Slowing Down The Wall Street Bailout Steamroller
I am very concerned about the $700 billion bailout of Wall Street that the Bush administration is demanding to be done immediately this week. To be honest, I don't even understand the problem, and I suspect that most Americans don't understand it any better than I do. Considering the absolutely inept manner in which the Bush administration has handled both domestic and international matters in the last eight years, I have absolutely no confidence that what the administration is saying is actually the truth.
It may well be that some sort of bailout is necessary to prevent further erosion of economic confidence in America. However, considering the tremendous amount of tax payer money that could be put at risk, I think it is imperative that the Congress and Senate do not rush a bill through without taking a sufficient amount of time to understand the problem and devise a carefully thought out strategy to improve the situation. In my opinion, it may well be advisable to take several months to study the problem before any bailout bill is voted on.
One thing that I am adamant about is that corporate executives who are responsible for this economic mess should not be given any sort of golden parachute severance packages. If the American people are going to suffer for their misdeeds, then those executives should suffer right along with the rest of us!
Please do not rush any sort of bailout bill through this week.
Thank you for your attention to my concerns.
Reply from Senator Evan Bayh:
Dear Mr. :
Thank you for contacting me regarding the Emergency Economic Stabilization Act of 2008 , the legislation recently enacted to stabilize our financial system. I share many of your concerns about this legislation. It was among the hardest votes I have ever cast.
Hoosiers who have behaved responsibly, who did not take inordinate risks, who saved their money, and who did not get in over their heads are angry. They have every right to be. I am angry, too.
We should not be in this mess, but we are. The question is: What are we going to do about what experts call the greatest economic crisis to face America in more than a half-century? In the end, Senator Lugar and I both concluded that, as imperfect as the bill is, the risks of doing nothing were too great for the American economy.
Regrettably, those who would pay most if Congress failed to act would be ordinary people who have done nothing wrong. This conclusion was reached by countless groups representing ordinary people across Indiana and the nation: AARP (representing seniors); the U.S. Chamber of Commerce (representing employers); the Farm Bureau Federation of America (representing farmers); the National Federation of Independent Business (representing small businesses); the National Education Association (representing teachers); and many others.
The president of the Indiana Chamber of Commerce stated, "Now, more than ever, partisanship and politics must be put aside for the benefit of our state and country. The Indiana Chamber and its members are typically not in the position of advocating for government intervention in the free market system. Today's unique circumstances, however, make it essential for our legislative and executive leaders in Washington to act now to restore our financial markets and consumer confidence."
Many of our state's leading newspapers also concluded that an immediate federal response was an unfortunate, but necessary step for Indiana . The Indianapolis Star wrote, " The cost of further inaction is likely to be devastating to the American public, both now and in the years ahead." The Louisville Courier-Journal stated it "is critical to pass the best available bill now to avoid panic." The Evansville Courier-Press warned of "preventing financial Armageddon [and] the potential loss of millions of jobs, a scenario not contemplated since 1929." The Times of Northwest Indiana wrote, "For the sake of local investors, savers, employees and their families, Congress must not delay. A bailout might be distasteful, but bitter medicine is sometimes necessary." Finally, the Lafayette Journal and Courier concluded, "The bailout isn't fair, and it isn't free enterprise at its best. But it's the right thing to do to shore up the nation's economy."
There were no good options. However, the final plan is far better than the Administration's original proposal. Executives seeking public help after ruining their companies will be prevented from profiting. There will be no golden parachutes or outrageous executive pay packages. There will be independent oversight to prevent conflicts of interest and outright corruption. The taxpayer will be protected by receiving an ownership interest in companies that receive government assistance. If after five years, the taxpayers have lost money, the financial industry can be required to pay it back.
This intervention is no cure-all. More difficult decisions lie ahead. But it is better than doing nothing, and that was the alternative. It is, however, not all that must be done.
Once we have stabilized our system, we must channel our anger into making sure this never, ever happens again. I'm not a cynic, but I am a skeptic about the way Washington can work in times like these. Congress will act in a moment of crisis, but once it has subsided, the sense of urgency will pass. The forces of reform will not have the energy that they do today. All the special interests will circle the Capitol like hungry birds looking for prey in order to prevent us from taking the steps that are necessary. We must not let that happen. I will do everything I can to see that it does not.
The troubled state of public finance highlights the importance of restoring fiscal responsibility to the federal budget. As Governor of Indiana, I balanced the budget without once raising taxes, and I left behind a $1 billion budget surplus, the largest in state history. I vetoed an entire state budget because I didn't think it was fiscally sustainable.
I have continued to push for a more conservative fiscal approach during my time in the U.S. Senate. This year, I was the only member of my party to vote against a bloated budget that would have added $2 trillion to our national debt. I was one of a handful of Senators who voted for a one-year moratorium on wasteful earmark spending. I was one of only seven Democrats to support a commission to recommend cuts in wasteful government programs. I was one of only 15 Senators to vote against the now-infamous Bridge to Nowhere.
In September, the Senate passed my legislation requiring Iraq - not the U.S. taxpayers - to pay more to help themselves. Iraq has a $79 billion surplus. It's not fair to ask American taxpayers to borrow billions from China to hand over to a country that is not spending its own money to help itself.
We must treat every taxpayer dollar like the precious commodity it is. Hoosiers work their fingers to the bone, and money sent to Washington must be spent on critical national priorities, such as preventing a collapse of our economy.
Again, thank you for contacting me. I value your input and hope you will continue to keep me informed of the issues important to you.
Office of Senator Evan Bayh