Dems tie Wall Street woes to Phil Gramm

Democrats and their allies attempted to tie Wall Street's growing financial crisis to the policies advocated by John McCain's former senior adviser.

The critics are pointing to a 1999 law co-sponsored by then-Sen. Phil Gramm (R-Texas) and that paved the way for consolidation between commercial and investment banks.

{mosads}"The system of regulation of these integrated banks has failed, and it is clear that much stronger firewalls are needed," AFL-CIO President John Sweeney said of the so-called Gramm-Leach-Bliley Act.

Senate Majority Leader Harry Reid (D-Nev.) picked up on that line during a scathing floor speech Tuesday morning that compared Sen. McCain's (R-Ariz.) approach to the economy with that of the Hoover administration. In his speech, Reid blasted the Republican candidate's decision to choose Gramm as a top economic adviser.

"The same Phil Gramm who, as a senator, was responsible for deregulation in the financial services industries that paved the way for much of this crisis to occur," Reid said. “It was Phil Gramm who pushed legislation through a Republican Senate that allowed firms like Enron to avoid regulation and destroy the life savings of its employees, and it was Phil Gramm’s legislation that now allows Wall Street traders to bid up the price of oil, leaving us to pay the bill."

Gramm served as McCain's chief economic adviser until July when he resigned after saying the country is in a "mental recession" and has "sort of become a nation of whiners."

Republicans strongly reject that criticism, saying Democrats have been advocating destructive tax and spend polices that have made the economy vulnerable.

A McCain aide pointed out that a co-sponsor of the 1999 law, Rep. James Leach (R-Iowa), spoke at the Democratic National Convention and co-founded the group Republicans for Obama. And a Senate GOP aide pointed out that the 90-8 Senate vote in 1999 that sent the legislation to President Clinton's desk included "aye" votes from Reid and Democratic vice-presidential nominee Joe Biden (D-Del.).