From: http://www.commondreams.org/
Published on Friday, October 3, 2008 by CommonDreams.org
We Had Alternatives

by Dennis Kucinich

The following statement was presented on the floor of The House of Representatives after Congressman Kucinich voted against the Wall Street bail out plan, H.R. 1424, the Emergency Economic Stabilization Act of 2008:

The public is being led to believe that Congress has reconsidered its position because we have before us a better bill than we had a few days ago. It is the same bill plus hundreds of new pages for hundreds of millions of tax breaks. What does this have to do with the troubles of Wall Street?

Driven by fear we are moving quickly to pass a bill, which may produce a temporary uptick for the market, but nothing for millions of homeowners whose misfortunes are at the center of our economic woes. People do not have money to pay their mortgages. After this passes, they will still not have money to pay their mortgages. People will still lose their homes while Wall Street is bailed out.

The central flaw of this bill is that there are NO stronger protections for homeowners and NO changes in the language to ensure that the secretary has the authority to compel mortgage servicers to modify the terms of mortgages. And there are NO stronger regulatory changes to fix the circumstances that allowed this to happen.

We should have created a mechanism for our government to take a controlling interest in mortgage-backed securities and use our power to work out a new deal for the homeowners. We could have done this. We should have done this. But we didn’t.

Now millions of Americans will face the threat of foreclosure without any help. And the numbers will soon rise for a number of reasons. Not only because of the Alt-A, jumbo mortgages which will soon be reset at higher interest rates, but because the London Interbank Offered Rate (LIBOR) is pushing up rates on adjustable mortgages and more than half of the US adjustable mortgage rates are tied to LIBOR. Homeowner defaults will grow in significant numbers. Let’s see if Congress will be as quick to help homeowners on Main Street as they were to help speculators on Wall Street.

Now the government will have to borrow $700 billion from banks, with interest, to give banks a $700 billion bailout, and in return the taxpayers get $700 billion in toxic debt. The Senate “improved” the bailout by giving tax breaks to people in foreclosure. People in foreclosure need help paying their mortgage, they do not seek tax breaks.

Across our Nation, foreclosures continue to devastate our communities, people are losing their jobs, and the prices of necessities are skyrocketing. This legislation, just like the one we defeated last week, will do nothing to solve the problems plaguing American families or help them to get out from underneath the oppressive debt they have been forced to take on.

Unfortunately, there has been no discussion of the underlying debt-based economy and the role of our monetary system in facilitating the redistribution of wealth upwards.

It is not as though we had no choice but to pass the bill before us. We could have done this differently. We could have demanded language in the legislation that would have empowered the Treasury to compel mortgage servicers to rework the terms of mortgage loans so homeowners could avoid foreclosure. We could have put regulatory structures in place to protect investors. We could have stopped the speculators.

This bill represents an utter failure of the Democratic process. It represents the triumph of special interest over the triumph of the public interest. It represents the inability of government to defend the public interest in the face of great pressure from financial interests. We could have recognized the power of government to prime the pump of the economy to get money flowing through out society by creating jobs, health care, and major investments in green energy. What a lost opportunity! What a moment of transition away from democracy and towards domination of America by global economic interests.

Years ago, in a Cleveland neighborhood, I saw a hand-scrawled sign above a cash register in a delicatessen. The sign said: “In God We Trust, All Others Pay Cash.” The sign above the Speaker’s rostrum reads “In God We Trust,” but we are paying the cash to Wall Street.

It is not as if we had no other choice but to pass this bill.

 Dennis Kucinich is a Democratic member of the US House of Representatives from Ohio. _______________________________________________________________

From: http://www.commondreams.org/headline/2008/10/03-12

Published on Friday, October 3, 2008 by Agence France Presse
House Passes Bailout Bill

– The US House of Representatives on Friday approved a revised 700-billion-dollar Wall Street bailout, bowing to intense pressure to help avert a global economic meltdown.

The House, which sparked market and political turmoil by rejecting an earlier version of the bailout on Monday by 228 votes to 205, voted 263 in favor to 171 against in favor of the largest US government economic intervention since the Great Depression of the 1930s.

Congressional leaders had worked together to win over more Republican and Democratic votes amid signs that businesses are already being hurt by a failure to procure credit, triggered by the US subprime mortgage crisis.

Three Democratic lawmakers said earlier they would switch their votes. Several revealed that calls from White House nominee Barack Obama played a key role in their decision. A House source said four other Democrats were also switching.

House Minority whip Roy Blunt said the pain of the deepening credit squeeze was now being felt by the public.

“Calls to members officers are beginning to even out, people are beginning to realize this has impacts on their pension plans.”

Rahm Emanuel, a senior member of the House Democratic leadership spoke out in support the bill from the House floor.

“This is only the first step. While we address the balance sheets of banks, the next step must now address the checkbooks for middle class families and the struggles that they face,” he said.

The Senate passed a revised version of the bailout package 74-25 on Wednesday, including sweeteners on extending bank deposit insurance and expired tax breaks in order to get more Republicans behind the legislation.

Maryland Democratic representatives Donna Edwards and Elijah Cummings said they had received calls from Obama after voting against the original package.

“It meant a lot to me that somebody who at least has a 50-50 shot at being the next president of the United States would take time,” Cummings said.

Obama said during the call that he would push attempts to reform bankruptcy laws to help ill-fated homeowners escape foreclosure, Cummings said, but stressed urgent action to save the US financial system was vital.

Edwards said Obama reached out to her on Thursday morning, as she was considering how she would come down in Friday’s looming vote.

“I had a very good conversation with Senator Obama yesterday morning, and I had to weigh on that the entire day in coming to this decision,” Edwards said.

There were still many holdout lawmakers though, who voiced deep skepticism whether the new measure would work, while bleakly concluding that the bill was a necessary evil.

The debate resumed amid more shocking news for the world’s largest economy which shed some 159,000 jobs in September as the weight of the housing collapse and credit crunch hit a broad swath of industries.

The unemployment rate held at 6.1 percent, a five-year high, with payrolls having fallen by 760,000 this year, the Labor Department said.

Global stocks had sank heavily early Friday with losses in Asia as some lawmakers continued to make known their opposition to using vast amounts of taxpayer money to bail out Wall Street firms.

The amended version of the plan is laced with 150 billion dollars in tax breaks to coax reluctant lawmakers from both the Democratic and the Republican parties to get on board.

The bailout gives the US Treasury power to buy up toxic mortgage debt which has been choking the financial industry and would create a 700-billion dollar federal program to buy bad assets from banks and other financial firms.

The Senate raised the ceiling on federal insurance for bank deposits from 100,000 dollars to 250,000 dollars, and added up to 150 billion dollars in tax break extensions for middle class families and business.

They also retained limits on “golden parachute” severance payments to disgraced Wall Street executives.
© 2008 Agence France Presse ________________________________________________________________

Published on Friday, October 3, 2008 by One World.net
Activists Push(ed) Against Bailout, Offer(ed) Alternatives

by Haider Rizvi

(CD Editor’s note: Shortly after this story was filed the US House of Representatives voted to pass Resolution H.R. 1424, the Emergency Economic Stabilization Act of 2008.  However, this reporting should still stand to note that there were those voices declaring their opposition right until the end, and we remain committed to covering their brave activism despite today’s outcome.)

NEW YORK – As lawmakers prepare to vote Friday on a renegotiated plan to spend hundreds of billions of dollars to protect Wall Street from financial disaster, activists are ramping up protests against the bill and some independent analysts have offered alternatives focusing on financial relief for regular Americans.

[CODEPINK activists outside Barack Obama’s Senate office. (Credit: CODEPINK)]CODEPINK activists outside Barack Obama’s Senate office. (Credit: CODEPINK) In Thursday, tens of thousands of people sent letters to members of the House of Representatives urging them to make drastic changes in the Senate version of the bill authorizing the Wall Street bailout at the cost of $700 billion.

Despite nationwide protests, the Senate approved the plan Wednesday to buy bad debts of financial institutions. The bill is now under consideration in the House of Representatives.

At press time, it remained unclear whether the bill would muster enough support to pass the House on Friday, though reports from Washington indicated that the bill’s passage was looking increasingly likely.

Ahead of the Senate vote on Wednesday, labor and consumer rights groups across the nation held dozens of rallies and demonstrations in protest against the bill, which they consider to be unjust because it offers relatively few protections for homeowners and taxpayers.

“People are up in arms about this,” said Matt Holland of TrueMajority.org, an advocacy group comprising 70,000 members that played a major role in organizing the nationwide protests.

Due to increased public pressure, the Senate made several changes in the original bill. Many of those changes were aimed at enticing individual lawmakers to support the bill through financial incentives for specific projects, but few addressed rising concerns about the millions of Americans on the verge of losing their homes.

“While many are focused on providing relief to Wall Street, millions of homeowners are at risk of being left behind,” said Janet Murgula, president of the National Council of La Raza, the nation’s largest Hispanic civil rights organization.

To her, it is “irresponsible public policy to ask taxpayers to foot the bill for a Wall Street rescue package while simultaneously denying them a sustainable response to the devastation rising foreclosure rates are having throughout the country.”

The activist networks engaged in protest organizing say they want Congress to pass a better bill, with tough restrictions on executive pay, protections for homeowners and taxpayers, and a sensible plan to pay for recovery.

“Americans recognize the need to act on our current crisis but detest the idea that ordinary taxpayers should bear the brunt of bailing out the kingpins of Wall Street,” said the Institute for Policy Studies (IPS), a Washington, DC-based think tank focusing on issues of peace, justice, and the environment.

A Plan to Rescue Main Street Too

In its “Sensible Plan for Recovery” released Wednesday, IPS suggests adding four key elements to the $700 billion plan, beginning with a $200 billion “Main Street Stimulus Package” that would create jobs in the renewable energy sector, help people remain in foreclosed homes, and support state and local government services that are threatened by declining tax revenues.

It also identifies $900 billion in potential revenue streams that could “make Wall Street speculators pay for the bailout” — the original $700 billion plus the additional $200 billion of its proposed stimulus package.

The IPS plan would also limit CEO pay for any bailed-out company to 25 times the pay of the company’s lowest-paid worker — the same ratio of the president of the United States’ pay to that of the lowest-paid federal government worker. It would add oversight to the companies hired to manage the bailout process to prevent “bailout profiteering,” and it would “shut down the casino” by asserting new oversight measures on financial markets.

“The House did the right thing on Monday by rejecting a bailout bill that did too much for Wall Street and too little for Main Street,” the group said in a letter it’s asking supporters to send to their Congressional representatives today, adding: “Don’t cave in to White House pressure to ram through similarly flawed legislation again.”

Pressure Remains High on Lawmakers

Activist groups have been organizing demonstrations throughout the week in the halls of Congress, throughout Washington, DC, and across the nation. Capitol Hill switchboards have been jammed with constituents calling their members of Congress to express their opinions about the upcoming vote.

Activist groups and lawmakers are crediting the outpouring of public dissent for Monday’s defeat of the first version of the bailout legislation.

“We joined together, in a wonderful, resolute outpouring of democracy. We stood toe-to-toe with Wall Street and their lackeys in Congress, and defeated them. Amazing what can happen when the people stand up!” said the peace group CODEPINK in a message to its activists Tuesday.

“It’s thanks to you that the bill is better than it was, and it’s thanks to you that the next bill will be better than this one,” added Michigan Congresswoman Carolyn Kilpatrick.

On Friday, several groups announced plans to stage sit-ins and rallies in Washington and other cities to amplify their concerns to the House of Representatives.

“Congress is indeed very generous, giving extravagant gifts to all its friends,” said Medea Benjamin, co-founder of CODEPINK. “Of course, it’s easy to be generous with other people’s money.”

In the face of the second House vote on the bailout bill, Benjamin’s group set up a Christmas tree outside Capitol Hill, with ornaments and gifts representing the initial $700 billion the bill would pledge, plus $150 billion in giveaways that have been added in the version passed by the Senate this week — for everything from sheep and arrows to bicycles and sludge.

“Members of Congress will be on hand to trim the tree. President Bush will make an appearance to light the lights,” Benjamin said. “And a very merry Treasury Secretary Hank Paulson will be there to receive the people’s money.”

With additional reporting by Jeffrey Allen
© 2008 One World
_________________________________________________
Published on Friday, October 3, 2008 by Inter Press Service http://www.ipsnews.net/news.asp?idnews=44110
“Sweetened” Bailout Goes Back to the House

by Adrianne Appel

BOSTON – The bailout bill passed by the U.S. Senate Wednesday is nearly the same Wall Street giveaway as its original, critics say — except that it now includes 100 billion dollars more in tax giveaways and pet projects for lawmakers’ home districts.

“They decided this bill should be Christmas in October,” said Republican Rep. Steven La Tourette.

The bill, loaded up with “sweeteners” to entice the senators to vote for it, passed 74-25. It is headed back to the House Friday for debate — and possibly more sweetening up to win the 12 additional votes needed to pass it.

The idea of a 700-billion-dollar bailout for Wall Street was fielded by Treasury Secretary Henry Paulson, who said the funds are needed to shore up financial firms at risk of collapse. The proposal was first delivered to the House, where it was pushed by both Democrat and Republican leaders, but it failed.

Senate leaders who backed Wednesday’s bill described it as much improved over the original.

“This is not a bailout for Wall Street, it’s a bailout for our country,” Senate Majority Leader Harry Reid said.

But Democratic Rep. Peter DeFazio said the big problems with the bill remain, mainly that it is designed to benefit Wall Street firms while ignoring the deeper economic problems plaguing the U.S.

“Talk about lipstick on a pig,” DeFazio said. “They added some tax cuts so Republicans would vote for it, and added [a health provision] so that progressives and liberals would pay for it. But, it’s the same flawed plan that the House defeated earlier this week.”

The bill now includes tax breaks and funds for projects individual lawmakers asked for, and are used to entice them into voting for the bill.

A 2-million-dollar tax break is given to an Oregon manufacturer of toy wooden arrows, and a 100-million-dollar break is given to racing car tracks, and a 192-million-dollar tax break on rum imported to the states from Puerto Rico and the Virgin Islands, according to an analysis by Taxpayers for Common Sense, a private watchdog group.

“There is not one bit of assistance in this package for homeowners struggling to make ends meet. My constituents don’t understand that, and neither do I,” said Sen. Ron Wyden, in casting his vote against the bill.

A look at the Senate bill shows that it includes a large loophole that would still allow excessive CEO compensation and multi-million-dollar golden parachute packages to retiring CEOs. It offers no funds to help homeowners facing foreclosure, and does not include permission for local judges to make changes in bad mortgages when people come to court in foreclosure.

The treasury secretary is granted wide discretion to disperse the funds to those firms that need it. In addition, Wall Street firms would be hired to help disperse the money, and federal contracting rules will not be enforced in hiring them.

In terms of oversight, the treasury would report to a new Congressional board and be audited by the Government Accountability Office.

Bank accounts up to 250,000 dollars would be insured, instead of the 100,000 dollars today.

Independent Sen. Bernie Sanders tried to convince his colleagues to tax millionaires as a way to pay for the bailout. Many senators, however, are millionaires and the amendment failed.

“Most of my constituents did not earn a 38-million-dollar bonus in 2005 or make over 100 million dollars in total compensation in three years, as did Henry Paulson, the current secretary of the treasury, and former CEO of Goldman Sachs,” Sanders said.

DeFazio expressed concern that the bill is misguided, and said he and other House progressives will offer an alternate plan, if allowed to by Speaker Nancy Pelosi who will control the House debate.

“Economic analysts noted yesterday that the credit markets around the world were almost entirely dysfunctional even when political leaders and investors assumed that Congress had reached a deal and would easily approve the bailout. There is no reason to believe Paulson’s plan will work,” DeFazio said.

The progressives will be going up against conservative House Republicans, who originally voted against the plan because of its cost.

William Frenzel, a former congressman, said the Senate bill was changed to appeal to conservatives and it will be changed further in the House to appeal to far right Republicans there.

“They don’t seem able to move to the left. They have already moved it to the right,” he said. “The House bill will win a handful of Democrats but mostly Republicans,” he predicted.

While the House readied for Friday’s debate, financial indicators pointed to a troubled economy. The fickle Dow Jones industrial average dropped 348 points by Thursday’s end on the news that factory orders were down and that jobless claims for August were the highest in seven years.

Fears deepened that some European nations may be headed for recession and bank credit problems related to the U.S. mess.

Earlier Thursday, Pres. George Bush implored the House to “get this bill passed so we can get about the business of restoring confidence” in the U.S. economy.

Many citizens still oppose the bill, and are flooding the Congress with emails and calls. However, lawmakers are reporting more calls from people who are scared by the prospect of a depression, and are in favour of the bailout.

“They’re for the bailout bill now only because they fear that a failure to pass it will have worse consequences,” says Robert Reich, an economist and former secretary of labour.

“Angry populism has always been a potent force in American politics. And now, with wages dropping, jobs insecure, fuel and food and health-insurance costs soaring, and millions of homes in jeopardy — and what’s perceived to be a massive taxpayer bailout of some of the richest people in the land — angry populism is about to explode,” Reich wrote this week.

Bush and Paulson, who started referring to the bailout as a “rescue plan”, with the media and Democrats following suit, say the bill is needed to stimulate the biggest banks, which are not readily lending each other money because they fear each other’s credit worthiness.

During the past few years, the banks made billions by investing in risky financial products created from bundles of mortgages, including mortgages with excessively high interest rates and unfair terms. The mortgages were peddled to consumers in the absence of strong consumer protection rules. Millions of homeowners could not meet the high rates, and are defaulting. Many banks now hold high debt, estimated in the billions, and millions of people have lost their homes.

The 700 billion dollars would be used to buy up the risky financial products, even though their true value is not yet known.

“Over the last six years our system became a house of cards, based on the endless over-leveraging of each dollar through the use of financial instruments so complex and illusory that it turns out no one even knows their value — the infamous credit default swaps that were nearly 1 trillion dollars in 2001 and now amount to 62 trillion dollars,” says Harvey Rosenfield, the founder of Consumer Watchdog, an activist group.

This week a 300-billion-dollar programme got underway to help about 400,000 homeowners in foreclosure. To qualify, borrowers must be spending more than 31 percent of their income on their mortgage. Millions more foreclosures are expected in the next three years.

 © 2008 Inter Press Service