HARRISBURG -- U.S. Senate candidate Joe Sestak didn't spare fellow Democrats any blame Monday for supporting a financial services deregulation bill a decade ago that he now views as a key ingredient in Wall Street's meltdown and the national recession.
Mr. Sestak has repeatedly blamed his Republican opponent, former U.S. Rep. Pat Toomey, for helping cause the recession by supporting a 1999 banking deregulation law that, Mr. Sestak says, led to the Wall Street meltdown. Asked by a Pennsylvania Press Club luncheon moderator whether he also blames Democrats who supported the bill -- including former President Bill Clinton, Vice President Joe Biden and Senate Majority Leader Harry Reid -- Mr. Sestak responded: "Yes."
"I stood up to my party when they're wrong and I'll say it again," Mr. Sestak said, a reference to his primary challenge to Republican-turned-Democrat Arlen Specter against the wishes of President Barack Obama and party leaders. Mr. Sestak won the primary.
Mr. Sestak, currently a House member, then repeated his criticism of some Democratic senators who had voted for Mr. Obama's health care overhaul earlier this year only after they received heavily criticized carve-outs in the bill.
It's similar to "when someone like at the end of the health care debate reaches over for a goody bar and says, 'You get my vote only because I take this back to my state,'" he said.
And while much of Congress supported the financial services deregulation bill, Mr. Sestak said, "there were people and there were senators who spoke against that."
In 1999, Mr. Toomey supported the deregulation bill as a House member representing the Lehigh Valley. Mr. Reid and Mr. Biden, then a senator, voted for it and Mr. Clinton signed it.
In the primary campaign, Mr. Sestak leveled the same criticism at Mr. Specter, who responded during a debate that Mr. Clinton had countered that the law did not cause the financial crisis.
Mr. Toomey's spokeswoman, Nachama Soloveichik, made the same point Monday.
"The fact is Bill Clinton signed the deregulation bill into law, praised it and still today says it helped avert a larger banking crisis," she said.
Prior to 1999, the Depression-era Glass-Steagall Act prohibited lending banks from underwriting securities or selling insurance to prevent federally insured savings deposits from being used to buy risky securities.
But the 1999 financial services deregulation law removed those walls, in theory allowing the creation of "too-big-to-fail" financial institutions that could imperil the personal savings of Americans by making ill-conceived bets in securities markets.
With that fear in mind, Mr. Sestak supported a move by the Bush administration in 2008 to step in to bail out Citigroup Inc., Bank of America Corp. and American International Group Inc. with tens of billions of public money. Mr. Toomey has said he would have opposed the bailouts.