Congress Starting To Feel Like They Have Been Had Over The Bailout Bill
It is being reported that Congress is starting to complain that the bailout bill they approved is no longer what is being done as is being 000reported on FoxNews here. Many in the blogs (not to mention many a constitute) warned Congress that this would happen, but we were all told we did not know what we were talking about and that this was necessary to help the economy.
Well it looks like things have changed. Lawmakers on both sides of the aisle that voted down the first bill now realize that some of their colleagues in Congress and the Bush Administration has changed what the original bail out was about into a huge monster (which is what myself and many, many others in the blogs warned would happen).
It started out to help homeowners stay in their homes, then it was lets by stakes in banks so that we can unfreeze the credit market (although banks have said they will use the money to buy other banks instead), now it is let’s buy into the insurance companies. The only question is what is next?
I contacted my Congressman (Congressman Baird WA-3CD) about this issue and here is his response:
As you may know, through the program, the federal government will buy troubled assets. It is quite possible, and even likely, that the value of these assets will go up over the next few years and that the federal government will be able to sell them at a profit. If this occurs, the federal government will make money off of this deal. (ed – I told him the government has never been any good at making money only printing it so I doubt this will happen) However, there is a chance that this will not happen. That is when my “recoupment clause” would kick in. Under this clause, a fee will be imposed on the financial services industry and that fee will remain in place until the taxpayers recoup the loss. This provision ensures that, at the end of the day, the taxpayer will not be forced to bear any cost associated with the program.
So Congressman Baird, do you still believe that this will help people stay in their homes?
Congressman Baird also had this to say:
I am pleased that the bill also provides for strong oversight. As you may know, the original proposal laid out by the Administration did not provide for any oversight or review of the Department of Treasury’s actions under this program.
Yet here is what Mr. Neel Kashkari (pronounced cash carry by the way) had to say about the safeguards:
Neel Kashkari, head of the Treasury’s financial stability program, told Dodd’s committee this past week that there are few strings attached to the capital-infusion program because too many rules would discourage financial institutions from participating.
Like I told Congressman Baird in my letter to him that oversight without any ability to actually enforce means nothing at all. I wonder if the Congressman sees the truth in that now?
It seems to me that Congress passed yet another bad bill in an election year under the mantra of “we must do something” to help provide them political cover in November and ultimately it will be the taxpayers who get stuck with this $700 billion tab.
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