Economy & Budget

Senate's Wall St. bill shows reminds of House bill's flaws (Rep. Ed Royce)

As the Senate moves closer to another cloture vote on Senator Dodd’s legislation, we are again reminded of the several flaws found in the Dodd-Frank approach to financial regulatory reform.

Beginning with the rescue of investment bank Bear Stearns in the spring of 2008, the Federal government has committed trillions of taxpayer dollars to institutions like Fannie Mae, Freddie Mac, AIG, Citigroup and Bank of America, out of fear that the demise of any of these “too big to fail” institutions would trigger a systemic crisis and collapse of the global financial system. With the bailout of creditors domestically and overseas, we have seen an increase in moral hazard and a 78 basis point advantage in lower borrowing costs for those firms receiving government funds.

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Real Wall Street Reform (Sen. Bernie Sanders)

Alan Greenspan, the former Federal Reserve chairman and one of the architects of financial deregulation, testified recently to the effect that no one could have predicted the Wall Street collapse of 2008. Really?
 
As a member of the House Financial Services Committee voting against the Gramm-Leach-Bliley bank deregulation bill on the House floor in 1999, I said,   “I believe this legislation, in its current form, will do more harm than good. It will lead to fewer banks and financial service providers; increased charges and fees for individual consumers and small businesses; diminished credit for rural America; and taxpayer exposure to potential loses should a financial conglomerate fail.  It will lead to more mega-mergers; a small number of corporations dominating the financial service industry; and further concentration of economic power in our country.”

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Tilting at indebted windmills (Sen. George LeMieux)

The president’s debt commission holds its first meeting today and the first order of business should be to pull the fire alarm. Nero fiddled while Rome burned. Now Washington is ablaze and Congress is the symphony. Government spending is so out of control, tax revenues are barely enough to cover entitlement programs. Every other operation of the federal government including defense, transportation, education, emergencies and other responsibilities, is funded by borrowed money.
 
Having come from running a business and having worked in State government, it is alarming the way Washington misspends money. In perhaps no other place in the world is money spent by an organization without any reference to how much money is taken in. Unfortunately, the situation has gotten to a point where it is completely unsustainable for this country.

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Restitute tax dollars lost in Lehman collapse (Rep. Anna Eshoo)

When Lehman Brothers collapsed in September 2008, it represented the single largest bankruptcy in the history of the United States. As a result, more than 40 municipalities from around the country lost almost $1.7 billion. I’ve introduced the Restitution for Local Government Act to assist the affected municipalities in recouping these lost tax dollars.

In my Congressional District, San Mateo County and its public institutions were part of the collateral damage and today are still reeling from the losses. When Lehman collapsed, San Mateo County lost $155 million. Teachers are being laid off. Schools are not being built or renovated. Roads are not being improved. Transportation plans are being scrapped, and critical upgrades in public safety have ceased.

San Mateo County is required by California State law to hold operating funds, reserves and bond proceeds in an investment pool. Their investment pool held funds on behalf of the county and local cities, school districts, transit agencies and the community college district.   

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A critical number (Sen. Mark Udall)

Last week, Senator Lugar and I, along with eight of our colleagues, introduced the Fair Access to Credit Scores Act of 2010. This bill is a common-sense way to empower consumers to take responsibility for their finances – by offering Americans annual access to their credit score when they access their free annual credit report. 

In 2003, Congress enacted legislation requiring the three major consumer credit reporting agencies to provide a free annual credit report to consumers. A credit report tells consumers what outstanding credit accounts they have open, like student loans, credit cards, and perhaps a car or home loan, but it tells them little else. And they often, hopefully, already know the kind of information contained in their credit report.

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Expensive lights (Rep. John Campbell)

The sheer amount of spending that has gone on in this town for the preponderance of this year and the last is simply staggering. Whether it was the stimulus bill at the beginning of 2009 or the health care bill at the beginning of 2010, and everything in between, most Americans understand that the spending levels are simply out of control…and are continuing in ways that are both big and small. But I assure you, even the instances that receive less media attention, they are every bit as egregious.

On Wednesday, House Speaker Nancy Pelosi called a press conference of the Capitol Hill Press Corps to announce the installation of new light fixtures in one of the House cafeterias. Nothing major to report here right?  Well these new light fixtures will cost the taxpayer $140,000. That’s $140,000 for light fixtures in ONE room in a single House cafeteria.

I will let you draw your own conclusions about the lighting needs of the Capitol, but at a time when we have debt and deficits as far as the eye can see…do we really need a $140,000 lighting system for a cafeteria?

Crossposted from Green Eyeshade Blog

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No more deceit -- strictly regulate Wall Street

Recent stories about Wall Street contain a recurring theme: deceit. 

For example, this week the CEO of the late Lehman Brothers, Richard S. Fuld Jr., with a completely straight face swore to Congress that he’d been utterly out to lunch on the issue of “Repo 105,” a sleight-of-hand accounting procedure auditors found Lehman used to conceal its debts. 

Last week, the Securities and Exchange Commission filed a civil lawsuit charging Goldman Sachs with securities fraud and describing a scheme in which Goldman defrauded clients by selling them a mortgage investment to bet on after secretly permitting selection of its component securities by a hedge fund manager who Goldman knew planned to bet against it.  

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The Big Question: Will financial reform work?

Some of the nation's top political commentators, legislators and intellectuals offer insight into the biggest question burning up the blogosphere today.

Today's question:


Will financial reform legislation, if signed into law, prevent economic meltdowns like the one the nation faced in 2008?

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Tax day is here again (Rep. Steve King)

Tax day is often marked by many political events objecting to our nation's tax policies. This year will be no different, as tea party groups and advocates for tax reform will be out in full force across the country.

Americans are upset with Washington, and it is easy to see why. Government dependency and spending is up, while nearly half the households in America (47%) will pay no federal income taxes this year. Meanwhile, Gallup reported this week that 63 percent of Americans believe their taxes will increase in the next 12 months. Private sector jobs are increasingly difficult to obtain, and special interest groups control the agenda on Capitol Hill.

Many wrongly claim that only the "rich" are affected by high tax rates. In reality, the average American worker surrenders 27 percent of his earnings to federal, state and local governments, meaning the average American gives three months of his annual earnings to government.

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