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$700 Billion BAIL-OUT Legislation

 
 
Reply Tue 23 Sep, 2008 03:34 am
Congress is working fast and furious to compromise on a bail-out bill by the end of the week.

I'm trying to find information on the financial rescue proposal. Does anyone have a link to the Bush Administration's 3-page proposal?

I found this statement by Senator Dorgan (D-ND):

Quote:
DORGAN SAYS WALL STREET BAILOUT PLAN IS "STAMPEDE IN WRONG DIRECTION"

Monday, September 22, 2008

STATEMENT OF U.S. SENATOR BYRON DORGAN

“The financial rescue proposal offered this weekend by the Bush administration is nearly unbelievable. President Bush wants Congress to provide a minimum of $700 billion in taxpayer money so that the federal government can purchase toxic securities from failing Wall Street firms without any safeguards or oversight attached to that bailout. The Bush administration is also asking for unlimited authority, proposing that, no matter what they do with the $700 billion in taxpayer money, it would not be subject to any oversight or review by the courts or Congress. Nothing like this has been done in the history of our country.

“I am prepared to take aggressive emergency action to prevent a collapse of our financial system. But this proposal looks to me like a stampede in the wrong direction. Right now it looks like a proposal to reward the very people on Wall Street who created this mess, and who pocketed more than $100 billion over the last several years making it.

“How did we get here? In 1999, when the Congress was pressured to repeal the financial protections that were put in place following the Great Depression, I voted against it. That bill, the mis-named Financial Modernization Act, repealed the Glass-Steagall Act. I warned then that a ‘financial swamp’ would result from the casino-like prospect of merging banking with the speculative activity of real estate and securities.

“In 1999, when the bill was debated, I warned, ‘This bill will also raise the likelihood of future massive taxpayer bailouts…I also think we will, in 10 years time, look back and say…we forgot the lessons of the past.’ I take no satisfaction that I was right.

“I agree that the Congress must now act, but that action must be smart and effective. That means any action taken must be guided by two principles: protecting U.S. taxpayers from being ripped off in a rushed, blank-check, no-strings-attached Wall Street bailout, and ensuring accountability and oversight to put an end to the very reckless business practices that led to this crisis and put our entire economy at risk.

“Congressional action must include:

1. Restoring the stability and safety of the banking system by recreating protections of the Glass-Steagall Act, which prohibited the merging of banking businesses with riskier investments. That post-Depression Era protection served us well for seven decades before its repeal.

2. Addressing the wildly excessive compensation on Wall Street, which has incentivized reckless behavior. In recent years, Wall Street has doled out more than $100 billion in bonuses to the very people who have steered us into this mess, including more than $33 billion in each of 2007 and 2006.

3. Developing a system of regulation that would require accountability for the speculative investment activities of hedge funds and investment banks that create and sell complex securities.

4. Providing for a period of forbearance on mortgages where homeowners could continue to pay mortgages at a set rate.

5. Creating a Taxpayer Protection Task Force that would investigate and claw back and claw back ill-gotten gains. This would be targeted at individuals and firms that profited from creating and selling worthless securities and toxic products. Despite the fact that this practice caused the current economic crisis, many of these individuals and firms now seek to benefit from a government bailout.

6. Making sure that U.S. taxpayers get to share in the increased values " not just the burden of risk " of the firms they are bailing out.

“If government action is taken without the safeguards described above, it will not address or cure the major problems of our financial system, and it could wreck our economy and lower our standard of living. This is a crisis and we must address it quickly, but we need to get this right.”



Should our Congress approve the Bush Administration's financial rescue proposal (blank check without accountability or oversight) or should our Congress insist on provisions to protect taxpayers as outlined above? What's the right thing to do for our country?


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Type: Discussion • Score: 7 • Views: 4,456 • Replies: 95

 
Debra Law
 
  1  
Reply Tue 23 Sep, 2008 04:00 am

Quote:
September 19, 2008

Statement of Senator Hillary Rodham Clinton on the Administration's Proposal to Restore Stability to U.S. Financial Markets


WASHINGTON, DC " Senator Hillary Rodham Clinton made the following statement on the administration’s proposal to restore stability to U.S. financial markets.

“When the American people, facing a foreclosure crisis and struggling economy, turned to this administration for help, the answer was no. Now, the administration is turning to the American people for help, to rescue the credit markets and take on hundreds of billions in debt and financial obligations as a consequence of that same foreclosure crisis. The truth is, Main Street came to Washington and got little. Now Washington is coming to Main Street and asking for a lot. The American people deserve to know that this isn't a blank check. While the need to address the current crisis is clear, I will only support steps that will prevent a widening crisis, tackle the worst kinds of abuse tolerated for too long by the Bush Administration, and address the root problems at work.

The proposed intervention outlined today by Treasury Secretary Henry Paulson would be a watershed moment for our economy. I believe that such an intervention demands that we fundamentally alter the priorities and policies of our nation under the Bush Administration that allowed this crisis to take place and escalate. Corporations that will benefit must be held accountable not only to large shareholders but also to the American people. And American taxpayers deserve to know that their money will not allow for a continuation of the status quo: short term profit at the expense of long term viability; obscene bonuses and golden parachutes regardless of performance; reckless risk taking that have placed the markets in so much jeopardy; rewards for those who foreclose on middle class families and sell mortgages designed to fail to turn a profit; and outsourcing of good jobs to serve short term stock prices instead of America's long term economic health. The prevailing dynamic of corporate America, where the sole priority was the dividend, the inflated bonus and the quarterly earnings report, must give way to a new respect for the long term prosperity of the American worker and the well being of the middle class.

After eight years of failed policies " and two years of an absentee administration " our only option left may be an unprecedented government intervention into the private markets. The markets must be stabilized to stave off wider turmoil. Nevertheless, the urgency of this crisis does not mean that we should offer a blank check to financial institutions or the privileged few. Nor can we simply allow the administration to use the taxpayers like a ‘reset button.’ We cannot allow Wall Street to act without oversight by a vigilant SEC and administration " and without regard for the American people, who will now have paid twice: in falling prey to a widening credit crisis, and in paying the bill to hopefully bring it to an end.

I will be examining the administration's proposal very closely to ensure that we do not approve a policy that may stabilize the markets in the short term without addressing the root problems facing middle class families or the kinds of reckless gambling that was permitted for far too long by the administration. The Bush Administration may have changed its tune once the crisis facing Main Street hit Wall Street. But we need to be sure that the American taxpayers " asked to shoulder yet more risk and responsibility " have a voice.”


On Thursday, Senator Clinton outlined her plan to halt the market crisis in a speech on the floor of the Senate, calling for a series of specific proposals, including creating a new version of the Home Owners’ Loan Corporation (HOLC) to remove bad mortgage debt from the market and restore confidence, curbing the most damaging and manipulative trading practices, providing immediate relief to homeowners facing foreclosure through modifying troubled mortgages, and reasserting competent federal oversight. Senator Clinton also explained her plan in a letter to more than 15,000 New Yorkers who had expressed concern about housing and the economy.


http://clinton.senate.gov/news/statements/details.cfm?id=303310


0 Replies
 
Debra Law
 
  1  
Reply Tue 23 Sep, 2008 04:03 am
Check out the Senators' websites to see what they are saying, if anything, about the Bush Administration's financial rescue proposal.

United States Senate
Senators of the 110th Congress
http://www.senate.gov/general/contact_information/senators_cfm.cfm
0 Replies
 
Debra Law
 
  1  
Reply Tue 23 Sep, 2008 04:06 am
Senator Clinton's Plan outlined on Senate floor:

Quote:
In response, Senator Clinton outlined a series of proposals to address the crisis:



Create a new entity to buy up and quarantine toxic mortgage securities that are dragging down the markets which would allow the markets to stabilize. Last spring Senator Clinton was among the first to call for a new entity modeled after the successful Depression-era Home Owners’ Loan Corporation (HOLC) or the Resolution Trust Corporation (RTC) created after the Savings and Loan crisis.


Place a temporary moratorium on the most abusive stock transactions, many of which involve the “short-selling” of stocks. Yesterday, Senator Clinton wrote to the Securities and Exchange Commission urging such a moratorium, saying it would provide breathing room for the markets to recover, for investors to make accurate assessments of companies and for regulators to assess what trading practices should be permanently banned.


Convene an emergency economic summit to show the American people their government is working together. Bringing together leaders in the administration and Congress with lenders, consumer advocates, non profits, financial institutions, and all stakeholders will allow a coordinated response to the crisis.


Aggressively pursue and encourage mortgage modifications. Senator Clinton has introduced legislation to remove barriers to mortgage modification and to encourage lenders to voluntarily work with borrowers to keep them current on payments and in their homes.


Restore competent federal oversight of the increasingly complicated financial markets. The rapid evolution of the securities and banking industry overwhelmed the current regulatory framework, resulting in a “shadow banking system” that operates outside of oversight and without accountability.


Require transparency and accountability on executive pay. Senator Clinton has proposed the Corporate Executive Compensation Accountability and Transparency Act to impose new transparency rules on executive pay, end the accounting techniques that hide compensation, and provide shareholders a say in executive compensation packages.


Ensure the accountability of financial institutions borrowing money from the Federal Reserve’s new lending facilities. Taxpayers deserve to know that the companies they are bailing out are on the road to recovery and aren’t throwing more good money after bad.



http://clinton.senate.gov/news/statements/details.cfm?id=303208

0 Replies
 
Debra Law
 
  1  
Reply Tue 23 Sep, 2008 04:56 am
Democrats Work With Paulson on Rescue; Some Republicans Object

Excerpts:

Quote:
Sept. 23 (Bloomberg) -- Members of President George W. Bush's own party are voicing their opposition to his financial rescue plan even as Democratic leaders narrow their differences with the administration.

* * *
Members of both parties are rallying around one proposed change to the Treasury plan: limiting the compensation of executives in companies that take part in the government program to buy troubled assets.

* * *

Paulson has opposed pay limits, saying "punitive'' terms would only discourage companies from selling their debt to the Treasury.


Link: Bloomberg.com

What does this mean? If the CEOs of these failing institutions cannot continue to draw their multi-million dollar salaries, then they will refuse to sell their bad debt to the Treasury? You've got to be kidding me.

0 Replies
 
Debra Law
 
  1  
Reply Tue 23 Sep, 2008 05:22 am
Treasury Secretary Henry Paulson: What has he saying for the last year?

ANSWER: Party mantra: economic fundamentals strong

EXAMPLES:

March 8, 2008

Quote:
Paulson says dollar to reflect strong fundamentals

STANFORD, California (Reuters) - Treasury Secretary Henry Paulson on Friday reiterated his view that a strong dollar was in the U.S. interest and the greenback's value would ultimately reflect strong economic fundamentals.

"The strong dollar is in the nation's interest. Our economy like any other has got its ups and downs," Paulson told an economic policy conference at Stanford University. "The long term fundamentals are strong. And I'm confident they'll be reflected in currency market."


http://uk.reuters.com/article/companyNews/idUKN0739942220080309


Jun 24, 2008

Quote:
Paulson says economy strong despite oil strains

CANCUN, Mexico (Reuters) - Treasury Secretary Henry Paulson said on Tuesday that the global economy was being strained by costly energy but said U.S. economic fundamentals were sound.

In an interview on Mexican television, Paulson said he thought that most of the slump in U.S. housing prices would be over by year-end and that growth should be stronger by then.

"I think it's going to take some time to get out of this but don't forget that the foundation of the United States economy is very solid. I think the United States can compete with any economy of any industrialized country," Paulson said, according to a translation of his comments into Spanish.


http://www.reuters.com/article/domesticNews/idUSWBT00925320080624

July 22, 2008

Quote:
WASHINGTON, July 22 (Xinhua) -- U.S. Treasury Secretary Henry Paulson said Tuesday that the U.S. banking system is sound and the long-term fundamentals of economy are strong.


http://news.xinhuanet.com/english/2008-07/23/content_8750777.htm

Quote:
US Politics
Sunday September 14

Paulson voices confidences in U.S. fundamentals
WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson, trying to remedy the biggest U.S. financial crisis in decades, said on Sunday, "I wouldn't bet against the long-term fundamentals of this country."

"But this is a humbling experience to see so much fragility in our capital markets, and ask how did we ever get here," Paulson told NBC's "Meet the Press" as he sought to sell the U.S. Congress and the American people on his multi-billion-dollar rescue plan.


http://www.topix.com/us/politics/2008/09/paulson-voices-confidences-in-u-s-fundamentals




0 Replies
 
rosborne979
 
  1  
Reply Tue 23 Sep, 2008 06:21 am
@Debra Law,
Quote:
Should our Congress approve the Bush Administration's financial rescue proposal (blank check without accountability or oversight) or should our Congress insist on provisions to protect taxpayers as outlined above? What's the right thing to do for our country?

It's a good question. Unfortunately, I don't have the expertise or education necessary to determine the proper macro-economic response to a situation like this.

That's why I vote for people who I think are smart enough to figure this stuff out for me. Unfortunately, other people apparently vote for politicians that look good, or would be fun to hang out with. This is happening at all levels of government and affecting everything that government is doing. Florida can't even figure out a way to count votes accurately during elections, even 8 years after the last debacle.

At some point, "Main St." has to quit blaming Wall St., when the only thing we know about the politicians we're voting for is who was the last one to put lipstick on a pig.

0 Replies
 
revel
 
  1  
Reply Tue 23 Sep, 2008 09:41 am
Quote:
What if the bailout plan doesn't work?

Lawmakers raised doubts Monday about what would be the largest government bailout in American history, but a bigger, more terrifying question lurked right under the surface: What if it doesn’t work?

Failure, says one insider, is not an option.

“The alternative is complete financial Armageddon and a great depression,” said a former Federal Reserve official. “Where do they go after this? Well, the U.S. government could nationalize the banking system outright.”

A few months ago, that idea would have been laughed out of the room.

But no one’s laughing anymore.

While almost no one wants to dwell publicly on the possibility that a $700 billion package could simply be too small to forestall a financial meltdown, privately some aides were already thinking of what the government might do if the Treasury plan passes but fails.

In a statement Monday, President Bush said that “the whole world is watching to see if we can act quickly to shore up our markets and prevent damage to our capital markets, businesses, our housing sector and retirement accounts.”

What the president didn’t say is that the whole world will be watching to see not just if Washington can act but whether Washington’s actions can still make a difference.

Under the current plan, the U.S. government will buy up to $700 billion in assets from private holders on Wall Street. That would help banks stabilize their balance sheets, and in theory provide an incentive for banks to begin extending credit among themselves again " a critical component of a functional financial system.

So what’s Plan B?

There really isn’t one.


http://news.yahoo.com/s/politico/20080923/pl_politico/13769

(rest of the article at yahoo for however long it last)
0 Replies
 
cicerone imposter
 
  3  
Reply Tue 23 Sep, 2008 10:07 am
Let's face it, Hillary has more smarts for our country than Palin ever will, and guess who might have a shot at the white house.

This issue is as important as the wranglings of congress on how to spend $700 billion taxpayer dollars - which, by the way, is the wrong direction - has all the indications of past wrong decisions wrapped around it.

Congress is talking about oversight, but we know what happened to billions in Iraq; much of it just disappeared into thin air.

Now they have the audacity to increase their gambling to $700 billion without understanding what the end-game will be.

They are a bunch of incompetents who got us in this mess in the first place.

I wouldn't trust them with $1 million no less $1 billion. They'll still push for pork, give money away to foreign countries in the billions while our own citizens are struggling to survive, and our infrastructure continues to crumble.

They are on the road to destroy our country for good.

Debra Law
 
  3  
Reply Tue 23 Sep, 2008 10:32 am
@cicerone imposter,
cicerone imposter wrote:
. . . Congress is talking about oversight, but we know what happened to billions in Iraq; much of it just disappeared into thin air.

Now they have the audacity to increase their gambling to $700 billion without understanding what the end-game will be. . . .


I'm listening to Paulson testify before the Senate Banking Committee. I've never heard so much of NOTHING in my life. For every question, he stammers away without providing any information. The gist of every Paulson statement, as far as I can discern, is that the taxpayers MUST give Paulson 700 billion and just TRUST him and his experts to take care of this COMPLICATED matter.
cicerone imposter
 
  1  
Reply Tue 23 Sep, 2008 10:42 am
@Debra Law,
They are all addicted to gambling, and only understand they're talking about big bucks and nothing else. They have no clue what that money will do to our economy, but it doesn't take a rocket scientist to figure out that adding more money in urgency is not the answer.

They want to "save" those big investors who gambled and lost; now our government wants to bail them out; small investors be damned if they lost most of their investments. I've lost in the stock market, and never got my money back. Damn!

That conservative mantra of the wealthy shouldn't have to transfer their wealth to the middle class and poor through taxes has a whole new meaning.

0 Replies
 
revel
 
  3  
Reply Tue 23 Sep, 2008 10:46 am
@Debra Law,
I read an interesting comment underneath an article from McClatchy newspapers.

Quote:
Most likely scenario, tried and tested: Keep your eye on the birdie; watch Congress vote for the bailout bill and see Bush sign it with a "signing statement", stating that he accepts the $700 bn but not the caps on executive compensation and without the oversight.
Michael S. Cullen, Berlin, Germany


http://www.mcclatchydc.com/227/story/52922.html

Seems like this guy from Berlin knows more about how our government has been working for the last eight years than most American voters seem to.
cicerone imposter
 
  2  
Reply Tue 23 Sep, 2008 10:48 am
@revel,
I don't find that surprising one iota; look how they've been spending our money in Iraq for the past almost six years.
0 Replies
 
gungasnake
 
  2  
Reply Tue 23 Sep, 2008 10:53 am
What you see is a gargantuan vote-buying scheme by a rogue political party at public expense.

All registered demoKKKrats should be sold into slavery to pay for this ****.
cicerone imposter
 
  4  
Reply Tue 23 Sep, 2008 10:54 am
@gungasnake,
Just received from a friend in Australia:


The latest email doing the rounds in America ...


SUBJECT: REQUEST FOR URGENT BUSINESS RELATIONSHIP

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO [email protected] SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.
YOURS FAITHFULLY MINISTER OF TREASURY PAULSON
cicerone imposter
 
  3  
Reply Tue 23 Sep, 2008 10:59 am
@cicerone imposter,
Here's another one just out from Bernanke:
Quote:

Bernanke: Recession certain in absence of bailout
Federal Reserve Chairman Ben Bernanke bluntly warned Congress on Tuesday it risks a recession, with higher unemployment and increased home foreclosures, if lawmakers fail to pass the Bush administration's $700 billion plan to bail out the financial industry.


They're still claiming we're not in a recession now. How many of you are living better today than when our president was Bill Clinton, raise your hands.

Ramafuchs
 
  0  
Reply Tue 23 Sep, 2008 11:13 am
@cicerone imposter,
C i
as usual you had explained the presnt bad predicament of USA born not out of the immatured innocent Americans. but because of the CRIMINAL GANGS which had shattered the image of USA.
Don't thiink that i cast aspersions on those innoocent American people but my views are against the corporate criminals and the handful of christian compassionate comrades.
Thanks anyway for your views which are belongs to the majority of the rational thinkers.
Rama
0 Replies
 
Debra Law
 
  3  
Reply Tue 23 Sep, 2008 11:14 am
@cicerone imposter,
". . . WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. . . ."

Exactly! This does feel like a common, but fraudulent Nigerian email scam. I think we all have reason to distrust and feel like we're being scammed. BushCo's last chance to raid the treasury before his days in office expire...
Ramafuchs
 
  1  
Reply Tue 23 Sep, 2008 11:18 am
@Debra Law,
Of course I got once in a while this nigerion Emali like my brother-in-law in Indian.
But my Emails are full of flowery English from USA.
Should I cut and paste those nonsense?
0 Replies
 
Debra Law
 
  2  
Reply Tue 23 Sep, 2008 11:42 am
Paulson rejected a proposal that Congress give 150 billion now and review the progress in January before allocating more money. Based on hearing testimony, Paulson claims that he needs the entire 700 billion NOW--to spur CONFIDENCE in the market--even though he "only" expects to spend 50 billion a month.

One senator stated he was scared of placing his trust in Paulson--and allocating the entire amount that Paulson is asking for--because Paulson WON'T be here in January when Congress reconvenes. After all, it will be the senator who must account to his constituents--not Paulson (as the outgoing Secretary of the Treasury).

More info here:

Bailout: Bernanke, Paulson appear before Senate Banking Committee
http://blogs.usatoday.com/ondeadline/2008/09/bailout-bernank.html

Here's a link to Paulson's written testimony:
http://blogs.usatoday.com/ondeadline/files/paulson_testimony.pdf?loc=interstitialskip

Paulson: "We have proposed a program to remove troubled assets from the system. This troubled asset relief program has to be properly designed for immediate implementation and be sufficiently large to have maximum impact and restore market confidence. It must also protect the taxpayer to the maximum extent possible, and include provisions that ensure transparency and oversight while also ensuring the program can be implemented quickly and run effectively."

NOTE: Paulson claims if the CEOs are penalized by placing caps on their compensation, or if the taxpayers demand anything more than bearing the burden for the entire financial risk, then the proposed program won't be effective.
 

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