Too big to fail makes the front page of The New York Times this morning, which reports that Congress, specifically Barney Frank, is toughening up the administration’s plan to deal with the problem.

Specifically, it gets the scoop that the legislation will “make it easier for the government to seize control of troubled financial institutions, throw out management, wipe out the shareholders and change the terms of existing loans held by the institution,” which sounds quite a bit sharper than what the administration had proposed. The Times also says the administration plans to support the tougher measure.

It remains to be seen whether this is a real story or political spin, but the press would do well to keep a close eye on it as it’s proposed, as it’s lobbied against, as it’s watered down, and as it, perhaps, passes.

As the Times notes in its lede, it’s a critical issue:

Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble.

And as it also is good to note, ending too big to fail has broad support on the left (break ‘em up and limit size) and the right (let ‘em fail and let the chips fall where they may), which would seem to open the way for a compromise.

But it’s not just left and right or moderate going on here. There’s the inertia of power. This quote from the banks lobby is hilarious:

“Of course you want to set up a system where an institution dreads the day it happens because management gets whacked, shareholders get whacked and the board gets whacked,” said Edward L. Yingling, president of the American Bankers Association. “But you don’t want to create a system that raises great uncertainty and changes what institutions, risk management executives and lawyers are used to.”

Of course, you can’t have one without the other. Expect lots of cognitive dissonance like this in the weeks to come.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.