Posts tagged ‘bail out’
So today the email response (again, I know it is a stock letter) came from Barbara Boxer. I post this just to be in contrast to the Eshoo letter. While I may not agree with Barbara Boxer on many views, I respect and appreciate her response.
Unlike the Eshoo email, Boxer does not show partisanship in her response. She is respectful and appears to have crafted her response for all constituents. So kudos out to Barbara Boxer. Even though I still am not happy with the bill, I appreciate your respect and consideration.
Dear Mr. and Mrs. xxxxx:
Thank you for contacting me regarding the financial rescue legislation (H.R.1424). I appreciate hearing from you on this critical issue.
The fundamentals of our economy have been shaken, and Americans are deeply concerned. When Secretary Paulson and Chairman Bernanke placed an urgent phone call a few weeks ago to Congress to say we needed emergency action to prevent a major financial meltdown, I expected they would come forward with a plan that was targeted and reasonable, with appropriate oversight and taxpayer protections.
Unfortunately, what they brought us was a $700 billion blank check, which they asked us to sign with no questions asked. This plan contained no oversight, no taxpayer equity, and no control over CEO pay. I strongly opposed this proposal – and thanks to your phone calls, e-mails, and letters, Congress stopped it in its tracks.
The Senate made major improvements designed to strengthen our economy and protect our taxpayers. Instead of a blank check, the Senate plan included significant Congressional oversight, equity for taxpayers, curbs on executive compensation, an increase in FDIC insurance protection for bank depositors, middle-class tax relief, and job-creating tax incentives for renewable energy. The bill passed the Senate by an overwhelmingly bipartisan vote of 74-25 and the House by a vote of 263-171.
These were very important changes. But let me be honest: There were still aspects of this package that I didn’t like. I preferred the government acquiring more equity instead of toxic assets. I wanted the package to be put forward in smaller installments and to include more checks and balances to make sure it would work.
For me, the deciding factor in my Yes vote was information I received from the State of California. I was told by the Treasurer’s office that without access to credit, which is the goal of this legislation, California wouldn’t be able to sell voter-approved highway, school, and water bonds that are desperately needed for our economy and the creation of good-paying new jobs. In addition, I was told by the Governor’s office, that without action, our state might be forced to withhold funds for law enforcement, schools, and other needed services. This would bring our state to its knees and many middle-class families would be in deep trouble. Small businesses are beginning to tell me they cannot get lines of credit to meet payroll, as well.
Rest assured, I will continue to speak out forcefully about the failures that led us to this place and keep working with my colleagues to strengthen confidence in our markets, protect the American taxpayers, and enact regulatory reform to ensure that we don’t end up in this mess again.
Again, thank you for writing to me about this very important matter. Even though you may feel frustrated with the outcome of the legislation that passed, your voice absolutely resulted in the enactment of a better bill. Feel free to contact me again about any issue of importance to you.
United States Senator
It will be interesting to see what happens now. Lawmakers voted 263-171 to pass the bill. Whether their speculation about the economy and what this bill will offer is correct or if they are lemmings just giving into peer pressure and jumping off the proverbial bridge because their friends did. Apparently the Dow jumped with news of the passing. But only time will tell what all the fallout from this will be.
So it is not really that but they need to come up with either a new plan or let the market correct itself. Historically the market will correct itself, given time. I am not advocating that we get into a situation like the Great Depression or anything but I don’t believe in big government either, and that is where we are heading with this bill.
I believe it did not pass for a plethora of reasons but the biggest is because Congress is scared. They are scared to make the wrong decision especially since it will trickle down to their presidential candidate. Democrats can’t fully support it because if they are wrong it will hose them and the same for Republicans. Although, Republicans are generally more concerned with limiting government while the Democratic party wants to grow government. But they are all scared of losing their jobs too. They are getting record numbers of letters and emails from their constituents. Heck, I sent a letter to all my representatives – and they are all Democrats. Here is her response, which I know is a form letter, but they have a form letter for this. They are getting slammed from both parties.
Dear Mrs. xxxxx,
Thank you for contacting me about the unprecedented financial crisis in our country. Over 2,000 constituents have shared their views with me about the crisis and I certainly value yours.
As of today (Saturday evening September 27th) negotiations between House and Senate, Democrats and Republicans, as well as Treasury Secretary Paulson continue. As soon as the final bill is drafted, I will post it on my website (www.eshoo.house.gov/) with a summary, and I will of course let you know whether I vote for or against the final package.
Each of us is outraged about the circumstances that have brought our financial system to near collapse. In my view, the Administration has practiced “cowboy capitalism”, saying the markets must be allowed to run free, but they instead let Wall Street run wild without accountability, without transparency and without enforcement or regulations to protect the American taxpayer.
The following describes what President Bush and Secretary Paulson presented to Congress on Monday, September 22nd.
o Requested Congress to approve a $700 billion bailout, with the Treasury Secretary empowered to set the rules for all transactions
o No safeguards, No transparency, No accountability, and No oversight. The President’s plan was rejected.
As I see it, there are three elements we need to build into legislation #1 Reinvest in troubled financial markets to stabilize our economy and insulate Main Street from Wall Street. #2 Reimburse the taxpayer through ownership shares and asset recovery as the plan begins to work. #3 Reform how business is done on Wall Street including the prohibition of golden parachutes.
The following are elements which I’m hopeful the legislation will include:
o Ensure That Taxpayers Have an Equity Share in Any Profits
oGive taxpayers an ownership stake and profit sharing of participating companies.
oPut taxpayers first in line to recover assets if a participating company fails.
oAllow the government to purchase troubled assets from pension plans, local government, and small banks that serve low and middle-income families.
o Strong Independent Oversight and Transparency
oEstablish four separate independent oversight entities or processes to protect the taxpayer including:
w Establishment of an independent bipartisan board to provide oversight, review and accountability of taxpayer funds.
w A Government Accountability Office presence at Treasury to oversee the program and conduct audits to ensure strong internal controls, and to prevent waste, fraud, and abuse.
w An independent Inspector General to monitor the Treasury Secretary’s decisions.
w Have all transactions posted online for the public.
o Staging of Funds
oFunding for the rescue program should occur in stages (not all up front) and condition future payments on Congressional review.
o Limits on Golden Parachutes
oRestrict CEO and executive compensation for participating companies.
w No multi-million dollar golden parachutes
w Recover bonuses paid based on promised gains that later turned out to be false or inaccurate.
o Home Foreclosures
oAllow the government to change the terms of mortgages to help reduce the 2 million projected foreclosures in the next year.
o Protection of School District and City/County Investments
oAssist school districts, cities and counties who had investments in failed institutions.
As I continue my work representing you, I’m mindful of the profound responsibility I have to you and my solemn obligation to do my utmost to protect the taxpayer and help bring our country through the largest financial crisis in the history of the world.
I believe if we do nothing, our ability to obtain a home mortgage, a car loan, a loan for small businesses, or even a credit card will become highly difficult or impossible. Even more financial institutions could fail and millions could lose their savings, thousands of jobs could be lost, and large parts of our economy could cease to function. The repercussions would be far greater than the cost of a financial rescue program.
Let me know what you think. I value what my constituents say to me because I always benefit from your ideas.
Anna G. Eshoo
Member of Congress
While I found her obvious partisanship in the first paragraph calling out “Cowboy Economics” I decided to let it slide for now. For now. I don’t assign blame to any one group since I think there is plenty of blame to go around. Just to pass some blame around here is a post to an article about Fannie Mae, note the publish date – 1999.
Will be interesting to see what happens, but I do appreciate and respect the fact that congress is trying to do what we want. I will be anxiously waiting to see what happens.