and Internet address. "And if we don't change what led to the crisis, we'll doom ourselves to repeat it.
"Opposing reform will leave taxpayers on the hook if a crisis like this ever happens again," the president said.
A proposal that Senate Democrats are readying for debate creates a mechanism for liquidating large financial companies to avoid a meltdown.
For the first time, the government would regulate derivatives, those financial instruments whose value depends on an underlying asset, such as mortgages or stocks. Derivatives can help hedge risks. But derivatives can produce steep losses, or huge profits, if the value of their underlying asset sinks.
The proposal also would create a council to detect threats to the financial system and set up a consumer protection agency to police people's dealings with financial institutions.
On Friday, Obama promised to veto the bill if it doesn't regulate the market for derivatives, which contributed to the nation's economic problems after their value plummeted during the housing crisis.
But Democrats haven't agreed on how far such regulation should go, and all Senate Republicans are united against the bill. That opposition complicates Democratic efforts to get the 60 votes necessary to overcome likely GOP procedural roadblocks.
Republicans contend that a provision creating a $50 billion fund for dismantling banks considered "too big to fail" would continue government bailouts of Wall Street. Obama administration officials say such a fund is unnecessary and they want Senate Democrats to remove it.
Obama criticized financial industry interests for opposing the proposed regulations and for waging a "relentless campaign to thwart even basic, commonsense rules." He repeated his call for Republicans and Democrats to work together to overhaul the system but made it clear that Democrats are prepared to go it alone.
"One way or another, we will move forward," he said. "This issue is too important."
In the weekly Republican address, House Minority Whip Eric Cantor of Virginia took note of the week's April 15 income tax filing deadline and criticized government spending and climbing deficits that he said are driving taxes higher.
Cantor said Obama has enacted 25 tax increases passed by the Democratic-controlled Congress that will cost families and small businesses more than $670 billion over the next decade and create a "bleak future for our kids and grandkids."
He urged a vote for the GOP in the November congressional elections.
"You have to take action so that we can begin to erase our deficits and free our children from our debt," Cantor said. "And rather than putting the squeeze on our nation's job creators and entrepreneurs, we believe in a pro-growth strategy to create jobs and empower the American entrepreneur and small business people to thrive."