Economy & Budget

We are listening, America — speak out! (Rep. Jim Jordan)

Right now, there is a family sitting at their dining room table, looking over receipts and figuring out how they can cut a few extra dollars from their budget. They may be calculating the cost of a summer vacation or cutting coupons to make the most of their next grocery trip.

But that family is doing what Washington refuses to do: tighten their belt and make the tough decisions to live on what they have. Families don't answer their problems with more spending. But Washington does.

We have recently seen countless examples of the disconnect our Congress has with the people they represent. In the same year of record unemployment and economic decline, this Congress has exploded our deficits, loaded us with health care regulation and increased taxes. They've named post offices while continuing to ignore our near-ten percent unemployment rate. They've prioritized misguided legislation such as Cash for Caulkers instead of listening to the American people.

I hear your frustrations every day -- when I stop by your business, bump into you at the gas station or even on my Facebook page. You are tired of more spending and you have more unemployed friends and family members than ever before. Simply put, Congress' to-do list doesn't match up with yours.

It is time to change the priorities of Washington and introduce a new way of doing business -- a business where the American people drive the agenda in Congress.

House Republicans are on the brink of bringing such an agenda from America. We will listen to Americans and get to work for them right away.

Our new project -- America Speaking Out -- is unprecedented and is finally giving Americans the pen and paper. You will have a seat at the table when it comes to building the agenda.

In stark contrast to the Washington arrogance, House Republicans want to hear what you think should be a part of a new policy agenda. Whether it’s on the economy, spending, family values or national security -- your priorities will be reflected.

On the new online forum, AmericaSpeakingOut.com, you can lend your voice to build a new agenda. Using the best of social media, AmericaSpeakingOut.com will allow you to submit a policy solution, promote your priorities, debate the ideas posted by other Americans, and share the conversation with your friends and neighbors via Facebook and Twitter. It is our hope that AmericaSpeakingOut.com will become the home to an unprecedented online conversation between Americans and their elected representatives.

Now is America’s time to rewrite our to-do list -- a groundbreaking way of changing Washington and giving you what you need.

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Wall Street reform ends 'too big to fail' (Sen. Jon Tester)

You've probably already seen the ads on TV or heard them on the radio. Out-of-state groups are shelling out millions to sway your opinion on a very important bill I'm working on in the Senate Banking Committee -- a bill that finally ends the era of "too big to fail" on Wall Street.

I can see why some folks with a lot of money to burn don't want this bill to pass. They don't want it to pass because it finally puts referees on Wall Street. And without refs on Wall Street, business has been brisk for a handful of well-off Americans.

But our entire economy almost collapsed a year-and-a-half ago because there were no referees on Wall Street. And sadly, hardworking, honest taxpayers -- and our entire economy -- paid the price.

The bailouts President Bush asked for in 2008 weren't the answer. That's why I voted against both of them.

The best way to fix this problem -- and to prevent it from happening again -- is to rewrite the rules. To require big banks and huge financial institutions to play by those rules. And to take "too big to fail" out of the equation.

The Wall Street reform bill, which combines good ideas from Republicans and Democrats -- does just that.

It will create a bipartisan council of regulators to serve an "advance warning system" to snuff out problems well before they hurt the entire economy. It will streamline existing regulators, giving them the power to write rules and enforce them on America's biggest banks.

The bill will not, however, affect Montana's banks. Montana's Main Street banks and credit unions played by the rules during the financial crisis. I made sure this bill won't create more hassles or costs for banks that do honest business.

A few weeks ago, a secretive organization called the Committee for Truth in Politics saturated Montana's airwaves with TV and radio ads. The ads called Wall Street reform a "bailout."

Why? Good question. Calling the Wall Street reform a "bailout" -- even though it isn't -- is a poll-tested way get folks to be against it.

In response to those ads, thousands of callers were automatically patched into my office to tell me, "vote against the bailout." Many callers were relieved -- and confused -- to learn that Wall Street reform is not a bailout. No matter how you spin it. This bill is just the opposite.

The fact is, Wall Street reform will finally make some much needed changes to the way things work, to protect the good actors on Main Street -- and across rural America -- from the bad actors on Wall Street. And it ends "too big to fail."

I've posted the Wall Street reform bill online at tester.senate.gov/legislation. You can also follow the progress of the bill at facebook.com/senatortester. As this very important legislation moves through Congress, I'll make sure it's the best possible bill for Montanans.

And I'll make sure we have an honest debate based on the facts.

Cross posted from the Huffington Post

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Which checkbook?

When it comes to the effect of the Citizens United decision on real world politics, the relevant question is when a CEO decides to spend on politics, which check book does he reach for? The company’s checkbook or his own?

Before Citizens United changed America elections, a CEO had to pay for political speech in favor or against federal candidates with his own dime.  After Citizens United, he can use someone else’s.  And what’s worse, there is a lack of transparency about corporate political spending.  No SEC regulation or rule requires disclosure of corporate political spending to shareholders or the investing public.

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It's time to end risky gambling on Wall Street (Sens. Jeff Merkley and Carl Levin)

When historians look back at the financial crisis of 2008 and the Great Recession that followed, they will fix their blame, in part, on the invention of complicated financial products that hid massive risks and spread them throughout the economy. They will record how Wall Street chased short-term gains at the expense of functioning markets, long-term economic stability and the well-being of the financial institutions themselves.

Those future historians will also look at how the government responded to the mess. They will examine whether members of Congress took the serious steps needed to avoid another crisis. The votes taken in the Senate this week will be crucial in determining the answer.

The high-risk trading of these complex and opaque instruments with a firm's own money -- and not on behalf of a client or investor -- is known as "proprietary trading." This trading became an increasingly large share of the business of Wall Street in the last decade. But when those gambles went south, the financial fortresses on Wall Street crumbled, and taxpayers were stuck paying a $700 billion bailout for the bad bets because pension funds, educational institutions, endowments and other institutions would have been severely damaged in the process.

It was no accident that these firms have increasingly focused on trading for their own account instead of serving their clients. The huge amounts of information and capital they control gives them advantages in betting on market trends. There is a lot more money to make if those bets pan out than by simply serving their clients. Of course, as we all have learned, the bets don't always pan out and this strategy carries huge risk.

The increasing reliance on high-risk trading to drive profits also creates enormous conflicts of interest between a big firm and its own clients. As the Senate Permanent Subcommittee on Investigations uncovered, Goldman Sachs traders made huge sums betting on the collapse of mortgage-backed securities that Goldman itself had created and sold to its customers. It's as if Goldman built and sold a car with no brakes and then took out life insurance on the new owner.

Even in the absence of a spectacular collapse, the focus on proprietary trading damages families and businesses. Every dollar spent on trading is a dollar not lent on Main Street. We need our banks to return to the primary business of making loans to businesses and consumers who can get our economy rolling, not operating their own trading desks.

This week we have the chance to address the problems caused by these hazardous investments in three ways. The Merkley-Levin amendment restores the wall that keeps high-risk investing out of commercial lending banks. It requires greater capital requirements at investment banks to protect against losses. And finally, it eliminates conflicts of interest, such as those we saw with Goldman Sachs, in which bankers package and sell a security, and then bet against it.

We can enact these common-sense rules of the road, while preserving the flexibility that financial firms need to conduct business. But we can only do it if Americans tell their senators loud and clear that it is time for a change.

Wall Street opposition to reform is no surprise -- the old system worked out pretty well for them. In the short-term, they made profits through risky bets. When those bets went bad, they were bailed out.

Thus, there is little downside for banks in keeping the existing rules on Wall Street.

But there is huge downside for Americans. We have barely begun to recover the jobs and savings that were lost. History can't be allowed to repeat itself.

The vote this week will answer a critical question: is Congress on the side of the American worker who lost so much in the Great Recession or is it on the side of the Wall Street firms that put all of us at risk?

We need every American to make their voice heard and send a message loud and clear: the days of Wall Street recklessly betting against our futures are over.

Cross-posted from the Huffington Post

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Unusual market activity: The SEC and high frequency trading (Sen. Ted Kaufman)

Last Thursday, for one of the few times since 24 stock brokers first gathered under a buttonwood tree in 1792, we had a stock market that for 20 minutes stopped performing its essential function: discovering the prices of securities based on a balance between buyers and sellers.

Our equity markets collapsed in a matter of minutes. Liquidity dried up, a deluge of sell orders overwhelmed buyers, and the rug was pulled out from underneath millions of investors, plummeting the Dow Jones Industrial Average toward its biggest intraday loss in history, nearly 1,000 points.

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Reckless spending agenda in Washington could put the U.S. on course for a Greek-type economic collapse (Rep. Leonard Lance)

New projections from the Congressional Budget Office (CBO) show that the new health care law will cost an additional $115 billion over the next ten years.  The CBO report comes on the heels of last month’s report from President Obama’s chief actuary of the Centers for Medicare and Medicaid Services (CMS) which found that the new health care law actually increases national health care costs over the next 10 years by $311 billion.

Both of these non-partisan government estimates confirm what many members of Congress have known all long — the new health care law was unaffordable and rushed through the legislative process under false promises, faulty pretenses and shoddy cost estimates.

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Misplaced priorities (Rep. Paul Broun)

As the old saying goes, “Don’t put off until tomorrow what you could do today.” With 15 million unemployed Americans, Democrats may be wishing they had heeded this advice.

The fact is after Democrats implemented a failed, trillion-dollar stimulus, they looked the other way.  And instead of keeping a close eye on the job market, they quickly pivoted and passed a law that allows the federal government to takeover our nation’s health insurance.   Over a year later, our nation’s economic troubles have not disappeared.  However, the liberal leadership in Washington continues to put off today what they should have done yesterday.

Unfortunately, the millions of unemployed Americans do not have the luxury of ignoring these problems.  As they struggle to make ends meet, it’s time for Washington to address American’s number one priority: job creation.

My JOBS Act would fix previous mistakes and rescind any unspent funds from the failed stimulus.  It would also provide immediate relief for small businesses as it puts money back where it belongs—in the hands of job creators.   It’s time to address the issues facing our nation’s economy today.

From Broun's blog.

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Democrats ignore causes of housing crisis, refuse to rein in Fannie & Freddie (Sen. Jim DeMint)

Fannie Mae and Freddie Mac are more overleveraged and more underwater than any of the banks in trouble, but the Dodd bill doesn’t even mention them in its hundreds of pages.

Senator McCain has offered an amendment that would repeal their liberal housing goals that encouraged more risky lending and fueled the housing crisis, as well as end their dominance of the mortgage market and let the private sector back in. While more needs to be done to quickly end the permanent bailout of these mortgage giants, the McCain amendment is an important first step.

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