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Despite strong rhetoric against aggressive Wall Street lobbying and deceptive Republican attacks, President Barack Obama appears ready to declare victory on a tepid and ineffective financial reform bill. The aims Obama outlined in his April 22 Cooper Union speech are laudable, but the legislation that cleared the Senate Banking Committee under the stewardship of Chris Dodd (D-CT) simply will not protect our economy from bank abuses. Fortunately, it only takes a handful of legislative amendments to fix the Dodd bill. Here they are:

1. Break Up the Banks: The Brown-Kaufman Amendment

Washington has tied itself in knots trying to find a way to thwart "too big to fail" without cutting megabanks down to size. It can't be done. When something is too big, the solution is to make it smaller. Sens. Sherrod Brown (D-OH) and Ted Kaufman (D-DE) introduced a bill this week to cap big bank liabilities at 2% of gross domestic product (about $300 billion). Right now, Bank of America's liabilities total 7% of GDP (about $1 trillion). Nothing—nothing—that has been proposed other than Brown-Kaufman will for force our banking behemoths to shrink.

Obama and Treasury Secretary Timothy Geithner have been saying for some time that size alone isn't the most serious problem in today's financial system. That is simply not true. The bigger the bank, the more power that bank has over Washington, and the greater its ability to block other important reforms. But even if Obama and Geithner were right about size, it's worth asking why anybody in Congress would vote against breaking up the big banks. There is literally no evidence that banks of today's scale create any economic benefits whatsoever. Even if you don't think size is the central problem, voting in favor of this amendment would create zero economic problems.

If your goal is to protect the bonuses of Wall Street executives, this amendment looks terrible. The bigger the bank, the more money its executives can pay themselves. If a $1 billion bank and a $1 trillion bank have the same profitability ratios, and pay out the same percentage of profits in bonuses, then the $1 trillion bank is going to have 1000 times as much money available for its executives.

So make no mistake: a vote against Brown-Kaufman is a vote for big bank bonuses.

2. Protect Consumers: The Jack Reed Amendment

The most significant proposal Obama asked for when he rolled out his reform plans in June 2009 was the establishment of a new Consumer Financial Protection Agency. Existing regulators are charged with both ensuring bank profitability and keeping consumers safe from abuses. In practice, this has meant that regulators look the other way on predatory lending, so long as it creates big short-term profits for banks. The solution to this problem is a new agency with the power to write and enforce consumer protection regulations for anybody who offers consumer loans.

Dodd essentially gutted the proposal in the Banking Committee in an effort to garner Republican support (nevermind that zero Republicans on the Committee actually ended up voting for the bill). Jack Reed has authored legislation that would reverse all of Dodd's useless concessions and restore President Obama's original intent.

There is no reason anybody should oppose the Reed amendment. A vote against the Reed bill is a vote in favor of the banking industry's right to pillage your pocketbook.

3. Reinstate Glass-Stegall: The Cantwell-McCain Amdendment

As Nomi Prins has detailed, Obama and Dodd have diluted the already-compromised Volcker Rule into even weaker broth. Volcker had a good idea: Banks that benefit from federal deposit insurance shouldn't be going out and gambling with taxpayer money. Commercial banks that accept deposits and extend consumer and business loans are the core of the financial system. If they go down, the payments system dissovles, people cannot pay for goods and services with money, and we're back to the barter system. We shouldn't be subjecting such a critical economic function to the risks inherent in the securities markets.

So Volcker wanted to ban dangerous speculation by cracking down on "proprietary trading"—pure bets that are unrelated to serving any clients a bank works with. The trouble is, proprietary trading that Volcker targets is very difficult to distinguish from other "client-related" trading, and in many cases, client-related trading is just as dangerous.

We need to go further. For more than 50 years, the Glass-Steagall Act banned banks that accepted deposits from playing around in the securities markets in any way, whether for clients or themselves. During that time, there were zero financial crises. For anybody eyeing bipartisanship, John McCain is a co-sponsor of this amendment.

4. Crush the Casino: Blanche Lincoln's Derivatives Bill

Derivatives are extraordinarily dangerous. They brought down AIG, and AIG nearly brought down our economy. The market is huge—the trading value of derivatives is $3.3 trillion, and the contracts bet on $500 trillion worth of stuff. A whopping 96 percent of this market is housed in just five banks.

What's worse, three of the biggest derivatives dealers, Bank of America, Citigroup and J.P. Morgan Chase are commercial banks – the kind that accept deposits, make loans and form the core of the payments system. Commerical banks like to back derivatives, because federal deposit insurance gives these companies stronger credit ratings, which makes their risky bets appear less risky to investors. And in fact, they are less risky for investors—because taxpayers like you and me are protecting them. So Blanche Lincoln (D-AR) has pushed a bill that would ban banks from dealing derivatives. Bravo.

Lincoln also wants to make sure derivatives are traded on exchanges, where everyone can see what risks everyone else is taking on, and her bill has the strongest language on this requirement of any proposal in Congress. Sunshine really is a good disinfectant-- nobody would have traded with AIG had they seen the trillions of dollars in subprime mortgage risk the company was loading up on.

5. Audit the Fed: The Bernie Sanders Amendment

Speaking of sunshine, the Federal Reserve has pumped out $4.7 trillion in bailout money for the financial sector over the course of the crisis, and refuses to tell the public who is receiving that money and on what terms it is being extended.

Reps. Ron Paul (R-TX) and Alan Grayson (D-FL) authored legislation requiring a full audit of the Fed's activities and it passed the House in December with loads of bipartisan support in December. Sen. Bernie Sanders (I-VT) plans to offer the same amendment in the Senate. It's our money. We deserve to know where it's going.

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