FOR a moment last week, watching the Senate Banking Committee hearings on money market mutual fund reforms, I thought I had fallen into a time warp. As Mary L. Schapiro, the chairwoman of the Securities and Exchange Commission, outlined proposals meant to ensure that taxpayers would never need to bail out a money fund, some of the sharp questioning she received had a depressingly familiar ring.


“In my view you’re portraying an industry that’s extremely vulnerable, that has all these risks of runs, and I really find that extraordinary in light of the actual history,” needled Senator Patrick J. Toomey, a Pennsylvania Republican, citing the failure of just one money market fund — the Reserve Fund in 2008 — throughout years of crises and panics. “You’re telling us that this is a very vulnerable industry and there’s great threats of a run and using that to justify regulations that I think threaten the very existence of this industry.”


Suddenly, I was back in September 2003 at a House Financial Services Committee hearing on a similar effort to avert a bailout of Fannie Mae and Freddie Mac, the mortgage finance giants that would become wards of the state just five years later. “The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see,” Representative Barney Frank, the Massachusetts Democrat, said then. “I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios.”


Note well: I am not arguing that the money market mutual fund industry is on the same road to ruin that Fannie and Freddie were in 2003. But it is worth pointing out that protecting the taxpayer from a failure of the mortgage giants didn’t work out so well, in large part because their defenders in Congress rose to their aid.


With that in mind, it would be a shame if the effort by the S.E.C. to prevent a run on a money market fund — and the contagion and government assistance that could accompany it — met a similar fate. Fact is, when the government moved to shore up the money market fund industry in the fall of 2008, the federal financial safety net expanded exponentially. Once the government steps in to stabilize an industry, we have learned to expect it will probably do so again.


Mr. Toomey said Friday that he did not think investors saw money funds as government-backed. He rejected the notion that his defense of the industry was similar to the support given to Fannie and Freddie, saying the circumstances surrounding those companies were completely different.


Ms. Schapiro has stirred the ire of this $2.6 trillion corner of the fund industry by making several suggestions that would cost the industry money or make its offerings less attractive to investors. One idea is to require that the funds set aside capital to protect against an investor selling stampede; another is to require funds to value their shares based on a floating net-asset value, which more accurately reflects changing prices in the investments they hold.


Both are anathema to the fund industry, which is accustomed to its low-volatility and low-overhead business model. And who doesn’t like an implied government guarantee?


At the hearing, Ms. Schapiro upset the industry further by disclosing that since the 1970s, there have been 300 occasions where money fund sponsors stepped in to support a fund financially. This casts doubt on the industry’s contention that money funds have rarely faced financial difficulties. Paul Schott Stevens, president of the Investment Company Institute, accused regulators, without naming Ms. Schapiro, of viewing money market reform “through the outdated lens of 2008.” In remarks prepared for the banking committee, he wrote: “They are considering structural changes that would alter the characteristics that investors deeply value and reduce competition by driving fund sponsors out of the business. These changes would destroy money market funds, at great cost to investors, state and local governments and the economy.”


BUT is the S.E.C.’s lens really so outdated? David S. Scharfstein, a professor of finance and banking at the Harvard Business School who also testified, thinks not. In an interview Thursday, he pointed to the large withdrawals made by institutional money market fund investors last summer as the European debt crisis escalated. “It wasn’t a panic run but it was a significant withdrawal of funding from financial institutions,” he said.